David Wudyka discusses Straight Commission Pay Plans in a BLR webinar entitled ‘Commission Pay Plans: How to Motivate Your Sales Staff in a Roller Coaster Economy’. He states that there are three common types Commission Pay Plans (CPP) namely: Straight Salary Plans, Straight Commission Plans and Combination Plans. Regarding Straight Commission Plans, Wudyka provides the following information:
- The sales representatives earns no set pay, but rather commissions based on a percentage of his or her sales numbers
- In the Straight Commissions Pay Plan, it is very easy to evaluate the performance of sales people, and keeps sales costs in line (since they're a set proportion of sales revenues)
- The sales representative's income will vary widely (sometimes due to external factors beyond his or her control), turnover may be higher as a result, and the total focus on closing sales may lead your sales force to neglect their critical ‘non-closing’ duties such as customer care
David Wudyka, SPHR, MBA, BSIE, is the founder and managing principal of Westminster Associates (www.westminsterassociates.com), a Massachusetts-based human resource and compensation firm that specializes in pay, performance, and productivity issues. He brings more than 30 years of professional HR and compensation experience to the table for clients around the country. He speaks and writes frequently on HR and compensation issues, and he earned his master’s degree from Syracuse University.