Question 1

When more than one individual works together to make a sale, the selling process is described as:

Accepted Answer

A)  networked commissions. 
B)  grouped territories. 
C)  team selling. 
D)  cross-functional territories. 
E)  none of the above. 
A)  networked commissions. 
B)  grouped territories. 
C)  team selling. 
D)  cross-functional territories. 
E)  none of the above.

Question 2

Salary programs are most appropriate when it is difficult to relate the efforts of individual salespeople to the size or timing of a sale.

Accepted Answer

A) True 
 B)False

Question 3

Building an effective sales force compensation plan boils down to:

Accepted Answer

A)  Providing the highest level of wages possible. 
B)  Finding the right combination of salary and incentive pay. 
C)  Designing the plan around the seniority of the workers 
D)  All of the above 
E)  both a and b of the above 
A)  Providing the highest level of wages possible. 
B)  Finding the right combination of salary and incentive pay. 
C)  Designing the plan around the seniority of the workers 
D)  All of the above 
E)  both a and b of the above

Question 4

As a branch manager of an office products company, you notice a large disparity between your top salespeople and your mid- to low-performing salespeople. The current culture is for each salesperson to work independently of each other, but you want to change the culture to more of a team atmosphere where the top salespeople help train the lower producers. However, you don't want to lower the motivation level either. Which of the following compensation plans would you implement to help you accomplish this?

Accepted Answer

A)  straight salary 
B)  salary plus year-end bonus 
C)  straight commission 
D)  salary plus commission plus year-end branch bonus 
E)  salary plus commission 
A)  straight salary 
B)  salary plus year-end bonus 
C)  straight commission 
D)  salary plus commission plus year-end branch bonus 
E)  salary plus commission

Question 5

Despite some obvious advantages of straight commission, it has a number of drawbacks which include:

Accepted Answer

A)  encourages salespeople to secure only the best accounts in their territories. 
B)  non-selling activities are apt to be neglected. 
C)  salespeople are tempted to sell themselves rather than the company. 
D)  both b and c of the above. 
E)  all of the above. 
A)  encourages salespeople to secure only the best accounts in their territories. 
B)  non-selling activities are apt to be neglected. 
C)  salespeople are tempted to sell themselves rather than the company. 
D)  both b and c of the above. 
E)  all of the above.

Question 6

The goal of the compensation package is to reward employees for their efforts without putting the firm's profitability in jeopardy.

Accepted Answer

A) True 
 B)False

Question 7

Your boss thinks you should implement a salary plus commission plan. You have a meeting with her to outline the drawback(s) of this type of plan. Among the drawback(s) you will discuss include:

Accepted Answer

A)  more complicated to explain to salespeople. 
B)  more costly to administer. 
C)  sales managers lose control in direct proportion to the amount of commissions paid. 
D)  If an incentive ceiling is put in place, it could dampen some salespeople's motivation. 
E)  all of the above. 
A)  more complicated to explain to salespeople. 
B)  more costly to administer. 
C)  sales managers lose control in direct proportion to the amount of commissions paid. 
D)  If an incentive ceiling is put in place, it could dampen some salespeople's motivation. 
E)  all of the above.

Question 8

Sales force compensation should not only meet the goals of the firm, but should also provide communicate what is important to the sales force.

Accepted Answer

A) True 
 B)False

Question 9

Benefit packages amount to a negligible portion of the cost of keeping a salesperson in the field.

Accepted Answer

A) True 
 B)False

Question 10

Salary compensation plans tend to overpay the least productive salespeople.

Accepted Answer

A) True 
 B)False

Question 11

Companies wanting to exert some behavioral control using incentives should make sure that the incentive component is between 15 and 30 percent of total compensation.

Accepted Answer

A) True 
 B)False

Question 12

Although many customers expect after-sale service on repair parts and delivery, compensation programs based on straight salary are not likely to encourage these important follow-up activities.

Accepted Answer

A) True 
 B)False

Question 13

A major objective of a well-designed compensation package is to:

Accepted Answer

A)  provide equal pay to all employees at the same level. 
B)  Increase sales and revenues. 
C)  provide extensive benefits. 
D)  encourage a "hard sell" attitude among the sales force. 
E)  micromanage salesperson behaviors. 
A)  provide equal pay to all employees at the same level. 
B)  Increase sales and revenues. 
C)  provide extensive benefits. 
D)  encourage a "hard sell" attitude among the sales force. 
E)  micromanage salesperson behaviors.

Question 14

Changing from a straight salary plan to a combination salary plus commission plan provides a number of benefits. Which of the following is not an advantage of the salary plus commission plan:

Accepted Answer

A)  They are flexible. 
B)  They are simpler and cheaper to administer. 
C)  Commissions can be adjusted to reflect the profitability of products. 
D)  Commissions provide a fairly immediate reinforcement for the salesperson's efforts. 
E)  This type of plan is good for relatively complex products or services. 
A)  They are flexible. 
B)  They are simpler and cheaper to administer. 
C)  Commissions can be adjusted to reflect the profitability of products. 
D)  Commissions provide a fairly immediate reinforcement for the salesperson's efforts. 
E)  This type of plan is good for relatively complex products or services.

Question 15

According to the Customer-Product Matrix, sales positions which focus primarily on New Business Development require a greater proportion of __________ in the compensation plan than those sales jobs in the lower left-hand quadrant (Account Management). Sales jobs consisting primarily of Account Management involve a greater account servicing component and are therefore better suited to a primarily __________ form of compensation.

