Looking to Benchmark Pay?
Example of interval measurements
A salesperson sells a product for $90,000, and his employing broker's commission is 5% after the first $30,000 in sales. The salesperson receives 60% of this broker's commission. What is the salesperson's commission?
Salesperson's compensation:
| Revenue | $90,000.00 |
| Less Base | -30,000.00 |
| Commissionable Revenue | $60,000.00 |
| Broker's Percentage | x 0.05 |
| TOTAL COMMISSION | $3,000.00 |
| Salesperson's Percentage | x 0.60 |
| SALESPERSON'S COMMISSION | $1,800.00 |
These plans are often increased or decreased in specific percentage amounts for:
- special product mix
- new client solicitation
- new market or product introduction
- administrative effectiveness
- other variables
Salespeople operate (and are motivated) on ordinal rates via interval increases.
Memory Jogger
Compute the total salary plus commission for the following two salespeople:
Salesperson A
Base Salary: $40,000
Total Sales: $100,000
Commission % of Sales: 5% first $50,000, 3% thereafter
Salesperson B
Base Salary: $45,000
Total Sales: $150,000
Commission % of Sales: 7% first $60,000, 5% thereafter