Rewarding Employees: Commission, Bonuses and More

Managing people

9 January 2023

A good commission, bonus, or other reward structure can play a big role in connecting your sales staff with your business, ensuring your goals are aligned and your team are happy and productive.

And with staff turnover at an all-time high, finding ways to keep your staff engaged and feeling appreciated will go a long way towards a better staff retention rate.

How it works

These initiatives can promote loyalty, provide motivation to meet and exceed targets, keep employees feeling happy and recognised for their efforts, and reduce staff turnover.

Let’s take a look at each reward system in a little more detail:


This is usually used for sales roles to give additional compensation to salespeople who meet and exceed the minimum sales goal. This reward style is often found in customer-facing sales roles or roles that are very focused on selling and prospecting and is based on individual performance alone.

For a small business, it’s probably not realistic for employees to earn a wage from commission alone, so many companies will use a blended compensation package to allow a stable salary but also reward employees for good work.

Often commission has a graduated system – you get a certain percentage of each sale until you meet your goals and then the percentage you earn goes up for sales that are in excess of your goal.


Bonuses are usually a predetermined amount that is paid out depending on a mix of individual and company performance. These are more common to see in non-selling roles and bigger companies but can be a great motivator in small companies as well.

This can push individual motivation and increase teamwork because the bonus is based on both group and individual performance.

Other rewards

Small gifts like a box of chocolates, a bottle of wine, or a bunch of flowers can go a long way towards making employees feel appreciated when they go above and beyond with outstanding work. While this is not as formalised of a reward system as commission or bonuses, it’s great to make sure your team members are recognised in some way when they go above and beyond.

Some rewards may be considered benefits in kind and will need to be declared to HMRC, so make sure you understand what small gifts are tax free and what gifts need to be declared.

Using rewards to meet goals

Which type of reward system you decide to use will depending on what actions you’re trying to motivate employees to take.

If you’re trying to get employees to regularly make use of a system, then small rewards like wine or chocolate may be sufficient. For example, if you have a gardening business and you need employees to take better notes about what work is carried out after each visit, then you can have a reward for the most consistent or thorough note taker.

If you’re trying to boost sales of a certain product line or promote upselling, then commission might be your best plan of action. Say you own a salon, and you want your employees to start selling more haircare products – you could give commission to those who manage to cross sell or upsell to consumers.

If you’re trying to increase business revenue but most of your sales are touch by many team members, then a bonus system may work best for you as it’s hard to determine each individual’s contribution to meeting the goal.

Building a reward system

A really successful reward structure motivates your whole team and meets wider business targets. To do this, you may want to introduce additional bonus elements. For example:

  • Gamification: encourage healthy competition by offering an added bonus or reward for sales staff who sell the most of a specific product. This is both a fun and effective way to encourage upselling, cross-selling or customer sign-ups.
  • Peer-to-peer recognition: use an anonymous ‘pay it forward’ box to let staff and customers tell you when someone does a good job, so you can reward them.
  • Personal development targets: reward staff for learning about a new product, keeping the store in shape or restocking in busy periods.
  • Non-cash motivators: managerial praise, opportunities to lead new projects, or even just a card to say thanks can boost morale as well.

Managing your reward scheme

Back in 2015, SpecSavers launched an ePoints scheme that rewards each employee for achieving a range of sales and personal development targets. It was a great example both in terms of tailoring staff rewards and tracking ongoing improvements and was a big step in acknowledging that rewarding employees is important.

Since then, more companies have started to recognise that the key to staff retention is to appropriately reward employee effort. But even if you don’t have the financial firepower for an electronic system like the one at SpecSavers, keeping records of whether your employees are meeting their targets will help you hone your schemes, develop your team and foster success in the long-term.

One benefit of being a small business owner is that if you’re not sure what kinds of reward would be best for your employees – you can ask them! You’re likely way more connected to your employees and in tune with what motivates them than the boss at a big corporation would be.

All links are checked and valid at time of publishing, 9 January 2023.

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