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by bradleyjg
3037 days ago
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It's hard to design an incentive structure that's perfectly aligned. In the case of a commission only on the increase, now they've gone from having too much of an incentive to get any deal done quickly to not enough of an incentive to close a deal even if it isn't a large increase. You can fiddle around with a fixed part and incentive part, but it is very hard to find the right spot. One alternative is to pay by the hour but that comes with its own set of perverse incentives. |
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Anyway, look at the numbers here: a good salary negotiation takes maybe 5-20hrs to fight for, I don't know, $10K-$50K/yr gain? And a $5-$50k sign-on bonus? Even targeting an "premium consulting" rate of $500/hour, the agent can make a lot of hay to get their cut, putting in the basic standard amount of work.