Combination compensation plans combine two or three of the basic compensation methods. They usually include commissions and bonuses to motivate reps to achieve volume or profit goals, and salary to help attain less quantifiable goals, such as customer service, expense control, and longrun sales development. Combination plans are the most widely used of all compensation methods and more than 70% of companies favor them.30 The critical factor in a combination compensation plan is the selection of a target salaryandincentive mix. The decision is not an arbitrary one. The sales manager needs to offer a salary high enough to attract talent, and an incentive sufficient to motivate. That means being familiar with the competitive compensation environment and the amount of incentive that will motivate the sales force, given the nature of the sales job. The compensation leverage ratio varies among companies, but it is generally 7080% salary and 2030% incentive. No compensation plan will fit all situations. Combination compensation plans, however, are the most flexible of all approaches. These are some combination compensation plans that fit a variety of conditions:

Salary plus commissions This combination is best when management wants to get high sales without sacrificing customer service. It is good for new salespeople, since it provides more security than straight commission. Salary plus bonus This combination is preferred for achieving longrun objectives, such as selling large installations or product systems or achieving a desired customer mix. Salary plus commission plus bonus This plan is appropriate for seasonal sales, when there are frequent inventory imbalances and when management wants to focus on certain products or customers. Commission plus bonus This plan is usually applied to group efforts, in which some salespeople call on central company buyers or buying committees while others call on store managers.

Questions:

What compensation plan would you prefer? and Why?

Based on the compensation plan - what is the disadvantages? And, what are the advantages.

Answer: Upload your response via Canvas. Please follow the instructions listed below.

Your response should be 1-2 paragraphs (APA format) explaining your choice.

Your response should be 1-2 paragraphs of the disadvantages & advantages.