Sales

The History of Commission Plans: How We Got Here (and What Needs to Change)

A timeline of compensation, control, and the (very human) urge to hit quota

Commission plans shape how sales teams behave.
But most of today’s comp structures are inherited—not innovated.

To design better systems, we need to understand how we got here.

Here’s a timeline of the evolution of sales commission plans—and what it tells us about where RevOps needs to go next.

🕰️ 1850s: The Traveling Salesman Era

  • Sales reps are lone wolves on trains and horses
  • Paid a percentage of goods sold—no base, no benefits
  • Incentives are simple: sell more, earn more

📚 Rooted in pure variable pay—commission as survival

📇 1920s–1950s: The Rise of the National Sales Force

  • Mass-market products and brand marketing take off
  • Companies standardize territories, quotas, and tiered commissions
  • Sales contests emerge as early SPIFs (“Win a Cadillac!”)

📚 Influenced by Taylorism and early industrial management theory
💡 Sales = efficiency + charm

📈 1960s–1980s: The Era of Activity-Based Selling

  • CRM predecessors appear (Rolodex, phone logs, call sheets)
  • Managers track activity, but commissions still based on revenue closed
  • Base salaries become more common—especially in B2B

📚 Enter management control theory: oversight meets incentives
💡 Incentives reward output, but inputs are now tracked

💻 1990s–2000s: CRM + Comp Complexity

  • CRMs like Siebel, then Salesforce, change how performance is tracked
  • Quotas become more granular (monthly, weekly, per-product)
  • Comp plans balloon: draw systems, clawbacks, accelerators, decelerators

📚 Rise of the “Excel Era” in RevOps
💡 The spreadsheet is now the comp plan’s best friend—and worst enemy

📉 2010s: The “Quota = Culture” Era

  • Tech sales booms. Startups go aggressive with variable-heavy plans
  • The 50/50 split becomes gospel: 50% base, 50% on-target variable
  • Burnout rises. Attrition spikes. Sandbagging and gaming increase.

📚 Behavioral economics gains traction—motivation ≠ money alone
💡 We begin to question whether quotas drive performance or panic

🤖 2020s: The Shift Toward Science (and Sanity)

  • COVID accelerates digital transformation—and exposes broken comp
  • AI and analytics enter incentive design
  • Focus shifts to:
    ✅ Transparency
    ✅ Real-time visibility
    ✅ Behavioral alignment
    ✅ Risk-adjusted goals
    ✅ Comp plans that reward more than just closed-won

📚 Influenced by modern motivation science: autonomy, mastery, purpose (Deci & Ryan; Pink)
💡 Leaptree Incentivize and similar platforms emerge to make incentives scalable, adaptive, and human

🚀 The Future: From Control to Coaching

Sales comp isn’t going away.
But the future isn’t just about higher quotas or shinier bonuses.

The future is about:

  • Tying comp to customer value
  • Rewarding behaviors, not just outcomes
  • Making plans transparent, explainable, and evolvable
  • Designing with psychology, not just math

Incentives aren’t a lever to control behavior.
They’re a system to shape culture.

RevOps leaders aren’t just building comp plans.
They’re building trust.

📚 References

  • Taylor, F. W. (1911). The Principles of Scientific Management.
  • Pink, D. H. (2009). Drive: The Surprising Truth About What Motivates Us.
  • Deci, E. L., & Ryan, R. M. (1985). Intrinsic Motivation and Self-Determination in Human Behavior.
  • Harvard Business Review (2022). Why Sales Compensation Plans Fail—and How to Fix Them.
  • Gartner (2023). The Future of Sales Compensation Design.

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