Within companies, commissions reflect potentially secure sales by salespeople and, in turn, employees encouraged to close more sales, visit more prospects and win back customers, i.e., generate more cash flow for the business.
The greatest advantage of the commission system is that it rewards employee success and productivity and, in turn, gives workers an unlimited amount of income. This is usually present in motivated employees, who are willing to work longer hours.
A major disadvantage of this system is that consumers prefer not to work with commission-based salespeople, because salespeople who are interested in making a sale can become aggressive and imposing, even if the customer shows no interest.
Another disadvantage is that some employees earn little or no income other than their commissions, so if they do not sell your product, they may not receive any income, which makes the work environment stressful and tense.
Employment contract law sales commissions
For salespeople, this type of incentive helps to motivate them, even in adverse economic situations. Although not everyone may feel the same way, a sales team sees variable compensation as an opportunity for growth and particular economic benefit.
The study showed that 64% of the companies offer variable compensation to control and reduce fixed costs and encourage productivity; 54%, to generate added value to the employee and 48%, to adjust to labor market practices.
Advantages and disadvantages of working on commission
RDIC.: Sets meaning and scope of Articles 54 bis and 55 of the Labor Code, incorporated and amended, respectively, by Law No. 20.611, published in the Official Gazette of 08.08.2012, on protection of remunerations especially commission in cases indicated.
For reasons of good service, it has been deemed necessary to fix the meaning and scope of articles 54 bis, and 55, of the Labor Code, in their respective texts contained in law No. 20.611, published in the Official Gazette of 08.08.2012.
“Article 54 bis.- The remunerations accrued are incorporated to the worker’s assets, and any clause implying their return, reimbursement or compensation by the worker to the employer, in the event of events occurring after the remuneration was accrued, shall be deemed unwritten, unless such subsequent events originate in the breach by the worker of the obligations contained in his employment contract.
“However, prizes or bonuses may be agreed for future events, such as the permanence for a certain period of time of the client who has contracted a service or product from the company or the punctuality of the same in the payments of the referred service or others, provided that the occurrence of these events depends on the fulfillment by the employee of the obligations contained in his employment contract.
Salary per commission federal labor law
Albert Einstein once said: “The best things in life cannot be bought with money. That may well be true. For those who disagree, in 2019, Germans spent an average of €2,574 per month per household. The largest share went to housing, energy and home maintenance (890), followed by food, beverages (356 euros) and transport (351 euros). However, culture and leisure time also took their share, as Germans spent 284 euros per month on sports, movies and similar activities.