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On balance, which compensation plan do you prefer: straight salary, straight commission, or a combination of...

On balance, which compensation plan do you prefer: straight salary, straight commission, or a combination of base salary plus incentive pay in the form of commissions, bonuses, or both? Why?

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Answer #1

The compensation that I prefer is that of a combination of base salary plus incentive pay in the form of bonuses. Below are the reasons for the same -

1. Base salary will be the fixed amount that can be guaranteed while bonus as incentives will be based on the performance of the individual which will not have any bounds and can exceed 100% pay if the performance is too good. Hence, it acts as a motivating factor to work for the organization and invest in individual development.

2. Bonus is received once in a year as bulk amount which is something the employees long for and is a kind of indirect saving of the salary with the employer which once received, can be planned better.

3. Work and performance between two indivduals can be differentiated through bonus payouts thus rewarding the performers while sending a message to the non-performers to improve.

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