More Americans Are Getting Paid on Commission

Workers in sales roles and certain related positions are accustomed to receiving part of their pay in the form of performance bonuses or commissions while their base salary is lower. But this incentive-based pay structure is growing more popular with companies.

More than a quarter of employers are building incentive-based pay into new roles, even those that don’t have a commercial angle, such as human resources, according to an Alexander Group survey of more than 300 U.S. companies, cited by the Wall Street Journal.

Pros and Cons

So is this good or bad for workers? Incentive-based pay can give employees the potential to earn more money — but to do so, they’ll have to reach certain performance benchmarks first, which is good for their employers.

On the flip side, the pressure of hitting monthly or quarterly targets may be stressful or hard to measure in certain positions. Incentive-based compensation can also lead to fluctuating or inconsistent pay, which may make budgeting more difficult.

For companies, the benefit may also include lower base salaries, given commissions and bonuses are directly tied to a workers’ performance.

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