Sales commissions encourage workers to put in more effort, which raises their marginal product.

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Sales commissions are a form of incentive pay, which is designed to motivate workers to put in more effort and increase their productivity. As workers strive to achieve higher sales targets, they are likely to work harder, develop better sales techniques, and generally increase their output. This raises their marginal product, or the additional output they contribute for each unit of input, which in turn leads to higher sales revenue and profits for the company. Therefore, sales commissions can be an effective way to promote positive behavior and improve performance among workers.

Sales Commissions Encourage Workers to Put in More Effort, Which