The first issue was the redesign of compensation plan. The previous compensation plan was targeted at sales volume. Apart from the base salary, salespeople received annual commission and quarterly bonus. The new sales strategy forced salespeople to consider the economies of scale which combined variable costs and volume with a limited range of drugs. In my opinion, quarterly bonus was the short-term incentive and annual commission aimed at long-term performance. In short term, quarterly bonus could be replaced by others such as sales contest. Sales contest promotes short-term performance and
The first issue was the redesign of compensation plan. The previous compensation plan was targeted at sales volume. Apart from the base salary, salespeople received annual commission and quarterly bonus. The new sales strategy forced salespeople to consider the economies of scale which combined variable costs and volume with a limited range of drugs. In my opinion, quarterly bonus was the short-term incentive and annual commission aimed at long-term performance. In short term, quarterly bonus could be replaced by others such as sales contest. Sales contest promotes short-term performance and