Beruflich Dokumente
Kultur Dokumente
True/False
1. Salesperson compensation has been an issued marked by trial and error to discover
the right formula.
Ans: True
Response: See page 301
2. Sales force compensation should not only meet the goals of the firm, but should also
provide communicate what is important to the sales force.
Ans: True
Response: See page 302
3. The ideal compensation plan motivates salespeople to achieve their own and the
company's objectives.
Ans: True
Response: See page 302
4. As a sales manager you must design a compensation plan that meets the firm's
goals as well as the needs of both the firm's customers as well as your sales force. This
may be difficult, as some plans encourage salespeople to sell more inventory than is
needed - resulting in unhappy customers.
Ans: True
Response: See page 302
5. It is usually easy to design pay plans that fully meet the goals and needs of the firm,
customers, and salespeople.
Ans: False
Response: See page 302
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6. Compensation plans should be designed to encourage salespeople to work
efficiently.
Ans: True
Response: See page 301
7. In designing plans one must balance the goals of the firm, as well as the needs of
the sales force and customers.
Ans: True
Response: See page 302
8. The goal of the compensation package is to reward employees for their efforts
without putting the firm’s profitability in jeopardy.
Ans: True
Response: See page 302
9. Although many customers expect after-sale service on repair parts and delivery,
compensation programs based on straight salary are not likely to encourage these
important follow-up activities.
Ans: False
Response: See page 304
10. According to the Customer-Product Matrix, sales positions that focus primarily on
new business development require a greater proportion of salary than incentive.
Ans: False
Response: See page 302
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Ans: False
Response: See page 303
12. Selling situations that require salespeople to perform special services for customers
are more likely to be performed when salespeople are on salary.
Ans: True
Response: See page 304
13. Salary compensation plans tend to overpay the least productive salespeople.
Ans: True
Response: See page 304
14. Salary programs are most appropriate when it is difficult to relate the efforts of
individual salespeople to the size or timing of a sale.
Ans: True
Response: See page 304
15. Straight salary plans often do not provide strong incentive for extra effort.
Ans: True
Response: See page 304
16. More firms use straight commission plans than any other type of compensation
plan.
Ans: False
Response: See page 303
Ans: True
115
Response: See page 305
18. When the economy and sales are expanding, some firms shift from salary to
commission plans to cut expenses and lower fixed costs.
Ans: False
Response: See page 305
19. Under a straight commission plan, sales managers usually have less control over
their reps.
Ans: True
Response: See page 305
20. With regard to compensation programs, most firms just use a draw against
commission.
Ans: False
Response: See page 303
21. Real estate and life insurance firms typically use a sales force compensation
package based on salary plus commission plus bonus.
Ans: False
Response: See page 306
22. The size of the bonus payment is entirely arbitrary in many salary-plus-bonus plans.
Ans: True
Response: See page 307
23. The primary benefit of salary-plus-commission plans is they allow the compensation
program to be tailored to the needs of a particular firm.
Ans: True
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Response: See page 307
24. The major drawback to salary plus commission plans is that they are more
expensive and more costly to administer.
Ans: True
Response: See page 307
25. Wage caps are used by some firms to prevent salespeople from making too much
money.
Ans: True
Response: See page 307
26. A commission plus bonus plan is particularly suited to a company that uses brokers
or independent sales reps.
Ans: True
Response: See page 309
27. Companies wanting to exert some behavioral control using incentives should make
sure that the incentive component is between 15 and 30 percent of total compensation.
Ans: True
Response: See page 303
28. One of the advantages of the gross margin commission plan is the firm and
salesperson share the same pool of money so both are interested in maximizing that
amount.
Ans: True
Response: See page 311
29. To establish the “best” wage level for salespeople, managers have only two options:
pay a premium to the marketplace, or pay less than the going rate.
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Ans: False
Response: See page 314
Ans: False
Response: See page 315
31. In an unlimited expense account plan, a salesperson can make money for himself
by cutting back on travel.
Ans: False
Response: See page 312
32. A per diem expense plan pays the salesperson for all reported expenses.
Ans: False
Response: See page 312
33. The net result of setting limits on sales expenses is that salespeople spend their
valuable time juggling expenses from one category to another or from one time period
to another to make sure they cover their costs.
Ans: True
Response: See page 313
Ans: True
Response: See page 313
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Ans: False
Response: See page 314
36. According to compensation surveys, ales managers typically earn less than the top
reps in their district when sales reps are on an incentive-based plan.
Ans: True
Response: See page 314
37. It is not clear that offering unlimited opportunities to earn higher pay will always be
an effective method for continued salesperson motivation.
Ans: True
Response: See page 314
38. Compensation plans, once set, do not need to be evaluated to determine if it will
negatively affect salespeople's wages and total costs.
Ans: False
Response: See page 316
39. Sales managers don't need to estimate how much a compensation plan will cost
once it is introduced.
Ans: False
Response: See page 316
Multiple Choice
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d. encourage a “hard sell” attitude among the sales force.
e. micromanage salesperson behaviors.
