In a sales job can a company recruit employees on variable salary.. i.e without any fixed pay..
From India, Kolkata
From India, Kolkata
Dear friend,
One of the basic ingredients of employment is the creation of the relationship of employer and employee with the feature of regularity of hiring the time and the services of the employee under the continuos control and effective supervision of the employer. Here the mutual considerations are performance by the employee and payment of salary by the employer.
But, sales is a job the performance of which depends on so many factors like the product or services, its price, offers to incentivise the intermediaries, levels of market competition, changing consumption patterns apart from the hard work and salesmanship of the concerned employee. Thus, the time spent by the employee at the disposal of his employer or on the job cannot be completely ignored in the fixation of his salary. Therefore, the regularity and assurance of a fixed salary at the end of the wage period becomes indispensable whether the performance of the employee can be objectively assessed either quantitatively or qualitatively or even both. If it can be a mere quantitative assessment only, then the person need not be 'employed' but simply ' engaged' on some other kind of remuneration like commission.
My opinion, therefore, would be a fixed sum of salary for the compulsory time spent on sales plus a variable sum of incentive linked to the quantum of sales effected over and above a reasonable predetermined target.
From India, Salem
6018One of the basic ingredients of employment is the creation of the relationship of employer and employee with the feature of regularity of hiring the time and the services of the employee under the continuos control and effective supervision of the employer. Here the mutual considerations are performance by the employee and payment of salary by the employer.
But, sales is a job the performance of which depends on so many factors like the product or services, its price, offers to incentivise the intermediaries, levels of market competition, changing consumption patterns apart from the hard work and salesmanship of the concerned employee. Thus, the time spent by the employee at the disposal of his employer or on the job cannot be completely ignored in the fixation of his salary. Therefore, the regularity and assurance of a fixed salary at the end of the wage period becomes indispensable whether the performance of the employee can be objectively assessed either quantitatively or qualitatively or even both. If it can be a mere quantitative assessment only, then the person need not be 'employed' but simply ' engaged' on some other kind of remuneration like commission.
My opinion, therefore, would be a fixed sum of salary for the compulsory time spent on sales plus a variable sum of incentive linked to the quantum of sales effected over and above a reasonable predetermined target.
From India, Salem
Dear sir, Please have a look at the salary structure...and if possible let me know under which Act this kind of salary falls into..Even the ta/da is hourly based... Please help.. Regards,
From India, Kolkata
From India, Kolkata
There is nothing wrong with the salary structure as such, only they are asking to ensure you work full 8.5 hours a day.
However, as per Minimum Wages Act (and also in the new Code on Wages), the company has to ensure it pays the minimum salary specified for the location and work you are doing.
Further, payment of wages act (and code on wages) also says in case the employer is not able to give you work for the full day, then you will be paid for the full day even if you work for less than the full day. However, if you have work and you do not do it, then the company is allowed to deduct salary for the period when you are not at place of work (basically doing work).
The other rule is that the total deduction from gross salary (including this particular deduction) can not exceed 50% of gross salary. Therefore subject to these two restrictions, there is no rule that says you need to have a fixed salary.
Incidentally, you do have a fixed salary in your case. Only you need to work 8.5 hours a day for 26 days a month. which seems to be normal. Do you expect to be paid when you do not come to work? or did i miss something?
From India, Mumbai
However, as per Minimum Wages Act (and also in the new Code on Wages), the company has to ensure it pays the minimum salary specified for the location and work you are doing.
Further, payment of wages act (and code on wages) also says in case the employer is not able to give you work for the full day, then you will be paid for the full day even if you work for less than the full day. However, if you have work and you do not do it, then the company is allowed to deduct salary for the period when you are not at place of work (basically doing work).
The other rule is that the total deduction from gross salary (including this particular deduction) can not exceed 50% of gross salary. Therefore subject to these two restrictions, there is no rule that says you need to have a fixed salary.
Incidentally, you do have a fixed salary in your case. Only you need to work 8.5 hours a day for 26 days a month. which seems to be normal. Do you expect to be paid when you do not come to work? or did i miss something?
From India, Mumbai
Dear colleague,
By any chance, if by " variable pay" , you mean entire pay , then it may not be workable.
Salesman' s pay packet generally keeps pace with market conditions consisting of fixed component aligned with market trends for his level of experience and capabilty as well as retirals, and veriable incentive component to motivate him to push his potential further to achieve targeted sales.
This aspect is well brought out by the learned colleagues which can guide pay structure design for the sales staff.
Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant
From India, Mumbai
By any chance, if by " variable pay" , you mean entire pay , then it may not be workable.
Salesman' s pay packet generally keeps pace with market conditions consisting of fixed component aligned with market trends for his level of experience and capabilty as well as retirals, and veriable incentive component to motivate him to push his potential further to achieve targeted sales.
This aspect is well brought out by the learned colleagues which can guide pay structure design for the sales staff.
Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant
From India, Mumbai
Hi Vinayak
If you see the salary structure, it is not variable pay as such. It talks of pay for working for 8.5 hours a day and 26 days a month. To me it seems to be a fixed pay. If you dont work all days or work less than a full day (assuming there is enough work), then obviously they will deduct LWP.
The rest is on attaining certain targets. Allowances can be subject to target, there is nothing wrong with it. Any hard working person will try to achieve his targets. Though the industry is not disclosed, the targets seem pretty fair if they are working in a 'market' location and will probably be a problem only if its a rural area without enough customers to mine.
From India, Mumbai
If you see the salary structure, it is not variable pay as such. It talks of pay for working for 8.5 hours a day and 26 days a month. To me it seems to be a fixed pay. If you dont work all days or work less than a full day (assuming there is enough work), then obviously they will deduct LWP.
The rest is on attaining certain targets. Allowances can be subject to target, there is nothing wrong with it. Any hard working person will try to achieve his targets. Though the industry is not disclosed, the targets seem pretty fair if they are working in a 'market' location and will probably be a problem only if its a rural area without enough customers to mine.
From India, Mumbai
Thank you all, for all the replies n comments... although i m getting incentive on achieving sales target but plz tell me as am i suppose to get more pay if my total working hours is more than 8.5....
From India, Kolkata
From India, Kolkata
I am not sure what the actual terms are since we do not have a copy of the appointment letter, I think the note above says that this the monthly salary subject to you working at least 8.5 hours a day. I don't think you are eligible for additional pay beyond 8.5 hours unless you are basically eligible for overtime
From India, Mumbai
From India, Mumbai
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