Question 1

Incentive programs should never have ceilings.

Accepted Answer

A) True 
 B)False

Question 2

The primary advantage of the ________________ expense reimbursement plan is it gives the sales manager some control over the magnitude and kinds of activities salespeople will be motivated to engage in.

Accepted Answer

A)  Limited reimbursement 
B)  Advanced lump-sum 
C)  Fixed cost drawing account 
D)  Direct reimbursement 
E)  Computerized reimbursement

Question 3

In terms of Maslow's hierarchy of needs, benefit packages as a part of a compensation plan are intended to satisfy a salesperson's need for:

Accepted Answer

A)  Self-esteem 
B)  Belonging 
C)  Security 
D)  Self-actualization 
E)  Style

Question 4

Which of the following statements about a straight salary compensation plan is true?

Accepted Answer

A)  Straight salary compensation is more commonly used with experienced salespeople than with new sales recruits 
B)  The major limitation of straight salary compensation is that financial rewards are not tied directly to any specific aspect of job performance 
C)  Straight salary compensation plans do not give sales managers the flexibility they have with commission plans 
D)  Straight salary compensation plans are most useful when management wants to motivate its salespeople to achieve short-run sales volume increases 
E)  Straight salary compensation is inappropriate for industries where missionary selling is commonplace

Question 5

Assessing the firm's relationship selling objectives and determining which aspects of job performance to reward are key issues when:

Accepted Answer

A)  Deciding on the most appropriate level of compensation 
B)  Monitoring sales motivation programs for fairness and effectiveness 
C)  Hiring young sales representatives 
D)  Paying straight commission 
E)  None of the above

Question 6

Boris is graduating from college and looking at a career in sales. His career counselor advises him to look at __________________ positions in order to have time to learn the ropes and develop his selling skills.

Accepted Answer

A)  Market research 
B)  Relationship selling 
C)  Product stocking 
D)  Nonfinancial selling 
E)  Straight commission

Question 7

In designing a compensation plan, the primary objective of a salary is to:

Accepted Answer

A)  Stimulate additional effort targeted at achieving specific short-term goals 
B)  Motivate salespeople to a higher level of selling effort 
C)  Encourage sales success 
D)  Satisfy salespeople's security needs 
E)  None of the above

Question 8

The foundation of most compensation plans is a package of benefits that is designed to satisfy the individual salesperson's need for security.

Accepted Answer

A) True 
 B)False

Question 9

A limited reimbursement expense account plan can:

Accepted Answer

A)  Motivate salespeople to spend their own money 
B)  Lead to uncontrollable spending 
C)  Hurt motivation of salespeople 
D)  Be used to control production financing 
E)  Stimulate bonus/quota attainment

Question 10

What is the primary purpose of sales contests?

Accepted Answer

The answer of What is the primary purpose of sales...

Question 11

Which of the following statements about limited reimbursement plans is true?

Accepted Answer

A)  Firms on a limited reimbursement plan minimize the total amount of expense reimbursements by setting maximum limits for each expense item 
B)  Firms on a limited reimbursement plan minimize the total amount of expense reimbursements by providing lump-sum payments to cover total expenses 
C)  Of all the reimbursement plans, the limited plan is the best motivator 
D)  When on a limited reimbursement plan, the typical salesperson pays his or her expenses out of pocket rather than doing without 
E)  Both A and B

Question 12

One of the advantages of sales contests is the way they always create employee cohesiveness and improve employee morale.

Accepted Answer

A) True 
 B)False

Question 13

Candice is developing a compensation plan for the salespeople in her new company. In order to have a successful compensation plan, a basic question she will need to address is:

Accepted Answer

A)  How many salespeople to hire? 
B)  What mix of financial and nonfinancial compensation and incentives to use for motivating the sales force? 
C)  When to involve the clerical staff in the compensation plan? 
D)  How often to change the compensation plan? 
E)  Where to find bonus/quota ratios appropriate for international sales reps?

Question 14

A sales contest can be designed to encourage extra effort aimed at specific short-term objectives.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements about the straight commission compensation plan is true?

Accepted Answer

A)  Financial administrators believe that commission compensation plans are anxiety producing and often try to dissuade organizations from implementing such a plan 
B)  Straight commission compensation is appropriate for companies that require its sales force to engage in missionary selling 
C)  Commission compensation plans are especially advantageous for companies that are short of working capital 
D)  Salespeople on a straight commission plan are more likely to engage in making cold calls than salespeople on a straight salary plan 
E)  Straight commission compensation plans are inherently unfair

Question 16

What are the common criticisms of sales contests?

Accepted Answer

The answer of What are the common criticisms of sales...

Question 17

Which of the following statements describes an advantage inherent in the straight commission compensation plan?

Accepted Answer

A)  It gives sales reps little financial security 
B)  It provides sales managers with minimal control over their sales forces 
C)  It allows sales managers to relate selling expenses directly to sales resources 
D)  It makes selling expenses less predictable 
E)  All of the above

Exam 11: Salesperson Compensation and Incentives Comprehensive Cases for Part Two

Incentive programs should never have ceilings.

The primary advantage of the ________________ expense reimbursement plan is it gives the sales manager some control over the magnitude and kinds of activities salespeople will be motivated to engage in.

In terms of Maslow's hierarchy of needs, benefit packages as a part of a compensation plan are intended to satisfy a salesperson's need for:

Which of the following statements about a straight salary compensation plan is true?

Assessing the firm's relationship selling objectives and determining which aspects of job performance to reward are key issues when:

Boris is graduating from college and looking at a career in sales. His career counselor advises him to look at __________________ positions in order to have time to learn the ropes and develop his selling skills.

In designing a compensation plan, the primary objective of a salary is to:

The foundation of most compensation plans is a package of benefits that is designed to satisfy the individual salesperson's need for security.

A limited reimbursement expense account plan can:

What is the primary purpose of sales contests?

Which of the following statements about limited reimbursement plans is true?

One of the advantages of sales contests is the way they always create employee cohesiveness and improve employee morale.

Candice is developing a compensation plan for the salespeople in her new company. In order to have a successful compensation plan, a basic question she will need to address is:

A sales contest can be designed to encourage extra effort aimed at specific short-term objectives.

Which of the following statements about the straight commission compensation plan is true?

What are the common criticisms of sales contests?

Which of the following statements describes an advantage inherent in the straight commission compensation plan?