The impact of launching sales comp plans late (and 5 ways to get ahead for 2025)

When was the last time you saw a new sales compensation plan roll out on time?  

If you just scoffed and thought “never”, you're not alone.

For most organizations—with the absence of connected planning and execution, late-in-year sales compensation plans have become a perpetual problem. And frankly, the norm.

As you'll know well, delays in one area of sales planning have a cascading, domino effect, and the impact on your timeline compounds. Before you know it, even if your new plan stands to be a gamechanger for the business, it's rolled out 40 days late.  

In this post, I'll discuss why new sales compensation plans are notorious for being delivered late, the damage this wreaks on your sales force's morale and your subsequent bottom line, and I'll cover specific recommendations for streamlining this year's planning process with an accelerated timeline in mind.

But first...

What's the culprit behind delayed comp plans?

Sales compensation plans are the result of complex work between people, processes, technology, and data. When these four components don't move in lockstep, the entire process unravels—resulting in late delivered plans disrupting your team and growth.

The main culprit? At Forma.ai we see it's primarily the disconnect between planning and execution.  

Everything informing sales performance management is inextricably linked, but all too often, critical elements operate in silos. I'll get into connected planning a little later on.  

But in the meantime, here's more on what I consider to be the four biggest factors slowing down today's rollouts:

1. Misaligned people

With so many stakeholders involved (sales leadership, finance, HR, operations, and sometimes even external consultants), each bringing their own priorities and opinions, it’s extremely easy for the compensation plan process to get bogged down.  

In fact, when we surveyed 100+ revenue and sales comp leaders, both agreed that stakeholder alignment was the biggest bottleneck to plans launching on time, followed closely by system limitations:  

It's all too common that different teams can be working in parallel without collaborating.

‍Ultimately, sales planning teams can be building models, while incentive compensation management (ICM) teams are configuring rules, and these siloed pieces then struggle to meld together in a cohesive plan down the line causing delays.

2. A lack of defined process

Beyond people working in silos, many organizations I speak with simply don’t have a standardized, repeatable process for creating and rolling out comp plans.  

This is especially problematic in high-turnover environments, where institutional knowledge isn’t passed down easily, leaving teams to reinvent the wheel every few months.  

Without a solid framework, every planning cycle starts from scratch.

3. Siloed, disconnected tech

In far too many organizations, sales planning and compensation management are still handled with several point solutions—often using Excel for modelling (underpinning the systems and holding things together like duct tape).  

Without a centralized source-of-truth to bring stakeholders, processes, and data inputs into alignment, the entire SPM process becomes fragmented, error-prone, and slow. Excel just isn't built to scale for the complexities of a modern sales org.  

What's more, the lack of integration across point solutions means that sales planning, quotas, and ICM data can’t “talk” together—further contributing to the delays.

When I think of the typical sales planning process, most organizations' C-suite collaborate to determine the overarching objectives (including the targets with finance), then layer on the go-to-market strategy. The channels are defined, as are the territories, then the quotas, then finalizing the comp plan metrics.  

The takeway? it's a linear workflow.

The implication is—if at any point changes arise and require redesign of any one component (territories, quotas, etc.), then, because of the interconnected nature of the data, you need to go all the way back to the beginning. This return to the start is made even harder if you're orchestrating the changes amid tech that doesn't connect corresponding values or dependent data together.

Overall, SPM is a cascading process full of dependencies, and today it's wildly inefficient as most of it happens in too many disjointed places.

4. An absence of standardized data and analytics

In a perfect world, all SPM decisions would be informed by clean, interconnected data. This ideal, real-time data would deliver insights used to continually (and iteratively) optimize the plans.  

But in reality, most businesses have a messy patchwork of disconnected data sources. No one has a standardized way to consistently analyze data year-over-year. Let alone the infinite resources like data engineers on hand to distill and deliver this data. With disconnected and incomplete data, too much decision-making ends up based on subjective, gut instinct rather than actionable insights.

With an absence of trusted insights, not only do SPM decisions take longer to make, but they're also subject to change pending whichever stakeholder can provide the strongest subjective argument. It's often the loudest, most emotionally confident person who becomes the default decision maker.

