Question 1

Combination compensation plans combine two or three of the basic compensation methods, e.g., salary plus commission plus bonus. For which one of the following situations would a combination compensation be inappropriate?
A) when a sales manager wants to motivate high sales without sacrificing customer service
B) when long run sales objectives are being sought such as selling product systems or large installations
C) when sales are highly seasonal
D) none of the above would be inappropriate for combination compensation plans

Accepted Answer

Combination compensation plans are versatile and can be tailored to fit various situations, including motivating high sales, achieving long-term sales objectives, and managing seasonal sales fluctuations. Therefore, none of the listed situations would be inappropriate for such plans.

Question 2

Which of the following are examples of combination compensation plans?
A) salary plus commissions
B) commission plus bonus
C) salary plus commission plus bonus
D) all the above

Accepted Answer

Combination compensation plans involve a mix of different types of compensation, such as salary, commissions, and bonuses. All the options listed are examples of such plans.

Question 3

Combination compensation plans are the most flexible of all approaches and fit a variety of conditions. ____________ are best when management wants to get high sales without sacrificing customer service. It is good for new salespeople, since it provides more security than straight commission.
A) salary plus commissions
B) salary plus bonus
C) salary plus commission plus bonus
D) commission plus bonus

Accepted Answer

Salary plus commissions plans provide a stable income through the salary component while incentivizing high sales through commissions, making it suitable for encouraging sales without compromising customer service.

Question 4

Combination compensation plans are the most flexible of all approaches and fit a variety of conditions. ____________ is appropriate for seasonal sales, when there are frequent inventory imbalances and when management wants to focus on certain products or customers.
A) salary plus commissions
B) salary plus bonus
C) salary plus commission plus bonus
D) commission plus bonus

Accepted Answer

Combination compensation plans like salary plus commission plus bonus are flexible and can be tailored to fit various conditions, such as seasonal sales, inventory imbalances, and targeted focus on specific products or customers.

Question 5

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.
A) salary plus commissions
B) salary plus bonus
C) salary plus commission plus bonus
D) commission plus bonus

Accepted Answer

The answer of Combination compensation plans are the most flexible...

Question 6

The main advantages of a combination compensation plan include the following except:
A) provides the greatest flexibility and control over salespeople, in that all desirable activities can be rewarded
B) provides security plus incentive
C) allows frequent, immediate reinforcement of desired sales behavior
D) all the above are advantages

Accepted Answer

All the options listed are advantages of a combination compensation plan, so there is no exception.

Question 7

The main disadvantages of a combination compensation plan include the following except:
A) may fail to achieve management objectives if not carefully conceived
B) can be expensive to administer, particularly if not computerized
C) can be complex and easily misunderstood
D) all the above are disadvantages

Accepted Answer

All the options listed (A, B, and C) are indeed disadvantages of a combination compensation plan, so there is no exception among them.

Question 8

Recent trends in sales compensation include all of the following except
A) tying sales compensation to productivity as well as retention
B) including customer satisfaction in the sales compensation plan
C) increased emphasis on international sales compensation
D) all of the above are recent trends

Accepted Answer

All of the options listed are recent trends in sales compensation, so there is no exception among them.

Question 9

With regard to recent financial compensation trends which of the following statements is incorrect?
A) managers are recognizing that high levels of customer satisfaction and retention are critical to profitability
B) many firms have incorporated customer satisfaction-based incentives into their sales compensation plans
C) key account salespeople or customer sales teams who call on the largest and most profitable customers are often the highest-paid salespeople in their companies.
D) all of the above are recent trends

Accepted Answer

All the statements A, B, and C are correct and reflect recent trends in financial compensation, making option D incorrect as it suggests that one or more of the statements are not trends.

Question 10

As U.S. firms continue to expand into international markets, they are being confronted with a range of circumstances that require them to adjust their sales compensation plans for indigenous salespeople. Which of the following statements is incorrect with respect to compensation in the Far East?
A) sales volume is the primary indicator of success
B) compensation is tied almost exclusively to sales volume
C) less weight should be placed on non-selling activities when developing a compensation plan
D) all of the above are recent trends

Accepted Answer

All of the statements A, B, and C are incorrect with respect to compensation in the Far East, as they do not accurately reflect the cultural and business practices in that region.

Question 11

Which of the following are not the building blocks of any well-designed expense plan?
A) inflexibility
B) equitability
C) legitimacy
D) simplicity

Accepted Answer

Inflexibility is not a desirable characteristic of a well-designed expense plan, as it should be adaptable to changing circumstances.

Question 12

Alan Farber is a top notch sales representative for a 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. Farber's company using?
A) unlimited reimbursement plan
B) limited reimbursement plan
C) combination reimbursement plan
D) negative reimbursement plan

Accepted Answer

The company uses a combination reimbursement plan because it reimburses expenses up to a certain percentage and also provides a bonus for keeping expenses below that percentage.

