Cedric Jiaan S.

Holgado
BSBAMM-M1A
MarkS2
ACTIVITY/TASK
For all the incentive schemes below: George, the salesperson, sells 1,000
toasters in April and 2,000 toasters in May

Scheme One
 George commission only
 George gets paid $3 per toaster
George’s total remuneration in April and May?
April - $3,000
May - $6,000

Incentive Scheme Two

 Straight commission but with a guaranteed salary
 George gets paid $3 per toaster
 But with a minimum salary of $4,000 per month
George’s total renumeration in April and May?
April - $7,000
May - $10,000
Incentive Scheme Three
 Salary only
 George gets paid a salary of $5,000pm
George’s total renumeration in April and May?
April - $5,000
May - $5,000

Incentive Scheme Four

 Straight commission but with a guaranteed salary and a bonus
 George gets paid $2 per toaster
 But with a minimum salary of $3,000 per month
 And a bonus of $2,000 if he sells 2,000 or more toasters
George’s total renumeration in April and May?
April - $5.000
May - $9,000

Incentive Scheme Five

 Salary plus commission
 George gets paid a salary of $2,000 pm
 And a commission of $2 per toaster
George’s total renumeration in April and May?
April - $4,000
May - $6,000

Instructions: Start this exercise by completing the above calculations.

Answer this question: Is it always necessary to use some sort of
incentive scheme or is sometimes a straight salary approach the best
option? Explain
I believe that a straight salary approach can be the best option if the
salesperson’s job does not directly contribute to revenue making. An
example of this would be if they mainly work in customer service. However,
if the salesperson’s job is to sell a certain product to consumers or
business partners, then I believe that they should be incentivized based on
the sales they make, while also receiving a minimum salary from the firm
they are associated with.