While a very simple comp plan such as the one advocated by Holmstrom and Milgrom can be appealing (for one thing, it’s easier and less costly to administer), many companies opt for something more complex. They do so in recognition that each salesperson is unique, with individual motivations and needs, so a system with multiple components may be more attractive to a broad group of reps. In fact, to get the optimal work out of a particular salesperson, you should in theory design a compensation system tailored to that individual. For instance, some people are more motivated by cash, others by recognition, and still others by a noncash reward like a ski trip or a gift card. Some respond better to quarterly bonuses, while others are more productive if they focus on an annual quota. However, such an individualized plan would be extremely difficult and costly to administer, and companies fear the “watercooler effect”: Reps might share information about their compensation with one another, which could raise concerns about fairness and lead to resentment. So for now, individualized plans remain uncommon.