Most sales compensation plans feature transaction-based incentive formulas where each sales event triggers a commission payment or quota achievement level. However, many sales environments require more in-depth management of key sales objectives. Often field management needs to reward specific goals related to account, product, territory management and support of corporate initiatives.

In many cases, management wants to use both transaction and objective-based measurement plans for sales personnel and their managers.

Additionally, new sales roles such as global accounts, product and market overlay specialists, field marketing, point of sale, and pre-sales support jobs virtually mandate the use of objective-based measurement and reward programs.

Target incentives are usually expressed as a percent of base salary, or a flat target amount. Unlike transaction-based incentives, KSO payouts are normally capped at twice the target incentive amount.

Funding is usually expressed as the summation of target incentive amounts. Occasionally, companies will link the payouts to either local sales revenue or business unit results.