Sales quotas decide the payout, and targets set the goal.
April 27, 2023
Pulkit Agarwal
Pulkit Agarwal
Key Insights
In SalesGlobe's 2026 research, about 66% of reps hit quota when quotas reached them before the year started. When quotas arrived at the end of month three, about 41% did. I see that gap every April, when a field force starts the year on the previous year's number while the new quotas are still in review.
Sales quotas are also the part of the plan many companies find hardest. In the Alexander Group's 2025-26 survey, 57% said they struggle to set accurate quotas. Part of the problem is language: a target is a goal for the business, while a quota is the number a payout is calculated against.
Quotas work when they are allocated from more than the previous year's sales, tested so that around six in ten reps can reach them, costed before launch and shared before 1 April. Mid-year changes should be rare, dated and recorded.
A question worth asking the head of sales planning this week: on what date will every rep have next year's quota in writing?
In SalesGlobe's 2026 research, about 66% of reps hit quota when quotas reached them before the year started. When quotas arrived at the end of month three, about 41% did. I see that gap every April, when a field force starts the year on the previous year's number while the new quotas are still in review.
Sales quotas are also the part of the plan many companies find hardest. In the Alexander Group's 2025-26 survey, 57% said they struggle to set accurate quotas. Part of the problem is language: a target is a goal for the business, while a quota is the number a payout is calculated against.
Quotas work when they are allocated from more than the previous year's sales, tested so that around six in ten reps can reach them, costed before launch and shared before 1 April. Mid-year changes should be rare, dated and recorded.
A question worth asking the head of sales planning this week: on what date will every rep have next year's quota in writing?
Timing shows up in attainment. SalesGlobe found that when quotas reached reps before the year started, about 66% hit quota. When quotas arrived at the end of month three, about 41% did.
Sources: SalesGlobe, Sales Compensation: The Big Issues of 2026 and The 2026 State of Sales Compensation, September 2026, sample not disclosed · Alexander Group, 2025-26 Sales Compensation Trends Survey research briefing
A quota that reaches the field late costs attainment, and many companies say they find quotas hard to set at all.
The difference between a sales target and a sales quota
A target and a quota are often used as one word. They do different jobs, and a plan that mixes them pays the wrong people.
Sales target and sales quota compared
Point of difference
Sales target
Sales quota
What it is
The goal for the company, region or product
The share of that goal assigned to one payee
Who owns it
Leadership and finance
Sales operations, with the line manager
What it is used for
Planning, budgets and investor guidance
Calculating the incentive
How hard it should be
Can carry stretch the business is willing to miss
Set so a planned share of reps can reach it
When it can change
When the business plan changes
Rarely, with a dated record and notice
The sum of quotas is usually set slightly above the target, so the company reaches its goal even when some territories fall short. The gap between the two is a planning decision, and it belongs in writing.
A target is a goal for the business, and a quota is the number a payout is calculated against.
What a healthy quota distribution looks like
A quota set too high for the majority of reps stops working as an incentive. Alexander Group guidance suggests that around 60% of reps should reach plan or better. SalesGlobe puts the healthy range at 50% to 70% of sellers at or above quota, against a 2026 average of about 52%.
SalesGlobe, 2026. Reps who receive quotas before the year starts reach them far more often.
The research on effort explains why. Locke and Latham's review of goal-setting studies found that specific, difficult goals produced higher performance than vague ones, up to the limits of ability. Chung, Steenburgh and Sudhir found that salespeople tend to give up when they are far from a quota, and do not slow down once they reach it.
Sources: Alexander Group, How to Analyze Your Quota Distributions · SalesGlobe, 2026 · Locke and Latham, American Psychologist, 2002 · Chung, Steenburgh and Sudhir, Marketing Science, 2014
When about six in ten reps can reach quota, the plan pays for effort, and the incentive budget lands where it was planned.
How to set sales quotas for the next financial year
Seven steps set quotas that the field can reach and finance can fund.
Allocate from more than the previous year. Blend each territory's history with its market potential and capacity, so a strong year does not simply become a higher bar.
Distribute before the year starts. In India that means before 1 April for a financial-year plan, with every rep's quota in writing.
Test the distribution. Model the share of reps expected to reach quota, and adjust until it sits near 60%.
Publish with a worked example. Show each rep the quota, the slab table and what one more sale earns, in rupees.
Limit mid-year changes. Alexander Group guidance keeps mid-year quota changes to no more than 5% of sellers. Record each one as a mid-year incentive plan change, with its reason and date.
Read attainment every quarter. Compare the distribution with the plan, and read the payout against what it bought using return on incentives paid.
If more than seven in ten reps beat quota, or fewer than four in ten reach it, the quotas are deciding the payout more than the selling is.
Quotas set from more than history, distributed before the year and tested for attainment give an incentive plan a fair starting line.
How Kennect helps set and track sales quotas
In the sales teams we work with, quotas are often set in one workbook and shared in another. So we hold targets and quotas in the same engine that calculates the payout.
Setting quotas. Quotas are set by role, territory and product and disseminated to every payee from one place. Admins can define a quota measure by describing it in a prompt, using our AI KPI builder, live today.
What the rep sees. Each rep sees the quota, achievement and current earning on every parameter, the slab reached and a what-if simulator for further business. AI-powered nudges tell a rep when the next slab is within reach, and an AI summary explains what they have earned.
What the manager and leadership see. Managers see their team's attainment in one view, with an AI coaching summary of where each person stands. Generative scenario modeling, expected between January and March 2027, will let a plan designer describe a quota change and see its effect on payouts and cost.
In one Kennect deployment of roughly 8,000 representatives, the share of the field earning an incentive rose from 34% to 76%.
Source: Kennect claim register · same cohort, roughly 8,000 representatives · the base of earners widened, and the size of each earning is a separate measure
Quotas held in the engine that pays them can be tested, shared and tracked as one record.
What this means for next year's quotas
Quota-setting season for a financial-year plan starts in January. The companies that separate the target from the quota, test the attainment distribution and share quotas before 1 April give their field a number it can plan a year around.
Quotas set from more than history, shared before the year and tested for attainment give the field a fair starting line.
57% of companies struggle to set accurate quotas. Reps who receive quotas before the year starts reach them far more often than reps who wait three months.
See how Kennect sets, shares and tracks quotas in the engine that pays them.
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