Question:
Choose from the following, what is not an advantage of straight commission compensation reward ?
Choose from the following, what is not an advantage of straight commission compensation reward ?
Show Hint
Straight commission pays only for sales made. Think about what happens to the salesperson's income when sales are low.
Updated On: Oct 19, 2026
- It encourages hardworking salesmen.
- Sometimes salespeople may earn more than their managers.
- It is directly linked to performance.
- It benefits the company during slack season.
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The Correct Option is D
Solution and Explanation
Step 1: Understand straight commission:
Under straight commission, the salesperson gets no fixed salary.
Pay is a fixed percentage of the sales he or she makes.
So the question is: which of the four statements is NOT a benefit of this plan?
Step 2: Check option (A):
Pay rises only when sales rise, so a hardworking salesperson earns more.
This is a real advantage. So (A) is not the answer.
Step 3: Check option (B):
There is no upper limit on commission. A top performer can earn even more than the sales manager.
This is a real advantage for able salespeople. So (B) is not the answer.
Step 4: Check option (C):
Commission is calculated on sales made. Pay and performance move together.
This is the main advantage of the plan. So (C) is not the answer.
Step 5: Check option (D):
In the slack season, sales fall, so commission earned also falls sharply.
The salesperson earns very little and may leave the job. The company does not gain from this, because it loses trained staff and sales drop further.
Benefit in a slack season is the feature of a fixed salary plan, not of straight commission. So (D) is NOT an advantage.
Final Answer:
Option (D) is not an advantage of straight commission, so the answer is option 4.
Under straight commission, the salesperson gets no fixed salary.
Pay is a fixed percentage of the sales he or she makes.
So the question is: which of the four statements is NOT a benefit of this plan?
Step 2: Check option (A):
Pay rises only when sales rise, so a hardworking salesperson earns more.
This is a real advantage. So (A) is not the answer.
Step 3: Check option (B):
There is no upper limit on commission. A top performer can earn even more than the sales manager.
This is a real advantage for able salespeople. So (B) is not the answer.
Step 4: Check option (C):
Commission is calculated on sales made. Pay and performance move together.
This is the main advantage of the plan. So (C) is not the answer.
Step 5: Check option (D):
In the slack season, sales fall, so commission earned also falls sharply.
The salesperson earns very little and may leave the job. The company does not gain from this, because it loses trained staff and sales drop further.
Benefit in a slack season is the feature of a fixed salary plan, not of straight commission. So (D) is NOT an advantage.
Final Answer:
Option (D) is not an advantage of straight commission, so the answer is option 4.
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