According to Martocchio (2013), there are five commonly used sales compensation plans: salary only plans, salary with bonus plans, salary with commission plans, commission only plans, and commission with draw plans (p. 191). Under a salary only plan, an employee earns a fixed rate of compensation that does not vary with sales performance (Martocchio, 2013, p. 191). Martocchio (2013) suggests that salary only plans may be taxing on the organization since employees get paid whether they produce or not (p. 191). Thus, the salary onl...
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...red (p. 192). Abratt and Klein (1999) posits that commission only plans work well for organizations that seek to increase its sales volume and profitability (p. 66). Martocchio (2013) states that if organizations fail to be realistic about its sales goals and employee performance standards, the consequences may include decreased employee motivation, loss of profits, and unprofessional behavior (p. 192).
Abratt, R., & Klein, M. (1999). Sales force compensation and incentive schemes: practices in the South African .. South African Journal Of Business Management, 30(3), 65.
Martocchio, J. J. (2013). Strategic compensation: A human resource management approach (7th ed.). Boston, MA: Pearson.
Ryals, L. J., & Rogers, B. (2005). Sales compensation plans -- One size does not fit all. Journal Of Targeting, Measurement & Analysis For Marketing, 13(4), 354-362.
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