Sales incentive schemes are one of the most powerful tools a sales manager has, and one of the most frequently misdesigned. Ninety percent of top-performing organisations use incentive programmes to motivate and reward their salespeople. But the design of those programmes matters more than their existence.
A sales incentive scheme works when it ties rewards to what each individual rep actually cares about, aligns the behaviours you're incentivising with the outcomes the business needs, sets targets that are achievable and entirely within each rep's control, and gets reviewed every year without mid-cycle rule changes. Get those four things right and an incentive scheme becomes a genuine performance lever. Steve Myers, who has coached more than 3,000 salespeople across a 40-year career and served as MD of Sandler UK, says most schemes fail not because of the reward structure but because managers guess at motivation instead of asking.
In this article, Steve Myers, who has coached more than 3,000 salespeople across a 40-year career and served as Managing Director of Sandler UK for nine years, shares the principles behind incentive schemes that work.
This article is part of MySalesCoach's guide to sales team leadership.
Why Most Sales Incentive Schemes Fail
The most common mistake is building an incentive programme around what the manager thinks motivates salespeople, rather than asking. It sounds obvious. But most schemes are designed in a spreadsheet, not a conversation.
As Steve Myers puts it:
"The universal truth of all sales teams, anywhere in the world, is that salespeople are people. People are hardwired in very similar ways. If you get sales incentives right, they will motivate people to do the behaviours you need in order to achieve the results you want."
The second most common mistake is incentivising the wrong behaviours. If the scheme rewards activity rather than quality, that is exactly what you will get.
Steve Myers makes this plain:
"If you're rewarding people for booking appointments, they'll be motivated to book appointments. But in many cases, what you end up with is a bunch of poorly-qualified appointments."
How to Build a Sales Incentive Scheme That Drives the Right Behaviours
The foundation of a well-designed incentive scheme is individual motivation. You cannot build a programme that works without first understanding what each rep is working towards.
The only way to get that information is to sit down with each person in a structured 1:1 and ask. Not in a team meeting. Not by assumption. One to one, with real questions about what they want financially, professionally, and personally.
For more on how to structure those conversations, see our guide on what to focus on in sales 1:1s.
Once you understand individual motivation, you can start designing a programme. The principles below form what Steve Myers calls the building blocks of a scheme that consistently works.
The MATCH Framework for Sales Incentive Design
Steve Myers' approach to incentive design, drawn from 40 years and 3,000+ coaching engagements, maps to five principles. Apply all five and the scheme works. Miss any one and it starts to break down.
M: Motivation-first design
Start with the individual, not the programme structure. What does this rep care about? Financial goals, career progression, flexibility, recognition? Until you know the answer, any incentive you design is a guess.
A: Alignment with business outcomes
The behaviours you incentivise must match the outcomes you need. This sounds obvious until you realise how often schemes reward activity (calls made, meetings booked) when the business needs quality (qualified pipeline, closed revenue). Misalignment produces exactly the wrong results at scale.
T: Tailored to the individual
A blanket incentive package applied to an entire team is not a package, it is a policy. Steve Myers on recognition as an example:
"One man's meat is another man's poison. Bringing them up on stage in front of 1,200 people at the sales kick-off could be better than winning the lottery or the worst torture imaginable."
The same principle applies to every element of the scheme.
C: Control matters
Nobody performs well when they are being held accountable for things outside their control. Steve Myers is direct on this:
"Nobody likes being responsible for things they can't control. In my experience, team-based incentives do more damage than good."
Keep the incentive entirely within the individual's control. If hitting the target depends on a colleague's performance, the design is broken before it starts.
H: Honest measurement
Measure what you said you would measure, and do not change the rules mid-year. Steve Myers: "Be careful not to change the rules in the middle of the game, as it can be massively destabilising."
On how you measure success overall:
"I have a very simplistic view of this. It's measured by the performance of your salespeople and the retention of good talent."
Monetary vs Non-Monetary vs Hybrid: Which Sales Incentives Work Best?
Monetary incentives: cash bonuses and commission
Cash is the default. It is rarely the best option on its own.
Steve Myers:
"My belief is that cash bonuses have a very limited impact on behaviours and sales performance. It's hard to get emotionally attached to numbers on a screen. People get emotionally attached to the things money provides them."
