In order for a business to grow, it is of paramount importance to hire human resource. In this premise alone, businesses are required to pay the employees. Nowadays, businesses have standard payroll computations. But then adhering such practice has its own set of limitations.
The simplest way to pay your employees is on a fixed salary; this is where the employee earns a specific figure in a year, which is then divided over each payroll
This is the most favored method of computation by the employers because of its simplicity. A salary figure is very simple to calculate, which means that the administration and calculation of the payroll is much simpler than with other forms of payment; which saves on accounting and administration costs. But it seems s that it is not the case on the employees side. A major problem with salary based pay is the need to work out overtime payments. If an employee stays for an extra half an hour, do they get extra pay? If not, or if the system is poorly worked out, your employees may be left feeling that their extra work is not appreciated.
In most cases, companies who are offering their staff members and hourly wage restrict working hours. For some professions, this could mean working nights, weekends or even during holidays which mean less time to devote to friends and family members. Furthermore employees may be required to make up time if they miss work for any reason. On the lighter side when an employee is paid by the hour, punching a clock, or recording your time on a timesheet, there is no doubt that you are being compensated for every moment worked.
The main advantage of commission based pay to a company is that the payroll
cost is related to the value of business achieved rather than just the amount produced; after all, businesses exist to sell goods and services for profit. With commission only, businesses are in a position where they are in charge of their income. If people are good in sales, focused, self-starters and willing to work hard - they will more than likely have better than fair commission checks.