Christian Guillermo BSHRM 1Y2-8

COMMISSION-services rendered or products sold is a common way to reward sales people.

Payments often will be calculated on the basis of a percentage of the goods sold. This is a way for firms to solve the principalagent problem, by attempting to realign employees' interests with those of the firm.

TYPES OF COMMISSION:
1. Base plus commissions- It involves receiving a pre-determined base salary plus some type of commission on the sales you actually make. 2. Draw against commission- type of compensation plan is totally commission based. 3. Residual commissions- Earning residual commissions is a salesperson's dream, because as long as their accounts are generating revenue for the employer, the salesperson continues to receive a commission. 4. Salary plus bonus- this is the method of compensation you agree upon, you'll receive a pre-determined salary each pay period that is not impacted by your performance. 5. Salary plus commission- This is the same as a "base plus commission" compensation structure. 6. Straight commission- type of compensation can be a bit risky, since you only get paid based on how much you sell. 7. Straight salary - you'll earn a straight salary that is in no way impacted positively or negatively by your sales performance. 8. Variable commission- This type of commission structure is similar to a straight commission, however, the commission rate you're paid goes up or down based on predetermined circumstances.