HRM 6123 Summer B-18 Case Study: Compensation and Benefit Analysis

This case study analyzes the compensation and benefits plan for a new sales representative at United Fleet Service (UFS), a company providing vehicle repair services. The analysis begins with a case summary detailing the company's growth, the need for a sales representative, and the importance of customer relationships. The sales objectives include developing and maintaining customer relationships through cold calling and contract renewals. The compensation design plays a crucial role in motivating the representative to achieve sales goals. The recommended sales incentive plan is a salary plus commission base strategy, aiming to incentivize performance and foster loyalty. The case study also references relevant literature on sales and distribution management, personal interaction, and sales compensation plans. The analysis emphasizes the importance of aligning compensation with organizational goals to drive sales and customer satisfaction.

Running Head: COMPENSATION AND BENEFIT
0
A NEW SALES REPRESENTATIVE
7/23/2018

COMPENSATION AND BENEFIT 1
Case Summary
John Shurtman was the founder of United Fleet Service (UFS) which provides various
services like mechanical repair and body repair to those organizations that have large vehicles
and the company has a contractual agreement with the customers including school areas that
own bus fleets and local government (municipality) that possess police and fire vehicles. John
also sees opportunities in others sectors like utility companies and commercial truck
companies.
The USP of United Fleet Service is that it provides comprehensive service to their
customers that also include high-quality repairs and fast turnaround times on services which
differentiate it from the competitors.
Over the past 10 years, John has experienced a steady growth of the business and that
needs John to spend more time on planning and administration rather than generating new
sales. The company also has a service consultant who is responsible for processing the
incoming vehicle from the client and communicating the work progress in a timely manner.
But as due to the growth in the business, the service advisor gets little time in developing a
more significant relationship with the customers and also many add-on sales opportunities
have been missed out. This generates the need of hiring a sales representative who can both
call potential customers and develop quality relationships with both current and new
customers.
So, John needs to recruit a sales representative and he also needs to find out the
market rates for sales representative in his industry.
Case Analysis
a) For a new sales representative, the main sales objective will be developing and
maintaining a superior customer relationship with both current and new potential
customers. For this purpose, he needs to cold call various customers and organizations
about the services given by the UFS which build a reputation for the company. He
also has to analyze very old customers of the organizations who are looking for
renewing their contractual agreements. For a business model like UFS, Personal
Interaction with the customers can also prove to be a key success factor for the
sustainable growth of the business (Mainela & Ulkuniemi, 2012).
b) An effective compensation plan for this position in the company will motivate the
sales representative to gain new sales and try to develop a long-term relationship with
the new customers. “A good compensation plan will provide a sense of satisfaction to
the sales representative and he will try to accomplish the organizational goal before
any specific goal” (Dutta, 2011). Here Compensation is directly related to the
effective performance.

COMPENSATION AND BENEFIT 2
Executive Decisions
a) According to this current position and the business model of UFS, Salary plus
commission base strategy. It will stimulate that individual to perform more with a
belief that he will get assured fixed package (Wasserman, 2018). In addition, it will
not only motivate that employee but trust and loyalty will increase as they will receive
a commission from the profit share of the company. Moreover, the motive of the
employee will be positive to increase the sales that a result in higher profits which is
directly related to their commission (McDonald, 2018).

COMPENSATION AND BENEFIT 3
References
Dutta, B. (2011). Sales and Distribution Management. New Delhi: I. K. International
Pvt Ltd.
Mainela, T & Ulkuniemi, P. (2012). Personal interaction and customer relationship
management in project business. Journal of Business & Industrial Marketing.
28. 3-3.
McDonald, D. (2018). Show Me The Money! A Guide To Creating A Scalable Sales
Compensation Plan. Retrieved from:
https://labs.openviewpartners.com/creating-a-scalable-sales-compensation-
plan/
Wasserman, E. (2018). How to Set Up a Sales Compensation Plan. Retrieved from:
https://www.inc.com/guides/sales-compensation-plan.html