[marcus0x62]

What you've written about is mostly it. The other aspect is that setting fair quotas (individually, and at the district level) is really, really, hard but managing sales expense is extremely important. The two concepts are inextricably linked[0]. There's a huge amount of information hiding (mostly on the part of the sales reps,) and companies will compensate by putting limits in the comp plan that attempt to prevent windfall situations. Usually, there is a specific windfall clause that is straightforward enough: past a certain commission or quota attainment or transaction size threshold, the company reserves the right to review the circumstances of a particular deal and decide how to pay commission on it outside the usual terms of the comp plan. But beyond that, there will frequently be rules about what counts as new business vs renewals (which generally are paid at vastly different rates,) or even if certain transactions will be paid at all (where this occurs, it is usually limited to large transactions the company knows about, but that weren't forecast for the current fiscal year and therefore not part of the rep's quota.)

0 - while every tech company in recorded history puts their top performers on display at their annual sales meeting and boasts about how these people all exceeded plan by x% and just bought a new lakehouse or something, privately, the sales leadership gets raked over the coals due to over performance. I once received a top district award in front of the whole company, then not 30 minutes later got chewed out along with my colleagues over how many people overachieved and how much extra it cost the company, etc.