How to Manage a Sales Team: Hiring, Quotas, Commission Plans and Coaching

Many top salespeople get promoted to sales manager and discover it's a different job: they no longer win by what they sell, but by what their team sells. A great rep who can't lead may end up with a team that sells less than they did alone. In this final lesson you'll learn the foundations of sales management with LedgerPoint, which wants to grow from 3 to 5 account executives to reach $200,000 in new sales a month. For the leadership side of the move, see our 90-day plan for first-time managers.

1. Calculate capacity
2. Hire well
3. Onboard and train
4. Quotas and commissions
5. Rhythm, coaching and dashboard

How many reps you need

A rep's capacity comes from their funnel (lessons 11 and 12):

Qualified opportunities worked per month:        40
Win rate:                                        25%
Average deal:                                 $4,000
Capacity: 40 × 25% × $4,000 =                $40,000 a month

Team goal: $200,000 a month ÷ $40,000 = 5 fully ramped reps

But a new rep doesn't perform at 100% from day one. At LedgerPoint, ramp-up takes about three months:

In their first three months, a new rep brings in $60,000 instead of $120,000. That's why you hire before you need the capacity, and why turnover is so expensive: every rep who leaves takes months of training and relationships with them.

Hire well

A bad sales hire costs their salary, months of training, mishandled customers and the manager's time. A simple process lowers the risk:

1. Before posting the jobA written profileWhat they'll sell, to whom, through which channel and which skills it takes. Selling software to CFOs (consultative, long cycle) isn't the same as selling by text to consumers (fast, high volume).
2. First interviewBehavioral interview"Tell me about a deal you closed that looked lost: what did you do, step by step?" Concrete answers are worth more than opinions ("I'm very proactive").
3. Second interviewRole-playA simulated prospecting call or discovery meeting. Watch whether they ask before presenting (lesson 5) and how they react to an objection (lesson 7).
4. Before the offerReferencesFrom former managers, with specific questions about results and teamwork.

When you write the posting, check your state's pay transparency rules: many states, including California, Colorado, Illinois, New York and Washington, require a pay range in job postings, and Colorado expressly asks employers to describe incentive pay such as commissions. Stating base salary and OTE also attracts candidates who understand the role.

Ready-to-use interview questions

Onboarding

Prepare a 30-60-90-day plan: in month one, product, ideal customer, playbook and CRM (lessons 2 and 11), plus shadowing other reps' calls; in month two, their first calls and meetings with support; in month three, their own territory with a reduced quota. Assign a peer mentor and certify each stage with a role-play.

Quotas and commissions

Realistic quotas

A quota should come from real capacity (funnel and ramp-up), not just from what the company wishes. A common practice is to assign quotas that add up to a bit more than the company target (for example, 110%), because not everyone hits 100% every month. An impossible quota demotivates as much as one that's too easy.

The commission plan

Design it from on-target earnings (OTE), what a rep earns at 100% of quota, and the base/variable split. At LedgerPoint: OTE of $8,000 a month ($96,000 a year), 60% base and 40% variable:

Base salary:                          $4,800
Variable pay at 100% of quota:        $3,200
Monthly quota:                       $40,000
Commission rate: 3,200 ÷ 40,000    = 8% up to quota
Accelerator above quota            = 12%

Sells $30,000 (75%):   4,800 + 30,000 × 8%                    = $7,200
Sells $40,000 (100%):  4,800 + 40,000 × 8%                    = $8,000
Sells $50,000 (125%):  4,800 + 40,000 × 8% + 10,000 × 12%     = $9,200

Principles of a good plan:

• Simple: every rep should be able to calculate their commission in a spreadsheet. If they have to ask finance, the plan won't motivate.
• Aligned with what the company needs: if margin matters, pay on margin or limit discounts (lesson 9); if retention matters, pay part of it on collection or after the customer's first months.
• With an accelerator above quota to reward top performers.
• Stable and in writing: changing the rules midyear destroys trust. In California, Labor Code section 2751 requires commission contracts with employees to be in writing, explain how commissions are calculated and paid, and be given to each rep as a signed copy, with a signed receipt.

The team's rhythm

Coaching: a manager's highest-return task

Making each rep a little better pays more than selling yourself. A simple method: observe (a call, a meeting), ask first ("What went well? What would you do differently?"), give one specific observation, practice together with a role-play and agree on how the improvement will be measured. If Luis's win rate goes from 20% to 25% thanks to better discovery, his capacity rises 25% without hiring anyone. Our lesson on coaching and developing talent goes deeper.

A guide for a 30-minute coaching session:

0–5 min    "Which call or meeting from this week do you want to review?"
5–15 min   Listen to part of the recording together (everyone on the call
           agreed to be recorded; see lesson 12)
15–20 min  "What went well? What would you do differently?" (the rep talks first)
20–25 min  One observation from you + practice: you play the customer
25–30 min  Commitment: "In your next 5 meetings you'll ... and we'll review
           it Thursday the 14th with your meeting-to-proposal rate."

The sales manager's dashboard

• Results: sales vs. quota by rep and for the team.
• Activity: calls, meetings and proposals per week.
• Pipeline: pipeline value vs. quota (the coverage you need is roughly 1 ÷ win rate, as you saw in lesson 11: at a 25% win rate, about 4 times quota), win rate, average deal and cycle length.
• Quality: average discount, retention of the customers sold, satisfaction.

Treat activity and pipeline metrics as leading indicators: this month's results depend on what the team did one or two months ago.

Common mistakes that wreck a sales team

1) Capacity: 50 × 20% × $3,000 = $30,000 per rep
   Team: 4 × $30,000 = $120,000 → a gap of $60,000 a month

2) Option A, hire: $60,000 ÷ $30,000 = 2 more reps (6 total), but with
   ramp-up the gap takes about 4 months to close.
   Option B, improve the process: raise the win rate to 25% through
   coaching on discovery and proposals: 50 × 25% × $3,000 × 4 = $150,000
   (closes half the gap without hiring).
   The sensible move: combine B (impact in 2-3 months) with 1 hire.

3) Base: $7,000 × 60% = $4,200 · Target variable: $2,800
   Commission: 2,800 ÷ 45,000 ≈ 6.2% up to quota; 9% accelerator above it.
   Quotas: 4 × $45,000 = $180,000 (100% of the goal); for a safety
   margin, add the ramping new hire's quota on top.

Summary

• Rep capacity = opportunities × win rate × average deal; plan for ramp-up time.
• Hire with a written profile, behavioral interviews, a role-play and references, and onboard with a 30-60-90-day plan.
• Base quotas on real capacity; keep commission plans simple, aligned with the business, with an accelerator, stable and in writing.
• A weekly team and pipeline rhythm, biweekly coaching and a dashboard with results, activity, pipeline and quality.
• A manager's job is to help the team sell more, not to sell for them.

Course recap

• Level 1, Beginner: what selling is, your product and ideal customer, prospecting and first contact.
• Level 2, Intermediate: SPIN discovery, presentations and proposals, objections and closing.
• Level 3, Advanced: negotiation, follow-up and retention, CRM and metrics, and your sales plan.
• Level 4, Expert: social selling on LinkedIn, selling by text and WhatsApp, complex sales and key accounts, and sales management.

Congratulations, you've finished the Free Sales Course! Now it's time to practice: pick one technique a week and measure its effect with your own numbers.

What's next? To bring more leads into your pipeline, continue with our free digital marketing course; to understand your business's numbers, try the free bookkeeping course; to lead your team better, the free leadership course. Or browse our full catalog of free courses.