Ch. 12: Sales Commissions

Concept and brief description:

Sales commissions is a form of incentive pay calculated as a percentage of sales. Salespeople can earn a commission in addition to a base salary or earn only commissions. The nature of salespeople's compensation affects the kinds of people who will want to take and keep sales jobs. Sales commission jobs can be risky for employees but also motivating and beneficial to both the company and employee.

Emotional hook (provocative question/ claim/real-life problem):

I have worked in several positions relating to sales commissions. I wish I could say that I have had a positive experience in these positions, but I cannot. It seemed that the incentive of being able to earn commissions was not motivating to employees. It was very apparent to the employees that managers earned raises and extra bonuses based on sales. The manager would push sales to intensely, not motivating employees and causing bad morale.

Key points to elicit in discussion:

Commissions can be very beneficial to a company and its employees if implemented in a good way. Managers and employees need to work together and really care about the product they are selling in order to really grow. There are different types of commissions that a company can implement. An employee's earnings can be based solely on commissions or an employee can have a base salary plus commissions. Each company will differ but all around sales commissions can be a great way to increase productivity and profit.

Facilitative questions:

Have you ever had a job that provided sales commissions? What was your experience? Negative or positive?