In a recent post, I described what I think is the best way to charge for translation as a freelance translator or translation agency. This new post is designed to share our experiences with compensating the work of another large group of translators—the in-house folks. Our basic compensation principle is that paying a percentage of what the company makes on a project works better than a salary. Here is why and how we do it:
Working on Commission is Good for Both Short and Long Term
Our in-house translators are paid a percentage of the sales just as salespeople, for example. The single most important reason for choosing this compensation method is its positive impact on motivation—people tend to work harder on each project and take responsibility for own professional development:
- With a fixed salary, a translator isn’t always motivated to do their best job. As a result, they may procrastinate or cut corners, thinking that a good-enough translation is okay occasionally. For example, we once had to let go an employee who was quite a good translator generally, but delivered an outrageously unprofessional translation from time to time. On the contrary, a translator who is on commission sees a direct connection between how well they work and how much they earn. With such compensation, procrastination means losing personal time and money. A translator who recognizes this connection tends to focus and concentrate better, and quality improves as a result.
- What’s probably more important is that translators on commission know exactly what they should do to increase their paycheck. Instead of just sitting and hoping to get a raise from a manager, a translator who wants to make more money can simply start translating more words right away. A salary typically doesn’t allow this kind of freedom of choice: you can go out of your way and translate twice as much as you normally do during any given month, but you’re going to receive the same paycheck as you always do. Because quality is one of the factors we use to calculate commission, a translator also recognizes that quality is essential to how much they make. By helping realize how their paycheck reflects their performance, this approach puts translators in the driver’s seat of their own career. On the contrary, a salary can be a roadblock to development especially if the individual is happy with their salary.
Better Understanding of the Company’s Operations
An added benefit of paying a percentage is the increased awareness of what’s going on in the translation company. A translator on salary who’s just told what to do has a limited understanding of when and how the results of their work are going to be used. This can lead to poor decisions such as failing to ask questions or point out problems promptly. For example, a translator can notice an error in the source text or some other problem, but doesn’t let the project manager know until it’s too late. On the contrary, by knowing the components of the project budget, a translator typically gets more insight into what kind of results are expected of them, what the project schedule is, who else is working on the project, and so forth. This leads to improved integration into the translation process, which helps better understand what is expected of the translator and deliver to those expectations.
Bonuses and Profit Sharing
The above compensation principle also extends to the bonuses paid to our translators as an incentive at the end of the year. Because the bonus is calculated as a 12-month average salary, it depends directly on our translators’ performance during the year. We also have a profit sharing scheme in place, which is designed to motivate every translator to help the entire company improve the bottom line.
Paying a commission to in-house translators is not ideal, but it’s our experience that it’s more effective than a salary. At the very least, it empowers employees to work better thanks to increased motivation and awareness of the company’s operations. The downside of this compensation approach is that it makes payroll more difficult and the monthly amount of money a translator makes can be volatile.