360 Test 3
The disadvantage of a straight commission plan include no ceiling on potential earnings and income is indirectly related to productivity
FALSE
The fringe mix refers to the relationship between salary, commission, and other incentives.
FALSE
Transactional leaders adopt a long-term perspective. They gain extraordinary commitment from their followers through several key characteristics: charisma and vision, inspiration, intellectual stimulation, and individual consideration.
FALSE
Angela Claridge is a sales representative who is most interested in making sure that her income covers her home mortgage, food, and utilities each month. Ms. Claridge probably feels that the most important criterion for a compensation plan is to ensure
Income regularity
________ takes place largely through body language, facial expressions, gestures, or body postures.
Non-verbal communication
In considering situational variables along with the four basic leadership styles identified by The Ohio State University and University of Michigan researchers, which of the following statements is accurate?
A low-consideration, high-structure leader style is appropriate if the sales force consists of individuals who are socially mature and highly cohesive but do not understand or relate to the task to be done
Charisma is a mystical, inspirational quality that few people possess; the charismatic leader wins the emotional loyalty and enthusiasm of followers.
TRUE
Sales managers should stress four principles in using MBO. _____ refer(s) to the personal goals of the individual salesperson being integrated with the overall goals of the organization so that they are mutually reinforcing
Coinciding goals
Sales managers must decide what proportion of each salesperson's total income should be earned through incentives and whether the incentive pay schedule should be
all of the above (fixed, regressive, progressive)
Which of the following is an example of a compensation plan? -salary plus commissions -commission plus bonus -salary plus commission plus bonus -all of the above
all the above
Which of the following is not a way to overcome communication barriers?
be silent
All quotas are guided by and established for
certain time period
In examining the effect of various compensation plans on company profits, a seminal study identified several types of salespeople. _______ try to maintain their standard of living by earning a predetermined amount of money.
creatures of habit
To effectively implement an empowerment program, sales managers need to focus on all of the following except: -enhancing salesperson skills -developing salesperson character -creating a culture of empowerment and providing empowerment opportunities -all of the above
-enhancing salesperson skills -developing salesperson character -creating a culture of empowerment and providing empowerment opportunities -all of the above
Combination compensation plans are the most flexible of all approaches and fit a variety of conditions. _______ is usually applied to group efforts, in which some salespeople call on central buyers or buying committees while others call on store managers.
Commissions plus bonus
Effective communication takes place largely through body language, facial expressions, gestures, or body postures.
FALSE
________ suggests that the subordinates whom a leader favors are given preferential treatment and assigned to an "in group," whereas less desirable subalterns are placed in "out groups."
Leader-member exchange theory
According to the leader behavior studies conducted at The Ohio State University and University of Michigan, initiating structure entails exhibiting behaviors such as leaders organize, clearly define, and clarify the tasks subordinates must perform.
TRUE
According to the leader behavior studies conducted at The Ohio State University and University of Michigan, leader consideration entails exhibiting behavior such as friendship, mutual trust, respect, support and warmth.
TRUE
A problem with ______ is that salespeople may not be motivated to perform their activities effectively. Since salespeople may just go through the motions, it is wise to use them in conjunction with sales-volume quotas.
activities quotas
Which of the following characteristics is(are) not a central behavior(s) of informational leaders?
takes a short-term perspective to generate favorable results from the sales force
Which of the following behaviors do salespeople tend not to exhibit when sales managers place primary importance on using outcome-based criteria?
tend to be more accepting of managerial direction
Sales managers have a number of evaluation techniques at their disposal, with each having limitations as well as strengths. The extent to which the evaluation method should be helpful for making decisions about promotion, compensation, and termination is known as
usefulness
Mutual goal-setting devised by the sales manager and the salesperson, who jointly agree on the salesperson's specific goals or performance targets for the coming period, is known as management by objectives
TRUE
Performance reviews are a periodic summing up of the daily appraisals so that the salesperson can see where he or she stands.
