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11 Cards in this Set

  • Front
  • Back

Purposes of Compensation

Connect individual with organization

Influence work behavior

Organizational Choice

Influence satisfaction



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.


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


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 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





legal compliance

motivation training

penalties promotion

personnel planning

Guidelines for performance criteria






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