The Wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services are compensation.
Compensation plans include (1) straight wages or salary, (2) straight commission, (3) wages or salary plus bonus, and (4) wages or salary plus commission. Salespeople receive hourly wages, a salary, commissions, or a combination of wages or salary and commissions. Commissions are usually based on the amount of sales, whereas bonuses may depend on individual performance, on the performance of all salespeople in the group or district, or on the company’s performance. Commissions offer salespeople the opportunity to significantly increase their earnings, but they may find their earnings depend on their ability to sell their product and the ups and downs of the economy. Employers may use incentive programs such as awards, banquets, and profit-sharing plans to promote teamwork among the sales staff.
