III. Your Turn: A Sports Sales Plan
Summary of Case
become more difficult. The Bisons had a weak team last year, and the projections are that
games and sell advertising. The sales team relies fully on the seven member
administrative team who are responsible for the ancillary activities in the selling event.
Learning Objective
Analyze the factors that influence a sales compensation package.
Teaching Guideline
Use this case to address the challenges faced while, designing a sales compensation
package for the sales team.
Discussion of Case Issues
1. Of the above information, what is most important in your design of a sales incentive
plan for the three sales staff? How does this information affect your plan design?
designed for this type of job. There is much more reliance on incentive payments tied
to individual performance. In this case, since the sales person’s ability is of high
oMarket maturity
to the possible exclusion of supportive tasks such as processing customer returns, which
2. Your book talks about unit rate plans. Which of these types of plan would you use for
sales of tickets? Which plan might be appropriate for sales of advertising? Why?
sale of tickets ramped commissions can be used, which have rate up to a target level
and, then a higher rate tied to a more difficult “above target sales”. This can be
For advertising sales flat commissions can be used, which have the same rate
3. What factors influence the dollar amount you can pay for increases in ticket sales?
oThe nature of people who enter the sales profession—popular stereotypes of
of salespeople to organizational strategy. Salespeople must know when to stress
move toward a more conservative sales pattern, focusing even more on customer
recognize that external competitiveness is essential. The very nature of sales
positions means that competitors will cross paths, at least in their quest for
sales, companies can afford to hire mid- and low-level sales personnel to capture
sales presentation. Such products are said to have high barriers to entry, meaning
Answers to Review Questions
1. We read an article the other day that said it’s getting harder to find good people
willing to serve on a corporate board of directors. Given what you learned in this
chapter, speculate on why it’s hard to attract good people to this job.
involved directors willingly or unwillingly being party to it, stockholders are angry about
compensation for the board of directors averages around $250,000. However, some
Another backlash includes the fact that stockholders are demanding that CEO’s executive
Not only do they help set strategic plans that affect the profitability of an organization,
2. What makes professional/scientist jobs different, such that they qualify for special
group status in many companies? Why is the compensation of knowledge workers so
frequently linked to the amount of time these workers have been out of school?
obsolete. Upon tracking the salaries of these professionals, you will see a close
A second reason for classifying these professionals under the special group status is equity.
and years of experience in the labor market. Generally, surveying organizations ask for
3. The differential between the salary of top executives and the lowest paid workers in
the same country is quite small in Japan, at least in comparison to the United States.
The same is true in unions (president of union versus union workers). Explain why
the differential might be small in Japan and in U.S. unions but much larger in private
U.S. corporations.
are in the second level of a company earn about two-thirds of a CEO’s salary, while the
A second approach to understanding executive compensation focuses less on the difference
executive pay bears some relationship to company success. A recent article analyzing the
relationship whatsoever. Worse yet, the present value of future compensation (mostly stock
will make decisions to solidify their positions and to maximize the rewards they personally
receive. It is possible to state that the CEO will increase their wages in all of the following
three situations:
4. Romance Novels, Inc, located in Cheektowaga, NY, has gradually increased the
number of contingent workers (full-time, temporary) from 10 percent of the
workforce to about 28 percent today. Why might they do this? Also, what equity
problems can arise from hiring contingent workers, especially when they work
alongside regular employees?
desirable characteristics, and contingent workers offer these options.
However, while employee benefit costs are about 50 percent less for contingent workers,
sometimes wages are higher. Contingent workers often work beside regular workers yet
for high-skilled contingent workers, it is increasingly popular to view careers as a series of
opportunities to acquire valuable increments in knowledge/skills. Contingent status is not
5. Why is it easier to explain a $2 million payout to Tiger Woods for working four days
to win a Masters Championship than it is to explain why William Clay Ford made
$30 million as CEO of Ford Motor Company?
Empirical research points out that executive pay bears some relationship to company
success. According to a recent article analyzing the results from over 100 executive pay
profitability or sales.
However, it can also be argued that results from over 100 executive pay studies, size
necessarily related to executive performance. Indeed, in markets with prolonged stock
increases, executives may receive windfall profits regardless of the firm’s performance.
Union are much lower. For example, wages plus incentives for French CEOs average