Working on a Commission?

So I have a question regarding working on a commission. I am the new design director of a furniture design company (starting their creative department, they have never had an in-house design team before), and they have given me a regular salary, and in addition they are offering a .5% commission on things that I develop. My company and I have quickly come to the realization that this will not work, because as part of my job I am supposed to have some role in every product we develop. We are looking for a new way to structure my commission or we are open to a completely new way to go about things. I am looking to see if anyone has any recommendations, or has had any experience working on a commission and has any suggestions on how to distinguish what is “my” design work.

Any insight is appreciated. Thanks!

How will it not work? Sounds like you’ll get commission from every single one of their products, which is a good deal, no?

I’m with Tarng here… Sounds like you need to say, “Sorry guys. This is what you made me sign up for when you hired me. Deal with it.” And as long as the check clears, you’re golden. I’d kill for that kind of deal, personally.

If the rest of the deal is legit then roll with it. They dropped the ball on that.

Telling the company, “Suck it. You made your bed, now lie in it.”, is a quick way of getting fired. I wouldn’t recommend that approach.

Since you are the director and will have a hand in everything, a straight salary (but higher) may be the easiest option.

Otherwise, you will have to negotiate with the company your percentage of “ownership” of each and every project. To me, that seems extremely complicated. What’s the difference between specifying a drawer pull for a cabinet and designing an original pull? Does the jointery in the drawer save on material or waste material? Will it lead to more sales? What is the percentage if you only spec the drawer pull and someone else does the entire cabinet design? What’s the difference between desiging something with lower overhead versus something new?

A third choice would be an overall profit sharing approach. In 2010, your company grossed $10MM. In 2011 (after you came on board), your company grossed $12MM. You would then get a chunk of the $2MM based on your base salary. That assumes, the higher the base salary, the more important you were in creating the additional 2 million.

Thought of a 4th option.

Base your commission on new product development sales. This is the sales figure based on products that have launched in the last 5 years. This works for the device industry, you may have to adjust the 5 years according to the furniture industry.

When I first read the post I missed the decimal point, and read 5%, thought that it seemed high to include you in on every project. I thought maybe the full percentage on stuff that is primarily you and a lesser percentage on the work you are doing to enhance existing products. The second read I saw it is 0.5%, that seems like it would not be a disincentive to include you in. However, it sounds like there is a little bit of balking though. So I would suggest three tiers, 0.0 percent for project that have no involvement, 0.25% for bettering existing projects, 0.5% for projects that you are driving.

Thanks everyone for the great feed back and insight, much appreciated. Now I have some great ideas to bring to the table!