What is a potential financial risk for an employee under a Draw Against Commission plan?
Answer
They may end up owing the company money if they fail to generate enough sales to cover the advance.
If an employee receives an advance (draw) and then does not earn enough commission to cover that advance, they might owe the company the difference or the advance may simply disappear depending on the specific terms.
Related Questions
What is the common retail commission structure called when it is applied on top of a guaranteed hourly or weekly wage?What defines a straight commission arrangement?What is the primary goal of any retail commission plan?How does a Tiered or Graduated Structure reward increasing levels of success?In a Goal-Based Commission system, when does commission begin to accrue?What is a potential financial risk for an employee under a Draw Against Commission plan?What is the distinction management must define regarding the base used for commission calculation?Which calculation method applies the same fixed percentage to every dollar sold, regardless of total volume?What is the purpose of implementing a differential commission rate in retail?What downside does income instability present for the employee under a commission system?What negative outcome can result from management setting commission pressure too high?