Eldon Broady

Is Commission Pay Better Than a Salary?

In order to get quality employees and minimize turnover, you need to carefully consider your pay structure. Offering something subpar is going to keep good employees away or only attract people looking for a quick check. When you're considering how you want to pay your employees in a sales environment, you need to decide between three options: salary only, commission only, and salary with commission. There are pros and cons to each of course, so make sure you weigh each option carefully.

Salary Only

Salary only isn't very common in a sales environment, but there are certainly some benefits to it. For one, there isn't likely to be high turnover, because employees won't have to worry about their pay changing. This means you'll be able to keep employees around for the long-term if you pay enough. But therein lies one of the downsides. If you want good sales employees who are ok with only getting a salary, they'll need to be paid more than you might be willing to give. With commission, there isn't much incentive to perform better.

Commission Only

Commision only leads to highly driven sales staff, but at the cost of potentially increasing turnover. If someone isn't able to support themselves on their commission only pay structure, they're unlikely to stick around for very long.

Salary with Commission

The happy medium is usually salary with commission. This model is pretty popular for a reason. When your employees have a salary to fall back on, they won't seek new employment after having a bad month. You also won't need to pay as much salary as the salary only option, since a lot of their compensation will come from the commission structure. This motivates sales staff to do well but also shows them you care about their ability to support themselves in times of lower business.

Use a Commission Tracking Software

If commission is part of your pay structure, make sure you have a good commission tracking software to help you stay on top of how your sales team is doing. Commission tracking software is also great for employees because they can clearly keep track of their own pay and know when and where their pay is coming from. Find a commission reporting software that works for your company, so you can focus on the big picture instead of the minute details of compensation.

Author Resource:-

Eldon Broady writes about business software and services like commission tracking platforms, softwares etc. You can find his thoughts at tracking commission blog. Get the best sales commission plan by visiting this website.