Submitted by: Submitted by pamela115
Views: 282
Words: 742
Pages: 3
Category: Business and Industry
Date Submitted: 04/05/2013 09:53 AM
Leadership Challenge: A Quote by Any Other Name
1. Sales volume-based quota system is a prominent goal-setting method that is used in many sales organizations. They are used by companies to set expectations for sales employees and give out rewards for performance and set consequences for those performing badly.
Advantages:
A sales manager can use the system to increase motivation and set up a rewards payout. The tactic of sales volume can easily establish the levels of performance. It can be used early on in the business cycle to encourage earlier sales which in turn improves efficiency.
A sales manager can set the quotas based on the level of an employee’s experience. They can also set quotas for an entire sales team as opposed to an individual. Sales managers can adjust the quotas according to the standing of the market at any given time. This can enforce higher or lower expectations when the market is experiencing a high or low in the market. This allows for flexibility.
Disadvantages:
Sales quotas can be deterrence to its sales team. The employees can feel pressured to meet the sales quotas or face unemployment. The pressure can cause an adverse effect on the confidence and enthusiasm of the sales person which in turn can affect his ability to sell.
Another disadvantage is the enforcement of the failure to meet a quota. The sales manager is placed in a bad predicament if a “good” employee fails to meet his quota. If the sales manager does not enforce any consequence the system is not effective. This in turn creates a high turnover of employees who do not meet the quota. The turnover and the loss of sales can mean a loss of revenue for the company.
Another disadvantage is the competition and pressure can cause a salesperson to act out of good character. They may feel pressured to make a sale no matter and come across too aggressive to the potential customer. They can appear too pushy and persistent which can cost the company a long term relationship...