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Straight Salary vs Straight Commission or Combination Plans

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In what respects would a compensation plan differ among salespeople for the following firms? a) the manufacturer of small airplanes used by executives; b) a wholesaler of office equipment and supplies; c) an automobile dealer.

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When looking at which ways the salary plan should be, one must consider the following ideas

1) does this salary plan encourage sellers to sell more?
2) does this salary plan provide at least minimum income at all times?

with this in mind, ...

Solution Summary

This solution discusses the three different compensation planse for salespeople in 166 words.

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See Also This Related BrainMass Solution

Two successful firms are observed with quite different compensation plans for their

Two successful firms are observed with quite different compensation plans for their
salespeople. One firm pays its salespeople on a commission basis, whereas the other firm pays its salespeople fixed salaries. Do you think that one of the two companies is making a mistake? What are the pros and cons of each approach?

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