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Fitting the Pieces Together: A Guide to Office Operations for the Liquid Waste, Portable Toilet & Septic Pumping Industries |
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Commission systems come in many flavors. Some of the more common programs are:
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Program |
Description |
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Percent of completed sales |
An employee receives a percent of the completed sale at the end of the pay period. This is added to their base pay.
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Fixed amount per unit of sales |
Fixed dollar bonus for each unit of service or provided or sold during the pay period. This is then added to their base pay. |
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Group commissions |
Where workers can effect each other’s productivity. A commission is paid to all workers based upon total sales for the period. This is sometime combined with individual programs to aid in team building within a company |
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Reward commissions |
These are one time cash awards for new business only. This is usually the one used and does not have the employee have any part of base salary at risk. |
In any commission system it is very important to carefully think through the entire program so that it is:
Fair and balanced between the company and the employee
Allows for change as market conditions require
Run a trail period to account for any unplanned for circumstances
Commission systems are like any tool they can be used in the wrong way and create more bad then good. Some typical problems are:
Not fair. A normally working employee does not earn a fair days pay for a fair days work
Tries to limit compensation of the outstanding workers
Requires to much paper work
Calculation of commission not clear and straight forward
A septic company has the following commission system for it’s drivers. They are paid 100% on commission, no straight time. The drivers keep a work sheet to record all activity so they know exactly how much they are earning. The commissions are follows:
20% of invoice amount minus dump fees
30% of all jobs scheduled after 4 PM (customers are charged an additional $45 for late service)
10% of all work they do not complete themselves, i.e., repair work
The bottom line is the drivers complete 8 to 10 jobs per day and work about a 10 hour day on the average.