MKTG 5317-600 Week 5 Individual Assignment -Salespeople Incentive Schemes Introduction There are a variety of incentive schemes that can be implemented in order to help motivate and reward salespeople. Part A:Calculate the total salary/incentive paid to George in each of the following payment structures. Part B: Which structure would be preferred by the salesperson? Which one the firm would prefer? Is the same or a different scheme preferred? Important Note: For all the incentive schemes below: George, the salesperson, sells 1,000 toasters in April and 2,000 toasters in May.

Incentive Scheme One Straight commission only George gets paid $3 per toaster

George's total remuneration =

In April?

In May?

Incentive Scheme Two Straight commission but with a guaranteed salary George gets paid $3 per toaster But with a minimum salary of $4,000 per month

George's total remuneration =

In April?

In May?

Incentive Scheme Three Salary only George gets paid a salary of $5,000pm

George's total remuneration =

In April?

In May?

Incentive Scheme Four Straight commission but with a guaranteed salary and a bonus George gets paid $2 per toaster But with a minimum salary of $3,000 per month And a bonus of $2,000 if he sells 2,000 or more toasters

George's total remuneration =

In April?

In May?

Incentive Scheme Five Salary plus commission George gets paid a salary of $2,000 pm And a commission of $2 per toaster

George's total remuneration =

In April?

In May?

Further Questions

1. Which scheme would George probably prefer?

2. Which scheme would the firm probably prefer?

3. If different, is there another scheme more suitable to meeting the needs of both parties?