| Priyansha tweets at. Part B: As a retail sales manager of a large superstore, one of your responsibilities is to train the newly hired employees. The advantages of straight salary compensation include which of the following? Readers should verify statements before relying on them. This $35,000 level is called: Your customer's buying cycle is approximately 2 years and your reps need to invest significant amounts of time understanding their customers. MBA Skool is a Knowledge Resource for Management Students, Aspirants & Professionals. This is a very broad category of compensation. How to Pay Your Sales Force - Harvard Business Review What change in the firm's salesforce reward system might be in response to customer's needs? Which one of the following statements regarding global compensation is false? The economy has entered a period of recession, and even the Administration's economists predict that it will remain so for at least three more quarters. Salary programs are most appropriate when it is difficult to relate the efforts of individual salespeople to the size or timing of a sale. It helps the firm to direct the activities and efforts of the salesmen towards the cultivation of markets (i.e., creation of new customers), undertaking of window display, store demonstration, etc. 5. As salesmens remuneration is not related to the volume of sales made by them, this method imposes a serious burden on the earnings of the firm in terms of sales. Which of the following is not an advantage of combination plans? He holds a Bachelor of Science in marketing from York College of Pennsylvania. This type of compensation plan is every salespersons dream. Get help with QuickBooks. \text{Winning Team} & \text{Points} & \text{Losing Team} & \text{Points} & \text{Winning Margin}\\ https://quickbooks.intuit.com/oidam/intuit/sbseg/en_us/Blog/Photography/Stock/b865e494cb3a98c7739d65e0c9442b1c.jpg, https://https://quickbooks.intuit.com/r/payroll/employee-compensation-benefits-guide/, The complete guide to employee compensation and benefits | QuickBooks, In my experience, both in the corporate (salary) and retail (hourly) space, an employee compensation plan encompasses salary or, How to find a balance between employee pay and benefits, Companies often feel they can justify a lower salary or rate if they include a more robust benefits package. For post-Depression-era baby boomers, the security of a steady salary is important. This type of sales compensation plan is employed in companies which prohibits direct sales. After initial investigations by Holmes Miller, head of the Operations Department, BIA has narrowed the list to 9 cities. Is your team struggling with burnout and a lack of fulfillment at work? Benefit packages amount to a negligible portion of the cost of keeping a salesperson in the field. \end{array} This form of nonfinancial reward is generally considered to be more desirable to younger salespeople With ambitious expansion plans, BIA has decided it needs a second service hub on the continent, to complement its large Heathrow (London) repair facility. In your job analysis of the salesperson's activities, you discover that a significant level of activity of a successful salesperson includes taking orders for inventory replenishment, equipment installation and maintenance, and shelf-management programs. Provide a mix of both compensation and noncompensation rewards comparable to other firms. You think you have finally selected a compensation method and wage level that meets your boss's requirements. Advantages of salary plus commission The benefits of a salary plus commission plan include: 1. Which of the following is not a guideline recommended in the management of motivation? Many appreciate the fallback stability of the base salary paired with performance incentives. The Advantages & Disadvantages of Salary - Career Trend +1,500\\ In many companies, basics plus bonus-based compensation plans are used as a way to motivate employees. A fixed dollar amount is paid for each day or week in the field. ___________ rewards are those that are given in return for acceptable performance or effort. How much investment capital should you accept? The importance of matching the abilities and needs of sales recruits to the ____ cannot be overstated. Is it just monetary? Your positive feeling towards inclusion at work should be synced with your actions on making a change. Expert Answer. If an employee is required to work on a holid ay as a regularly scheduled work day, . , LLC in Miami, Florida. Which of the following accurately describe per diem expense plans? provide salespeople with trips and other rewards. Increment is given annually as per the scale of pay, and after a certain number of years of service, salesman is promoted to a higher scale of pay. Salaried employees receive an equal portion of their annual compensation every week. 10. Those who sell below $35,000 will not receive commissions. Check to see how the salespeople would fare under the new plan by using sales figures from the previous year and calculating expecting compensation. Its critical for employers to keep this in mind when deciding between different types of compensation packages. One regulation is employers are required topay overtimeat a rate of time and a half if an employee works over 