Hello, can't find a better forum than this to post this question.
A friend is being offered an OTE contract. However, her role is not sales. Instead, they set internal goals for her. If she meets those goals, then she gets that portion of her contract. Is that fair? Since it is a non-sales role, she should not be getting an OTE contract, right? Or is it free-for-all, up to the employer and employee agreement?
Thanks!
OTE rates (for sales) are usually quite attractive. If she's happy with the base (or close to it) then OTE is a good bonus. If she feels like there is too much at risk and she is in a position to negotiate, no harm in doing so. May also be worth asking how her predecessor went with their achievements/targets (assuming there was a predecessor)
Anyone want to define what OTE means
Your contract says you get something like:
1. $75k salary
2. $25k in commissions if you reach 100% of your target.
In this case the OTE is $100k with 75-25 split. Irrespective of your results, you'll get $75k. However, the second part is variable and if you go above 100% of your target can go to $30k or $40k or even higher, depending on results and conditions. However, the OTE will always be $100k, as that's what you would get with 100% of quota achievement. Your target next quarter may change, but $25k on-target commissions and OTE will stay the same.
On-target earnings definition (OTE)
Most commonly found in sales it involves a contract between the company and the sales person that ensures a specific commission percentage. It can also refer to an executive pay schedule contingent upon the achievement of specified goals.
So long as they are paying at least the minimum wage or whatever the award is if there is one, it's probably legal.