 MONETARY COMPENSATION REMAINS AS ONE OF THE MOST DIRECT, LEAST AMBIGUOUS WAYS OF COMMUNI-CATING TO SALES PERSONS ABOUT THEIR PERFORMANCE.  SALES FORCE COMPENSATION IS USUALLY THE LARGEST COMPONENT OF THE DIRECT SELLING COST

A.STRAIGHT SALARY B.STRAIGHT COMMISSION C.COMBINATION OF SALARY, COMMISSION AND/OR BONUS  IN A RECENT SURVEY, VPs IN HRD WERE ASKED “WHAT ARE THE MOST EFFECTIVE FACTORS IN ENCOURAGING A VALUABLE EMPLOYEE TO STAY WITH YOUR COMPANY?” FULLY 42% OF THE RESPONDENTS REPLIED “MORE MONEY ”.

-PREPARE JOB DESCRIPTION -ESTABLISH SPECIFIC OBJECTIVES -DETERMINE GENERAL LEVELS OF COMPENSATION -DEVELOP THE COMPENSATION MIX

-INCOME REGULARITY -REWARD FOR SUPERIOR PERFORMANCE -FAIRNESS DETERMINE THE GENERAL LEVEL OF COMPENSATION: SEVERAL FACTORS INFLUENCE THE BASIC LEVEL, VIZ, THE SKILLS, EXPERIENCE AND EDUCATION REQUIRED TO DO THE WORK -

 THE LEVEL OF INCOME FOR COMPARABLE JOBS IN THE COMPANY -THE LEVEL OF INCOME FOR THE COMPARABLE JOBS IN THE INDUSTRY

A. STRAIGHT SALARY ADVANTAGES: iPROVIDES SECURITY TO SALESPERSON ii.HELPS DEVELOP A SENSE OF LOYALTY TO THE COMPANY iii. IS SIMPLE TO ADMINISTER

DISADVANTAGES: i. PROVIDES NO FINANCIAL INCENTIVE TO PUT FORTH EXTRA EFFORT ii. MAY INCREASE SALES COST iii. LEADS TO ADEQUATE BUT NOT SUPERIOR PERFORMANCE

STRAIGHT COMMISSION: ADVANTAGES:  INCOME IS DIRECTLY LINKED TO PRODUCTIVITY  EASY TO CALCULATE  SALES PEOPLE HAVE MAXIMUM WORK FREEDOM

DISADVANTAGES:  SALES PEOPLE HAVE LITTLE LOYALTY TO THE COMPANY  DUE TO EXTREME FLUCTUATIONS IN EARNINGS, IT CAN CREATE UNCERTAINTY