40 hours in one week (this is a U.S. standard and differs by country). In some organizations, selling is a collaborative effort. Does not provide security, so the reps will work harder. When there are considerable seasonal variations in the sales made by the salesmen. Straight salary method of remuneration is simple. The introduction of HR technology has revolutionized the way HR departments operate. What are the most popular types of compensation packages? But straight commission method is based on the sales effected by the salesmen and not on the time spent on the job. O True O False. Person B works for an NFP and is part of a salary packaging program. Each is then rated on 12 factors, as shown in the table below. They may have less vacation time or even zero paid vacation time. Sparks holds a Bachelor of Arts in business. 12. The only downside with territory volume compensation plan is that it can lead to hostility between co-workers if certain members feel that effort isnt equally divided. Summary financial data for February are presented in equation form as follows. \end{array} __________ tends to help give the sales force the needed push to sell complex products or services and can be used to redirect salesperson efforts toward specific product lines; under this plan administrative costs tend to be high. 6. Startup companies using profit margin/revenue based compensation plan can also incorporate long-term incentives such as stock to build loyalty and a valuable sales base. The ATO considers this $80,000 taxable income. According to the text, which of the following is not one of the rewards typically offered to salespeople? The high level of uncertainty associated with performance-based pay often leads to extreme competition among the salespersons; leading to lack of cooperation that can harm the companys goals at times. Offer your support. These plans often include a straight salary income for training periods or during low seasons. So, it can be easily understood by all salesmen. The workplace catchphrase you need to know. This compensation category also includes restaurant employees paid mostly in tips. Whos using straight salary plus commission compensation? That means, there will not be much bad debts. 8 Pros and Cons of Straight Commission - BrandonGaille.com 6 Different Types of Compensation Plans and Benefits - The HR Digest Straight salary plans are not popular with salespeople because: They don't provide strong incentives for extra effort. Sales Management Insight: Sales Commission Plans. manner. While there are no real downsides to this type of plan, organizations should be mindful of several things: This requires a solution that benefits both employee and employer. The least valued nonfinancial reward by salespeople, other than those nearing retirement, is, According to the text, controls typically used by companies to ensure judicious spending by the Straight salary method promotes team-spirit and cooperation among the salesmen in the case of joint sales. \text{Symbol} & \text{Stock} & \text{High} & \text{Low} & \text{Last} & \text{Change} & \text{Volume} & \text{High} & \text{Low}\\ \hline Happy hours are a great way to connect with colleagues, share experiences, and have some fun together. 4. Salesperson compensation has been an issued marked by trial and error to discover the right formula. One of the advantages of the gross margin commission plan is the firm and salesperson share the same pool of money so both are interested in maximizing that amount. Although most compensation plans are incentivized, the straight salary plan is a method of compensation in which the salespersons receive a straight-forward fixed salary with no commissions. 9. The advantages of paying employees a straight commission include the fact that it provides direct motivation to sales representatives to sell more products and services so they can earn more. Finding balance and setting boundaries at work. The directors, who strongly wish to retain family control of the company, must consider issuing securities to outsiders. It does not distinguish between efficient and inefficient salesmen, as the same remuneration is paid to both efficient and inefficient salesmen. When the salesmen are new to the job (i.e., for remunerating the newly appointed salesmen.). Design the plan centrally and dictate to local countries. A salesperson who is intrinsically motivated. The Management Dictionary covers over 2000 business concepts from 5 categories. While in certain compensation plans, the salespersons receive benefits on accomplishment for specific tasks (e.g. Differences between Straight Salary and Straight Commission Method Another advantage of this pay structure is that it helps in attracting more talent . When more than one individual works together to make a sale, the selling process is described as: You have just been promoted to the position of sales manager. But straight commission method provides sufficient incentive to the salesmen to do hard work. international stocks and bonds This system safeguards the interests of the consumers also. Employees who like working in sales but also in a team environment will be attracted to such compensation, as it takes the pressure off the individuals performance.
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