The Corner

Capping Commissions

Here’s a completely random thought: Door hinges!

Here’s a slightly less random one. The missus and I were watching the latest episode of the The Office last night on the DVR thingy. One of the plotlines involved the fact that the suits over in corporate capped the commissions salesmen could make. I’ve heard of this practice before from friends and family but I have never heard a good explanation for why in the world any business would want to do such a thing. Why have commissions at all if you’re going to cap them? What on earth would be wrong with having your sales force make more money than everybody else in the company? As far as I can tell, in principle, there’s nothing wrong with salesmen making more in commissions than the CEO makes in salary.

Anyway, this has always bugged me and I figured it’d be a good question to throw out to the Corner on a slow day.

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