IGCSE, A Level Business Student Forum

23 Analyse one benefit of using a commission-based pay system for computer shop employees. [5]

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Possible Structure
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[AN] Application Required (analysis of benefit in perspective of computer shop employees)
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[AN+]
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[KN] Incentive to increase sales. [AN] This means that sales staff may feel more encouraged to sell computers as they may receive a commission for selling more. [AN+] Commission may be payed on addition to basic salary, hence security of pay may be provided. [AN+] As security of pay may lead to less stress about varying pay levels, the sales staff may allocate time in strategizing ways to increase sales without distractions. [AN+] This may also reduce labour turnover of the computer shop as employees may feel committed to the existing business dude to security of pay.

Kn: encourages employees to work harder
An: commissions are a form of incentive given to employees in order to motivate them for computer shop employees eg managing software etc boring tasks can be done quicker
An+ when job will be done quicker deadlines can be met which leads to greater job satisfaction
An+ the workers will be more invested in achieving the.company goals and will work diligently towards it
An+: this decreases labour turnover and improves the overall position of the business

KN: Commission based pay has unlimited earning potential
AN: this kind of pay doesnt have an income cap, so its a good financial motivator
AN+: sales will increase as employees get motivated to work harder
AN+: This increased sale benefits business as it has confirmed conversion rate which isnt possible through marketing campaigns
AN+: business will enjoy higher profits due to increase in sales

kn: improved customer service
an: employees in a commission-based pay system are likely to have a higher amount of product knowledge, such as the type of software, etc. which improves customer satisfaction
an+: this will lead to the business gaining a better reputation.
an+: this will result in customer loyalty.
an+: increase in customer loyalty will lead to higher revenue

Kn: This type of commission makes workers work harder.
An: It is a good type of financial motivator as now employees will work hard to get most of it.
An+:The workers will also satisfy the customers properly by telling them good specs of computers so that they buy from them.
An+: This will get more positive reviews about the services and product.
An+:So more customers will be attracted and hence more revenue.

[Kn] Flexible schedule
[An] Since sales employees e.g. in a computer shop, are given a set target to achieve at the end, they are more independent while doing their job and thus, it results in a higher outcome from them as they are not bound or pressurised.
[An+] This flexibility allows salesmen to increase their productivity as they are both mentally and physically relaxed.
[An+] An increase in productivity will result in less supervision required for the salespeople and hence, they become more adaptable and make good decisions
[An+] This skill will let the business have a competitive advantage due to leading employees.

[KN]A commission-based pay system ties employees' earnings directly to their sales performance.
[AN]When employees have a financial stake in the sales they generate, they are motivated to actively engage with customers, promote products, and close sales.
[AN+]This motivation can lead to higher sales volumes.
[AN+]Which can increase the profit.
[AN+]And can improve the image of the business.

I THINK I'LL EXPLODE...THIS IS SO INSANE...I HAD TO WRITE my ANSWER WITH SUCH BRAIN STORMING AND WHEN I SUBMITTED IT THE WHOLE ANSWER VANISHED!

KN: More engaged employees with the customers in the computer shop
AN: Leads to employees being more focused and thus less errors made e.g. providing the right services and products (required computers) to the customers
AN+:In this way more loyal customers are developed
AN+When customers are loyal than free advertisements are done as they share the benefits of purchasing a computer from that shop to other individuals
AN+:In this way customer base in increased thus increasing sales and leading to an increment in profit.

[KN]: an incentive for increasing sales
[AN]: it would motivate the computer sale staff to sell more products
[AN+]: to increase sales, the staff would promote them in order to spread awarness
[AN+]: hence, incresed sales would lead to increase in the revenue of computer sales
[AN+]: thus, increasing the profits of the business and increased profit means increased commission for the salemen

(Kn)it may be in addition to a basic salary so it could offer some security of pay too.
(An)this encourages them to sell more products.
(An+)they also try to put pressure on the customers to buy that product.
(An+)it is usually paid to salesmen not just in retail but also in industries. It is paid additionally.
(An+)this encourages/gives motivation to salesmen to sell more by which income is also given to government .

(Kn) motivates employees to work harder to reach the margin.
(An) to earn more financial reward employees would work harder to sell nore computers to customers to earn additional commission attached to.
(An+) this would directly increase the overall sales of the business hence increases their revenue margins.
(An+) this helps business to identify the skilled workers amongst all employees as more skilled worker would be able to sell more computers hence business could deal with them accordingly.
(An+) thsi could create element of jealousy amongst employees as less efficient pnes would be paid less which may create conflicts amongst workers hence could damage business working environment.