The salary is based on the employee's job title and work description. There can be tax advantages to taking on debt. E. one of the above: Answer» b. 1. It assures a steady minimum income to the salesmen. In this arrangement, the company decides whether or not to raise the employee's salary base on his or her work performance. Part A: Compare the advantages and disadvantages of straight salary and straight commission compensation plans. While an hourly grocery bagger makes $15,080 in a year, a salaried bagger might earn between $19,925 per year and $26,219. 100 of these enrollees make a total of 200 office visits to primary care physicians over one year and each visit costs the . The commission rate can be a percentage or fixed fee per sale. 3 Benefits of Studying Abroad. An 8-ounce serving of celery juice contains: 42.5 calories. View full document See Page 1 32. Straight salary: Employees earn a . Horizontal growth, meanwhile, is a way . Features of Piece Wage System . However, a straight salary plan also has its own advantages. 1. It can help you attract new talent with the promise of consistent pay, no matter how they perform. But with straight piece work (without a guaranteed minimum) the worker would be paid purely on the basis of output at the rate of 50 paise per . Further, the straight commission motivates poor performers to become more productive since it rewards good performers (Johnston and Marshall, p. 329). 75. Example: Each rep in your company earns a straight salary of $75,000 a year, or $1,440 a week (gross). b. the working capital requirements are lessened with the straight-salary compensation plan. This type of compensation plan is for employees who work . A happy worker is an efficient one, as well as a positive influence on the rest of the office. Advantages of salary plus commission The benefits of a salary plus commission plan include: 1. Each statement or question is required to be rated merely as " Yes " or " No .". Your base pay provides a steady income during seasons where commission may be more difficult to earn. Saving Money. Checklist Method. Cons: Focus on Service A straight salary can work well for sales positions for which a high focus on service is required, such as a salesperson who calls on retail stores on a regular basis to take orders and stock merchandise. B. D. A straight salary plan links performance to leadership style. Vesting schedules can be effectively used to "tie up" key executives. A salary (or wage) is a fixed amount paid in exchange for an employee's services. Straight piece rate system: This is the type of wage system where the wages are paid to the workers based on the output or result of work done. What is straight salary? Based on these two factors, different plans are designed. (FFS), discounted fee-for-service (FFS), and capitation work. Part B: As a retail sales manager of a large superstore, one of your responsibilities is to train the newly hired employees. The employer prefers the retention bonus as opposed to a raise in salary because . 1. Only after seeing exactly how the numbers work out will the NP know which plan will work . E. one of the above: Answer» b. Benefits. This sales compensation plan is far better than the straight salary sales compensation plan as it motivates employees to work hard and make more and more sales. by Adam Stein - 06/06/13. In this case, the employee may not be incentivised enough to push the product as he is assured of his salary. The opposite might also be true. The difference, fundamentally, between these two types of personal accomplishment is this: Vertical growth has a tendency to focus on flashy new job titles. There are three fundamental methods of s ales compensation plan - , viz. 2. Part B: As a retail sales manager of a large superstore, one of your responsibilities is to train the newly hired employees. It is called a 1 for 1 plan for each 1 per cent increase in production the worker is paid a 1 per cent increase in wages. D. A straight salary . For full-time employees, salary is generally described in annual, monthly, bi-weekly or weekly amounts. What are the advantages of straight salary vs compensation on the basis of relative value units (RVUs)? A. 2. 3. 2. Straight salary can make all sales people equal members, which is best when they're working as part of a team or a small group and when everyone contributes equally to the sales goals. If you choose this plan, you'll pay your reps using a mix of base salary and performance-based rewards. It decides the right salary and other benefits befitting the position and is at least in conformity with the prevalent salary structure for such a position in the industry. The following are the different types of conventional methods of employee appraisal: 1. Some employers even reimburse students for college costs if their area of study is related to the job. B. 1. Employees are provided with a base salary and are then paid a commission for each sale. A 70/30 split between base salary and commission plus bonuses is a fairly typical mix according to a 2008 survey from the Canadian Professional Sales Association. Where. Your earning potential is unlimited. From this baseline, it's a good idea to adjust as needed. An advantage of productivity-based models is that . The straight salary plan is simple and economical to administer. The answer is False. That's enough to buy a decent. Hence, this concludes the definition of Straight Commission