What payment method is typically based on a percentage of the employee's sales?

Prepare for your IB Business Management Exam with multiple choice questions and in-depth explanations. Get ready to excel and achieve your goals!

The correct answer is commission, as this payment method specifically incentivizes employees based on their sales performance. When an employee earns a commission, they receive a portion of the sales they directly generate, which is calculated as a percentage of those sales. This structure motivates employees to increase their sales efforts, directly linking their earnings to their performance in generating revenue for the company.

In contrast, wages and salaries are fixed compensation methods that do not vary with sales activities or employee performance. Wages may be paid hourly and can be consistent regardless of the level of sales achieved, while salaries provide a predictable income on a longer-term basis, often paid monthly or annually. Perks, on the other hand, refer to additional benefits or non-monetary compensation, such as health insurance, bonuses, or flexible work arrangements, and are not directly tied to sales performance. Thus, the nature of commission distinctly aligns with sales-based earnings, reinforcing its role as a key driver in sales-oriented job roles.

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