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Accounting for Decision Making and Control 8th Edition by Jerold Zimmerman
Edition 8ISBN: 978-0078025747Accounting for Decision Making and Control 8th Edition by Jerold Zimmerman
Edition 8ISBN: 978-0078025747 Exercise 5
Formula 409
"I used to run the company that made Formula 409, the spray cleaner. From modest entrepreneurial beginnings, we'd gone national and shipped the hell out of P G, Colgate, Drackett, and every other giant that raised its head. From the beginning, I'd employed a simple incentive plan based on 'case sales': Every month, every salesman and executive received a bonus check based on how many cases of 409 he'd sold. Even bonuses for the support staff were based on monthly case sales. It was a happy time, with everyone making a lot of money, including me."
"We abandoned our monthly case-sales bonus plan and installed an annual profit-sharing plan, based on personnel evaluations. It didn't take long for the new plan to produce results."
Source: Wilson Harrell, "Inspire Action: What Really Motivates Your People to Excel?" Success, September 1995.
Required:
What do you think happened at this company after it started the annual profit-sharing plan?
"I used to run the company that made Formula 409, the spray cleaner. From modest entrepreneurial beginnings, we'd gone national and shipped the hell out of P G, Colgate, Drackett, and every other giant that raised its head. From the beginning, I'd employed a simple incentive plan based on 'case sales': Every month, every salesman and executive received a bonus check based on how many cases of 409 he'd sold. Even bonuses for the support staff were based on monthly case sales. It was a happy time, with everyone making a lot of money, including me."
"We abandoned our monthly case-sales bonus plan and installed an annual profit-sharing plan, based on personnel evaluations. It didn't take long for the new plan to produce results."
Source: Wilson Harrell, "Inspire Action: What Really Motivates Your People to Excel?" Success, September 1995.
Required:
What do you think happened at this company after it started the annual profit-sharing plan?
Explanation
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Organizational Architecture:
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Accounting for Decision Making and Control 8th Edition by Jerold Zimmerman
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