Differentiate between commission-based and salary-based compensation structures and their impact on salon profitability.

Differentiate between commission-based and salary-based compensation structures and their impact on salon profitability.

• A. Commission ties pay to sales and can incentivize performance; salary provides predictable costs but may require bonuses; mix influences profitability.
• B. Commission always increases costs, while salary never changes.
• C. Salary plans are always more profitable than commissions.
• D. Commission structures are irrelevant to profitability.

Answer: (A)