Collegiate Promotions Discussion

1. Do you think the compensation system at Collegiate Promotions is effective?

Collegiate Promotion Company pays employees based on commissions. These commissions are paid on the framework of piece-rate pay. One drawback of this compensation method is that individuals offered commissions may believe they are free agents without commitment to the business (Stewart and Brown 474). If other sales employment is available, turnover might be substantial. Another issue might occur when salespersons concentrate on short-term outcomes to collect commissions (Stewart and Brown 474). Some sales representatives may put efforts into building their accounts over months, yet their work may take time to be rewarded. The sales representatives will only have the motivation to pursue long-term growth if they are assured of immediate rewards.

2. Why would a sales representative try to sell at the top of the price range? Why at the bottom of the price range? Do you predict that most sales are made at the top or bottom of the range of possible prices?

The company’s sales representatives will likely sell at high-end prices. That is because the commission is based not only on sales volumes but also on sales price, hence the motivation to ask for a higher price. As a result, every sales representative’s responsibility is to aim high and sell at a higher price to earn a higher commission. However, some sales agents may be motivated to sell at a lower price range to increase sales volumes.

3. How does the lack of geographically protected sales areas affect salespersons’ behaviour?

Collegiate Promotions has not implemented the geographically protected sales model, making it difficult for sales representatives to determine an effective target audience. In this case, multiple sales representatives at Collegiate Promotions likely target the same clients. Although the company will sell anyway, some salespeople may be disadvantaged if they operate in an area with other sales representatives.

4. How committed do you think the independent contractors are to Collegiate Promotions? What are some positive features of the independent contractor status for the organization? What might be some positive features for the independent representatives? Would you expect sales representatives to have long-term associations with the company?

The sales representatives at Collegiate Promotions operate under the framework of independent contractors. To that end, the employer has limited control over how long they will work for the company or how many hours they may work per day. Organizations that use independent contractors seek to cut labour costs. However, one problem associated with this model is that an organization has limited control over employees’ conduct   (Stewart and Brown 166). Therefore, they are likely to be less motivated, more so if they understand that no financial incentives are forthcoming. On the other hand, independent contractors benefit from the flexibility characterized by their jobs, allowing them to achieve a work-life balance. However, Collegiate Promotions’ sales representatives may not stay long at the company since they are less engaged. They may leave to organizations that assure them of a safety net.

Works Cited

Stewart, Greg L., and Kenneth G Brown. Human Resource Management: Linking Strategy to Practice. Hoboken, NJ, John Wiley & Sons, Inc., 2019.

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Please read the case and answer the questions at the end. Please respond to two of your peers. Do you agree or disagree?
Collegiate Promotions distributes products that are marketed to students and alumni of major universities. High-selling products include coffee mugs and T-shirts that bear collegiate logos. Collegiate Promotions has adopted an independent sales representative model to distribute its products. The sales representatives work for themselves and are not actual employees of Collegiate. They have independent contractor status.

Collegiate Promotions Discussion

Becoming an independent sales representative is easy. An interested person pays a $300 fee to obtain catalogues and other literature needed to advertise and sell the line of products. The sales representative then begins to write orders for products. A sales representative can sell to anyone through any channel. This means there are no protected territories, so several sales representatives often work in the same location. Many representatives also sell through Internet websites.
Collegiate Promotions does not set an absolute price for its products. Instead, it uses a wholesale plus pricing strategy that allows sales representatives to sell within a relatively broad range. The range is normally 30 to 50 per cent higher than wholesale. For instance, if the wholesale price of a coffee mug is $10, then the representative can choose to sell the mug at a price anywhere between $13 and $15. The sales representative receives a commission of half the amount charged over the wholesale price. If the mug sells for $13, the representative receives $1.50. If the mug sells for $15, the representative receives $2.50. Because they are independent contractors, the sales representatives receive no other compensation.
Questions:
1. Do you think the compensation system at Collegiate Promotions is effective?
2. Why would a sales representative try to sell at the top of the price range?
Why at the bottom of the price range? Do you predict that most sales are made at the top or bottom
of the range of possible prices? 3. How does the lack of geographically protected sales areas affect salespersons’ behaviour?
4. How committed do you think the independent contractors are to Collegiate Promotions? What are some positive features of the independent contractor status for the organization? What might be some positive features for the independent representatives? Would you expect sales representatives to have long-term associations with the company?