The Threshold Game: Why Your Sales Comp Plan Is About to Get Simpler (Or You're Getting Screwed)
Payment thresholds in commission plans are dying, and if your company won't kill them, talented reps will kill the company instead.
The threshold conversation is happening in every sales org right now, and most CROs are having the wrong version of it.
Here's what's changing: The old model where you need to hit 70% of quota before commission kicks in? Dead. The "first dollar" approach—where you earn from sale one—is becoming table stakes for companies that want to keep their best reps.
This isn't about being nice. It's about basic incentive design.
When you tell an AE they earn nothing until they hit an arbitrary threshold, you're creating a perverse incentive structure. Miss 70% by one deal? You worked three months for base salary while the company banked your pipeline. Hit 71%? Suddenly that same work generates commission. The math makes no sense, and reps know it.
The ANZ reality check:
Most Series B+ startups here still run threshold-based plans because "that's how enterprise software comp works." Except the companies pulling top talent from SafetyCulture, Canva, and Atlassian? They're offering first-dollar plans with transparent accelerators.
Your threshold isn't protecting the company from bad hires. It's protecting bad forecasting and lazy quota-setting. If you can't trust a rep to close enough deals to justify their commission, you hired wrong or set quota wrong. The threshold just papers over that mistake.
What this means for you:
If you're negotiating an offer and the comp plan has a threshold above 50%, ask why. Not "is this normal" (it is), but "what's the strategic reason." If they cite "industry standard" or "protecting the business," you're looking at a comp plan designed by people who don't trust their own hiring or their quota model.
First-dollar plans with solid accelerators (120%+ paying 1.5x or better) are the new baseline for competitive offers. Anything else is negotiable leverage.
The threshold is dying because the best reps won't accept being penalized for the company's planning failures. If your org hasn't figured that out yet, start asking why—or start asking elsewhere.
The tell: Companies moving to first-dollar aren't doing it out of generosity. They're doing it because their best AEs threatened to walk, and replacing enterprise talent in this market costs more than fixing the comp plan.
Your move.