Commission

A commission is a type of performance-based pay given to an employee after they accomplish a certain task, most commonly related to selling a specified quantity of products or services. It is generally computed as a percentage of the overall sales amount, linking an employee's income to their effectiveness in their role. This compensation model is intended to encourage employees to meet designated targets and boost productivity.

The term 'commission' originates from Latin, meaning to assign or delegate authority. It was adopted into English in the 14th century, initially referring to an official grant of power or a specific assignment given to an individual or group.

This idea of assigning a task gradually transformed into a method of payment for its successful execution. The approach became prevalent in commerce and sales, establishing a direct connection between remuneration and performance. This framework created a strong incentive system that is still essential in business today.

Commission arrangements are designed to encourage particular sales behaviors and align with organizational objectives. They can vary from straightforward, fixed-rate models to more intricate systems that reward superior performance.

Although both 'commission' and 'committee' can denote groups of individuals, they serve distinctly different roles within a business environment.