Why should my employees earn on commission?
How does commission work?
Hi. So today’s top tip is the six of spades. It’s all about commission, and it’s part of our reward set of 52 top tips.
So, commission, getting commission levels right, ensuring that the targets and payment levels support the business objectives, and discourage negative behaviour, is a mixture of both art and science. Contractually, there should be an entitlement to join the commission scheme, but the details should change and be communicated on an annual basis, in line with the needs of the business and the economic climate. Accrual and payment periods need to be specified, and rules set around levers, sickness, holidays, and other absences.
So commission can become a really contentious issue, especially when it forms a large part of somebody’s reward package. Depending on the nature of your business, you may have people who are on quite a low, basic salary, but the bulk of their own income comes from their commission. So making sure that you get that right, so that it’s really motivational, and driving the right behaviours, is really important for your business. And the reason what we suggest that it changes on a regular basis is not only that it keeps up with the growth of your business, but that you make sure that it doesn’t become too much custom and practise that people have to keep striving to achieve. And therefore, growing your business, don’t let people become complacent about what they’re taking home, if it’s not benefiting your business.
It’s very much a balancing act between the art and the science of paying reward and paying commission.