When Quotas Go Up But Performance Goes Down
The sales compensation crisis nobody's talking about — and what the research says you should do instead.
In 2024, sales quotas rose by 37% compared to 2023, according to Salesforce's State of Sales Report. Companies looked at their revenue targets, divided by headcount, and pushed the number higher.
The result? According to the same Salesforce report, only 28% of sales professionals hit their quota — the lowest figure in six years.
Read that again. Quotas went up by more than a third. Performance dropped to historic lows. And yet most companies are planning to do the same thing again next year.
This isn't a motivation problem. It's a systems problem. And it's destroying sales teams from the inside out.
The Numbers Don't Lie
The gap between expectations and reality has never been wider.
QuotaPath's 2024 Compensation Trends Report surveyed over 450 finance, RevOps, and sales leaders. Their finding: 91% of sales teams failed to hit quota expectations in 2024. Not underperformed. Failed to meet the targets their companies set for them.
The RepVue Cloud Sales Index provides even more granular data. In Q4 2024, average quota attainment across sales teams was just 43%. Less than half. And that was actually an improvement from Q2 2024, when attainment hit a low of 42%.
How did we get here? Part of the answer lies in how quotas are being set.
Research from the Bridge Group found that 58% of companies over-assign quotas by 20-30% to ensure cumulative sales attainment aligns with company-wide revenue plans. In other words, leadership knows the targets are unrealistic — they're banking on a few overperformers to carry the team while most reps fall short.
This isn't strategy. It's hope disguised as planning.
The Compensation Plan Problem
If quotas are the target, compensation plans are the mechanism that's supposed to drive behavior toward that target. But most companies are designing plans that work against them.
A survey by Deloitte found that 62% of companies believe their sales compensation plans need improvement. They know something's wrong. They just haven't fixed it.
WorldatWork's research puts an even finer point on it: only 21% of companies are satisfied with their current sales compensation plans. Four out of five companies are operating with plans they know aren't working.
Why? Because most organizations lack the infrastructure to do it right.
Xactly's 2024 Sales Compensation Report found that 70% of companies still use spreadsheets to design compensation plans. They're trying to align complex incentive structures with business strategy using the same tool they use for expense reports.
Research from the Sales Collective reveals an even deeper problem: 87% of sales leaders set quota targets without a defined method. No formula. No framework. Just a number that feels right — or more often, a number that finance handed down.
The same Sales Collective research found that 86% of companies don't have a documented sales process. Think about what that means: companies are setting aggressive quotas and tying compensation to them, but they haven't defined the repeatable process that would allow reps to consistently achieve those numbers.
They're measuring outcomes without building the systems that produce outcomes.
What Happens When You Get It Wrong
Misaligned compensation doesn't just hurt quota attainment. It creates a cascade of dysfunction that damages your entire sales organization.
Reps chase bad deals. When the only thing that matters is hitting a number, reps will pursue revenue that doesn't fit your ideal customer profile. They'll discount to close. They'll overpromise to win. The deals close, but they churn — or worse, they consume support resources and damage your reputation.
Top performers leave. Your best salespeople know what realistic looks like. When they see quotas that are mathematically impossible given their territory, their pipeline, and their sales cycle, they don't complain. They update their LinkedIn profile and take a call from a recruiter. You're left with the people who couldn't leave.
Gaming becomes rational. When the system is broken, smart people find workarounds. Reps sandbag deals to hit accelerators in the right quarter. They pull revenue forward at the expense of next period. They focus on whatever metrics are being measured, even if those metrics don't align with what the business actually needs. This isn't a character flaw — it's a predictable response to poorly designed incentives.
Short-term thinking replaces customer value. Compensation plans that reward closed revenue without accounting for customer success create salespeople who disappear the moment the contract is signed. Implementation problems? Not my comp plan. Renewal at risk? Not my problem. The customer relationship becomes transactional because that's what you're paying for.