TRUE
Vision refers to an attractive, credible notion of a future state that is not readily attainable
TRUE
The purpose for a quota dictates the kind of quota a firm uses. For example, if management wants to increase market share, it should use
a sales-volume-oriented quota
To ensure that salespeople are conducting their tasks conscientiously, many companies require them to meet
activities quotas
The seventh step in developing the compensation plan for a sales force is to
administer the plan
Alan Farber is a top-notch sales representative for an industrial products company in the Midwest. He is reimbursed for expenses up to 4 percent of his net sales and receives a bonus for keeping selling expenses below 4 percent of net sales. Which of the following basic reimbursement plans is Mr. Faber's company using?
combination reimbursement plan
The eighth step in developing the compensation plan for a sales force is to
evaluate the plan
In general, salespeople need _____ on their performance
feedback
Developing an empowerment culture in the sales arena entails engendering all of the following characteristics except
instilling opportunistic behavior
Path-goal theory proposes that the leader can affect the level of satisfaction, motivation, and performance of team members by doing all of the following except: -increasing the support and rewards valued by team members by determining which rewards are important and increasing these rewards consistent with their needs and wants -making rewards contingent on the accomplishment of organizational goals and objectives -using sanctions to stop inappropriate behaviors -aiding team members by clarifying their paths to those goals by removing obstacles to performance and by ensuring that their goals are compatible with the overall objectives of the organization
-using sanctions to stop inappropriate behaviors
A reference description refers to the written description of the responsibilities and performance criteria for a particular position.
FALSE
Contingency theory suggests that the subordinates whom a leader favors are given preferential treatment and assigned to an "in group," whereas less desirable subalterns are placed in "out groups."
FALSE
Expert power is the leader's ability to influence subordinate compliance based on inspiration, charisma, loyalty, and personal identification with the leader.
FALSE
Fringe benefits are financial accounts that enable sales reps to carry out necessary selling activites
FALSE
In content listening, the receiver's goal involves critically evaluating the message by looking at the logic of the argument, strength of the evidence, and validity of the conclusions.
FALSE
Legitimate power refers to the leader's ability to obtain subordinate compliance through fear of punishment or sanctions or by withholding rewards and including being fired from the job.
FALSE
Outcome-based performance standards are defined as planned achievement levels that the sales organization expects to reach at progressive intervals throughout the year; they include an agreement between subordinate and superior as to what level of performance is acceptable in some future period.
FALSE
Regressive incentives are should not be used where there is a high probability of windfall sales and a propensity to overload customer inventories.
FALSE
Transformational leaders identify and clarify for subordinates their job tasks and communicate to them how successfully executing those tasks will lead to job rewards.
FALSE
________ is(are) day-by-day mini-evaluations on specific performacnes.
Performance appraisals
_______ rates, which step up the percentage of commission or bonus awarded as sales volume grows past designated levels, are best when profit margins climb significantly after the break-even point is reached.
Progressive
Sales managers should stress four principles in using MBO. _______ refer(s) to high-performing salespeople being rewarded through public recognition as well as increased financial compensation.
Rewards for performance
To help salespeople allocate their selling time more effectively and efficiently, sales managers can assign priorities to various quotas. For example, a weight of 4 might be assigned to gross margin (GM), a weight of 2 to sales volume (SV), and a weight of 1 to service calls (SCs). Then a summary of these three quotas can be used to compare each salesperson's overall performance. Given these weights and the following performance data, which salesperson (Swenson or Rosenkrantz) performed best overall? Swenson: SV 120 GM 70 SC 110 Rosenkrantz:SV 100 GM 90 SC 100
Rosenkrantz
In examining the effect of various compensations plans on company profits, a seminal study identified several types of salespeople. ______ perform just well enough to keep their jobs.
Satisfiers
A plan that combines two or three of the basic compensation methods (e.g. salary plus commission) is known as a combination compensation plan
TRUE
An individual salesperson, sales territory, branch office, district, region, dealer, or distributor is known as a sales unit.
TRUE
Assessing the effectiveness of the overall sales force organization and examining the process and methods used in evaluating the performance of individuals salespeople are both equally important components of controlling and monitoring a sales program.
TRUE
Compensation plans are designed to achieve certain organizational objectives, for example, larger market share, higher profit margins, introducing new products or services, winning new accounts, or reducing selling costs.
TRUE
Constituting a central part of extrinsic rewards, compensation plans and financial packages are the most important, least ambiguous way to remunerate employees.
TRUE
Factors such as differences in territory potentials and physical disparities in territories are beyond the salesperson's control contribute to difficulty in evaluating individual salesperson performance.
TRUE
Flexibility, equitability, legitimacy, simplicity, and affordability of administration are the building blocks of any well-designed expense plan.
TRUE
Key account salespeople or customer sales teams that call on the largest and most profitable customers are often the highest-paid salespeople in their companies.
TRUE
Long negotiations periods of a year or more may be needed to make a complex sale of a system of products and services or big-ticket items such as private jets.
TRUE
Managers are recognizing that high levels of customer satisfaction and retention are critical to profitability; thus many firms have incorporated customer satisfaction-based incentives (CSBIs) into their sales compensation plans.