Accepted Answer

A)  salary, commission 
B)  salary, bonus 
C)  commission, salary 
D)  commission, commission 
E)  none of the above 
A)  salary, commission 
B)  salary, bonus 
C)  commission, salary 
D)  commission, commission 
E)  none of the above

Question 16

One of the advantages of the gross margin commission plan is the firm and salesperson share the same pool of money so both are interested in maximizing that amount.

Accepted Answer

A) True 
 B)False

Question 17

The advantages of straight salary compensation include which of the following?

Accepted Answer

A)  salaries are a fixed cost to the firm and thus tend to decrease proportionally as sales increase. 
B)  it allows maximum control over salespeople's activities. 
C)  it makes the division of territories an easier task. 
D)  tends to generate more loyalty from salespeople. 
E)  all of the above. 
A)  salaries are a fixed cost to the firm and thus tend to decrease proportionally as sales increase. 
B)  it allows maximum control over salespeople's activities. 
C)  it makes the division of territories an easier task. 
D)  tends to generate more loyalty from salespeople. 
E)  all of the above.

Question 18

According to compensation surveys, ales managers typically earn less than the top reps in their district when sales reps are on an incentive-based plan.

Accepted Answer

A) True 
 B)False

Question 19

A per diem expense plan pays the salesperson for all reported expenses.

Accepted Answer

A) True 
 B)False

Question 20

In designing plans one must balance the goals of the firm, as well as the needs of the sales force and customers.

Accepted Answer

A) True 
 B)False

When more than one individual works together to make a sale, the selling process is described as:

Salary programs are most appropriate when it is difficult to relate the efforts of individual salespeople to the size or timing of a sale.

Building an effective sales force compensation plan boils down to:

Despite some obvious advantages of straight commission, it has a number of drawbacks which include:

The goal of the compensation package is to reward employees for their efforts without putting the firm's profitability in jeopardy.

Your boss thinks you should implement a salary plus commission plan. You have a meeting with her to outline the drawback(s) of this type of plan. Among the drawback(s) you will discuss include:

Sales force compensation should not only meet the goals of the firm, but should also provide communicate what is important to the sales force.

Benefit packages amount to a negligible portion of the cost of keeping a salesperson in the field.

Salary compensation plans tend to overpay the least productive salespeople.

Companies wanting to exert some behavioral control using incentives should make sure that the incentive component is between 15 and 30 percent of total compensation.

Although many customers expect after-sale service on repair parts and delivery, compensation programs based on straight salary are not likely to encourage these important follow-up activities.

A major objective of a well-designed compensation package is to:

Changing from a straight salary plan to a combination salary plus commission plan provides a number of benefits. Which of the following is not an advantage of the salary plus commission plan:

One of the advantages of the gross margin commission plan is the firm and salesperson share the same pool of money so both are interested in maximizing that amount.

The advantages of straight salary compensation include which of the following?

According to compensation surveys, ales managers typically earn less than the top reps in their district when sales reps are on an incentive-based plan.

A per diem expense plan pays the salesperson for all reported expenses.

In designing plans one must balance the goals of the firm, as well as the needs of the sales force and customers.

Introduction to Selling and Sales Management

Strategy and Sales Program Planning

Sales Opportunity Management

Account Relationship Management

Customer Interaction Management

Sales Force Organization

Recruiting and Selecting Personnel

Training

Leadership

Ethical Leadership

Motivating Salespeople

Evaluating Sales Force Performance

Estimating Potentials and Forecasting Sales

Territory Design

Sales Force Investment and Budgeting

Filters

Exam 12: Compensating Salespeople

When more than one individual works together to make a sale, the selling process is described as:

Salary programs are most appropriate when it is difficult to relate the efforts of individual salespeople to the size or timing of a sale.

Building an effective sales force compensation plan boils down to:

Despite some obvious advantages of straight commission, it has a number of drawbacks which include:

The goal of the compensation package is to reward employees for their efforts without putting the firm's profitability in jeopardy.

Your boss thinks you should implement a salary plus commission plan. You have a meeting with her to outline the drawback(s) of this type of plan. Among the drawback(s) you will discuss include:

Sales force compensation should not only meet the goals of the firm, but should also provide communicate what is important to the sales force.

Benefit packages amount to a negligible portion of the cost of keeping a salesperson in the field.

Salary compensation plans tend to overpay the least productive salespeople.

Companies wanting to exert some behavioral control using incentives should make sure that the incentive component is between 15 and 30 percent of total compensation.

Although many customers expect after-sale service on repair parts and delivery, compensation programs based on straight salary are not likely to encourage these important follow-up activities.

A major objective of a well-designed compensation package is to:

Changing from a straight salary plan to a combination salary plus commission plan provides a number of benefits. Which of the following is not an advantage of the salary plus commission plan:

One of the advantages of the gross margin commission plan is the firm and salesperson share the same pool of money so both are interested in maximizing that amount.

The advantages of straight salary compensation include which of the following?

According to compensation surveys, ales managers typically earn less than the top reps in their district when sales reps are on an incentive-based plan.

A per diem expense plan pays the salesperson for all reported expenses.

In designing plans one must balance the goals of the firm, as well as the needs of the sales force and customers.

Introduction to Selling and Sales Management

Strategy and Sales Program Planning

Sales Opportunity Management

Account Relationship Management

Customer Interaction Management

Sales Force Organization

Recruiting and Selecting Personnel

Training

Leadership

Ethical Leadership

Motivating Salespeople

Evaluating Sales Force Performance

Estimating Potentials and Forecasting Sales

Territory Design

Sales Force Investment and Budgeting

Filters