CHAPTER 8

Perhaps the most serious shortcoming of straight-commission plans is that a. salespeople may earn more than their managers. b. they contribute little to company loyalty, resulting in potential salesforce control problems. c. the firm suffers financially if the market declines or stagnates. d. high-pressure, non-customer-oriented sales techniques are often used to boost total sales. e. they are difficult to administer.

B

The motivation task is incomplete unless salespeople's efforts are a. aimed at improving overall salesforce sales. b. channeled in directions consistent with the overall strategic role of the salesforce within the firm. c. channeled into profitable activities. d. concentrated on sales quotas and ineffective activities are eliminated. e. motivated towards activities that improve the company's bottom line as well as the corporate image.

B

The reward system practiced by the majority of consumer and industrial firms is a. straight salary. b. salary plus incentives. c. straight commission plus bonuses. d. straight salary plus expenses. e. straight commission.

B

The salesperson's choice to expend effort over a period of time, especially when faced with adverse conditions is referred to as a. intensity. b. persistence. c. tenacity. d. determination. e. degree.

B

This form of nonfinancial reward is generally considered to be more desirable to younger salespeople than to older salespeople: a. opportunity for personal growth. b. opportunity for promotion. c. job security. d. sense of accomplishment. e. recognition for achievement.

B

What change in the firm's salesforce reward system might be in response to customer's needs? a. A pay freeze b. A change from straight commission to straight salary c. The introduction of a sales contest d. A change from straight salary to straight commission e. A pay raise

B

Expense account padding a. is an expected activity and is generally ignored unless it is very blatant. b. occurs very rarely as most salespeople are quite honest. c. is considered a serious offense, which, if detected, often leads to termination of employment. d. is so difficult to uncover that most companies simply do not try. e. is viewed as a fringe benefit by most salespeople.

C

The importance of matching the abilities and needs of sales recruits to the ____ cannot be overstated. a. abilities and needs of the customer b. requirements and desires of the company c. requirements and rewards of the job d. skills and requirements of the job e. specifications and abilities of the company

C

The most commonly used definitions of motivation include these three dimensions: a. intensity, degree, persistence. b. severity, direction, perseverance. c. persistence, intensity, direction. d. instruction, degree, tenacity. e. tenacity, persistence, direction

C

The most serious disadvantage of a straight-salary compensation plan is a. that it builds little in the way of salesforce loyalty or commitment to the company. b. that differences in salary levels among salespeople are often a function of seniority on the job instead of true merit. c. that they offer little financial incentive to perform past a merely acceptable level. d. the financial burden the firm suffers if the market declines or stagnates. e. that high-pressure, non-customer-oriented sales techniques are often used to boost total sales.

C

When a sales manager assures salespeople that they fulfill a critical role in revenue production and other key activities within the company, he/she is offering this non-financial reward: a. opportunity for personal growth. b. recognition for achievement. c. sense of accomplishment. d. job security. e. job redesign.

C

When determining the financial compensation mix, the sales manager must a. decide what the commission payout event will be. b. determine what percentage in commission is to be paid to salespeople. c. determine the relative amounts to be paid in salary, commission, and bonus. d. decide on what type of benefits package to offer. e. review the compensation plans offered by other firms in the industry.

C

Which of the following is not a factor to be considered when developing a commission-only plan? a. Commission base b. Commission rate c. Commission margin d. Commission splits e. Commission payout event

C

The Million Dollar Roundtable designation in the insurance industry is an example of this type of nonfinancial reward: a. opportunity for promotion. b. sense of accomplishment. c. personal growth. d. recognition for achievement. e. job security.

D

The amount of mental and physical effort put forth by the salesperson is referring to a. degree. b. persistence. c. tenacity. d. intensity. e. direction.

D

18. If the nonselling administrative duties of the salesperson are of major importance, this compensation plan is recommended: a. straight salary. b. salary plus bonuses. c. straight commission. d. salary plus commission. e. straight commission plus bonuses.

