What is a quota?
A quota is the sales result a person or team is expected to deliver in a period, usually measured in bookings or revenue. Quotas can also be set on units, margin or activities, over a month, quarter or year. Management usually sets them along with territories. In most plans, quota is the line that variable pay is measured against.
Why it matters to a revenue leader
Quota is where the board's growth plan becomes a seller's paycheck. Set it too high and good sellers leave. Set it too low and the company pays full commission for average work. Doug Chung, summarizing field research in HBR, reports that ratcheting, raising a seller's quota after a strong year, dampens motivation. In services businesses, quota also has to reflect territory reality: a seller with a mature book of service agreements and a seller opening a new metro face different math, even with the same title.
Example
Fictitious numbersA facility services company needs $12 million in new agreement bookings next year from eight ramped sellers. An even split gives $1.5 million each, but two territories have half the addressable buildings of the others. Leadership sets those two quotas at $1 million and the other six at about $1.67 million, so the total still covers the plan.
"If every seller hit quota exactly, would the company hit its plan, and with how much room to spare?"
Sources
- Sales operations: sales targets (Wikipedia) checked 9 Oct 2026
- How to Really Motivate Salespeople checked 9 Oct 2026