If Mr. White proceeds with the manufacturing expansion he feels he will need to alter the current compensation package for his sales team in order to make sure Cottage Living can sell the additional units at market price. In an attempt to retain talented salespeople he has previously offered a very competitive yearly salary of $70,000 plus benefits and 4 weeks paid vacation. This pay structure has worked well in the past to attract loyal employees and to create a positive work environment at Cottage Living. There are currently 5 permanent salespeople. However, given how strong demand in 2019 and 2020 for Cottage Living products has been Mr. White feels that his sales team has been lacking motivation. They have also been taking their vacations during high demand months from May-August (he is not interested in dictating when people take their vacation). He is worried that if there is an increase in Cottage Living’s inventory, the poor sales habits that his team has picked up during the pandemic may negatively affect future sales. He would like you to create a new compensation package plan that he can then present to his employees. He is willing to compensate his employees slightly more on average but he would like to make sure it provides motivation for them to each increase their average sales volume to ensure he is able to sell all of the additional units. He will need his employees to voluntarily agree to this so he would like you to help present the information to them in a way that shows different scenarios and how the new package can benefit them for their hard work, while not disrupting the positive culture that currently exists at Cottage Living.
If Mr. White proceeds with the manufacturing expansion he feels he will need to alter the current compensation package for his sales team in order to make sure Cottage Living can sell the additional units at market price. In an attempt to retain talented salespeople he has previously offered a very competitive yearly salary of $70,000 plus benefits and 4 weeks paid vacation. This pay structure has worked well in the past to attract loyal employees and to create a positive work environment at Cottage Living. There are currently 5 permanent salespeople.
However, given how strong demand in 2019 and 2020 for Cottage Living products has been Mr. White feels that his sales team has been lacking motivation. They have also been taking their vacations during high demand months from May-August (he is not interested in dictating when people take their vacation). He is worried that if there is an increase in Cottage Living’s inventory, the poor sales habits that his team has picked up during the pandemic may negatively affect future sales.
He would like you to create a new compensation package plan that he can then present to his employees. He is willing to compensate his employees slightly more on average but he would like to make sure it provides motivation for them to each increase their average sales volume to ensure he is able to sell all of the additional units.
He will need his employees to voluntarily agree to this so he would like you to help present the information to them in a way that shows different scenarios and how the new package can benefit them for their hard work, while not disrupting the positive culture that currently exists at Cottage Living.
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