What payment structure rewards employees based on a percentage of sales they make?

Boost your SQA National 5 Business Management exam scores. Our quiz offers flashcards and multiple-choice questions with hints and explanations. Prepare effectively for your exam!

The correct answer is commission because it specifically refers to a compensation structure where employees receive a payment that is directly tied to the amount of sales they generate. This payment is typically calculated as a percentage of the sales value, effectively incentivizing employees to boost their sales performance in order to increase their earnings.

In a commission-based system, the motivation for employees is clear: the more they sell, the higher their commission, which can lead to increased income. This structure can be especially effective in sales-centric roles, as it aligns the interests of the employee with those of the business, promoting an environment focused on sales performance and productivity.

The other options represent different types of compensation structures. Wages typically refer to a fixed amount paid regularly, regardless of sales performance. A bonus, while also a form of performance-related pay, is usually a one-time payment awarded for reaching specific goals or objectives rather than ongoing sales. Time rate involves payment based on the number of hours worked rather than sales figures, which does not incentivize sales directly. Each of these alternatives lacks the direct sales incentive that commission provides.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy