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Salaries and Commissions
In most workplaces, two forms of remuneration are paid to employees. The type of remuneration generally depends on the role itself and whether or not employees are tasked with actively sourcing new business for the company.
A fixed salary is the most common form of remuneration and is paid to employees on a contractual basis weekly, fortnightly or monthly. Several factors determine the amount of the salary including the experience, qualifications and skills associated with the role, the performance of the individual in the role, the current market rate paid to those in the profession, and the position the role occupies in the company's organizational structure. Salaries are generally reviewed annually following an appraisal of the employee's performance, yet increases are not usually guaranteed and need to be negotiated.
When negotiating your desired salary, you and your employer need to reach an agreement on your value as an employee. For most companies, your value will be based on how well you contribute to the profitablity of the organization. To ensure you negotiate the most favorable salary possible, make sure you know your value and can articulate it to your employer. It may help to source information about the salaries common to your field. You can also ask others in your profession to find out what the current market rate is. Similarly, unions, professional bodies and career websites on the internet can be useful sources of information.
If your role entails bringing in revenue, you may be eligible for commission. This second form of remuneration reflects performance and can be based on either profit margins, a percentage of sold revenues or a percentage of a base salary. Commission is most commonly associated with sales roles and most commissions make up between 30 to 50 percent of a salesperson's remuneration package.
However, commissions do have their disadvantages. As a new employee, you may find that it can take some time to achieve the desired level. Commissions are heavily dependent on your knowledge of a product, your confidence levels and the successful relationships you build with clients. While your company's commission plan may have no limits, make sure that you are receiving an acceptable salary when you first begin a sales role so that you are not forced to rely on commissions alone for the bulk of your remuneration.
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