A sales quota is a target that a sales rep or team plans to achieve. It is typically a measure of revenue, though it can include volume of products sold as well.
Sales quota is often tied to a time period such as a month, quarter, or year. Measuring performance alongside quota is used to inform sales forecasts and assess team performance.
A thoughtful sales quota can be determined through collaboration with individual reps and contributors. Leadership teams will often define an ideal revenue target, and work backwards from there to assess the quota necessary for sales to achieve this goal.
Sales quotas are criticized when they are created in a vacuum, without participation from contributors such as marketing dept. It can be especially difficult to achieve a quota when marketing and sales teams are misaligned, or when leadership has inflated expectations. Meeting or exceeding the target can lead to rewards and recognition for the rep, and is often defined in the on-target earnings (OTE) package. Missing a quota repeatedly is generally viewed as negative performance and can lead to changes in a team structure, process, or leadership.