Task: Sales Clerk's Compensation Plan
You are manager of a department store in Kyoto. Slaes are subject to month-to-month variations depending on the individual salesclerk's efforts. A new salary-plus-bonus plan has been in effect for four months, and you are reviewing a sales performance report. The plan provides for a base salary of $45,000 per month, a $58,000 bonous each month if the monthly sales quota is met, and an additional commisson of 5 percent of all sales over the monthly quota. The quota is set approximately 3 percent above the previous month's sales to motivate clerks toward increasing sales (in thousands):
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|
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Salesclerk A
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Salesclerk B
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Salesclerk C
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January
|
Quota
|
$4,500
|
$1,500
|
$7,500
|
|
|
Actual
|
1,500
|
1,500
|
9,000
|
|
February
|
Quota
|
$1,545
|
$1,545
|
$9,270
|
|
|
Actual
|
3,000
|
1,545
|
3,000
|
|
March
|
Quota
|
$3,090
|
$1,590
|
$3,090
|
|
|
Actual
|
5,250
|
750
|
9,000
|
|
April
|
Quota
|
$5,400
|
$ 775
|
$9,270
|
|
|
Actual
|
1,500
|
780
|
4,050
|
1. Compute the compensation for each sales clerk for each month.
2. Evaluate the compensation plan. Be specific. What changes would you recommend?