Commission refers to a compensation structure where employees receive a percentage-based payment in addition to their base salary. This additional payment is typically tied to the number of sales made, deals closed, or a specific performance metric achieved.

Example
A sales representative earns a 5% commission on every product they sell. If they sell $10,000 worth of products in a month, they would receive an additional $500 in commission on top of their regular salary. This performance-based incentive motivates employees to maximize their sales efforts.