Business studies Help!!?

Question

HEy can someone give me a short explanation to the term "commission" which is a type of monetary incentive..... and also a breif explanation to the term "non-monetary incentives"... thnx alot!-- _RoguE_

Answer 1

Sales people earn commissions. Let's say you own a car dealership and you have 7 salespeople. Let's just say the commission is five percent of the sales price. I'm not really sure what percent they pay. If Nancy sells a car for 20,000 dollars she gets 1000 dollars as a reward or commission. If Joe sells $120,000 worth of cars in a month he gets 6000 commission for the month. If Mary sells just $15,000 worth of cars in the same month, she gets $750.

Some sales people get only commission, some get salary plus commission. It rewards sales people who make sales. From the bosses point of view, it rewards people who work hard or who are successful in convincing people to buy.

The car dealership may also give out points to salespeople who sell cars, and then redeem the points for gift certificates at fancy restaurants, or for a new car, or for a fur coat, etc. These would be non-monetary incentives.

Answer 2

A commission is a way of compensating sales people. They receive a percentage of the value of the item sold, or fixed dollar amount per sale. Some sales people work for only commissions, while others may receive both a commission and a wage (salary or hourly). Sales managers may receive an "override" where they get a cut of the commissions paid to the sales people who work for them.

The idea of a commission is to motivate the sales people to sell more products, since the more they sell the more they earn.

Non-monetary compensation could be almost anything other than a salary, hourly wage, or commission. It may be company-paid health insurance, free coffee in the office, free tickets to a ball game, etc.