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Sales Comp Guy

Preventing and Resolving Commission Disputes

183:906269490 • June 13, 2023

Managing sales commissions and sales people.

Commission disputes are a costly occurrence on any sales team. Not only do they corrupt trust and morale, but they are quite literally expensive.


One Glassdoor study found that the average U.S. employer spends $4,000 and 42 days to hire a new employee. In my experience, that’s a very low estimate! On top of that, the average length of tenure for sales reps is 18 months. And it takes an average of 3.2 months to ramp up a salesperson to full productivity. 


The point of all of this is that investing the time and money into keeping your salespeople content is well worth the effort. One way to maintain satisfaction is accuracy and trust in pay through the prevention and resolution of commission disputes.


Preventing Commission Disputes

Most commission disputes are preventable and occur as a result of poor communication, processes, and plan design. Unfortunately, by the time sales leaders find themselves in the midst of a dispute, it’s well after they’ve made some initial plan mistakes.


The good news is sales compensation design should be regularly reviewed and updated to keep up with changes in the organization, so if you’ve experienced commission disputes, simply learn from them and apply those learnings along with these tips to the next update to your comp plan. 


  1. Make sure your compensation plan is documented and accessible to everyone on your team. Creating a central, digital location where everyone can refer to the plan will help your team stay informed and will help you in the event of a dispute.
  2. Assess all your compensation design components for fairness and biases.
  3. Understand that there will always be some level of misunderstanding, hurt feelings, and personal issues beyond your control, and prepare yourself for managing those unforeseen circumstances. Mistakes will happen. Plan accordingly.
  4. Convey clear expectations to your team about professional communication and how to address disputes and discrepancies. It is important to practice conversations about compensation. (Crucial Conversations is excellent on this subject)

Resolving Commission Disputes

If you’ve reached the unfortunate position of dealing with a commission dispute, here are some tips on resolving the dispute. These are early intervention tips. It’s important to note that I am not a lawyer or a legal expert, so if the dispute moves beyond your organization’s jurisdiction, you’ll need to consult your organization’s leaders and/or legal team.

The best practice is to establish a process to address disputes to ease the tension and emotion associated with the event. If you don’t have a process, these steps will assist within those potentially heated moments of claims and accusations.


  1. Don’t take it personally. Ensure to maintain a level head and calm voice, using professional language and not adding any further fuel to the fire.
  2. Listen. Genuinely seek to understand rather than looking for ways to defend.
  3. Don’t seek immediate resolution. Seek understanding. A good rule of thumb is to not make decisions when you’re in a high emotional state.
  4. Refer to the facts of the situation. Utilize the processes and documentation that exist. That may include policies, contracts, and the sales compensation plan.
  5. Acknowledge the dispute (or request) and the emotions behind it. Many times, what is fair is in conflict with current business practices. Those are the roots of change and should not be ignored.
  6. Respond and own the resolution.


Sometimes commission disputes can show flaws in your incentive plan, documentation, or processes. If this occurs, remember that it’s never too late to improve how you do things. Take responsibility for the discrepancy and make meaningful changes.


Remember, employees don’t expect perfection, but they do expect honesty, integrity, and respect. Rise to that occasion!


By 183:906269490 December 16, 2024
In my first Best Practices post, I talked about the importance of knowing what you can pay for your sales roles before worrying about what the market is saying. In my second post, I covered ways to utilize culture in a sales organization . The following Best Practice in sales compensation involves job content. Job content plays several roles in your compensation plan: 1. It gives your salesperson a guide to what success looks like in their role. 2. It gives you a guide to evaluating the performance of your salesperson. 3. It rationalizes differing levels of variable pay outcomes for varying performance levels. 4. It provides your organization with the structure needed to comply with any reporting, pay transparency, or other regulations. Hopefully, that’s enough to convince you of the importance of taking the time to define your new roles and revisit the definition of your existing roles. Now, here’s how job content actually does those things. Defining the job The first role of job content is to define the who, what, where, when, and how of the function. It can be tempting to borrow a job description from LinkedIn, Glassdoor, etc., with the assumption that the content will be similar enough to fit your needs. However, the way a specific role performs is unique to the organization it’s acting in, which is why it’s important to take the time to define the job from scratch. Here are the questions you should be answering in your job content: What does the person need to do on a daily basis? How does this individual pursue sales, and in what segment or with what type of customer? Where should they focus their time and attention when building a pipeline of deals? Who should they be interfacing with, both internally and externally? When do they engage with customers and/or prospects? What portion of the sales process do they own or support? How do they interface with and influence decision-makers? Now, even though I said to write your job description from scratch, that doesn’t mean this is the time or place to get too creative. Job seekers are going to be searching by job title or category, so it’s essential to stick to the common vernacular regarding industry jargon and expected job titles. Job Description: A Byproduct of Job Content Another positive outcome of creating job content for your roles is that you will have generated much of the information needed for a job description if or when you’re ready to hire. Information such as: Job duties and responsibilities that clarify the type of work and engagement with customers. Qualifications/Requirements that are both minimum and desired. Those include education, knowledge, skills, capabilities, and competencies. Performance measures of the role include items like achieving sales targets, new logo acquisition, development of pipeline, accuracy in forecasting, etc. With all of this information on file, it will not only be easier for you to prepare to hire for the roles you want, but it will also be easier to evaluate existing employees in those roles. Beyond all of that, you’ll be well prepared for competitive market research and establishing your variable pay program. I’ll be posting more best practices on the blog, but if you’re anxious to dive deeper into the subject of sales compensation, you can grab a copy of my book Starting Simple: Sales Compensation and consider working through the companion Workbook to build a sales compensation plan from scratch.
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