With something as sensitive as compensation, decision paralysis tends to set in and final choices for comp design are delayed until the absolute last moment.

The consequences of launching sales comp plans late

With each passing day a sales compensation plan remains in limbo, the consequences ripple through your sales org.  

At its core, a comp plan is intended to energize and guide your reps. It's their roadmap to not just meeting (and exceeding!) goals for company growth—but, importantly, driving the right behaviors.  

The major cost of a delay is that when reps are uncertain about the new comp plan (and thereby how to optimize earnings), the more they may resort to inefficient strategies. They may make decisions to optimize for end-of-year (pulling in deals at discounts), or delay closing until the comp plans are final (to optimize terms based on the new incentive structures).  

Delays can ultimately put customer experiences in jeopardy.

So let's get into exactly how you can get proactive.

4 ways to streamline sales planning and deliver your comp plans on time

It's best practice to roll out comp plans to reps as soon as possible in the fiscal year. This helps reps to go into SKO already knowing what the priorities are and excited to learn more. However, if there’s a drastic shift to comp plans that will align with larger shifting objectives, you'll want to roll out compensation changes during SKO. This lets you explain any new objectives first, then elaborate on how the new comp plans will reinforce them.

Having designed and implemented plans for fortune 500 companies, there are four actions I typically rely on to better streamline the sales comp plan design process and get new plans out earlier:

1. Assemble your “sales compensation planning” committee

Before (ideally) end of June, identify all key stakeholders in the plan design process. You'll want representation from sales leadership, finance, HR and people operations, sales operations, your incentive management specialists or analysts.

When you formalize a committee directly responsible for design, review, and approval of the comp plan, you reduce ambiguity, streamline communication, and ensure all voices have input and are heard at the right time, not at the last minute.  

The RACI framework is helpful for this. Who should be (R)esponsible, (A)ccountable,(C)onsulted, or (I)nformed for different elements of the plan? Who'll be responsible for creating the internal communication surrounding the plan choices? Who will lead SKO, etc.? This reduces ambiguity.  

Once you've identified the right people, define their roles.  

• Sales leadership and finance, for example, should take the lead on final approvals,  

• HR helps refine the employee experience of the plan

• Sales operations and ICM teams work making sure the plan is executable from a data and systems administration perspective

It’s important to establish a regular cadence of meetings. Meet at key points in the planning cycle—not just at the eleventh hour when things are already delayed.  

Also, map a work-back schedule of your planning cycle to understand the timeline you're adhering to together, allocating more time than you think might be necessary to account for action items between meetings. Account upfront for all of the core actions in each step, including the needed data collection, and things that typically take a long time, like determining the feasibility of desired comp plans in administration phases.

2. Assign a single “owner” to facilitate the new sales comp plan design process

Whether planning is run by someone in revenue or sales ops (or by sales leadership), it's about facilitating collaboration and collecting pivotal insights—not necessarily being 'rule maker'.  

Think of this person or team as the project manager, who creates the overarching execution plan, sets due dates, and assigns deliverables. They host the committee meetings and own the agenda.  

Week over week, they'll overcommunicate and keep things on track. It's also a good idea to have this person facilitate the Comp planning committee's alignment on how to measure sales comp effectiveness, ranking the importance of each KPI. This can help make decisions less subjective or negotiable.

The ultimate owner must be comfortable taking a highly operational, cross-functional, and data-driven role. They should also be comfortable getting vocal or calling out when things are taking too long from one step to another.

3. Standardize design processes and frameworks

Without a documented, standardized process each planning cycle can become a scramble, leading to missed deadlines.  

Implement processes and frameworks with clear steps and guidelines, so decisions made are not made from scratch annually. For example, establish specific criteria for your decisions and outline all respective stakeholders in your process in advance.    

• Besides the timeline for the entire process, set clear deadlines for when key milestones—like quota setting, sales crediting logic, modelling for new plan proposals, and final approvals—need to be completed.

• Ensure all stakeholders know what their contributions should look like. What insights or inputs are expected, by when?

• Identify the analyses or modeling templates you'll commit to annually for testing various plan designs or scenarios before rollout. You might always choose to do a potentialization exercise when balancing your territories, for example, or regularly run certain sales effectiveness analyses at a given time of year.  

