Tiering can motivate employees to increase performance, but thresholds can also create pressure to make inappropriate sales just to reach the next payout level. If you use tiers, make them reasonable, attainable, and balanced with quality measures. Avoid sharp cliffs where one additional transaction produces a disproportionately large payout, particularly when that transaction could create pressure to sell something a customer does not need.

Every incentive creates some potential conflict between the employee’s financial interest and the customer’s interest. Identify those conflicts before launch and establish controls to mitigate, monitor, and document them. Review whether employees are recommending products differently based on compensation, whether certain products are disproportionately represented, and whether customer complaints or cancellations increase after incentive changes.

A conflict that is visible in the data is an opportunity to redesign the program before it becomes a larger problem.

Employees should understand exactly how their incentives are calculated and what behaviors can reduce or eliminate their payout. At the same time, the organization should be able to demonstrate why the program was designed, how risks were assessed, and how compliance is monitored. Maintain clear documentation of incentive structures, approvals, performance metrics, exceptions, and changes. If regulators or auditors ask how the program works, the answer should be readily available.

Incentives work within a broader employee experience. Communicate goals, performance expectations, and changes clearly, and give employees visibility into their progress. Managers play an especially important role in reinforcing responsible sales behaviors over short-term pressure. If managers communicate that hitting a number matters more than serving the customer, no compliance disclaimer will fix the culture.