Deck 7: Motivation and Reward System Management

Question 1

According to the text, all of the following can impact salespeople's motivation except

A) job design
B) interaction with others on the job
C) personal goals and preferences
D) company turnover rate
E) work related rewards

Answer 1

D

Question 2

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.

Answer 2

C

Question 3

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.

Answer 3

D

Question 4

__________ implies that salespeople choose where their effort will be spent among various job activities.

A) Degree.
B) Persistence.
C) Tenacity.
D) Intensity.
E) Direction.

Question 5

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.

Question 6

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.

Question 7

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.

Question 8

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.

Question 9

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.

Question 10

Compensation rewards might include all of the following except

A) recognition.
B) bonus.
C) promotion.
D) task significance.
E) opportunity for personal growth.

Question 11

Noncompensation rewards include

A) opportunities for promotion.
B) those rewards given for acceptable performance or effort.
C) any current spendable income.
D) insurance policies and/or retirement programs.
E) a supportive sales management leadership style.

Question 12

___________ rewards are those that are given in return for acceptable performance or effort.

A) Sales
B) Intrinsic
C) Noncompensation
D) Compensatory
E) Compensation

Question 13

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.

Question 14

According to the text, the most popular sales incentive is

A) plaques/rewards.
B) merchandise/gifts.
C) recognition dinners.
D) cash.
E) leisure trips/travel.

Question 15

What change in the firm's salesforce reward system might be in response to customers' 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

Question 16

According to the text, which of the following is not one of the reward categories typically offered to salespeople?

A) social interaction opportunities
B) recognition
C) sense of accomplishment
D) pay
E) promotion

Question 17

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.

Question 18

The most widely used type of financial pay plan is

A) straight salary.
B) salary plus a bonus.
C) a combination pay plan.
D) straight salary plus expenses.
E) straight commission.

Question 19

This compensation plan provides no financial incentive to improve performance.

A) straight salary.
B) salary plus a bonus.
C) a combination pay plan.
D) straight salary plus expenses.
E) straight commission.

Question 20

With this compensation plan, it is difficult to build loyalty of the salesforce to the company.

A) straight salary.
B) salary plus a bonus.
C) a combination pay plan.
D) straight salary plus expenses.
E) straight commission.

Question 21

This compensation plan offers less control over nonselling activities.

A) straight salary.
B) salary plus a bonus.
C) a combination pay plan.
D) straight salary plus expenses.
E) straight commission.

Question 22

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.

Question 23

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.

Question 24

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.

Question 25

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.

Question 26

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.

Question 27

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

Question 28

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.

Question 29

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.

Question 30

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.

Question 31

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.

Question 32

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) they link compensation to actual sales.
E) they are difficult to administer.

Question 33

A(n) ___________ is typically used to direct effort toward relatively short-term objectives, such as introducing new products, adding new accounts, or reducing accounts receivable.

A) constant commission
B) incremental commission
C) performance bonus
D) regressive commission
E) salary

Question 34

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.

Question 35

A company that expects its salespeople to perform a variety of activities such as gain new customers, retain key customers, establish new product in the marketplace and maintain a balance between sales volume and profitability might use a

A) combination pay plan.
B) straight commission pay plan.
C) straight salary pay plan.
D) none of the above.

Question 36

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.

Question 37

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.

Question 38

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.

Question 39

With regards to determining appropriate financial compensation levels, all of the following are true except

A) In general, sales positions that are more complicated and require more skills are compensated at a higher level.
B) Salespeople with the most experience should always receive the highest wages.
C) Information about competitive salaries and the requirements for attracting and keeping qualified salespeople is necessary.
D) Information on competitive salaries can be obtained by benchmarking earnings levels of salespeople through a variety of methods.
E) Determining the appropriate financial compensation level depends upon an understanding of the duties expected for a particular sales position.

Question 40

Which of the following is not a form of nonfinancial compensation?

A) Career advancement through promotion
B) Job redesign
C) Opportunities for personal growth
D) Recognition of achievement
E) A sense of accomplishment on the job

Question 41

Which of the following conditions is not typically associated with higher pay levels?

A) Job experience.
B) The importance of personal selling in the overall marketing effort.
C) Higher skill levels.
D) The extent to which there is an expectation that salespeople will service current customers.
E) Highly competitive markets where an intense personal selling effort is important for customer retention and growth.

Question 42

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.

Question 43

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.

Question 44

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.

Question 45

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.

Question 46

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.

Question 47

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.

Question 48

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.

Question 49

All of the following are typical reimbursable expense items except

A) automobile.
B) mileage allowance.
C) home.
D) telephone.
E) entertainment.

Question 50

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.

Question 51

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.

Question 52

Which of the following does not help deter expense account abuse?

A) Tight financial controls.
B) Well-publicized and enforce requirements for documentation of expenditures.
C) An anonymous tip program.
D) Periodic visits by highly trained financial auditors.
E) All of the above help deter expense account abuse.

Question 53

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.

Question 54

Research suggests that salespeople's enthusiasm for participating in contests and their design preferences for goal type, number of winners, contest duration, and award value may vary by

A) individual characteristics.
B) supervisory characteristics.
C) sales setting characteristics.
D) all of the above.

Question 55

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.

Question 56

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.

Question 57

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.

Question 58

Which of the following is 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) Do not allow local countries flexibility in implementation.
D) Vary communication and training themes worldwide.
E) Do not allow local managers to decide the mix between base an incentive pay.

Question 59

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.

Question 60

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.

Question 61

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

Question 62

A salesforce reward system is one of the most important determinants of both short-and long-term sales performance.

Question 63

Salespersons' choices of which activities warrant action are less important than how hard they work or how well they persist in their efforts.

Question 64

A salesperson's overall motivation is either a function of extrinsic or intrinsic motivation, but cannot be both.

Question 65

Organizational rewards are classified as compensation rewards and reimbursement rewards.

Question 66

Noncompensation rewards include factors related to the work situation and well-being of each salesperson.

Question 67

Practicing a supportive leadership style is an example of a noncompensation reward.

Question 68

Job design factors such as skill variety and feedback are forms of nonfinancial compensation rewards.

Question 69

The optimal reward system would balance the needs of the organization, its salespeople, and its customers.

Question 70

From the organization's perspective, the reward system should attract and retain competent salespeople.

Question 71

From the organization's perspective, the reward system should reward salesperson performance based on measurable criteria that are easy to comprehend.

Question 72

Most salespeople prefer some stability in their reward system and care little about incentive rewards.

Question 73

The most productive salespeople have the best opportunities to leave the firm for more attractive work situations.

Question 74

In recent years, the needs of the salesforce have become more important than the needs of the customer in determining the structure of rewards systems in sales organizations.

Question 75

The motivational power of various rewards is dependent on individual salesperson preferences.

Question 76

The three basic types of salesforce financial compensation plans are straight salary, straight commission and bonus.

Question 77

A disadvantage of a salary compensation plan is that it provides no financial incentive to improve performance.

Question 78

Combination compensation plans may encourage crisis-oriented objectives.

Question 79

A straight-commission compensation plan is suggested for salespeople such as missionaries and detailers.

Question 80

A straight-commission compensation plan is appropriate for sales trainees who are involved in learning about the job rather than producing on the job.