Olympia Machine Company Case Study Example | Topics and Well Written Essays - 500 words

Olympia Machine Company - Case Study ExampleHowever, there ar weaknesses in the up-to-the-minute compensation plan. Regardless of the large volume of sales, there are high fixed selling expenses and also common measures that determine salary increases of the salespeople have not been established by the management.Some of the key issues that any new compensation plan must address include how to poise a balance amongst capital equipment and sales. A salesperson must be able to not just take any order that comes along but sell. Secondly, a leaden plan that allows a salesperson to assess what pays off and what does not should be addressed, in order for him or her to be more resourceful. Finally, there has to be a common standard where salary increases for all like employees should be known. This is of importance since the management is able to weigh how prolific a salesperson is.In the operate system, together with a salary, a salesperson is given bonus points in relation to his or h er performance in the sales activities. However, with this system, detailed reports about the performances of the salespeople are required thus increasing the organizations overhead cost.In this plan, a salary, expenses and a commission on sales were taken into consideration. This way, the salespeople had security because they were sure of a salary and were still motivated due to the commission rates incurred on several products. However, this would mean that the commission plan with specifications would result to a quash in current salary base for most salespeople.The bonus plan involved giving the salespeople an opening to earn bonuses from their sales, without putting a boundary chivalric a target. They also received the same salary as before. However, upholding a liable sales-expense-to-sales ratio would go against the Companys philosophy of upholding such.I would and so recommend the