Quota Allocation

Top-Down Quota Distribution

The Company's annual revenue plan of $[AMOUNT] shall be allocated to regions based on historical revenue contribution, territory potential, and strategic growth priority. Regional quotas shall be further distributed to districts and individual Participants by the District Manager in consultation with Sales Operations. Individual quotas shall be communicated in writing within [X] business days of fiscal year start. The sum of individual quotas within a region shall not exceed [X]% of the regional target.

Quota Adjustment Process

Individual quotas may be adjusted during the plan year under the following circumstances: (a) territory realignment that changes the Participant's addressable market by >15%; (b) material product launch or discontinuation affecting >20% of the quota base; (c) mid-year hire start (prorated quota based on days remaining). Adjustments require District Manager submission, Regional VP approval, and Sales Operations validation. Retroactive adjustments to prior-period attainment are not permitted.

Quota Coverage Ratio Policy

Total allocated quotas across all Participants shall fall within 100-110% of the Company's revenue plan (the 'coverage ratio'). Coverage ratios below 100% indicate under-capacity and must be addressed through hiring or territory consolidation. Coverage ratios above 115% indicate over-allocation and correlate with reduced morale and elevated voluntary attrition. Sales Operations shall report coverage ratios quarterly to the Compensation Committee.

Territory-Weighted Quota Allocation

// Blend of top-down and bottom-up
COMPANY_TARGET = $100,000,000
REGION_SHARE = HISTORICAL_PCT * 0.60 + POTENTIAL_PCT * 0.40
REGION_QUOTA = COMPANY_TARGET * REGION_SHARE

// Individual allocation within region
REP_QUOTA = REGION_QUOTA * (REP_POTENTIAL / SUM(ALL_REP_POTENTIALS))

// Coverage check
COVERAGE_RATIO = SUM(ALL_REP_QUOTAS) / COMPANY_TARGET
// Target: 1.00 to 1.10

Quota Achievability Check

// Validate quota is achievable using historical data
HIST_ATTAINMENT_MEAN = AVG(PRIOR_3YR_ATTAINMENT)
HIST_ATTAINMENT_STDEV = STDEV(PRIOR_3YR_ATTAINMENT)

// Target: 55-65% of reps at or above 100%
PCT_AT_QUOTA = NORMDIST(1.0, HIST_MEAN, HIST_STDEV, TRUE)

IF PCT_AT_QUOTA < 0.45: FLAG "Quotas too aggressive — fewer than 45% will hit"
IF PCT_AT_QUOTA > 0.75: FLAG "Quotas too easy — over 75% hitting, leaving upside uncaptured"

Copy & paste into your AI assistant

You are a sales compensation analyst. I need to allocate quotas for our upcoming fiscal year. Context: - Company revenue target: $[AMOUNT] - Total quota-carrying reps: [NUMBER] - Regions: [LIST with headcount per region] - Current allocation method: [EQUAL / HISTORICAL / POTENTIAL / BLENDED] - Historical attainment distribution: mean [X]%, std dev [Y]% Please: 1. Recommend an allocation methodology with rationale 2. Calculate region-level quotas using the recommended method 3. Set coverage ratio guardrails and flag any regions outside bounds 4. Model the expected attainment distribution and % of reps at/above quota 5. Draft the quota allocation section of the compensation plan 6. Recommend a mid-year quota adjustment policy

Enterprise SaaS — Quota Allocation Overhaul

A 300-rep enterprise SaaS company was allocating quotas by dividing the target equally across reps within each region (region splits were based on prior-year revenue). Result: attainment variance across reps was 45% standard deviation — some reps hit 200%+ while others struggled to reach 60%. The comp team redesigned: 60% weight on trailing 3-year territory revenue, 40% weight on forward-looking TAM analysis (based on account scoring data). They added a ±15% adjustment window for district managers and a 105% coverage ratio target. Individual quota-to-OTE ratios were standardized at 4.5:1 for enterprise AEs.

Attainment standard deviation dropped from 45% to 22%. The percentage of reps between 80-120% attainment (the 'productive zone') increased from 38% to 61%. Voluntary attrition among reps below 70% attainment dropped 40% — reps felt quotas were fair. Total comp cost variance vs. plan improved from ±12% to ±4%.