The payment of commission as remuneration Remuneration is pay or salary, typically a monetary payment for services rendered, as in an employment. Usage of the word is considered formal for services rendered or products sold is a common way to reward sales people A sale is the pinnacle activity involved in selling products or services in return for money or other compensation. It is an act of completion of a commercial activity. Payments often will be calculated on the basis of a percentage In mathematics, a percentage is a way of expressing a number as a fraction of 100 . It is often denoted using the percent sign, "%". For example, 45% (read as "forty-five percent") is equal to 45 / 100, or 0.45 of the goods sold. This is a way for firms to solve the principal-agent problem In political science and economics, the principal–agent problem or agency dilemma treats the difficulties that arise under conditions of incomplete and asymmetric information when a principal hires an agent, such as the problem that the two may not have the same interests, while the principal is, presumably, hiring the agent to pursue the, by attempting to realign employees interests with those of the firm.[1]
Commission rates are generally based upon the achievement of specific targets which have been agreed between management and the salesperson in question.
Offering monetary compensation in the form of commission alone, or commission in addition to salary rather than simply a fixed salary, is intended to create a strong incentive for employees to invest maximum effort into their work. Common industries where commission is used include car sales A car dealership or vehicle local distribution is a business that sells new cars and/or used cars at the retail level, based on a dealership contract with an automaker or its sales subsidiary. It employs automobile salespeople to do the selling. It may also provide maintenance services for cars, thus employing automobile mechanics, stock and sell, property sales A real estate broker is a term in the United States and Canada that describes a party who acts as an intermediary between sellers and buyers of real estate and attempts to find sellers who wish to sell and buyers who wish to buy. In the United States, the relationship was originally established by reference to the English common law of agency with, insurance broking The term Insurance Broker became a regulated term under the Insurance Brokers Act 1977 which was designed to thwart the bogus practices of firms holding themselves as brokers but in fact acting as representative of one or more favoured insurance companies. The term now has no legal definition following the repeal of the 1977 Act. The sale of and many other sales A sale is the pinnacle activity involved in selling products or services in return for money or other compensation. It is an act of completion of a commercial activity jobs.
A side effect of commissions is that in some cases, they can result to salespeople resorting to dishonest and fraudulent business practices in order to increase their sales.[1]
See also
References
- ^ a b McConnell, Cambell R.; Brue, Stanley L. (2008). Economics (Seventeenth Edition). New York, NY: McGraw-Hill/Irwin. ISBN 978-0-07-329392-9.
Categories: Contract law A contract is a legally-enforceable promise or set of promises made by one party to another. A contract is a legally binding agreement concerning a bargain which is essentially commercial in its nature and involves the sale or hire of commodities such as goods services or land | Employment compensation Categories: Employment | Factor income distribution | Labor economics | Financial economics | Sales
Liberian Daily Observer
... of the commission ; conduct and coordination of investigation; conduct and coordination of prosecution; and administration, management, remuneration and ...
