A sales compensation plan involving a combination of salary plus commission on net sales is popular because it:
A)Provides the reps with more security than other plans.
B)Offers some of the advantages of a salary plus the incentive and flexibility features of a commission.
C)Is the lowest cost plan.
D)Provides more incentive than other plans.
E)Gives management the greatest degree of control over the reps.

Question

Quizplus · Accepted Answer

A combination of salary plus commission on net sales offers the advantages of both salary and commission plans. It provides a base salary for security while also incentivizing sales with the potential to earn more through commissions on sales. This plan typically has a lower overall cost than commission-only plans while providing more incentive than a salary-only plan. It also allows for some flexibility in adjusting commission earnings based on performance, giving management some control but also allowing reps the opportunity to earn more through their efforts.

A Sales Compensation Plan Involving a Combination of Salary Plus