Case Study Assignment
Significant Information for Designing Sales Incentives and the Impact on Planning
After reading the case A Sports Sales Plan, the most significant insight gained from the scenario is that the three sales staffs are highly reliant on the administrative team to fulfill their supporting functions during selling events. The information is important in designing a suitable sales incentive program since it acknowledges the sales team’s contribution to any selling event.
Boué and Corradino (2019) assert that, in some instances, certain types of pay programs, including incentives, can only appeal to specific employees under conditions that the rest of the staff have influence over the selling process. Therefore, future selling events cannot only be attributed to the three sales staff.
Further, achieving a program that solely honors the three employees could demoralize the rest of the workforce and increase the risk of workplace conflict for the administrative personnel, who believe their roles merit acknowledgment (Boué & Corradino, 2019). The best plan of action is to concentrate on boosting ticket sales, paying particular attention to the expensive ones. Any rise in ticket sales will assist the staff reach advertising objectives since they are responsible for both selling of tickets and carrying out promotional campaigns.
A Sports Sales Plan
In light of the information obtained, it is prudent that the anticipated incentive plan design allocate a sizeable portion of the earned money toward incentivizing administrative personnel for their participation in sales events. Offering the inducement will motivate these staff and further express profound appreciation for employees.
Sales incentive plans, according to Milkovich et al. (2017), are effective motivators. Selling premium tickets and advertising may be challenging owing to the team’s subpar performances. It is vital that the intended incentive program’s design inspires the sales team. A good incentive scheme should encourage collaboration among the three sales representatives and the administrative team to boost ticket sales. The reward program will be established based on both the overall increase in ticket sales and the level of effect advertisement exert. Further, incentives will equally be awarded by increasing the sale of pricey tickets.
Unit Rate Plans for Sales-A Sports Sales Plan
The multiple-piece rate (MPR) system is ideal for ticket sales since payment varies with the volume of output. Using the method, the type and quantity of tickets sold will determine how much a salesperson is paid (Milkovich et al., 2017). Therefore, the pricing structure of the system will be divided into three levels, each reflecting the price disparities between bleacher, standard, and premium tickets. Premium tickets, for example, will be more expensive than standard ones.
The MPR system is ideal for ensuring all tickets in the same class are sold at the same price. Succinctly, standard tickets will cost 9 dollars while all premium tickets go for 12 dollars. Relatively, using the straight unit rate system will motivate target workers to raise their production. The model encourages the sales personnel to sell more premium tickets to receive greater pay, achieving the institution’s goal of raising premium ticket sales.
The Gantt plan is also excellent for carrying out the company’s advertising goal. The method allows for the establishment of a set amount of advertising revenue or sales. Therefore, for subsequent performance that meets standards, a guaranteed rate is paid (Chand, n. d.). Succinctly, the sales staff is entitled to a bonus based on the extra sales generated above the predetermined objective (Milkovich et al., 2017). The approach is ideal since it encourages the sales personnel to go above and beyond their expectations. Moreover, advertising sales fluctuate in size and are less predictable than ticket sales.
The Factors Influencing the Dollar Amount Payable for Increased Ticket Sales
The amount to be paid in dollars to boost ticket sales varies depending on a number of variables. Amongst these significant aspects include, advertising revenue, the types of tickets sold, pay level, and financial stability. In comparison to standard or bleacher options, the club would be willing to spend more for an increase in premium ticket sales. Because premium tickets are expensive, even a modest increase in their sales would result in a significant increase in returns.
Wwhether the anticipated maximum of 14,000 seats is filled or not, a sizable amount of money will be realized. In such a circumstance, the increased sales should be compensated with a larger dollar amount (Chung et al., 2020). The remuneration plan will change based on how much money the team makes from ticket sales (Milkovich et al., 2017). The amount received in the form of advertising revenue likewise affects the payment for higher ticket sales. The assertion is true considering that the advertising revenues rely on stadium attendance.
Succinctly, the workers will be compensated more if the rise in ticket sales results in an increase in advertising revenue-A Sports Sales Plan. Further, if the club is financially sound, probably, it will readily incur more costs for the increased ticket sales as opposed to when it is encountering strains.
The compensation level or fixed pay for the sales personnel also has an equivalent consequence on the amount payable for increased ticket sales (Chung et al., 2020). Thus, the bonuses and sales commission will typically be lower when the sales team is given a higher wage rate or base income.
References
Boué, G., & Corradino, M., D. (2019, June 5). Does incentive pay work? SHRM. https://www.shrm.org/hr-today/news/hr-magazine/summer2019/pages/does-incentive-pay-work.aspx
Chand, S. (n. d.). Taylor’s differential piece-rate plan and ganit’s task and bonus plans. Your article library. https://www.yourarticlelibrary.com/employee-management/wages/taylors-differential-piece-rate-plan-and-ganits-task-and-bonus-plans/34659
Chung, D. J., Kim, B., & Syam, N. B. (2020, February 16). A practical approach to sales compensation: What do we know now? What should we know in the future? Havard business school. https://www.hbs.edu/ris/Publication%20Files/ReviewPaper_2020_0210_final_64513e5f-6a65-43b3-aace-37af0c7a1bb1.pdf
Milkovich, G. T., Newman, J. M., & Gerhart, B. A. (2017). Compensation. New York, N.Y: McGraw-Hill Education.