Question

Chris receives $520 per week gross pay in his sales job at the Lark dealership. This amount remains fixed and does not vary with the number of sales. As long as Chris works his 40 hours, he gets paid $520. Chris is paid:

A. a salary plus bonus.
B. a straight commission.
C. a salary plus commission.
D. a commission plus bonus.
E. a straight salary.

Answer 1

E. a straight salary.

Step-by-step explanation:

Straight salary is a compensation method where the salesperson receives a fixed amount. Regardless of the level of output, the salesperson does not get any sales commissions or bonuses. Straight salary is time tied, not performance-focused.

Straight salary is suitable when the business objective is long-term market presence and not short-term high sales volume. It is also used when it is difficult to isolate an individual's effort from team performance.

Straight salary or time-bound salaries do not encourage individuals to put in extra efforts. The other options have commissions and bonus, which is not a feature of straight salaries.