Marty Smith recently graduated from college. He has been hired by Stevenson Associates as a sales associate. Stevenson provides payroll services for a broad range of manufacturing and service companies throughout the southeastern United States.

Marty has never set his own sales goals, but, regardless of his inexperience, management expects him to do so. Specifically, he has to estimate both the number of new jobs he will attain for the company as well as the total revenue these clients will represent over a year’s time frame.

Unclear about what to do, Marty turns for help to Sam White, one of the younger sales associates. Sam shares with Marty his own plan for the year, noting that he derived it by looking at last year’s sales and then adding the minimum amount he thought he could get by with as a sales increase. Marty decides that sounds reasonable, but decides that since he is new, he will make some estimates off of Marty’s sales from last year. Marty really needs the bonus he will get if he does better than his sales projections, so he does not want to set the bar too high.

After all of the sales associates have put in their projections, managers compile the data to see what the total sales of the company will be. When they are done, they are not happy. Even though they have hired three new sales associates over the last year, the total increase in sales is minimal. They know that the results need to be better than this if the firm is to make its growth goals, so they send a memo to all of the sales associates asking them to raise their projections by 5% and resubmit their sales plan.

Marty is worried because he does not really know how much he can sell. He does not want to add the 5%, but since he went low in his first estimates, he decides he really does not have a choice. That said, he manipulates the figures in such a way that he still feels he can make the goals by focusing on getting smaller jobs, so he can beat at least the number of new clients goal. He knows bigger jobs are more profitable for Stevenson Associates, but, after all, it is his bonus that matters most to him.

Listening at the lunch table, Marty finds out all of the sales associates are unhappy with the need to raise their goals 5%. Most worried of all is Sam White, who used last year’s record actual sales as the baseline to set new sales goals. The older sales associates simply smile, telling Marty to never use his best year as the baseline, as he will have a very di cult time beating these aggressive goals and getting his bonus. Mark Williams goes so far as to say that he put o reporting some December sales so he could keep this year’s goals lower and have a cushion to start the year. Marty is amazed at the number of ways the older associates have found to keep their goals down and bonuses up. It gives him a lot to think about, and worry about, since he used Sam’s sales as a starting point.

REQUIRED:

Discuss the various types of dysfunctional behavior that are taking place at Stevenson Associates. What should management do to change these dynamics?