straight salary plan

Definition

Salesperson compensation method in which only a fixed salary (but no commission) is paid. The amount received by a salesperson is a function of time worked and not of performance as reflected in sales volume. This method is used where (1) the firm is aiming at long term presence in the market instead of short-term sales volume, (2) the firm is aiming at thorough familiarization of a new market or geographic area, or (3) the performance of each salesperson is difficult to measure.