The death spiral begins. When most of the team misses quota, leadership often responds by raising quota again — on the theory that higher targets will drive higher performance. The research shows the opposite. QuotaPath found that 35% of leaders attribute quota failure to misaligned sales activities. The targets aren't driving the right behavior. Raising them just accelerates the dysfunction.
What Actually Works
Companies that get compensation right treat it as a strategic function, not an administrative one. Here's what the research says separates effective plans from broken ones.
Start with business strategy, not revenue targets. Before setting quotas, define what success actually looks like. Is it new logo acquisition? Expansion revenue? Market share in a specific segment? Customer retention? Your compensation plan should reward the behaviors that drive your strategic priorities — not just top-line revenue.
Use data to set realistic quotas. According to Salesforce, companies that revise sales compensation models based on data see 50% greater impact on revenue than similar investments in advertising. The inputs matter: historical performance, territory potential, market conditions, sales cycle length, and pipeline quality should all inform quota-setting. Research from the Bridge Group suggests that high-performing organizations now use attainment-based modeling to adjust quotas quarterly rather than setting annual targets and hoping for the best.
Simplify. Complex plans with multiple accelerators, SPIFFs, and conditional bonuses might look sophisticated, but they often backfire. When reps can't easily calculate their expected earnings, trust erodes. Research from Everstage found that poor communication and unclear payout rules were top reasons for plan dissatisfaction among both reps and compensation professionals. The best plans are simple enough that a rep can do the math in their head.
Balance base and variable appropriately. The Bridge Group's 2024 SaaS AE Metrics Report found that the median pay mix for account executives is 53% base salary and 47% variable compensation. Too much base and you lose the performance incentive. Too much variable and you create desperation that drives bad behavior. The right balance depends on your sales cycle, deal complexity, and market conditions — but the median exists for a reason.
Build in flexibility. Markets shift. Territories change. Products launch and fail. Research from the Bridge Group shows that 29% of companies now offer quota relief to sales reps when circumstances beyond their control impact their ability to hit targets. This isn't about lowering standards — it's about maintaining trust and keeping good people from leaving when the game becomes unwinnable.
Review and adjust regularly. Annual compensation planning made sense when markets were stable. They're not anymore. The companies seeing the best results review quota attainment and plan effectiveness quarterly, making adjustments before small problems become organizational crises.
Your Next Move
If you're a CEO or sales leader, ask yourself a few honest questions:
What percentage of your team is actually hitting quota? Not the number you report to the board — the real one.
Do you have a defined, documented methodology for setting quotas? Or does the number come from finance with minimal input from sales leadership?
Is your compensation plan driving the behaviors you actually need? Or is it rewarding activity that doesn't align with your strategy?
When was the last time you asked your top performers what they think of the comp plan? What did they say?
If the answers make you uncomfortable, you're not alone. Most companies are operating with compensation structures that made sense five years ago but haven't evolved with their business, their market, or their team.
I've spent 25 years building and fixing sales organizations. The companies that win aren't the ones with the most aggressive quotas. They're the ones who align compensation with strategy, set realistic targets, and build systems that allow good salespeople to succeed.
If you want to talk about what that looks like for your organization, I'm happy to have that conversation.
Sources
Salesforce, "State of Sales Report 2024-25" — Research on quota increases, attainment rates, and compensation model impact
QuotaPath, "2024 Compensation Trends Report" — Survey of 450+ finance, RevOps, and sales leaders on quota attainment and plan challenges
RepVue, "Cloud Sales Index Q4 2024" — Quarterly data on quota attainment across sales organizations
Bridge Group, "2024 SaaS AE Metrics & Compensation Benchmark Report" — Research on quota over-assignment, pay mix, and quota relief practices
Deloitte — Survey on sales compensation plan effectiveness and improvement needs
WorldatWork, "2024-2025 Salary Budget Survey" — Research on compensation plan satisfaction
Xactly, "2024 Sales Compensation Report" — Research on compensation plan design processes and tools
Sales Collective, "Sales Team Quotas Statistics USA 2025" — Research on quota-setting methodologies and sales process documentation
Everstage — Research on compensation plan communication and payout transparency