Should employees work on commission or should a base salary be sufficient?

Campus Life

Marty Wareman, 25 years old, Teacher Studies.

I think that selling based on commission certainly motivates people to sell more, so eventually you would earn more. If you look at Corporate Social Responsibility, it might have negative effects. If your goal is to sell more, then I think you get more sold on a commission basis. In terms of quality it may have negative results. These results could be maintained by following a code of conduct. It also depends what kind of product or service you are selling, of course. When it comes to subscriptions, the effectiveness remains higher when it is based on commission, but in terms of information about a product, I think that the negative effects of a product are excluded if commission based.

Kevin Baars, 23 years old, Msc Finance

In my opinion, selling based on commission is better, because if you earn revenue per product sold. I think you’re more motivated than if you receive a base salary. For example, if your boss says you have to sell fifty pieces of a product, and you get paid commission based, then you and your boss’ interests are more alike. Eventually, I think it yields to better results. Whether it is ethical or not, is another question. The company you work for should have rules for employees to follow or play a supervisory role so that the quality remains high and unaltered. I think it is rather difficult. It also depends on the product. I would not pay employees on commission in health care, because you do play with one’s life. But for example for a lottery, I do think that just makes sense.

Walid Benkaddour, 26 years old, MSc Finance

I would say on commission, because employees would have more incentive to maximize sales. Quality of information provided to customers will not suffer as a result as long as the company is well organized. Why does the company not have a different department for reviewing guarantees or the like? If the customer always has the option to return a product or make a complaint, and if that service is effective, it will not be a problem. However, I do not think that everyone should work on commission. A certain part of society, maybe employees in health care or other industries that are crucial for our living, should not work on commission, because they might lack the maintenance. Usually I do not mind if private companies sell on commission. It cannot do much damage.

Dimitar Parvanov, 26 years old, MSc Finance

A base salary is sufficient. If employees are selling on commission, quality will suffer for sure. If you work for a base salary, you just do your job as long as there is some probability that you will get fired when you do your job wrongly. The level of salary matters of course. Most people believe that they are paid less than they actually make, but if you can create some kind of utility other than material, social for instance, that your employees receive from working for you, then a base salary will be sufficient. If a company wants to maximize sales, then commissions really achieve that target. But if a company wants to maximize profits, a base salary might be sufficient as profits do not only come from quantity of sales.