Your Sales Comp Plan Has a Threshold Because Your Boss Doesn't Trust You
Payment from dollar one should be standard, but most ANZ tech companies still gate your commission behind arbitrary thresholds that have nothing to do with performance.
Here's a truth most sales leaders won't admit: if your comp plan has a threshold before you start earning commission, it's because they think you're going to sandbag.
The logic is simple. Pay from dollar one—you earn commission on every deal you close, no minimum required. Add a threshold—say, 50% of quota—and suddenly you're working for free until you hit that mark. The company calls it "performance management." What it actually means is they don't trust their own hiring or their own quotas.
Recent comp research confirms what every AE already knows: threshold-based plans create perverse incentives. Hit 49% of quota? You earn nothing extra. Hit 51%? Congratulations, here's your cut. The result is predictable: reps push deals across month-end that should close next quarter, customers get burned by rushed implementations, and your Q2 pipeline is a wasteland because you front-loaded everything to clear the threshold.
Compare this to commission clawbacks, which we've covered before. At least clawbacks admit deals can fall through. Thresholds assume you're lazy until proven otherwise.
The worst part? Thresholds don't even protect the company. If quota is set correctly and territories are balanced, paying from dollar one costs the business nothing extra—you're still capped by how much you can physically sell. But if quota is wrong or territories are a mess, the threshold just masks the problem while punishing reps for leadership failures.
ANZ tech companies love to talk about "transparency" and "alignment," then bury thresholds in comp plans and act surprised when trust evaporates. You want reps to care about every deal? Pay them for every deal. You want predictable behaviour? Make the incentive predictable.
Next time you're reviewing an offer, ask about thresholds. If they have one, ask why. The answer will tell you everything about whether they trust their sales org or just hope it works out.
Worth noting: If your current plan has a threshold and you're consistently clearing it by 20%+, you're being undertaxed on quota. That's a different conversation.