using the same example from above: A rep closes a $50,000 deal in March and the customer cancels in May. The rep adheres to a tiered commission structure: 5% commission until they hit $450,000, 10% for additional deals that quarter.
Rather than impact their Q2 quota attainment, this clawback method retroactively reduces their Q1 quota attainment by $50,000. So, let’s say the rep exceeded their quota in Q1 and afghanistan phone number list then closed one additional deal, for which they earned 10% commission. But, with the clawback implemented, the rep’s Q1 quota attainment drops below $450K so they owe the company the additional 5% they earned on that last deal, since they (retroactively) didn’t reach the second tier of their commission plan.
You can probably guess the biggest drawback of this approach: It’s complicated. Not only does it put a strain on finance teams, but it’s difficult to communicate to sales reps. No matter how transparent you are, reps might feel betrayed to learn that their accomplishment of exceeding quota in the previous quarter is being taken away from them.