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To me, it is obvious why sales people are paid by commission. It's because the most efficient thing for a company to do is pay someone their precise marginal va
by savanaly 9y ago
To me, it is obvious why sales people are paid by commission. It's because the most efficient thing for a company to do is pay someone their precise marginal value, not more or less, as that leads to the incentive of people doing the best they can given special constraints that only they personally know such as their own personal productivity function and how much they value their own time and effort.
Companies would do similarly for managers and engineers if there were a discreet non-gameable measurement of their output (I'm sure you don't need much imagination to see why paying per JIRA task completed wouldn't work). Unfortunately there's no such measurement system, so the best solution companies have found so far is pay them a salary and try to incentivize effort through bonuses, raises or promotions.
- scarface74 9y agoCompanies would do similarly for managers and engineers if there were a discreet non-gameable measurement of their output The sales process is gameable especially in software. The salesperson can sell vaporware and promise the customer that the company can deliver. That puts pressure on software development to work overtime - unpaid - to meet the deadline.
- NickNaraghi 9y agoIsn't this pretty much what the DAO was trying to solve for?
- arximboldi 9y ago> It's because the most efficient thing for a company to do is pay someone their precise marginal value, not more or less [...] But if they did so there would be no surplus value left for shareholders. Paying for labor less than its contribution to the value of the product is the basis of capitalism.