Plan along with its overview. The straight salary . Translated into a compensation model, capitation involves distribution of health plan payments among physicians in a nearly equal manner or based on some type of formula. Encourages employees to work harder. C) Salary plus commission. Salary. If you choose this plan, you'll pay your reps using a mix of base salary and performance-based rewards. This means you can always keep earning more money if you're willing to put in some extra hours of work. This sales compensation plan ensure stability as it offers a minimum salary to employees during low sales season or when they are training. States establish and administer their own Medicaid programs and determine the type, amount, duration, and scope of services within broad federal guidelines. Employees get a regular salary every paycheck. Most developed as attempts to capture the advantages and offset the, disadvantages of both the salary and commission systems. d. A straight . Part A: Compare the advantages and disadvantages of straight salary and straight commission compensation plans. Provide an opinion of which type of compensation plan you would prefer as a professional salesperson. On a straight salary, they will be paid this regardless of how many deals they close. With a straight salary plan, selling costs are kept in proportion to sales. As an example, a sales compensation plan arranges for salary to compose 60% of an employee's on-target earnings and commission earnings, 40%. Our recent energy survey revealed that straightline projections are the most common energy budgeting technique in commercial real estate. Such a plan is quite common in the services industry as well as in the industrial goods sector. B. With a straight salary plan, selling costs are kept in proportion to sales. Pros and cons. When deciding if a commission plan is right for your sales staff, keep in mind the sales targets must be attainable. Workers are paid according to their merits because distinction is made between efficient and inefficient workers. Disadvantages of straight salary compensation Some disadvantages of straight salary compensation may include reduced retention and high turnover if employees don't see opportunities to increase their pay. They are incentivized to sell more to increase their pay. The point is to make better use of the £30bn housing benefit bill, much of which goes straight to private landlords - helping pay off their mortgages. C. With a straight salary plan, salespeople have the assurance of positive feedback. The straight salary plan is one of the simplest compensation plans that companies offer to their employees, particularly sales representatives. Your paycheck is based on a specific percentage of the sales that you are able to generate. Salary plus commission: Most sales compensation plans are combinations of salary and commission plans. Thus, equitable piece work rates should be fixed if the piece rate system is to be successful. b. These types of variations can make it more challenging to budget and plan for the future. The straight salary plan is simple and economical to administer. Circumstances: Straight salary method can be used under any circumstances, whereas straight commission method can be used only in cases where the . Plans are flexible and costs can be recovered. a. Straight salary offerings can also be good for attracting new talent that's concerned with stability. Management can direct Salesforce into various activities more easily. The Four Major Types of Direct Compensation: Hourly, Salary, Commission, Bonuses. So, it can be easily understood by all salesmen. Territory Compensation. E) Combination plans are declining in popularity. Highly talented professionals in sales and marketing get more out of commission-based pay since their income relies on how hard they work. 2. The straight salary . This Summary Plan Description is the Plan Document for the Salary Continuation Plan. Ratings 95% (57) This preview shows page 9 - 12 out of 38 pages. A. Base salary + sales commission-based pay. Federal law requires states to provide certain mandatory benefits and allows states the choice of covering other optional benefits. True b. Fals e ANSWER: False From management's point of view, what is the advantage of a straight salary compensationplan? 1. Mandatory benefits include services including . It has lower turnover rates. Advantages of Straight Salary Method 1. No compensation or any commission on the top, an employee will receive a straight-forward fixed salary. The military is also an option, offering monetary support for future schooling as long as the enlisted individual . . As a means to encourage physicians to increase income, reduce costs, or achieve other predefined performance metrics, a salary plus bonus payment model may be in use. Advantages of straight-salary compensation plans include all of the following except a. salaries can provide control over salespeople's activities, especially nonselling activities. Base salary plus 7 % of gross profits plus 1/2 % of gross sales. Straight Salary Plan - It provides stable income and provides freedom from financial uncertainties. An advantage of using a straight salary plan to compensate sales employees is that employees are paid for performing only sales effort. 