Question 1

With this compensation plan, it is difficult to build loyalty of the salesforce to the company.

Accepted Answer

A)   straight salary.
B)   salary plus a bonus.
C)   a combination pay plan.
D)   straight salary plus expenses.
E)   straight commission.F) A) and D)
G) D) and E)

Question 2

Industries that have traditionally paid salespeople by straight commission include insurance and securities.

Accepted Answer

A) True 
 B)False

Question 3

A(n)  ___________ is typically used to direct effort toward relatively short-term objectives, such as introducing new products, adding new accounts, or reducing accounts receivable.

Accepted Answer

A)   constant commission
B)   incremental commission
C)   performance bonus
D)   regressive commission
E)   salaryF) B) and E)
G) C) and D)

Question 4

Expense account padding is a common and acceptable practice.

Accepted Answer

A) True 
 B)False

Question 5

Organizational rewards are classified as compensation rewards and reimbursement rewards.

Accepted Answer

A) True 
 B)False

Question 6

One disadvantage of commission plans is that salespeople may neglect cultivating potentially profitable long-run customers in favor of easy sales.

Accepted Answer

A) True 
 B)False

Question 7

Investing more time in recruiting and selection will pay off later in terms of fewer motivational and other managerial problems.

Accepted Answer

A) True 
 B)False

Question 8

In recent years, the needs of the salesforce have become more important than the needs of the customer in determining the structure of rewards systems in sales organizations.

Accepted Answer

A) True 
 B)False

Question 9

All of the following are steps suggested for facilitating a sense of accomplishment in the salesforce except

Accepted Answer

A)   ensure that salespeople know the critical role they play in sales revenue production.
B)   personalize the causes and effects of salesperson performance.
C)   consider the practice of management by objectives.
D)   reinforce feeling of worthwhile accomplishment in communication with the salesforce.
E)   provide salespeople with trips and other rewards.F) C) and E)
G) A) and B)

Question 10

Informal recognition awards are easy to administer and cost practically nothing.

Accepted Answer

A) True 
 B)False

Question 11

Sales managers should be committed to uncovering potential problems in motivation and eliminating them before they develop.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not true regarding the design of a global salesforce compensation system?

Accepted Answer

A)   Design the plan centrally and dictate to local countries.
B)   Involve reps from key countries.
C)   Allow local countries flexibility in implementation.
D)   Use consistent communication and training themes worldwide.
E)   Allow local managers to decide the mix between base an incentive pay.F) C) and D)
G) A) and C)

Question 13

When it is difficult for the salesperson to secure the first order from the customer, but reorders are virtually automatic, this form of commission rate would be appropriate:

Accepted Answer

A)   regressive.
B)   incremental.
C)   a combination of constant and progressive rates.
D)   constant.
E)   progressive.F) All of the above
G) B) and D)

Question 14

Which of the following is not a form of nonfinancial compensation?

Accepted Answer

A)   Career advancement through promotion
B)   Job redesign
C)   Opportunities for personal growth
D)   Recognition of achievement
E)   A sense of accomplishment on the jobF) A) and B)
G) B) and C)

Question 15

The most widely used type of financial pay plan is

Accepted Answer

A)   straight salary.
B)   salary plus a bonus.
C)   a combination pay plan.
D)   straight salary plus expenses.
E)   straight commission.F) A) and C)
G) A) and B)

Question 16

Which of the following is not an advantage of the commission compensation plan?

Accepted Answer

A)   Income is linked to results.
B)   There is a strong financial incentive to improve results.
C)   Costs are reduced during slow sales periods.
D)   Less operating capital is required.
E)   Customer loyalty is enhanced.F) B) and C)
G) A) and E)

Question 17

Advantages of straight-salary compensation plans include all of the following except

Accepted Answer

A)   salaries can provide control over salespeople's activities, especially nonselling activities.
B)   the working capital requirements are lessened with the straight-salary compensation plan.
C)   reassigning salespeople and changing sales territories is less of a problem than with other financial compensation plans.
D)   they are the simplest plans to administer, with adjustments usually occurring only once a year.
E)   planned earnings for the salesforce are easy to project, which facilitates the salesforce budgeting process.F) A) and B)
G) A) and C)

Question 18

One way to instill a sense of accomplishment among salespeople is to personalize the causes and effects of salesperson performance.

Accepted Answer

A) True 
 B)False

Question 19

One disadvantage of a combination compensation plan is that mediocre salespeople are eliminated less rapidly than they would be under a straight commission plan.

Accepted Answer

A) True 
 B)False

Question 20

Many firms use a per-diem allowance for meals and lodging to control salesforce expenditures.

Accepted Answer

A) True 
 B)False

Exam 7: Motivation and Reward System Management

Expense account padding is a common and acceptable practice.

Correct AnswerverifiedShow Answer

When it is difficult for the salesperson to secure the first order from the customer, but reorders are virtually automatic, this form of commission rate would be appropriate:

Correct AnswerverifiedShow Answer

In recent years, the needs of the salesforce have become more important than the needs of the customer in determining the structure of rewards systems in sales organizations.

Correct AnswerverifiedShow Answer

One disadvantage of a combination compensation plan is that mediocre salespeople are eliminated less rapidly than they would be under a straight commission plan.

Correct AnswerverifiedShow Answer

One disadvantage of commission plans is that salespeople may neglect cultivating potentially profitable long-run customers in favor of easy sales.

Correct AnswerverifiedShow Answer

Organizational rewards are classified as compensation rewards and reimbursement rewards.

Correct AnswerverifiedShow Answer

Industries that have traditionally paid salespeople by straight commission include insurance and securities.

Correct AnswerverifiedShow Answer

A(n) ___________ is typically used to direct effort toward relatively short-term objectives, such as introducing new products, adding new accounts, or reducing accounts receivable.

Correct AnswerverifiedShow Answer

With this compensation plan, it is difficult to build loyalty of the salesforce to the company.

Correct AnswerverifiedShow Answer

All of the following are steps suggested for facilitating a sense of accomplishment in the salesforce except

Correct AnswerverifiedShow Answer

Many firms use a per-diem allowance for meals and lodging to control salesforce expenditures.

Correct AnswerverifiedShow Answer

Advantages of straight-salary compensation plans include all of the following except

Correct AnswerverifiedShow Answer

Investing more time in recruiting and selection will pay off later in terms of fewer motivational and other managerial problems.

Correct AnswerverifiedShow Answer

Sales managers should be committed to uncovering potential problems in motivation and eliminating them before they develop.

Correct AnswerverifiedShow Answer

The most widely used type of financial pay plan is

Correct AnswerverifiedShow Answer

Which of the following is not true regarding the design of a global salesforce compensation system?

Correct AnswerverifiedShow Answer

Which of the following is not a form of nonfinancial compensation?

Correct AnswerverifiedShow Answer

Informal recognition awards are easy to administer and cost practically nothing.

Correct AnswerverifiedShow Answer

One way to instill a sense of accomplishment among salespeople is to personalize the causes and effects of salesperson performance.

Correct AnswerverifiedShow Answer

Which of the following is not an advantage of the commission compensation plan?

Correct AnswerverifiedShow Answer

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