Monday.com guide explains how commission plans shape sales behavior

Monday.com treats commission plans as behavior design, not payroll admin. A sales team does not just respond to what it is paid, it responds to what the plan rewards, what it ignores, and what it quietly punishes. That is why the company’s guide pushes leaders to map compensation carefully, because a sloppy plan can drive sandbagging, fast-close thinking, and morale problems long before revenue numbers show the damage.

Why commission plans shape more than pay

At its simplest, a commission plan is an outline for commission-based pay, usually built as base salary plus a variable component. That base-plus-variable structure matters because it gives leaders room to reward performance without turning the job into a pure gamble. Monday.com’s guide draws a hard line against commission-only arrangements and draw-against-commission models, describing them as unethical and a recipe for burnout and poor morale.

That warning is more than a policy preference. It reflects how sales teams actually behave when incentives are too narrow. If the only thing that matters is a booked logo, reps will naturally chase deals that close fastest, even if the fit is weak or the customer health story is fragile. If the plan also rewards retention, expansion quality, and a clean handoff to customer success, the behavior shifts toward longer-term account value.

What monday.com’s own business tells you about the stakes

The company’s own operating results show why this kind of design matters in a SaaS business. Monday.com reported fourth-quarter 2024 revenue of $268.0 million, said full-year 2024 revenue grew 32% year over year, and said its net dollar retention rate increased to 112%. Management called 2024 a remarkable year driven by product innovation and go-to-market execution, and the company said more than 250,000 customers worldwide use its platform.

Those numbers matter because they show how much growth depends on more than new logos. A strong net dollar retention rate suggests the company is not just winning customers, it is keeping and expanding them. If a commission plan pushes reps to sell any deal at any cost, the plan can undermine the very kind of growth that makes the business durable.

The company’s SEC filing reinforces that point from a cost perspective. Monday.com says sales and marketing expenses consist primarily of compensation expenses for employees, share-based compensation, marketing and advertising, channel partners’ commissions, and allocated overhead costs. In other words, incentive design is not a side note buried in HR policy, it is part of a material operating line that affects how the business spends to grow.

What bad plan design does to a sales team

For managers, the biggest risk is that comp problems often look like performance problems until they become retention problems. Pay and advancement are among the biggest reasons people leave jobs, so a commission plan can either stabilize a team or accelerate turnover. When reps feel the plan is unfair, too volatile, or disconnected from how the company actually wins, they start looking elsewhere.

Bad design also changes manager behavior. Forecast calls get less honest when reps think admitting risk will hurt their pay more than salvaging the deal will help. Quota conversations become more political when the plan rewards the end result but not the quality of the pipeline or the health of the account.

A weak structure can create several predictable side effects:

• Reps may sandbag deals to land them in a later period if that improves payout timing.
• Managers may pressure teams toward short-term closes instead of durable account fit.
• High performers may disengage if the plan caps upside or ignores real contribution.
• Customer success and product teams may feel left out if the plan only values signed contracts.

That is why the article’s base-plus-variable framing is so important. It is not only about paying people fairly. It is about telling the sales organization what kind of growth the company wants and how much it values sustainable execution.

What outside benchmarks say about the market

External research backs up the idea that sales comp remains a live management issue, not a solved one. Alexander Group’s 2024 sales compensation survey said employee turnover was expected to fall from 14% in 2022 to 10% in 2024 in its biotech and pharmaceutical sample. Its financial-services summary said turnover was down to 9% and that roughly two-thirds of companies were using more pay-for-performance in their plans.

That shift matters because it suggests companies are still experimenting with how aggressively to tie pay to results. More pay-for-performance can sharpen accountability, but it also raises the stakes for how the plan is built. If the metrics are wrong, the whole system can reward the wrong behavior more efficiently.

Harvard Business Review has made the same broader point in a different way. In 2024, it said many companies’ sales quotas and compensation structures have not evolved to keep up with the business environment. It also noted earlier research showing that less than 9% of U.S. companies believed their sales compensation plan consistently drives precise selling behavior, and that studies show commission caps hurt sales.

That combination is a useful reminder for any SaaS company with a complex go-to-market motion. The market changes, the customer journey changes, and the selling process changes, but a static comp plan can stay frozen long after it stops matching reality.

How to build a plan that reinforces the right behavior

For monday.com-style teams, the best commission plans do three things at once: they reward performance, they protect team health, and they fit the business model. That means thinking beyond closed-won revenue and asking which behaviors actually lead to healthy growth over time. The more the company relies on collaboration across sales, product, and customer success, the more the plan has to reinforce that cooperation.

A stronger approach usually starts with a few basics:

For a global SaaS company built around workflow software and AI-enabled execution, the lesson is bigger than compensation mechanics. The plan tells reps what kind of customer relationship matters, what kind of risk is acceptable, and whether the company values durable growth or just the next quarter’s number. That is why commission design stays central: it is one of the clearest signals a company sends about what it really wants from its sales force.