A

51. Which of the following is not true regarding the design of a global salesforce compensation system? a. Design the plan centrally and dictate to local countries. b. Involve reps from key countries. c. Allow local countries flexibility in implementation. d. Use consistent communication and training themes worldwide. e. Allow local managers to decide the mix between base an incentive pay.

A

52. Which of the following statements regarding changes in the reward system is false? a. They should be made during recessionary periods. b. They will likely produce widespread concern among the salesforce that their earnings will decline. c. They are precipitated by poor financial performance by the company. d. They can be traumatic for salespeople and management alike. e. Reasons for the change should be openly discussed.

A

A firm offering a college tuition reimbursement program has made a commitment to providing this nonfinancial reward: a. opportunity for personal growth. b. recognition for achievement. c. sense of accomplishment. d. opportunity for promotion. e. job redesign.

A

According to the text, which of the following is not one of the rewards typically offered to salespeople? a. social interaction opportunities b. job security c. sense of accomplishment d. pay e. promotion

A

Reward system management involves the selection and utilization of organizational rewards to a. direct salespeople's behavior toward the attainment of organizational objectives. b. reward salespeople for outstanding sales achievements. c. direct effort toward the attainment of short-term goals (e.g., a sales contest during a seasonal slump). d. compensate salespeople, with either financial or nonfinancial rewards, depending on those desired most by the individual salesperson. e. compensate salespeople according to the profitability of their total sales to customers.

A

When it is difficult for the salesperson to secure the first order from the customer, but reorders are virtually automatic, this form of commission rate would be appropriate: a. regressive. b. incremental. c. a combination of constant and progressive rates. d. constant. e. progressive.

A

Which of the following is an advantage of a straight-commission compensation plan? a. Operating costs are minimized during slack selling periods. b. They are highly flexible, allowing frequent changes in compensation practices to achieve short-term objectives. c. They are attractive to college graduates desiring an opportunity to earn while they train. d. The salesforce's loyalty to the company is enhanced. e. Salespeople often adopt high-pressure, non-customer-oriented sales techniques which increase total sales.

A

Current spendable income includes a. salaries and commissions, but not bonuses. b. salaries only. c. salaries, commissions, and bonuses. d. any cash award, but not bonuses such as merchandise or free trips. e. weekly or monthly income, but not rewards made only annually.

C

Advantages of straight-salary compensation plans include all of the following except a. salaries can provide control over salespeople's activities, especially nonselling activities. b. the working capital requirements are lessened with the straight-salary compensation plan. c. reassigning salespeople and changing sales territories is less of a problem than with other financial compensation plans. d. they are the simplest plans to administer, with adjustments usually occurring only once a year. e. planned earnings for the salesforce are easy to project, which facilitates the salesforce budgeting process.

B

Flexibility has been cited as both an advantage and a disadvantage of this compensation pay plan: a. straight salary. b. combination pay plans. c. straight commission. d. straight commission with bonuses. e. straight salary with bonuses.

B

Formal recognition programs have a better chance of success if sales managers do all of the following except: a. publicize the program before it is implemented. b. make it easy enough to allow for a majority of the salesforce to win. c. ensure that the celebration for winners is well-conceived and executed. d. arrange for individual salespeople or sales teams to acknowledge the support of others who helped them win the award. e. remember that the program should make sense from a return-on-investment perspective.

B

Which of the following conditions would indicate to the sales manager that the proportion of the salesperson's total pay that is salary should be relatively high? a. The reputation of the salesperson's company is little known. b. The importance of the salesperson's personal skills in making sales is slight. c. The company's reliance on advertising and other sales promotion activities is little. d. The importance of factors beyond the control of the salesperson which influence sales is slight. e. The importance of providing customer service is slight.

