Align your sales compensation plan to your actual growth strategy before execution begins. If your sales reps are chasing low-value deals, misreading quotas, or driving erratic results, chances are the compensation plan is the root cause. This typically occurs when incentives are set before leadership aligns on tradeoffs, priorities, and outcomes.
Misalignment here is expensive. You see it in the form of rising cost of sale, forecast volatility, rep turnover, and missed targets. You hear it when reps ask, “What do you want me to focus on?” and no one has a clear answer. That’s a design problem, not a performance one.
This blog post outlines what needs to happen before compensation design even begins:
- Locking in strategic goals and sales behavior that drive enterprise value
- Getting leadership agreement on comp philosophy and tradeoffs
- Translating business strategy into rep-level incentives and quota mechanics
If your team is building incentive plans without aligning on these elements, you’re gambling. The best-performing portfolio companies build comp into the strategic cycle. Not after. They gain rep clarity, leadership alignment, and board confidence in return. This blog walks through how.
This is the second Compensation and Quota strategy blog in a series. If you missed the first article in this series, take a moment to review the blog: Is Your Compensation Plan Quietly Failing? How to Spot the Hidden Revenue Drag.
Why Sales Strategy and Comp Plan Must Match
You wouldn’t build a forecast before confirming your targets. Yet many firms lock in comp plans before aligning on Go-to-Market (GTM) strategy. That’s how reps end up incentivized to close fast deals in SMB, even as the board pushes for enterprise growth.
While everyone understands that sales incentives shape behavior, it’s not ebay to connect comp to GTM strategy. GTM strategy defines where that behavior should go. When they drift apart, even great reps chase the wrong goals.
Consider three common failures:
- A rep over-delivers on logos but under-delivers on margin.
- Quotas rise with no clear rationale, killing morale.
- New product pushes fall flat because reps aren’t compensated to care.
Each reflects a strategy-comp misfire that quickly turn into real, measurable costs:
Avoiding Reactive Design
Most compensation plans are written in response to a problem. Attrition. Missed bookings. One rep “crushing it” with unclear drivers. That reactive approach leads to one-off fixes, not systemic alignment.
When comp becomes a patchwork of historic behaviors, strategy disappears. Instead, start with questions like:
- What customer segments drive the most profitable growth?
- Which selling motions improve renewal and upsell?
- What roles do we need to scale next phase growth?
Build the comp plan to amplify these answers.
Aligning Incentives to Desired Rep Behavior
You get what you pay for. Literally. So if reps are overselling discounts, ignoring new products, or ghosting big accounts, it’s usually not defiance. It’s the plan.
To drive the right actions, tie incentive mechanics to behaviors that matter. That means:
- Clarity on what gets paid and why
- Payout curves that reward consistent execution
- Metrics that balance short-term wins with long-term value
For example, if you’re trying to build expansion revenue, comp should reward land-and-expand behavior. That might mean deferring part of variable pay until after customer onboarding success and adoption.
If that sounds hard to implement, it’s not. It just takes upfront alignment on the motion you’re scaling.
Locking in Tradeoffs Before Execution
Every comp plan involves tradeoffs. Accelerators for top reps often reduce base pay across the team. Pushing new products may slow overall attainment short term. These aren’t mistakes, they’re decisions.
But too often, these tradeoffs aren’t discussed until reps push back. That puts leadership on the defensive.
Instead, make tradeoffs explicit before roll-out. Align on:
- Risk appetite: Will we pay above market for stretch goals?
- Growth horizon: Are we rewarding land, expand, or retain?
- Cost constraints: How much can we invest in incentives for this growth cycle?
When these questions get answered early, execution gets smoother and trust goes up.
Establishing a Clear Compensation Vision
Top-performing firms define a clear compensation vision. This guiding philosophy informs plan decisions, protects against perception of unfairness, and reduces churn.
A good philosophy answers:
- What role should pay-for-performance play in this org?
- How much variability is healthy across roles and tenure?
- How do we adjust plans across growth stages?
Without this lens, every rep dispute becomes a one-off escalation. With it, you get consistency and fewer battles.
Getting Leadership Consensus Early
Compensation design is a leadership issue imperative. And if the CEO, CRO, and board aren’t aligned, the plan gets pulled in different directions.
That’s why the most effective firms don’t delegate comp to HR or finance. They treat it as a strategic tool and get all stakeholders on the same page before execution.
To do this well:
- Start with a joint session to define growth priorities
- Use real data to model tradeoffs and rep impact
- Document key assumptions before drafting
Alignment up front saves weeks of rework and improves executive confidence in the output.
Aligning Pay with Corporate Objectives
Pay should tell the rep exactly what the company values. But when corporate objectives shift, say from acquisition to retention, plans often lag behind.
A quarterly booking target doesn’t drive long-term revenue quality. An incentive for new logos may kill net revenue retention. To match plan to objective, start with metrics that track strategic progress.
Then align payout timing, weighting, and thresholds. When the board sees comp driving the stated goals, credibility goes up.
Translating Business Goals Into Rep Priorities
You can’t hand reps a corporate growth plan and expect perfect execution. You need to translate those goals into individual-level actions and incentives.
That means answering:
- What behaviors support this year’s strategic themes?
- Which metrics reflect progress toward those behaviors?
- How do we weight those in the comp plan?
Building Trust With the Board and Investors
Misaligned comp plans create noise that investors notice. If rep productivity is falling or incentive spend is rising, they’ll ask why. You need to show that your comp design supports the stated strategy.
That means:
- Modeling plan impact before rollout
- Stress-testing assumptions under different performance scenarios
- Linking payouts to metrics investors already track
When the board sees alignment, they trust the plan and the leadership team behind it.
Closing Thought
Getting comp right is primarily about clarity and alignment. The right plan makes strategy executable. The wrong one creates drag.
The firms getting this right are doing less rework, wasting fewer dollars, and gaining faster traction. If you haven’t yet aligned comp with strategy, do it now. Before execution locks you in.
Need a partner to help? Cortado Group has done this across the portfolio fast, effectively, and without disruption. But start with the basics: alignment first, plan second.
And don’t forget: the first blog in this series breaks down how misaligned plans quietly kill performance. Comp doesn’t just reward growth. It drives it.
