Dell Overhauls Sales Compensation with Major Changes to Commission Structure
Dell Technologies has initiated its new financial year with a significant restructuring of how it compensates its sales teams, according to a report by Business Insider. In a town hall meeting led by Kyle Leciejewski, senior vice president of North America sales, the company unveiled a revised pay plan that increases rewards for high achievers but reduces earnings for those failing to meet quotas. This announcement, based on an internal presentation, has sparked concerns among employees about potential pay cuts.
New Pay Structure: Zero Commission for Underperformers, Tripled Rewards for Top Sellers
Under the new compensation model, sales staff who achieve less than 60% of their targets will receive no commission whatsoever. For employees hitting between 60% and 100% of their goals, payouts will be scaled: at 60% of the target, they earn 25% of the incentive; at 70%, it rises to 50%; at 80%, it reaches 75%; and at 90%, they get 90% of the incentive. Sellers who reach 100% of their quota will receive their full incentive, while top performers exceeding targets can now earn up to three times their target incentive—a 50% increase from the previous system.
Shift to Quarterly Targets and Modernization Initiative
Dell is also transitioning most divisions, including enterprise, AI Select, and telecom, from twice-yearly quotas to quarterly targets. This change is linked to the upcoming One Dell Way modernization initiative, scheduled to launch in May, which aims to streamline operations for the artificial intelligence era. While Dell frames these adjustments as a strategy to reward profitable growth and enhance competitiveness, employees express fears of reduced take-home pay. One data center sales representative noted that consistently achieving 70–80% of quotas in past years would now result in a 20% pay reduction.
Challenges and Broader Morale Issues at Dell
The compensation overhaul comes amid rising challenges for sales teams, including supply chain shortages, long lead times in certain divisions, and increased quotas, making it more difficult to hit 100% targets under the new quarterly cadence. Additionally, Dell is grappling with broader morale issues, as employee satisfaction scores have dropped nearly 50% over the past two years. This decline follows layoffs, stricter return-to-office mandates, and attendance crackdowns. Sales teams also face pressures from global memory chip shortages and recent product price hikes, further complicating their ability to meet targets.
The changes reflect Dell's push to align compensation with performance in a competitive market, but they highlight ongoing tensions within the company as it navigates operational and workforce challenges.