B

Which of the following conditions would indicate to the sales manager that the proportion of the salesperson's total pay that is salary should be relatively low? a. The reputation of the salesperson's company is well known. b. The importance of the salesperson's personal skills in making sales is considerable. c. The incidence of technical or team selling is high. d. The importance of factors beyond the control of the salesperson which influence sales is considerable. e. The competitive advantage of the product in terms of price, quality, etc., is high.

B

Which of the following is not a form of nonfinancial compensation? a. Career advancement through promotion b. Job redesign c. Job security d. Recognition of achievement e. A sense of accomplishment on the job

B

Which of the following is not an advantage of combination plans? a. They are flexible. b. They are fairly simple to administer. c. Sales behavior can be rewarded frequently. d. Specific sales behaviors can be reinforced or stimulated quickly. e. They are attractive to high-potential, but unproven, candidates for sales jobs.

B

Which of the following is not one of the desired outcomes of an optimal reward system? a. Encourage specific activities which are consistent with the firm's overall marketing and salesforce objectives and strategies. b. Provide a mix of both compensation and noncompensation rewards comparable to other firms. c. Attract and retain competent salespeople, thereby enhancing long-term customer relationships. d. Be clear and flexible enough to allow the kind of adjustments that facilitate administration of the reward system. e. Provide an acceptable ratio of costs and salesforce output in volume, profit, or other objectives.

B

A common criticism of combination pay plans is that they a. cost the firm more in total pay to salespeople. b. do not provide equitable treatment of high-performing salespeople. c. tend to produce too many salesforce objectives which are of the crisis-resolution variety. d. are unattractive to high-potential, but unproven college graduates. e. may often lead to salespeople earning more than their managers, which leads to resentment and other managerial problems.

C

A large direct sales company such as Avon would most likely compensate their salespeople in this manner a. straight salary. b. salary plus bonuses. c. straight commission. d. salary plus commission. e. straight commission plus bonuses.

C

A salesperson who is intrinsically motivated a. is motivated by the rewards that the job provides. b. is motivated by the need for love and belongingness. c. finds the job to be inherently rewarding. d. finds that the job's fringe benefits, pay, and generous vacation policy provide motivation. e. works for the feeling of security offered by the job.

C

According to the text, controls typically used by companies to ensure judicious spending by the salesforce include all of the following except a. the use of allowances for certain expenditures. b. the requirement of documentation for expenses to be reimbursed. c. the requirement that expenses be charged and the bills sent directly to the company for payment by the accounting department. d. a definition of which expenses are reimbursable. e. the establishment of expense budgets.

C

All of the following are typical reimbursable expense items except a. automobile. b. mileage allowance. c. home. d. telephone. e. entertainment.

C

An example of a selling situation requiring a commission split would be a. a field salesperson sells a computer to a customer and some time after this it requires a service call from a company service technician. b. a salesperson needs help from a salaried technical expert in order to provide a potential customer with certain information. c. a large company purchases products from a company and ships them to its affiliates in several cities, with the selling firm's salespeople in these cities required to provide follow-up and service. d. a salesperson provides a list of referrals that are not in his/her territory to the salesperson covering that territory. e. a sales manager is in the process of training a new recruit and accompanies him/her on sales calls.

C

Which of the following is not a guideline recommended in the management of motivation? a. Recruit and select salespeople whose personal motives match the requirements and rewards of the job. b. Provide adequate job information and assure proper skill development for the salesforce. c. Take a reactive approach to seeking out motivational problems and sources of frustration in the salesforce. d. Concentrate on building the self-esteem of salespeople. e. Use job design and redesign as motivational tools.

C

According to a survey of sales executives reported in the text, the most popular sales incentive is a. plaques/rewards. b. merchandise/gifts. c. recognition dinners. d. cash. e. leisure trips/travel.

D

Compensation rewards might include all of the following except a. recognition. b. bonus. c. promotion. d. task significance. e. opportunity for personal growth.

D

Lavish formal recognition programs can provide all of the following benefits to a salesforce except a. providing for public recognition for accomplishments in the presence of peers and superiors in the organization. b. making the winners feel special. c. enthusiasm inspired by the program carrying over into any related business or training sessions. d. costing little and reinforcing desirable behavior immediately after it occurs. e. providing the recipient with a symbolic award of lasting psychological value.

