Olympia Machine Company Case Study Example | Topics and Well Written Essays - 500 words

Olympia Machine Company - baptistry Study ExampleHowever, there are weaknesses in the current compensation plan. Regardless of the large brashness of sales, there are high fixed selling expenses and also common measures that determine salary increases of the salespeople lease not been established by the management.Some of the key issues that any new compensation plan moldiness address include how to poise a balance between capital equipment and sales. A salesperson must(prenominal) be able to not just take any localise that comes along but sell. Secondly, a weighted plan that anyows a salesperson to assess what pays off and what does not should be addressed, in order for him or her to be more resourceful. Finally, there has to be a common standard where salary increases for all like employees should be known. This is of importance since the management is able to weigh how prolific a salesperson is.In the point system, together with a salary, a salesperson is given bonus points in relation to his or her performance in the sales activities. However, with this system, detailed reports about the performances of the salespeople are required thus increasing the establishments overhead cost.In this plan, a salary, expenses and a commission on sales were taken into conside dimensionn. This way, the salespeople had earnest because they were assured of a salary and were still motivated due to the commission rates incurred on some(prenominal) products. However, this would mean that the commission plan with specifications would result to a cut in current salary motif for most salespeople.The bonus plan involved giving the salespeople an opening to earn bonuses from their sales, without putting a barrier past a target. They also received the same salary as before. However, upholding a liable sales-expense-to-sales ratio would go against the Companys philosophy of upholding such.I would therefore recommend the