How does a bonus differ from a commission?
A) Bonuses are typically made for each sale made; commissions are not paid until the salesperson surpasses some level of total sales
B) Commissions are part of the basic compensation plan; bonuses are additional incentives
C) Bonuses satisfy the salesperson's need for esteem; commissions satisfy the physiological and security needs only
D) Bonuses are always used as a tactical motivational tool; commissions are a strategic motivational tool
E) There are no real differences between bonuses and commissions

Question

Quizplus · Accepted Answer

Bonuses and commissions are both forms of incentive compensation, but they differ in their structure and purpose. Commissions are typically part of the basic compensation plan and are paid as a percentage of sales made by the salesperson. Bonuses, on the other hand, are additional incentives that are paid when a salesperson achieves a specific goal or milestone, such as reaching a certain level of sales or exceeding a sales target. Bonuses are used to reward outstanding performance, while commissions are a regular part of the compensation plan that helps to motivate salespeople to make more sales. Therefore, the best choice is B.

How Does a Bonus Differ from a Commission