Commissions reward distributors based on the sales they bring to the company, while bonuses might be given to distributors not particularly for the sales they make. Companies decide to acknowledge their salesforce efforts with one or all of these compensation methods but what organizations often miss notice is the impact it creates on the salesforce. The effects it can have on performance and brand and customer relationships can be monumental in the growth of the company. Hence it is key for companies to take into account the behavioral effects their commissions or bonuses can have on their salesforce. Let’s discuss the impacts of behavioral differences between bonuses, incentives, and commissions.

Commissions
A commission is a payment arrangement that pays distributors a percentage of sales they bring to the company. The sales they make positively impact businesses’ revenue. The commissions focus more on possibilities rather than sales and only consider profitable leads are considered for commissions. The commissions usually work on self-interest and pay little interest in customer support and only concentrate on making sales. Businesses must analyze how much the company can afford to pay distributors and this determines the mutually beneficial relationship between distributors and businesses.

Bonuses/Incentives
Bonuses may not be given to distributors on a regular basis. Instead, these payments are based on sales goals that are met. It is given to every distributor in the company despite of their sales performance. Bonuses and incentives given to the distributors can make a warm connection with the brand. Bonuses or incentives work at every chance to improve the brand and it builds team collaboration. Bonuses and incentives can help a business to build strong distributor relationships.