5. . A certain percentage is taken from a worker's salary, depending on how much he or she earns. Going with 25% depreciation after 1 year and using $5,000 as a down payment example: $35,000 car is worth about $26,250 after a year. The amount I really want is $110,000 and will not accept anything below $100,000, even said as much during the interview but they still offered $95,000. Salary Plus Commission. 4. $0 down: At $613/month I would have about $27,644 left on the loan. The advantages of studying abroad include an expanded worldview, foreign language skills and career opportunities. 2. Differential piece rate system: This is a type of wage system where the wages are paid to the workers after the completion of work. Advantages of salary plus commission 4. . On a straight salary, they will be paid this regardless of how many deals they close. But there is no additional incentive for good performance. Here Are the Pros of Straight Commission. Advantages of salary plus commission Number of hours worked: An advantage of the hourly wage rate is that a worker is paid for the hours he actually works. This is used in the case of permanent employees. Advantage: Pay Tied to Revenue This factor is why many sales-intensive companies pay on straight commission. It is easy to calculate. Mortgage payments are also often cheaper . Using an incentive compensation plan wisely will reward workers for high performance and decrease the likelihood that they will seek out employment from competitors. Managers can effectively control labor costs or ensure optimized selling efficiency by only paying workers for the results that they produce. Salary continuation plans are excellent tools companies can use to retain and reward key executives. Considerable difficulty is experienced in fixing a suitable piece work rate. Suppose that a health plan has 200 enrollees. The straight salary plan is simple and economical to administer. 7. motivator whereas other nancial incentives such. Differential piece rate system. Ontario Employment Standards legislation entitles most employees to receive a "minimum wage" in exchange for the work they complete for a company. It is based on one's income. Using a mixed compensation model. In the US, this would mean a salary package of $50,000 might actually only provide a paycheck salary of $35,000 to the employee. A college education can be life-changing; to get . 5. A regular and stable income can do much to develop a loyal and well-satisfied salesman. An efficient worker can earn more wages because wages are linked to output. Salary Plus Bonus. 215 milligrams of sodium. 0 grams of cholesterol. Advantages and disadvantages of straight pay plan and straight commission plan. . Advantages of commission-based jobs. D) Fringe benefits are not being used as much as in the past. Pros: There is more stability here and it's easy to know exactly how much you'll make every pay period. sales efforts and (2) the pay package is the basic. However, in straight salary plan, only a regular salary is paid, with no commission for sales. I'd be -$1394 on the loan but I would have the $5,000 to more than offset the amount I'm under on the loan. Once the person has established himself in the area, the company can switch to performance-based salary. The straight salary plan is simple and economical to administer. The average pay at my experience and location for this role is $108,000. 2. . Example: Each rep in your company earns a straight salary of $75,000 a year, or $1,440 a week (gross). With a straight salary plan, selling costs are kept in proportion to sales. of compensation on salesforce motivation, (1) monetary rewards are the primary motivator of. Advantages of Commission-based Pay. Straight salary compensation: Helps build customer/salesperson relationship. Types of Direct Taxes 1. 2. It can lower the overall interest rate that you pay when meeting your obligations with this option, helping you to grow your business while having access to the liquidity you need. It is generally offered during stressful times in an organization when the chance of an employee leaving the firm is very high. Compensation plan for salespeople consist of a straight salary plan, a straight commission plan or a combination of salary and commission plan. Carbohydrates: 9 grams. Under a straight salary plan, the retailer has flexibility in assigning salespeople to different activities and sales areas. This means that you can, theoretically, make as much as you want without a limit. Straight piece rate system 2. The following three step formula is applied: Step 1: Sales volume up to $ 18,000 a month. 1. Salary Plan a salesforce compensation method in which salespeople are paid a straight salary; a salary plan approach provides security and stability but may not provide . a. Example- Straight salary plan can be . - (1) Straight-salary method, (2 . Contents: . With a straight salary plan, selling costs are kept in proportion to sales. For example, if a worker works for 8 hours a day, then he will be paid for a complete 8 hours and if works overtime, then he will be paid more for that. Improved morale. 2. Focused on what is best for the customer, not what is best for the salesperson's pay check. • Security and collaboration: The straight salary plan provides a more stress-free working environment for the salespersons. Commission plans have advantages for employers and employees, but they have drawbacks as well. This sales compensation plan ensure stability as it offers a minimum salary to employees during low sales season or when they are training. 