You are a senior sales manager at a mid-size software rm. In your role, you oversee many sales teams across different regions and product lines. You are looking to overhaul your organisation's compensation/reward system practices. Before doing so, you recently trialed a new bonus plan on a single sales team in your organisation (all other sales teams continued to use the pre-existing compensation package). The bonus plan is designed to improve sales performance. To evaluate whether the bonus plan achieved this objective, you need to examine your sales teams' performance data over the past few months. You decide to compare sales performance for three teams over 5 periods. The chart below provides evidence of the sales performance pre and post the bonus plan introduction. Teams 1 and 3 were not subject to the trial bonus plan. Team 2 was subject to the trial bonus plan, but only after period 4 (as indicated by the dotted line below, which shows when the plan went 'active'). You need to keep in mind that underlying business conditions are time varying. As such, each team's sales performance is not expected to be constant over time. You also need to keep in mind that the different sales teams may or may not be subject to different economic shocks and may or may not serve different product markets. The performance data, plotted below, should help you determine the comparability of the historical sales performance data both within and across the teams. Sales Performance: Pro and Post Bonus Plan E E O t m n. 60 Q '5 m Consider Julian's interpretation of the graph with respect to the impact of the bonus plan: Julian: "To know if the bonus plan worked, you only need to look at how Team 2's sales performance changed between periods 4 and 5. if it went up, the plan worked. You're just confusing yourself by also trying to look at the performance of Teams I and 3!" From the following, choose the answer that best explains why Julian's argument is incorrect: Team 2's sale performance may have changed between periods 4 and S for reasons other than the introduction of the bonus plan. However, no amount of data analysis can tell you whether the bonus plan worked. You can only condently estimate cause and effect by running experiments in a laboratory 0 Team 2's sale performance may have changed between periods 4 and S for reasons other than the introduction of the bonus plan. For instance, perhaps Team 2's sales performance has been trending upward over the long run. By looking at Team 2's performance in periods 1, 2, and 3, you can lter out this trend and isolate the effect of the bonus plan. O Team 2's sale performance may have changed between periods 4 and S for reasons other than the introduction of the bonus plan. For instance, perhaps the bonus plan coincided with a change in the underlying conditions of the economy (a 'common economic shock'). By looking at all teams' performances in periods 1, 2, 3, 4, and 5, you can filter out the impact of these other factors and isolate the effect of the bonus plan. Q Team 2's sales performance may have gone up after period 4, but you still need to benchmark Team 25 sales performance in period 5. By checking if Team 25 performance in period 5 was better than Team 1 and 3's sales performance in period 5, you can establish that the bonus plan improved Team 2's performance