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11 Cards in this Set

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Purposes of Compensation

Connect individual with organization


Influence work behavior


Organizational Choice


Influence satisfaction


Feedback


Reinforcement



Performance-based pay: prerequisites and obstacles (if pay is going to influence salespeople performance, the following factors are important):

The salesperson must perceive a close relationship between performance and pay.


Pay must be important to the salesperson.


The salesperson must be able to perform what is necessary to achieve the pay.


The salesperson must know what is expected.


Performance must be measureable, and its evaluation must be fair.

2 types of compensation plans:


Straight salary- the simplest: The salesperson is paid a specific dollar amount at regular intervals.


profile:


dominant market share in mature, stable industry.


highly defined and stable customer base.


service vs selling emphasis


highly team-oriented sales effort

Straight commission


dont sell anything you dont earn.


2 types:


straight commission


draw against commission


Profile: low barriers to entry into the job


limited corporate cash resources


high risk reward sales force culture


undefined market oppurtunity or cust base

Criteria for an effective expense plan:

1. fair for the salesperson


2.fair for the company


3.cost effective


4. understandable


5. convenient

Ch.14


Power is the ability to influence the behavior of others.

1.legitimate-comes from a formal management position in an org. & the authority granted to that position


2.reward-can give rewards


3.coercive-opposite of reward, can punish or recommend punishment


4.expert-having knowledge or skill regarding the task


5.referent-they wish to emulate the leader because they respect and admire him.

ch. 15

80\20 principle:The majority of a companys sales (or profits) may result directly from a very small number of the companys accounts, product or price lines, or geographical areas.

The iceberg principle:


refers to the effect that averaging, summarizing, and aggregating data can have on presenting the true sales or profit picture and underlying problems.

2 basiic categories of expenses

Reasons for performance appraisals

compensation


development


feedback


goals


legal compliance


motivation training


penalties promotion


personnel planning

Guidelines for performance criteria

Measurable


practical


relevant


discriminating


stable

2 types of performance criteria

quantitative: sales volume, avg sales calls per day, new customers obtained, gross profit by product, ratio of selling costs to sales, sales order


qualitative: sales skills, territorial management, personal traits.

Influences on a performance appraisals accuracy

The managers attitudes


The salespeoples Expectations