Ans: b
Response: See page 301
2. A good starting point for developing a sales force compensation plan is to:
Ans: a
Response: See page 32
Ans: c
Response: See page 302
Ans: b
Response: See page 303
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5. When establishing goals for the compensation plan, a sales manager must consider:
Ans: e
Response: See page 302
a. salary, commission
b. salary, bonus
c. commission, salary
d. commission, commission
e. none of the above
Ans: c
Response: See page 302
7. As the Vice President of Sales for a new startup company, you decide to hire and
train your own field sales force. You also decide to pay your salespeople with the most
common type of compensation plan among companies. This pay plan is the:
a. salary plan.
b. incentive plan.
c. combination plan.
d. straight commission plan.
e. none of the above.
Ans: c
Response: See page 303
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8. ____________ is the easiest plan to administer and budget for.
Ans: d
Response: See page 304
9. In your job analysis of the salesperson’s activities, you discover that a significant
level of activity of a successful salesperson includes taking orders for inventory
replenishment, equipment installation and maintenance, and shelf-management
programs. Based on this analysis you know that a larger percentage of the
salesperson’s pay should be _____________ as compared to ______________ for the
best results.
a. incentive, salary
b. commission, bonus
c. salary, commission
d. commission, salary
e. none of the above
Ans: c
Response: See page 327
10. Disadvantages of paying straight salary include all of the following except:
Ans: c
Response: See page 304
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a. salaries are predictable.
b. salaries are stable.
c. they run the risk of having little or no income.
d. they do not provide strong incentives for extra effort.
e. none of the above - salary plans are always popular with salespeople.
Ans: d
Response: See page 304
12. Which of the following statements about a straight salary compensation plan is true:
a. Straight salary compensation plans are more complex to administer than straight
commission compensation plans.
b. A major limitation of straight salary compensation plans is that financial rewards are
not directly tied to any specific aspect of job performance.
c. Straight salary compensation is more commonly used with experienced salespeople
than with newly hired sales recruits.
d. Straight salary compensation plans are most useful when sales managers want to
motivate its sales force to achieve short-run sales volume increases.
e. It is inappropriate to use straight salary compensation for industries where
missionary selling is commonplace.
Ans: b
Response: See page 304
Ans: a
Response: See page 304
14. The advantages of straight salary compensation include which of the following?
a. salaries are a fixed cost to the firm and thus tend to decrease proportionally as sales
increase.
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b. it allows maximum control over salespeople's activities.
c. it makes the division of territories an easier task.
d. tends to generate more loyalty from salespeople.
e. all of the above.
Ans: e
Response: See page 304
15. Although quite popular, salary compensation plans have some disadvantages. For
example, since the pay of salaried salespeople is not directly related to performance,
some of them may not make all of their calls or give the firm "a full day's work for a day's
pay." Nevertheless, salary compensation plans are appropriate in a number of
situations. Which of the following is/are most likely to be among them?
Answer the series of questions. Recalling the text's discussion of the different
compensation plans, which of the above best fits the following descriptions?
Ans: e
Response: See page 304
16. " tends to overpay the least productive member of a sales team; it allows
maximum control over salespeople's activities; and although it makes it easier for the
sales manager to reassign salespeople to new areas, salespeople usually require much
closer supervision."
Ans: a
Response: See page 304
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17. " tends to attract the most highly skilled salespeople; it fosters independence
of action and is easy to understand; it may lead to poor morale among the lower-paid
personnel; and under this plan salespeople are tempted to sell themselves rather than
the company."
Ans: c
Response: See page 305
18. Many small firms use plans to get started and then shift to
plans when revenues grow.
Ans: d
Response: See page 305
19. You are the sales manager of a large, multi-product company. Your national sales
force is divided into eight regions, though the Mid-Atlantic region is currently
understaffed (sales volume there has always been low). Your salespeople are paid on
commission. The economy has entered a period of recession, and even the
Administration's economists predict that it will remain so for at least three more quarters.
In order to "weather the storm," the best course of action among those presented below
is to:
Ans: c
Response: See page 305
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a. fixed cost.
b. variable cost.
c. semi-fixed cost.
d. intermediate cost.
e. material cost.
Ans: b
Response: See page 35
Ans: e
Response: See page 305
22. Which of the following statements about straight commission compensation plan is
true?
Ans: b
Response: See page 305
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d. when products are presold through advertising.
e. both a and c of the above.
Ans: e
Response: See page 305
Ans: e
Response: See page 305
25. __________ tends to help give the sales force the needed push to sell complex
products or services and can be used to redirect salesperson efforts toward specific
product lines; under this plan administrative costs tend to be high.
a. Straight commission.
b. Straight salary.
c. Salary plus commission.
d. Salary plus commission plus bonus.
e. None of the above.
