SiriusDecisions analyst Joe Galvin accurately observed that salespeople will respond to two things: "what they get paid for and what their manager makes important." What managers make important typically involves process and performance. And in the arsenal of sales performance tools, nothing has more power to steer sales behavior and drive superior sales performance than a strategically designed and well-managed sales compensation plan.

So what does it take to get sales compensation right? You start by designing plans that directly align individual and corporate goals. Then you manage the compensation process by providing transparency and visibility in such a way that your compensation system is viewed as a trusted sales performance tool, rather than an erroneous, back-office commission calculation application.

What's the impact of a $40 million overage on the commission expense budget? If yours is one of the largest technology companies in the world, it means a big "miss" of your earnings forecast and a 22-percent drop in your stock price. This is precisely what happened last year at one company, whose stock is still recovering.

How does a multibillion-dollar company paying more than $150 million in sales commissions a year miss the budget by almost 30 percent? You would hope it means the company exceeded its revenue quotas, but, unfortunately, that wasn't the case. The reality is that a complex sales coverage model, exacerbated by multiple acquisitions, created an average of more than 50 people being paid for every transaction.

This simple, yet financially painful mistake, could have been prevented if the company had first modeled its commission plans and measured the results against multiple attainment scenarios.

Doing this would have allowed the company's executives to evaluate a myriad of changes and options, such as changes to quotas, commission rates, territories and organizational structures, that would have kept it on the straight and narrow.