You have been hired by a relatively large local automobile dealer to design a new compensation and ineentive system for several positions that make up the bulk of the firm's workforee. These positions are: - 10 administrative positions-These positions involve the day-to-day operational facets of running the dealership - answering phones, working at the customer service desk, filing paperwork, pulling records on cars, and so forth. These employees are currently paid on an hourly basis. The turnover rate is about 30% for these positions. There have been several complaints about the courtesy and helpfulness of employees occupying these positions. - 40 sales positions - The employees occupying these positions are primarily focused on selling cars and are paid entirely on commission. The turnover among these employees is fairly high (about 80% leave each year), although a few of the sales staff have been with the dealership for a number of years. - 15 service positions (mechanics and detailing personnel)-The employees occupying these positions are paid on a standard hour plan (that is, their pay is based on how much time it should take to perform each repair). The turnover among these employees is very low. As in any other dealership, there have been some complaints about the quality of the service the firm's mechanies deliver. A number of eustomers have had to bring their vehicles in several times before their auto problems were properly repaired. The detailing personnel generally are also tipped by customers. The goals of the dealership are primarily to make money on the sale of new and used ears, although increasingly the service department is generating more income. There are several challenges you must consider before you make your recommendations: 1. The dealership's profitability is fundamentally influenced by the aumber of cars sold and the prices of those cars. In addition, the dealership's profitability is enhanced by (a) repeat business (b) the company's reputation (c) customer retention and repeat business by way of servicing. Historically, repeat customers represent a sizable amount of business; the dealership gets to sell their used cars they traded in and also sells them new cars. Moreover, customer loyalty matters a lot because word-of-mouth advertising generates business. 2. Service quality in terms of the sales process as well as the service department (mechanics) is a critical component of customer satisfaction and affects the amount of repeat business dealerships get. 1 3. The income salespeople earn is directly related to the profitability of each car they sell. The prices on the cars are somewhat negotiable. Under the current system, the sales staff and the dealership split the profits 50 -50 from every transaction. 2. Relevant theory applicable to the exercise and TWO different incentive packages that would respond to the needs of the business