2. On the plus side, capitation rewards groups, and in turn those groups' individual physicians, who deliver cost-efficient, effective care. c. Benefits or Advantages A regular income gives the salesman a good degree of security. You can reach a lower interest rate with debt financing. What are the advantages of straight commission? The straight salary plan is simple and economical to administer. Where the straight-salary method is used, the sales executive lacks a financial means for stimulating the sales force to greater effort. 0 grams of fat. Step 2: Sales volume from $ 18,000 to . Straight salary is the normal wage given to an average employee. As the name suggests, straight salary compensation is just what you would expect. That's a difference of $4,845 to $11,139. 2 grams of protein. Thus, this method is an improvement on the time wage system. Salary - physicians are paid a fixed weekly or monthly amount, and pay is not tied to enrollees or services . C. With a straight salary plan, salespeople have the assurance of positive feedback. The more sales they make, the more generous their compensation will be compared to their less motivated counterparts. D. A straight salary . as . D. A straight salary plan links performance to leadership style. B) Straight salary. 3. 2. Base salary + sales commission-based pay. Low piece work rate fixed by the employer will frustrate the workers and will not provide any inducement to the workers to increase the production. Basis: Straight salary method is based on the time spent on the job, and not on the volume of sales effected by the salesmen.But straight commission method is based on the sales effected by the salesmen and not on the time spent on the job. Cons: There is not much ability to increase earnings since performance reviews are often once a year. Guaranteed income With a salary plus commission plan, you still earn a base salary regardless of how many products you sell. 1. C. With a straight salary plan, salespeople have the assurance of positive feedback. The cool thing about some commission-only jobs is that they might not have an earnings ceiling. From management's point of view, what is the advantage of a straight salary compensationplan? It provides stability of earnings without wide fluctuations. However, it's difficult to be happy when an employee feels . A retention bonus is defined as a one-time payment that is used as a financial incentive to keep a valuable employee in the organization. Disadvantages. The sales compensation plan that typically provides maximum security and stability of earnings for most sales reps is: A) Straight commission. What is Iscommission? The following mentioned are few top benefits of hourly pay. . 4 grams of fiber. STRAIGHT - SALARY PLAN Characteristics: • 100 percent compensation is salary, which is a fixed component • No concern for sales performance or salesperson's efforts • This plan is suitable for sales trainees, missionary salespeople, and when a company wants to introduce a new product or enter a new territory Advantages . When asking about compensation, most people want to know about direct compensation, particularly base pay and . Simple budgeting practices save time, but hidden assumptions can come back to bite you. Piece rate system has the following advantages: 1. Advantages and disadvantages of - straight salary compensation This plan is easy for the employee to understand and for the store to administer. Advantage: Straight-Forward Budgeting For you as a business owner, paying fixed salaries allows you to precisely know how much you're going to pay out each month in labor costs and to budget accordingly. The company can selectively choose plan participants. Income tax. The evaluator is given a checklist containing a list of statements or questions about various traits of the employee. c. With a straight salary plan, salespeople have the assurance of positive feedback. Straightline is the shortest route to bad budgets. Salary plus Commission This is one of the most reliable types of compensation plans. With a straight salary plan, selling costs are kept in proportion to sales. 8 Votes 1652 Answers. No bonuses, no commissions, and few, if any, sales incentives. This is one of the most common types of commission plans used in the sales industry. 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. C. With a straight salary plan, salespeople have the assurance of positive feedback. The good thing is that the government is also . With this type of structure, you'd pay your sales people a straight—albeit competitive—salary like all of your other employees, and nothing else. Provide an opinion of which type of compensation plan you would prefer as a professional salesperson. You can tweak the budget annually by deciding whether the business has flourished enough to offer merit raises. Straight Salary Straight salary sales compensation plans aren't very common, but they do have a place in some organizations. Other benefits can sometimes be included in the base salary package. Working for a year or so gives students the chance to save up money for college tuition, books and other expenses. The con aspect is that a straight salary model does not encourage innovation, or cost reduction efforts. No surprise payroll expenses will occur. I have another job offer currently but they haven't told me the salary yet so I don't know if I should mention it.
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