Q. Explain why you believe in compensation plans differ at the two firms? In particular, why do you think Kaufmann's pays commissions to salespeople, while Parkleigh does not? Why does Parkleigh offer employees discounts on purchases, while Kaufmann's does not?
Assume, for the instant which neither store pays sales commissions. Parkleigh presents an hourly salary also the employee discount. Kaufmann's offers only an hourly wage. Do you expect Kaufmann's hourly wage to be higher or lower than Parkleigh's? Why?