Commission is an additional compensation based on the employee’s performance.
A sales commission is a standard way of compensating salespeople in most businesses, usually paid in addition to a base salary.
It is typically based on the performance of the salesperson, e.g., meeting or exceeding specific sales objectives, and dynamically calculated for each member of the sales team.
- On-target earnings (OTE) is a metric used to forecast the total potential compensation of a particular salesperson once all performance targets are achieved. Also known as on-track earnings, it is mostly used when talking about commission-based sales compensation.
- Kicker refers to a higher commission rate that is used to reward high-performers and typically triggered once a sales rep achieves their quota.