By switching its sales agents to a sales neutral profit commission, the firm is trying to convince the agents a. Improve their compensation by pricing more aggressively (lowering prices) b. To not change their sales patterns, as it would not change their compensation c. None of the above d. Improve their compensation by pricing less aggressively

Question

Paxton Small

Business

2 April, 19:33

By switching its sales agents to a sales neutral profit commission, the firm is trying to convince the agents a. Improve their compensation by pricing more aggressively (lowering prices) b. To not change their sales patterns, as it would not change their compensation c. None of the above d. Improve their compensation by pricing less aggressively

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Answers (1)

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Braydon Cunningham · Answer 1

Improve their compensation by pricing less aggressively

Explanation:

Sales agents mostly prefer to have their commission based on the sales turnover as this appears to guarantee a seemingly better return compared to profit based commission at the expenses of the producer. however, one of the ways of persuading them to accept a change to this attitude is by introducing a switch to a sales neutral profit commission. With this, attention is shifted from generating a high sales volume at all cost.

Incentives and compensation should be modified to sales neutral, which will result to a change of behavior towards earning a higher compensation.

One of the changes that could come up to earn more is less aggressive pricing.