As a general rule it will be found that seasoned salesmen, particularly in specialty lines, will prefer to work on a straight-commission basis. The young fel low who has never done any selling, however, is loath to have his remuneration rest on that basis, even if he has had a thoro training. The salary-and-commission system has the advantage over the straight commission plan, of attracting new men of this kind to the or cranization.
Increases in the salesman's compensation under this plan may be made either by increasing his salary and leaving his rates of coin-mission the same, or by leaving his salary the same and increasing the rates of commis sion. The former will be found the more feasible method if the house has a varied line and a wide range of commission rates on individual items.
6. Straight COMMiSSi012.-It is often argued that the house knows what percentage of sales it can afford to pay out in selling expenses and that it will try to avoid exceeding the limit that is set. In its effort to keep these expenses down it often pays less than it had expected to, and in the last analysis the salesman's compen_sation will always be fixed on a percentage-of sales basis. Why not, then, pay this percentage out as commission in the first place? If this is done it fur nishes the salesman with a direct incentive inasmuch as the result of a week's good work is shown immedi ately in the size of the salesman's weekly remittance. This system virtually makes the salesman a partner of the house, the salesman investing his energy and ex penses against the house's capital. If the salesman doubles his results he doubles his earnings. Increases in compensation are taken care of automatically. The house, too, has the advantage of knowing defi nitely just what its selling expense is going to be. It pays out nothing to the salesman unless orders are actually received.
7. Disadvantages of the straight-commission plan. —This plan, too, has its disadvantages. The control of the house over the salesman is weakened. The lat ter feels that he is paid a commission for getting busi ness and does not consider himself under obligation to make out reports. Even if he allows the house to di rect his movements within his territory, he will be sure to blame lack of business upon such control. Usually
be will insist that, since his earnings are dependent upon his good judgment, he should be allowed to as sunae full direction of his own work. It is doubtful whether it is ever possible, by this method, to direct the salesman to the same extent as under a salary system.
There is danger, furthermore, of the salesman's feeling that Ile is under no obligation to work con stantly ; he may claim that since his money stops when he stops, whether he works or not is entirely his own affair. It has been shown that this attitude is likely to cause fluctuation in the amount of business and variations in the expense of handling it at the house. The chances are, too, that territory will not be worked as thoroly as it should be. In some lines, the commis sion salesman can more readily oversell a dealer than can the salesman who is on a salary. But, while there are these objections to the straight-commission sys tem, loyalty and a proper esprit de corps in the or ganization will eliminate, to some extent at least, cer tain of the disadvantages that have been enumerated.
8. Drawing houses allow a draw ing account in connection with the straight-commis sion plan of compensation. A salesman who has a family to support or other obligations to meet is likely to desire a drawing account to guard against any unexpected delay in reaching a, satisfactory volume of sales. Another may wish to equalize his income by taking a stipulated amount each week in place of widely varying commission checks. And it must be admitted that some salesmen expect to be in debt to their concerns constantly. • There was a time when drawing accounts were pretty freely granted, and it was not unusual for an unscrupulous individual to be receiving one from each of several different sources. Most houses today, when a drawing ac count is allowed, insist upon its being regarded strictly as money borrowed which must be repaid at the first opportunity. Overdrafts are held down, not only be cause the sales manager does not wish to place himself in a position where the salesman's leaving would cause a heavy loss to the concern—for overdrafts which are paid up after the salesman leaves are the exception— but because overdrafts mean a reduction of the con cern's cash resources.