Ans: d
Response: See page 308
26. As a sales manager, you liked the advantages that salary plus bonus plans offer yet
you were very concerned about some of the following serious problems associated with
it:
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Ans: d
Response: See page 307
27. You have decided to change your commission structure to enhance market
penetration. You now require the sales force to sell $35,000 worth of product each
month to make a commission. Those who sell below $35,000 will not receive
commissions. This $35,000 level is called:
a. commission threshold.
b. wage cap.
c. progressive incentive plan.
d. fringe benefit stage.
e. none of the above.
Ans: a
Response: See page 307
28. Your customer’s buying cycle is approximately 2 years and your reps need to invest
significant amounts of time understanding their customers. Your ultimate goal is to
control selling expense and provide extra rewards for added results. Based on this
information, which salesperson compensation plan would work best?
a. salary only
b. salary plus monthly commission
c. salary plus year-end bonus
d. commission only
e. commission plus bonus
Ans: c
Response: See page 307
29. You are leaning towards implementing a salary plus commission plan for your sales
force. You recognize that this plan is popular because it provides:
Ans: c
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Response: See page 307
30. Industrial sales reps are often paid with a compensation plan that can be tailored to
the incentive needs of a particular firm but also has a fixed salary component. This type
of plan is called:
Ans: c
Response: See page 308
31. Changing from a straight salary plan to a combination salary plus commission plan
provides a number of benefits. Which of the following is not an advantage of the salary
plus commission plan:
Ans: b
Response: See page 307
32. The compensation plan in which virtually every type of sales activity is rewarded, is
a:
Ans: b
Response: See page 308
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33. Your boss thinks you should implement a salary plus commission plan. You have a
meeting with her to outline the drawback(s) of this type of plan. Among the drawback(s)
you will discuss include:
Ans: e
Response: See page 307
34. You have read a "want ad" in the latest edition of Marketing News. The firm is
looking for a Vice President for sales and promotion. The company uses a combination
of brokers and independent sales reps. What kind of a compensation program would
they most likely to use for their salespeople?
a. straight salary
b. straight commission
c. salary plus bonus
d. commission plus bonus
e. salary plus commission plus bonus
Ans: d
Response: See page 309
35. As a branch manager of an office products company, you notice a large disparity
between your top salespeople and your mid- to low-performing salespeople. The current
culture is for each salesperson to work independently of each other, but you want to
change the culture to more of a team atmosphere where the top salespeople help train
the lower producers. However, you don’t want to lower the motivation level either. Which
of the following compensation plans would you implement to help you accomplish this?
a. straight salary
b. salary plus year-end bonus
c. straight commission
d. salary plus commission plus year-end branch bonus
e. salary plus commission
Ans: d
Response: See page 311
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36. When more than one individual works together to make a sale, the selling process
is described as:
a. networked commissions.
b. grouped territories.
c. team selling.
d. cross-functional territories.
e. none of the above.
Ans: c
Response: See page 310
37. Which of the following plans allows the salesperson and company to share the
same pool of money so that both are interested in maximizing the pool?
a. combination plans
b. gross margin commissions
c. group bonus plans
d. expense accounts
e. social security plans
Ans: b
Response: See page 311
38. You have just been promoted to the position of sales manager. One of your first
tasks is to evaluate the level of compensation for your sales force. Which, if any, of the
following sources available will help you in your task?
Ans: d
Response: See page 314
39. You are deciding on an expense reimbursement plan for your salespeople. You
work at a small firm and don’t have the staff to adequately monitor expense accounts.
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However, you also work in an industry where entertaining is routine. According to the
text, which of the following plans is typically used by these companies?
a. unlimited plan
b. per diem plan
c. limited repayment plan
d. payroll withholding plan
e. tax incentive plan
Ans: a
Response: See page 312
40. If a salesperson receives a set amount of money for mileage, meals, and hotel,
what type of expense plan is she receiving?
a. an unlimited plan
b. a per diem plan
c. a limited plan
d. a bonus plan
e. none of the above
Ans: c
Response: See page 313
a. unlimited.
b. per diem.
c. limited.
d. fringe benefit.
e. none of the above.
Ans: a
Response: See page 313
a. automobile.
b. food allowance.
c. lodging.
d. bail money for salespeople at conferences, “just in case”.
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e. tickets to theaters and sporting events.
Ans: d
Response: See page 313
Ans: a
Response: See page 312
44. Which of the following accurately describe per diem expense plans?
Ans: c
Response: See page 312
Ans: b
Response: See page 313
46. According to your text, which benefit is offered by the greatest percentage of
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companies?
a. hospital
b. dental insurance
c. pension plan
d. profit sharing
e. educational assistance
Ans: a
Response: See page 313
a. travel expenses
b. salary
c. bonuses
d. commissions
e. all of the above could be part of a compensation package.
Ans: e
Response: See page 341
48. You were given the mandate by your boss to change the compensation plan so that
the total salesperson compensation (salary plus commission) is lowered. You think you
have finally selected a compensation method and wage level that meets your boss’s
requirements. According to your text, what would you do next?
Ans: c
Response: See page 316
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