Question 13

Phyllis Gibfried is a sales rep for a cosmetic manufacturer who is allowed $50 per day for lodging, $20 for meals, and 20 cents per mile for travel. What reimbursement plan is Ms. Gibfried's company using?
A) unlimited reimbursement plan
B) limited reimbursement plan
C) combination reimbursement plan
D) partial reimbursement plan

Accepted Answer

The company is using a limited reimbursement plan because there are specific limits set for lodging, meals, and travel expenses.

Question 14

Which of the following is not a disadvantage of limited reimbursement plans?
A) salespeople may feel the sales manager lacks trust in their making selling expenditures
B) it restricts exceptional expenses which might gain or save a customer
C) it tempts salespeople to switch reporting of expenditures from one time period to another to avoid going over the expense limits
D) it makes salespeople less expense conscious to the possible detriment of sales and profits

Accepted Answer

Limited reimbursement plans actually make salespeople more expense conscious, not less, as they have to manage their expenses within the set limits.

Question 15

Concerning methods for controlling expenses, which of the following statements is inaccurate?
A) the most popular method of expense control is unlimited reimbursement
B) unlimited payment plans tend to make forecasts of selling costs easier
C) limited reimbursement plans tend to reduce expense account padding
D) with combination reimbursement plans, the sales rep's attention may shift from obtaining profitable sales to worrying about expense ratios

Accepted Answer

The answer of Concerning methods for controlling expenses, which of...

Question 16

An effective reward program and compensation structure is perhaps the most powerful mechanism to motivate average performers to achieve their full potential.

Accepted Answer

An effective reward program and compensation structure can incentivize average performers by aligning their efforts with tangible benefits, thus motivating them to improve their performance.

Question 17

Compensation structures and programs refer to intrinsic rewards that can stimulate higher levels of effort (motivation), thus contributing to superior salesperson performance.

Accepted Answer

Compensation structures and programs refer to extrinsic rewards, such as salary, bonuses, and commissions, rather than intrinsic rewards, which are related to internal satisfaction and motivation.

Question 18

Constituting a central part of extrinsic rewards, compensation plans and financial packages are the most important, least ambiguous way to remunerate employees.

Accepted Answer

Extrinsic rewards, such as compensation plans and financial packages, are tangible and directly linked to employee performance, making them a clear and significant form of remuneration.

Question 19

A straight salary is a fixed sum of money paid at regular intervals.

Accepted Answer

A straight salary refers to a consistent and predetermined amount of money paid to an employee at regular intervals, such as weekly, bi-weekly, or monthly, without any additional incentives or commissions.

Question 20

A straight salary is inappropriate for team selling, long negotiating periods, mixed promotional mixes, sales trainees, missionary selling, and in special situations such as introducing new products or developing new customer accounts.

Accepted Answer

The answer of A straight salary is inappropriate for team...

Quiz 12: Sales Force Compensation

Combination compensation plans combine two or three of the basic compensation methods, e.g., salary plus commission plus bonus. For which one of the following situations would a combination compensation be inappropriate?

Which of the following are examples of combination compensation plans?

Combination compensation plans are the most flexible of all approaches and fit a variety of conditions. ____________ are best when management wants to get high sales without sacrificing customer service. It is good for new salespeople, since it provides more security than straight commission.

Combination compensation plans are the most flexible of all approaches and fit a variety of conditions. ____________ is appropriate for seasonal sales, when there are frequent inventory imbalances and when management wants to focus on certain products or customers.

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.

The main advantages of a combination compensation plan include the following except:

The main disadvantages of a combination compensation plan include the following except:

Recent trends in sales compensation include all of the following except

With regard to recent financial compensation trends which of the following statements is incorrect?

As U.S. firms continue to expand into international markets, they are being confronted with a range of circumstances that require them to adjust their sales compensation plans for indigenous salespeople. Which of the following statements is incorrect with respect to compensation in the Far East?

Which of the following are not the building blocks of any well-designed expense plan?

Phyllis Gibfried is a sales rep for a cosmetic manufacturer who is allowed $50 per day for lodging, $20 for meals, and 20 cents per mile for travel. What reimbursement plan is Ms. Gibfried's company using?

Which of the following is not a disadvantage of limited reimbursement plans?

Concerning methods for controlling expenses, which of the following statements is inaccurate?

An effective reward program and compensation structure is perhaps the most powerful mechanism to motivate average performers to achieve their full potential.

Compensation structures and programs refer to intrinsic rewards that can stimulate higher levels of effort (motivation), thus contributing to superior salesperson performance.

Constituting a central part of extrinsic rewards, compensation plans and financial packages are the most important, least ambiguous way to remunerate employees.

A straight salary is a fixed sum of money paid at regular intervals.

A straight salary is inappropriate for team selling, long negotiating periods, mixed promotional mixes, sales trainees, missionary selling, and in special situations such as introducing new products or developing new customer accounts.