Perhaps the most serious shortcoming of straight-commission plans is that
A) salespeople may earn more than their managers.
B) they contribute little to company loyalty, resulting in potential salesforce control problems.
C) the firm suffers financially if the market declines or stagnates.
D) they link compensation to actual sales.
E) they are difficult to administer.

Question

Quizplus · Accepted Answer

Straight-commission plans provide no salary or benefits to salespeople, making it difficult for companies to retain the top performers. These plans incentivize salespeople to prioritize their own income over the company's goals and can lead to a lack of control over the salesforce. Without any guarantee of income, salespeople may be more likely to switch companies for a better commission rate, resulting in high turnover rates that can be costly for the company in terms of hiring and training.

Perhaps the Most Serious Shortcoming of Straight-Commission Plans Is That