Does Straight Commission Trump Being Pain a Salary?

¶ … theories on motivation that relate to an employee switching from salary to commission. The Maslow "Hierarchy of Needs" theory is applicable and appropriate; Maslow believed that people are motivated to fulfill basic needs first, then they move on to other needs. He presents five levels in his hierarchy of needs and the first is "physiological needs": these are survival needs -- food, water, air to breathe and sleep. The motivation to earn more money covers the ability to buy food and to have fresh water.

The second level of Maslow's Hierarchy of needs is the most applicable to the switch from salary to commission; that second on the hierarchy are "security needs" -- steady employment, access to healthcare, a safe place to live and shelter from the environment. The other needs (social, esteem, and "self-actualizing") fit into the change from salary to commission, but of those "self-actualizing" is particularly germane because it concerns "personal growth" and "fulfilling one's potential" (Cherry, 2014).

Another theory of motivation that is applicable is Vroom's Expectancy Theory, which works on the assumption that workers -- though they have different goals -- can be motivated if they believe that: a) there is a "positive correlation between efforts and performance"; b) a favorable performance results "in a desirable reward"; c) the reward will provide satisfaction "for an important need"; d) the "desire to satisfy the need is strong enough to make the effort worthwhile" (University of Cambridge).

Two other theories found on Understanding Management Chapter 12 include Herzberg's Two Factor Theory and Alderfer's ERG Theory. Herzberg's theory holds that factors that are motivational for people do change over a person's lifetime, but respect for the person (recognition) as a value is a top motivating factor. Satisfaction and dissatisfaction are independent of one another (satisfaction doesn't necessarily raise while dissatisfaction sinks).

Of the three components of Alderfer's ERG Theory ("existence, relatedness, and growth") relatedness (the need to receive recognition and to feel secure) and growth (building self-esteem by achieving at a personal level) have the most application to motivation at work vis-a-vis moving from salary to commission. TWO: the needs under the commission system are certainly met in the handbag and shoes department, because those items are quite expensive, and also because a sales person with talent can earn a lot more on strict commission.

The needs also have been met in the electronics, appliances and jewelry sections too because those items tend to be more expensive, and the sales person has a chance to chat with the customer about selections, how they work, and these items are simply more conducive to having a dialogue with the consumer than lingerie.

The reason the straight commission policy won't be as need-fulfilling in lingerie as shoes and handbags is that for one thing lingerie items are not nearly as expensive as handbags; to wit, there aren't many $1,000 bras or panties and yet shoes and handbags can easily cost that much.

THREE: If I were Frances Patterson I would restore the salary approach for those sales people in lingerie -- and in any other departments where it is a struggle to earn a decent paycheck through straight commission -- plus give them a small commission in addition to the hourly wage or another salary strategy structure that would.