D

Which of the following statements regarding sales contests is true? a. A sales contest is a temporary program that is used to accomplish a specified long-term objective. b. The optimum duration for a sales contest has been determined to include this range--longer than three months but less than six months. c. The most effective sales contest prize is a cash award. d. Sales contests will continue to be an important tool for achieving expedient results. e. Researchers have not yet been able to find any positive relationship between sales contests and sales and profitability.

D

Which one of the following statements regarding global compensation is false? a. The compensation of native salespeople is difficult. b. In many countries, political or cultural factors may have a strong influence on salesforce pay practices. c. Overseas assignments can enhance career opportunities. d. Companies are increasing incentives for foreign-based employment. e. Sales managers often rely on human resource professionals to assist in global compensation planning.

D

A salesperson who is extrinsically motivated a. would work for the pure pleasure of working. b. doesn't need or desire formal recognition for outstanding achievements. c. is motivated by personal growth needs. d. finds the job to be inherently rewarding. e. is motivated by the rewards that the job provides.

E

All of the following are steps suggested for facilitating a sense of accomplishment in the salesforce except a. ensure that salespeople know the critical role they play in sales revenue production. b. personalize the causes and effects of salesperson performance. c. consider the practice of management by objectives. d. reinforce feeling of worthwhile accomplishment in communication with the salesforce. e. provide salespeople with trips and other rewards.

E

Industries that have traditionally used a straight-commission-based compensation pay plan include all of the following except a. real estate. b. securities. c. automobiles. d. wholesalers. e. computers.

E

Noncompensation rewards include a. opportunities for promotion. b. those rewards given for acceptable performance or effort. c. any current spendable income. d. insurance polices and/or retirement programs. e. a supportive sales management leadership style.

E

The least valued nonfinancial reward by salespeople, other than those nearing retirement, is a. opportunity for promotion. b. sense of accomplishment. c. personal growth. d. recognition for achievement. e. job security.

E

This form of commission rate may actually result in overselling and higher selling costs to the company: a. regressive. b. incremental. c. a combination of constant and regressive rates. d. constant. e. progressive.

E

To implement a new or modified reward system, sales managers should do all of the following except a. clearly communicate details of the plan to the salesforce prior to its implementation. b. encourage salesforce feedback. c. promptly answer questions. d. detail any expected changes in job activities. e. issue a press release detailing the company's changes.

E

Which of the following is not a guideline for optimizing the use of sales contests? a. Recognize that contests will concentrate efforts in specific areas, often at the temporary neglect of other areas so plan accordingly. b. Consider the positive effects of including nonselling personnel in sales contests. c. Use variety as a basic element of sales contests by varying timing, duration, themes, and rewards. d. Ensure that sales contest objectives are clear, realistically attainable, and quantifiable to allow performance assessment. e. Salespeople should compete in teams with each member of the team making a contribution to the group's total goal.

E

Which of the following is not an advantage of the commission compensation plan? a. Income is linked to results. b. There is a strong financial incentive to improve results. c. Costs are reduced during slow sales periods. d. Less operating capital is required. e. Customer loyalty is enhanced.

E

Which of the following is not mentioned in the text as a challenge to sales managers attempting to adjust their compensation plans to recognize team performance? a. Existing reward systems for individual salespeople are not easy to adapt to team selling situations. b. Salespeople who are accustomed to earning commissions based on their individual efforts may not respond enthusiastically to team-based compensation. c. There is concern that rewards for high performers may be diminished by lower-performing team members. d. It is difficult to determine an individual salesperson's contribution to overall team performance. e. Overall compensation and rewards increase with the use of team selling.

E

___________ rewards are those that are given in return for acceptable performance or effort. a. Sales b. Intrinsic c. Noncompensation d. Compensatory e. Compensation

E