Want More Revenue? Simplify Commissions

Forbes

17-07-2025

Scott Hozebin, MBA, is Chief Revenue Officer at Better Health and a Managing Director at MetaEquity Partners.
There is something I have seen far too often: great salespeople spending hours trying to figure out how their bonus plan works. That's not motivation; it's a momentum killer!
You would be surprised by how many companies still overengineer their comp plans. Everyone gets the intention, and maybe it even does start from a good place. Leaders want to drive certain behaviors, protect margins and encourage long-term wins. But what happens in the real world is very different. You end up with reps who cannot explain how they get paid. And if they can't explain it, they sure won't be motivated by it.
Confusion Costs You
When a salesperson has to do mental gymnastics or guesswork to calculate their commission, the system is broken.
In my experience, the best salespeople are not trying to game the system. They are trying to win, and win consistently, but they need to know what winning means. If I sell this, how much do I make? If I exceed the quota, what happens? If I switch focus to that product line, is it worth my time?
If they don't know the answers to those questions, or if the answers keep changing, you start to lose them—first mentally, then literally.
It's also important to call out the internal damage this causes. Managers spend hours re-explaining the plan. Finance deals with reconciliation. Operations gets pulled in to fix misalignment. All of this takes time away from the customer, which is where the focus should be in the first place.
Simple Isn't Stupid
Now, let me be clear. I'm not saying comp plans should be flat or naive. They need to align with business goals. But simple doesn't mean ineffective. In fact, simplicity is often what unlocks performance.
Here is the approach I have seen work:
• Make earnings predictable. If a rep can't calculate their own paycheck while standing in line for coffee, it's too complicated.
• Align incentives with what you actually value. Don't say retention matters, but only pay for new business. That disconnect creates confusion and apathy.
• Stick to a few key levers. You don't need 10 bonus categories. Pick two or three things that matter and build around them.
• Explain it frequently. A plan is only effective if the team understands it. Repetition matters. So do visuals.
• Stay open to feedback. If your team is confused, don't chalk it up to them not paying attention. Assume something in the plan isn't as clear as you think.
None of this is a new radical idea. But it works.
Trust Is Transparent
A lot of sales leaders miss this point: Compensation is not just a financial tool; it is trust. When reps know what they are earning and feel like the system is fair, they go all in. When they don't, they start to hedge their effort. Think about it. Do you trust people you don't understand? Not often, I bet.
I have personally seen top reps walk away from high-paying medical sales roles simply because they could not understand or trust the way they were compensated. Not because they weren't making money. Because they didn't believe they had control over their success. That is not a talent problem. That is a system problem.
Culture Starts With Compensation
How you pay people signals your code to your employees. If your plan is confusing or secretive, your culture starts to feel that way, too. But if your approach is clear, fair and in alignment with what's said, boom—you build a culture where performance and integrity go hand in hand.
Think about how many other parts of the business rely on the sales engine working properly: customer success, product development, revenue forecasting. When compensation is unclear or misaligned, it doesn't just affect sales; it ripples through the whole operation.
Society Is Evolving, And Sales Leadership Needs To As Well
We're past the era of overcomplicating everything. The best teams are ditching complexity and focusing on speed, clarity and execution. That means giving reps clear visibility into their earnings. It means being able to explain the comp plan without slides or spreadsheets. It also means prioritizing motivation over micromanagement.
Sales is hard enough without adding unnecessary friction. When people know exactly what they are working toward and trust that the company has their backs, they perform better. Not sometimes. Every time.
One Last Thought
If you are seeing friction in your sales org, you might be tempted to buy another tool or restructure the team. But before you do, ask yourself a simpler question: Do my reps understand how they get paid? If the answer is 'not really,' start there. Clarity is a competitive advantage!
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