Reference no: EM133148608

Question. What changes do you recommend?

Aspect Cellular relies upon its sales staff to boost their position in the extremely competitive cellular telephone market.  With more than 500 sales representatives in twenty states, Aspect is the leader in personal cellular telephone sales.  However, several recent customer complaints have raised concerns about how the sales representatives earn their pay.

The customer complaints vary, but follow a similar trend.  Essentially, many sales representatives sell cellular telephone agreements that include extra products or services that the customer may not really need.   For example, a recent call to National Sales Manager Sally Mayes was from a customer who just received her first monthly bill that included a charge for text messaging, a service that the customer did not want or need.  Further, Aspect's customer service policy requires the sales representative to provide customer service to the client for the first six months after the sale to ensure that the customer is satisfied.  In this case, the customer first called the sales representative that sold her the agreement, but the sales representative did not return her call.  The customer threatened to cancel her contract and move to another provider.

Frustrated by the calls she has received, Sally has started to research the cause of the problem.  Since the complaint calls started shortly after the company implemented a new compensation structure, she plans to review the compensation plan for the sales representatives to determine if the plan design could be part of the problem.  

The sales representatives are paid on a commission-only plan.  The total sales amount on each sales agreement can vary.  Some agreements include only a basic plan, while others include add-on services such as text messaging.  The commission plan pays the sales representatives 5% of the total sales amount for each basic service plan sold.  However, last year Sally added an additional sales incentive opportunity. The sales representatives are paid 10% of the total sales amount for any add-on products or services such as upgraded telephones, text messaging, and call forwarding.  Because of the higher commission, the sales representatives work hard to sell the add-on products and services. 

As Sally reviews the details of the compensation plan, she must prepare her recommendations for the Director of Compensation on the design of the plan.  The company's overall competitive strategy is to grow market share through providing exceptional customer service while keeping costs low.  Sally must ensure that the compensation plan helps support this strategy.