Candice Is Developing a Compensation Plan for the Salespeople in Her

question 73

Multiple Choice

Candice is developing a compensation plan for the salespeople in her new company. In order to have a successful compensation plan, a basic question she will need to address is:

• A) How many salespeople to hire?
• B) What mix of financial and nonfinancial compensation and incentives to use for motivating the sales force?
• C) When to involve the clerical staff in the compensation plan?
• D) How often to change the compensation plan?
• E) Where to find bonus/quota ratios appropriate for international sales reps?

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Definitions:

Socially Optimal Level

The level of production or activity where the social benefits of consuming a good equal the social costs of producing it, often considered ideal from a societal perspective.

Per-unit Subsidy

A financial aid provided by the government for each unit of a product produced or sold.

Private Market-clearing

The process by which supply and demand balance out at a price where the quantity supplied equals the quantity demanded in a private marketplace, without excess surplus or shortage.

Emissions Taxes

Taxes levied on the emission of pollutants, aimed at reducing environmental harm by incorporating the cost of pollution into the market price.