Exam 12: Compensating Salespeople

As a sales manager you must design a compensation plan that meets the firm's goals as well as the needs of both the firm's customers as well as your sales force. This may be difficult, as some plans encourage salespeople to sell more inventory than is needed - resulting in unhappy customers.

With regard to compensation programs, most firms just use a draw against commission.

Sales managers don't need to estimate how much a compensation plan will cost once it is introduced.

A commission plus bonus plan is particularly suited to a company that uses brokers or independent sales reps.

The compensation plan in which virtually every type of sales activity is rewarded, is a:

Under a straight commission plan, sales managers usually have less control over their reps.

You have just been promoted to the position of sales manager. One of your first tasks is to evaluate the level of compensation for your sales force. Which, if any, of the following sources available will help you in your task?

As a sales consultant specializing in designing compensation plans, you advise your clients that the most influential factor is:

Compensation plans should be designed to encourage salespeople to work efficiently.

A good starting point for developing a sales force compensation plan is to:

The primary benefit of salary-plus-commission plans is they allow the compensation program to be tailored to the needs of a particular firm.

More firms use straight commission plans than any other type of compensation plan.

In an unlimited expense account plan, a salesperson can make money for himself by cutting back on travel.

You are leaning towards implementing a salary plus commission plan for your sales force. You recognize that this plan is popular because it provides:

Disadvantages of paying straight salary include all of the following except:

You are deciding on an expense reimbursement plan for your salespeople. You work at a small firm and don't have the staff to adequately monitor expense accounts. However, you also work in an industry where entertaining is routine. According to the text, which of the following plans is typically used by these companies?

The major drawback to salary plus commission plans is that they are more expensive and more costly to administer.

The most common combination plan is the salary-plus-commission-plus-bonus plan.

According to the Customer-Product Matrix, sales positions that focus primarily on new business development require a greater proportion of salary than incentive.

__________ tends to help give the sales force the needed push to sell complex products or services and can be used to redirect salesperson efforts toward specific product lines; under this plan administrative costs tend to be high.