TRUE
Self-efficacy refers to feelings of power and subordinate belief in the ability to make a meaningful contribution in influencing organizational performance.
TRUE
Taken together, The Ohio State University and University of Michigan studies suggest that four leadership styles may be effective for sales managers in varying situations. Specifically, a high-consideration/employee-oriented and high-structured/production-oriented leadership style is appropriate if the sales force requires social support from superiors, is not cohesive, and lacks a strong identity with the task at hand. This leadership is especially conductive when sales managers need to influence newly hired, inexperienced sales trainees.
TRUE
The salary plus commissions combination is best when management wants to get high sales without sacrificing customer service. It is good for new salespeople because it provides more security than straight commission.
TRUE
The salary plus commissions is best when management wants to get high sales without sacrificing customer service. It is good for new salespeople because it provides more security than straight commision.
TRUE
A _________ leader adopts a long-term perspective and gains extraordinary commitment from his or her followers through several key characteristics: charisma and vision, inspiration, intellectual stimulation, and individual consideration.
Transformational
Traditional performance evaluation systems suffer from one or more of several possible limitations. Which of the following is not a sales force evaluation bias for concern?
first-impression error
With respect to compensation plans, which of the following is not a category of salespeople listed below?
fringe benefit-oriented
Newly hired, inexperienced sales trainees need which of the following styles of leadership?
high consideration, high structure
Which of the following results generated by the salesperson are not among the three categories of outcome-based measures?
intrinsic results
As a method of compensation, straight salary has all of the following disadvantages except
it significantly reduces the sales managers' control over sales activites
The leader's manner and approach in providing direction, implementing plans, and motivating people are known as
leadership behavior
In terms of outcome-based criteria, which of the following is not a profitability index?
net customer satisfaction
To provide a complete assessment of a salesperson's job, sales managers should employ several variables to evaluate performance. These salesperson performance standards include all of the following except
only encompass metric data
According to theory H, when a sales manager takes on the role of "the kindly father who knows what's best" for the salespeople, his leadership style is
paternalistic
There are three successive stages in an effective performance evaluation monitoring system (PEMS). Continuous interpersonal communication between salespeople and the sales manager, which provides immediate feedback on each specific task or goal accomplished by the salesperson, is called the ______ stage
performance appraisal
Which of the following statements is incorrect with respect performance appraisals?
performance appraisals make it difficult to devise criteria for recruiting and selecting new salespeople
There are three successive stages in an effective performance evaluation monitoring system (PEMS). The phase in which salespersons are allowed to ask the sales manager three key questions, "Where am I going?" "How will I get there?" "How will I be measured?" is called the _______ stage
performance planning
Robert Finney is a sales representative for a large consumer products manufacturer. He is having a good sales year. At the end of the second quarter of the year, he had sold $1,000,000 worth of products, for which he received $25,000 in commissions. By the end of the year, he had sold a total of $2,000,500 worth of products and had earned $45,007.50 in total commission for the year. Mr. Finney's commission rate is
regressive
All of the following statements on the challenging tasks evaluating salespeople are true except
research has found that information asymmetry between salespeople and their sales managers often leads to functianal job behaviors
Of the following, which is not a professional development measure of selling skills?
return on assets managed
Straight salary plans are best in all but which of the following situations? -team selling -long negotiation periods -during the first year for sales trainees -simple promotional mix, that is where the company relies almost exclusively on personal selling instead of advertising to market its products
simple promotional mix, that is where the company relies almost exclusively on personal selling instead of advertising to market its products
Sales managers have a number of evaluation techniques at their disposal, with each having limitations as well as strengths. The extent to which the evaluation instrument and the way it is administered should be consistent throughout the sales organization is known as
standardizaion
Advisory staff, closely knit work groups, compensation plans, quotas, expense accounts, and customers and competitors are some the factors that explain
substitute for leadership theory
Ability, experience, training and knowledge, professional orientation, task-provided feedback, organizational formalization, and inflexibility are some the factors that explain:
substitutes for leadership theory
Taken together, The Ohio State University and University of Michigan studies suggest that four leadership styles may be effective for sales managers in varying situations. Specifically, a lot-consideration/employee-oriented and low-structure/ production-oriented leadership style is appropriate when
the sales force consists of highly motivated and experienced individuals who are socially mature and doing work they know and enjoy.
Sales managers include salespersons in quota setting for all the following reasons except
this practice significantly reduces questions of inaccuracy, unfairness, and unattainability
A _______ leader identifies and clarifies for subordinates their job tasks and communicates to them how successfully execution of those tasks will lead to rewards.
transactional