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Q: Sales Commission ( Answered 4 out of 5 stars,   1 Comment )
Subject: Sales Commission
Category: Business and Money > Finance
Asked by: scotty_uk-ga
List Price: $20.00
Posted: 13 Jun 2002 14:07 PDT
Expires: 20 Jun 2002 14:07 PDT
Question ID: 25381
I'm interested in research and statistics on sales commissions paid to
sales professionals within the IT services sector. Do sales
commissions work, what is the typical level of commission paid, do
they motovate staff to perform better, is it a good idea ?
Subject: Re: Sales Commission
Answered By: weisstho-ga on 16 Jun 2002 14:58 PDT
Rated:4 out of 5 stars
Ahh yes, Scotty - the age old question as to the motivation of money.

I vividly recall reading an article in the Harvard Business Review
back in the 1970's on this topic, authored by the (now) late Dr.
Frederick Herzberg. The one conclusion that I recall so clearly was
that the only thing that money motivates you toward is more money.
Lack of money is a de-motivator, but more money is not necessarily a

In remembering this old saw, I began my search with Dr. Herzberg. I
think that you will find the following instructive:

Herzberg separates factors into "hygene" and "motivation". Hygene
factors are those that do not lead to motivation, but without them
there is distinct dissatisfaction with the job. Examples of hygene
factors are: company, policies, salary, working conditions,
supervision, status, and security.

Motivation is defined here as achievement, recognition, interest in
the task, responsibility for enlarged tasks, and growth and
advancement toward higher level tasks.

I suppose that recognizing these distinctions is an important first
step in the process of truly motivating any force of people organized
to accomplish some task. Herzberg's old "KITA" ("Kick In The
'Backside'") analogies - both "positive KITA" and "negative KITA" are
interesting to think about, perhaps in the context of Roman galley
slaves providing propulsion versus a junior engineering officer for
Cunard. How is the Hygene of the workplace. How are my techniques of

There is other support for the proposition that money, by itself, may
not be a motivator. From the Louisville Business Journal:

This article suggests that money is fourth or fifth down the list as a
motivating factor:

The San Francisco Business Times suggests that as important as money
is, there are other factors:

ALTHOUGH, this September 2000 article on CNN suggests that money is
key, for among other reasons to differentiate one's company to
attractive recruits:

ARE COMMISSIONS A GOOD IDEA. Well, of course they are. But recognizing
the other factors above and placing an appropriate amount of
importance to each of the factors at work in your unique,
one-of-a-kind workplace seems to truly be the key to a happy and
productive set of I.T. professionals.

If I can provide any more specific information for you, please tap on
the clarify button and I will scurry back.

Best of luck,

Search Strings Used:
scotty_uk-ga rated this answer:4 out of 5 stars

Subject: Re: Sales Commission
From: morgan_mann-ga on 14 Jun 2002 12:27 PDT
Hi Scott,

   From my research I have found that motivation of sales
professionals in any industry differs with each person. Some are
motivated by money, others by a praise about their work, and still
others with more vacation time. There are a variety of ways to
   The level of compensation depends on what the value of the product
is, and possibly how well an employee performs on a daily, weekly or
monthly basis.
   I would suggest discussing this with your management team to see if
they feel that a commission would be helpful to your sales staff, and
if it would motivate them. They should have a better pulse on what the
staff wants and needs, which will help you make the best decision for
your company.

   Below is information I've found on your question that might be
Best of luck with your decision!
Informative Articles & Websites
   Setting up a sales commission scheme
   Clearlybusiness - HR and Training
   It has information on how to set up a scheme for sales commision
and explains the cause and effect relationship of different schemes.
   "...Some organisations pay their sales staff commission only - no
sale, no pay. Most owner/mangers, however, pay a basic salary and then
a sales commission on top.
   Commission rates vary from industry to industry. They depend on the
value of the item sold, the company's margin on that product, and the
likely turnover.
Cardiff University Business School recently conducted research into
what is the most effective commission rate in terms of sales. It found
that most sales were achieved in companies where the commission paid
amounted to 15-20% of the salesperson's total remuneration. So basic
salary is therefore 80%-85% of the total..."
   Sample Sales Commission Policy 
   It has a sample of a sales commission policy that might help you in
forming your own.
   Three Greatest Traits of a Sales Manager
   Curt Tueffert
   It explains what motivates sales professionals.
   "...One of my biggest challenges as a sales manager is knowing how
to motivate the veteran sales professional differently than the new
recruit, fresh with enthusiasm yet limited experience. This challenge
grows in proportion to the size of your sales team. Susan Larkin,
Human Resources Manager at Unilearn gave me a great analogy. When
motivating sales professionals, you have to figure out the combination
that unlocks their potential. This brings to mind the old movies where
someone was trying to crack a safe. Once the right combination to
numbers were dialed into the lock, the operator would place their hand
on the lever, hold their breath, and turn. When the sales manager
finds the right combination, the lock opens and you have insight as to
what motivates that individual sales pro. Note, not all people are
motivated by the same thing, it takes the discovery process to find
each individuals combination..."
   Director of Internet Sales
   Get That
   It's a day in the life of an internet sales professional, and you
might gain insight to what employees expect in their jobs (the article
contains pay rate).
   Advertising, Marketing, Promotions, Public Relations and Sales
   Occupational Handbook
   It has the median annual earnings of individuals in this industry,
which could help you in determining the amount of commission to give.
   "...Median annual earnings in 2000 for advertising and promotions
managers were $53,360; marketing managers, $71,240; sales managers,
$68,520; and public relations managers, $54,540. Earnings ranged from
less than $27,840 for the lowest 10 percent of advertising and
promotions managers, to more than $137,780 for the highest 10 percent
of sales managers. ..."
   You can look up what people in the specific job you are researching
make and what benefits they expect, which can help you determin the
amount of commission, if any, to give. It also specifies the market
area, which can change the amount to be given.
Newsletters - you might want to subscribe in some of these.
Internet Technology on
-They also have a great forum.

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