3) commissions incentivise sales to sell ANYTHING they can get a commission on, not necessarly the things you want to sell or are good at making. one needs to be very careful in what sales is allowed to sell.
Yeah, incentives for sales people can be a bit whacky. For one, they're rarely encouraged to do what's best for the company (and therefore their colleagues) in the long-run, but rather wind up taking a very self-centered, short-term view.
There was an interesting article I saw a while back (can't remember if it was here on HN or not), about paying sales people salary only, no commission. From what I remember, at least one company tried it and found that it worked really well.