Compensation and quotas

Pay for work your outbound motion can use. A plan should make the path from activity to useful pipeline clear and give the person doing the work enough control to trust the payout. Avoid rewarding an easy-to-count event that says little about progress or tying pay to an outcome controlled by people later in the deal. Your compensation plan tells the field what to care about.¹ Choose the commissionable outcome before the metric: start with an outcome the SDR can meaningfully influence and the next team can use.²

Start with the handoff

Start at the handoff. Write down what this role can cause, what the next team must receive, and which later events sit outside the role's control. That sets a clear boundary before you set the payout.

SDRs focus on a territory or market vertical where they canvass and qualify prospects.³ They initiate conversations, get decision-makers to act, handle objections, and close by scheduling meetings with Account Executives, who finalize the sales.⁴ The role does not make sales.⁵ If inbound and cold outbound sit in separate roles, write separate ownership and measures. Larger companies split those forms of coverage between two distinct roles.⁶

Choose the commissionable outcome

Choose a result the person can influence and the next team can use. Define the result, the proof required, and the payment calculation before setting the amount.

An SDR commission structure defines the outcomes that earn variable pay, the evidence required, and how the outcome becomes a payment amount.⁷ Reward qualified pipeline rather than only meetings when the handoff depends on quality.⁸ A held, qualified meeting or an accepted opportunity can serve as the commissionable outcome.⁹

Write the acceptance rule beside the outcome. Specify fit, qualification, need, attendance, and acceptance. Move on once someone outside the plan can tell whether a payout is earned without asking you.

Set base and variable

Set the pay mix after you know what earns variable pay. Decide the fixed and variable portions before selecting the indicators for variable remuneration.¹⁰ There is no single correct split,¹¹ and company objectives should drive the distribution.¹² A common rule puts fixed salary at 70% to 80% of the package¹³ and variable pay at 20% to 30%.¹⁴ The fit also depends on company stage, goals, and current setup.¹⁵

Let variable pay reward work the people doing it enjoy.¹⁶ The plan should make the people paid by it feel that the incentives are aligned.¹⁷ Put the guaranteed amount and the earning path in plain language so the person can understand the deal before accepting it.

Add quality controls

Quality controls keep volume from becoming the whole game. Choose modifiers that point to the objective you are pursuing, then explain how each one changes the payout.

Align the incentive structure with the objective being pursued.¹⁸ Reward larger deal size and decision-maker involvement in the plan.^{19, 20} Encourage accounts with larger end-user teams when broader impact matters.²¹ Quantity metrics can include the number of opportunities or meeting volume.²²

Use these measures to shape the work you want repeated. Keep the package competitive enough to attract high-potential SDRs.²³ Build it to reward consistent performance and encourage long-term commitment.²⁴

A worked plan

Use a worked plan to test whether your definitions hold up under real handoffs. Keep the structure as an example and set the targets from your own motion.

A plan described in one example paid variable compensation through a Qualified Opportunity plan.²⁵ The team quota was nine qualified opportunities per quarter.²⁶ Those opportunities were divided between five Stage One opportunities and four Stage Two opportunities.²⁷

Stage One meant a prospect had a meeting booked and qualified to buy based on budget, need, integration capability, and decision-maker buy-in.²⁸ Stage Two included the Stage One requirements plus another meeting booked to move the conversation forward.²⁹

To adapt this structure, define the initial paid outcome, list its evidence, and add a higher-quality outcome only when the next meeting changes the handoff. Keep each stage distinct in the plan and in the quota review.

Publish and review

A plan fails in practice when people need a private explanation to understand it. Put the definitions, evidence, calculation, and review rule in the same document.

Handle compensation, quotas, and performance management with careful transparency.³⁰ People immediately dissect compensation and quota to find how they can reach the target.³¹ An SDR compensation plan explicitly defines what the company wants its SDRs to do.³² Reevaluate the incentive plan when the behavior it produces stops matching the objective.³³

Move from draft to rollout when the payout can be calculated from the written rules. After rollout, inspect the handoff quality and the behavior the plan produces before changing the metric.

What not to do

These mistakes create plans that reward motion without giving the next team something usable.

• Do not make cold-call volume the commissionable outcome. Older models put the metric within the rep's control and produced no real benefit to the company.³⁴
• Do not tie SDR pay to revenue when much of the outbound process sits outside the SDR's control.³⁵
• Do not collapse booked appointments, SQLs, and closed-won deals into one payout event.³⁶
• Do not pay for a booked meeting before checking attendance, fit, and qualification.³⁷
• Do not treat a held meeting as qualified until the prospect and need meet the agreed criteria.³⁸
• Most companies treat SDR compensation as an afterthought.³⁹ Build it deliberately.