The short answer: a good commission structure rewards the behaviour you actually want — usually profitable sales, not just volume — while staying simple enough that staff understand it and fair enough that they trust it. The best incentives motivate without encouraging discounting, pushy selling or gaming the system.
Common commission models
- Percentage of sales — simple, but can encourage discounting to close deals.
- Percentage of profit — better aligned; rewards margin, not just revenue.
- Tiered — higher rate after hitting a target, to push for more.
- Team-based — shared incentive for cooperation over competition.
- Fixed bonus on targets — a set reward for reaching a goal.
Design for the behaviour you want
Incentives are powerful precisely because people respond to them — including in ways you didn’t intend. Commission on raw sales can drive heavy discounting that hurts margin; commission on profit protects it. If teamwork matters, don’t pit staff against each other with pure individual commission.
Keep it simple and fair
- Make it understandable — staff should be able to calculate their own.
- Make it achievable — targets that motivate, not demoralise.
- Make it transparent — clear rules, accurate tracking, timely payout.
- Avoid perverse incentives — don’t reward volume at the expense of profit or service.
Track it accurately
An incentive scheme is only as good as the data behind it. You need accurate sales — ideally by staff member, with cost so profit-based commission works. Disputes over “what I actually sold” kill trust fast, so the numbers must be reliable and visible.
Reward the right results
RushFlow tracks sales by staff member with profit, so you can run fair, profit-aligned commission with accurate, transparent numbers. See the live demo.