The right sales incentive scheme is a must for any business that relies on sales people. Finding the right scheme means rewarding employees in ways that encourage them to achieve more and sell more. You might opt for a commission based scheme, or reward yearly bonus pay based on performance, for example.
For some businesses, sales people work in teams rather than alone. In some cases, if you are selling a more complex product to another business, you’ll need more than one sales person to close the deal. For example, a member of your main sales team selling a piece of software might need the help of a technical sales support person. If you have sales people working together or in teams in your business, you might have wondered whether a team based commission scheme can work for you. Or perhaps you have a team based commission scheme that’s not quite working as you hoped.
Let’s take a look at how team commissions work, how to know if they’re right for your business, and how to implement them for the best results.
3 Key Takeaways
- Team incentives work best when your sales process is naturally collaborative, not forced into teamwork.
- They can drive higher performance and morale—but also create friction if not structured properly.
- Execution matters more than design—poor implementation kills even the best incentive plans.
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How To Apply A Team Incentive
There are two main ways of applying a team commission scheme:
- Within a single sales team and split equally between its members regardless of personal performance
- Within a single sales team based on direct involvement with a sale
In the first example, you might have a team of people covering one specific geographic territory. Say for example you have a team of three people who cover sales of your product in the UK. When calculating team commission, you look at the performance of the team as a whole. The exact breakdown of who sold what or who holds the most customer accounts isn’t important; if the team as a whole meets its targets, all three team members get the team commission.
In the second example, if your team has the opportunity to make a large sale to a specific company, then after the sale the commission will be split between each person who was directly involved in the sale.
However you decide to apply a team incentive, there are pros and cons.
Pros Of Using Team Incentives
Using team incentives offers some distinct advantages for your business:
- You don’t have to rely on one sales person’s abilities
- The team can absorb underperformance and protect revenue
- You foster a strong team spirit, boosting productivity and morale
- Shared goals act as a powerful motivator
- Teams can target bigger deals and higher outcomes than individuals
Cons Of Using Team Incentives
The main problems with using team incentives are:
- They can feel counter-intuitive to the competitive nature of sales
- They go against the traditional “individual target” model
- They are difficult to implement without an existing team culture
- Competition between teams can create friction or even sabotage
- Salespeople may resist losing control over their own earnings
Are Team Incentives Right For Your Business?
There’s no doubt that team incentives aren’t right for every business. They are most likely to work if your business meets one or both of these criteria:
- Your business already relies on teamwork as a core principle
- Your sales outcomes depend on multiple people collaborating to close deals
If your product or service naturally requires a team to sell, you already have the foundation for team incentives to work.
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How To Implement A Team Incentive For Maximum Success
So you’ve decided to implement a team incentive – what next?
- Start with a clear and detailed plan covering goals, rewards, and payment structures
- Define ownership of the program clearly so teams know where to go
- Align incentives directly with business objectives
- Invest in training to strengthen teamwork
- Address low performance proactively, as it impacts everyone
- Introduce regular reviews and coaching
- Don’t mix individual and team incentives—people will default to individual rewards
- Continuously gather feedback and adjust
Conclusion
Team incentives aren’t for everybody, but if your team has a real spirit of collaboration, a team incentive scheme can bring out the best in your people and create a more productive, aligned, and growth-driven culture.
FAQ
1. When should I use team incentives instead of individual commissions?
When deals require multiple contributors and collaboration is essential to closing business.
2. What is the biggest risk with team-based commissions?
Free-riding and internal friction if accountability isn’t clearly defined.
3. Can I combine team and individual incentives?
You can—but in practice, individual incentives will dominate behavior, so be very careful with the balance.
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