Is The Current Compensation Plan Fair For The Salesman? Does It Serve As A Motivator?
-The current compensation plan is not fair to the salesman. The compensation/incentive plan is not effective as proven by the company’s flat sales despite a growing market for outdoor sporting products. This is because of several issues. Annual earnings of the company?s salespeople are below industry average. The thresholds for commission pay are too large to motivate salesmen to strive to reach the next level. traveling expenses are drawn against commission which results in a lack of motivation from the salesmen. Sales increase awards award on percentage, which is more motivating to low-volume salesmen than high-volume salesmen. Salespeople also have to wait one year to become eligible for the awards, which is a big de-motivating factor for recruiting new, good salespeople. Sales had no increase appreciably from year to year and many salespeople earned less than $30,000 annually. The current compensation plan relies solely on the one factor of amount of sales and fails to take into account other aspects of the salesperson’s performance. There were incentives for the top five salespeople but not enough for others on the sales force that worked hard as well. The plan did not offer enough incentive for salespeople to stay motivated and continue to increase their sales.
-2. What are the strengths and weaknesses of the controller’s plan for compensation?
-The controller’s plan is one that has…