The implication: if you want cash to motivate, connect it to what it enables. The rep who wants to pay off their mortgage by 40 is not motivated by a £5k bonus in the abstract. They are motivated by a specific conversation about what that bonus means in the context of that goal.
Profit sharing and stock options work well when the individual is motivated by long-term outcomes and has the temperament to wait for delayed rewards. For reps who want their incentive now, they land flat.
Non-monetary incentives: recognition and career advancement
Recognition works for some people and is genuinely awful for others. The stage moment that energises one rep humiliates another. Know your people.
Career advancement works well when the rep is motivated by the intellectual challenge of a new role, the financial uplift that comes with it, or the ability to provide more for their family. It often hits all three.
Hybrid incentives: the highest-performing model
Most people's goals are not purely financial or purely non-financial. They mix immediate and longer-term ambitions, personal and professional targets.
Steve Myers: "Our goals are hybrid, so providing a hybrid of financial and non-financial incentives that meets all those goals could be everybody's perfect idea."
A hybrid approach requires more design work upfront. It also produces the highest engagement, the best behaviours, and the strongest retention. That trade-off is straightforward.
Setting Targets That Reps Will Actually Chase
Achievable targets are not soft targets. They are targets designed to drive high performance without destroying motivation or trust.
Steve Myers on this:
"One thing that's really important is making sure the goal is actually attainable. If you set thresholds too high, your people won't get what they need."
Two things break this principle in practice. First, organisations that set targets too high to begin with, banking on reps trying even if they fall short. Second, and more damaging: organisations that raise targets for reps who overperform without raising OTE.
Steve Myers is blunt about the consequence:
"Salespeople are savvy. If they see you doing this, they'll leave."
How you communicate targets at the start of the year sets the tone for how reps receive them throughout it. That conversation deserves real thought and the right setting. See our guide on sales kickoff best practices for how to frame it.
Involving Your Team in Incentive Design
Getting individual buy-in is not optional. It is the mechanism by which the scheme works.
Involve each person in designing their own package. Not as a group exercise, not as a team vote. One to one, structured, and honest. Show them the connection between what they want and how the scheme can get them there.
Once you figure out what they want, show them how to get it.
What Transparency Looks Like in Practice
Sharing what everyone is getting can feel uncomfortable. In practice, reps focus on their own package.
Steve Myers:
"If I'm getting what I need, I don't really care what you're getting."
Transparency works when the scheme is designed fairly and people understand the reasoning behind individual differences. If each person's package is genuinely tailored to their goals and the business objectives, most reps will accept variation without resentment.
Frequently Asked Questions
What makes a sales incentive scheme effective?
An effective sales incentive scheme ties rewards to individual motivation rather than applying a blanket approach. It aligns the behaviours being incentivised with the outcomes the business needs, sets targets that are achievable and within each rep's control, and involves each person in designing their own package. Generic schemes applied to whole teams consistently underperform individually designed ones.
What incentive structures drive top sales team performance?
Individual and hybrid incentive structures consistently outperform team-based ones. Steve Myers, who has coached more than 3,000 salespeople across a 40-year career, recommends combining financial and non-financial rewards to meet each rep's immediate goals and longer-term ones. Cash alone rarely changes behaviour. The things cash enables are what motivate people.
Should I use monetary or non-monetary incentives for my sales team?
It depends on the individual. Cash bonuses have limited emotional pull in isolation. People get attached to what money enables, not the number itself. Non-monetary rewards like career advancement, flexibility, or recognition work well for some reps and land badly for others. A hybrid approach tailored to each person produces the best results in practice.
Do team-based sales incentives work?
Rarely. Salespeople resist being held accountable for outcomes outside their control, and team-based rewards create resentment when contribution is unequal. In most sales teams, 20% of reps generate 80% of revenue. Team incentives in that environment do more harm than good.
How do I find out what motivates each salesperson?
The only reliable method is a structured 1:1 conversation. Ask directly what they want to achieve financially, professionally, and personally, then build the incentive package around that. You cannot externally motivate anyone. You can only identify what already motivates them and deliver it consistently.
About MySalesCoach
MySalesCoach matches sales teams with expert 1:1 coaches to drive consistent performance.
If you want a coach who can help each of your reps understand what actually motivates them and build a programme around that, book a call to see how it works.
