jayeff

There is zero evidence to support that, in this or any other industry. Primarily it is a way of making someone less expensive if they fail to do well.

But the point is that you shouldn't be looking to hire people who will fail and you shouldn't be running a business at all (which needs employees) if you don't trust yourself to hire the right people and can't live with the occasional mistake.

There are good and bad people for every job. The best people won't care if they are commission based because they know they will make their money. Untried and failed people won't care either because, hey, they may get it right (this time) and if not, there is always the next job. The problem is that there very few really good people are looking for jobs and what a high element of commission does is exclude all the people in the middle: those who would perform better-than-average but can get and prefer a reasonable flat salary.

If you employ a small army of commission-based salesmen, the 90/10 rule comes to your aid and among all the rubbish will be some gems which can make the whole thing work. But that rule still holds good even if you only hire 1 or 2 people at a time. The difference is it means that 1 year in 10 you have someone who is selling effectively.

In short, there isn't a single business model, but different ones to fit different circumstances and objectives.