Create a living, 'What-If' analysis document

One of the most persistent misconceptions in sales compensation is the idea that "simplicity" in a comp plan just means having an easy-to-understand commission rate structure or pay curve. But for the sales ops or comp team, the complexity is often far more upstream—especially when it comes to sales crediting logic.  

As sales orgs grow, with more geographic regions and specialized roles, the sales crediting process naturally becomes more complicated.

To navigate this complexity, we recommend a living "What-If" analysis document. It serves as a dynamic blueprint of various sales scenarios and forces you to find solutions for each one. Here’s how it helps:

1. During the plan design process, you'll have direct and meaningful discussions with sales leadership and the sellers themselves. By addressing potential "what-if" situations, such as complex sales crediting scenarios, you'll ensure that expectations around how the plan should work are crystal clear before rollout.

2. Once you have clarity, the living document becomes a reference point for the aspects you need to emphasize during the plan rollout. By preparing answers for specific challenges in advance, you can tailor your training and communication strategies to help sales teams understand how the plan will function in practice.

Continuously update the doc as new questions and edge cases arise.  

4. Standardize (and unify) the data and analytics you use to make decisions  

During the sales comp design process, you will see lots of folks advocating for different directions or decisions – often subjectively. So the more analytics you can use to run different scenarios and see potential outcomes, the better.  

Having a standard set of data you look at for plan design with shorten the time it takes to get alignment. But unfortunately, this is where traditional ICM or SPM solutions fall flat.  

Today, sales planning inputs (territories and quotas incentive compensation) are entirely siloed. Using ~4-9 different point solutions to plan and deploy your SPM strategy—each relying on its own set of data—there's no centralized view for sales planning accounting for interdependencies. This means you can't correlate variables between territories, quotas, and incentives to optimize SPM.  

For this many organizations are seeking to connect sales planning and incentive compensation, unifying all correlated data to understand how decisions related to sales compensation will impact the business. You need to see and manipulate data dynamically (where connected changes are reflected system-wide) and to stop working on each aspect of SPM in isolation.

This is exactly the problem we're solving wih Forma.ai.

We architected Forma.ai such that sales planning and incentive comp are connected.
Forma.ai is the only SPM platform that connects data and workflows across territories, quotas and incentive plans so you can instantly understand and account for the interplay of this data when any one variable is adjusted.

For instance, you can model new plans and see the impact that a territory change would have on quotas and rep earnings, without using Excel or duplicating the instance in a sandbox. Everything is within the platform and connected. Further, thanks to our unique, templated rule building. This vastly accelerates how quickly you can scale your administrative function for comp.

Create your sales comp 'center of excellence'

On a whole, creating a Sales Compensation Center of Excellence (COE) requires thoughtful structuring, strong governance, and effective communication.  

That said, not every team will have the resources to do this at scale right away. Here are some key, final takeaways to keep in mind to make your process smoother:

Tailor your COE structure

As Elizabeth Walgram, Senior Director of Sales Compensation at Siemens mentioned in our discussion on this topic, COEs can either be focused on strategy and design, or can encompass broader responsibilities including administration.  
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The key is understanding how much responsibility the COE should take on based on the company’s complexity. Ultimately, tailor your COE structure to your organization's needs—whether it's a lean team focused on strategic design or a more comprehensive team managing all aspects of compensation.

Balance governance with flexibility

Any organization’s COE must strike a balance between being prescriptive and allowing flexibility.

In 2025, work to establish firm guidelines for compensation plans (e.g., max of three metrics, minimum 20% metric weight) while allowing flexibility to adapt to local market conditions.

Actively seek ways to become increasingly data driven

As you plan for 2025, determine how you might collect and use data differently this year to inform compensation strategies and ensure that metrics are trackable and reliable. This might be a commitment to data accuracy, or determining how you’ll unify data going forward. All to minimize disputes and increase transparency.

Over-communicate to drive change

To ensure buy-in and alignment across departments and regions, strong communication around how your centre of excellence operates, your mandate, and what you aim to deliver will help overcome any resistance to change

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