Which of Jane’s 10 salespeople are the top two performers and which are the bottom two performers?

In order to determine the top two performers and the bottom two performances, it is important to calculate the sales contribution for each salesperson based on the sales force performance data. The sales force performance data shows the average transaction, gross margin percent and total transactions for each salesperson. As a result, the total sales for each person can be determined by multiplying the average transaction per salesperson by the respective total transactions. The table below shows the calculated total sales for each salesperson. 

From the figures, it is evident that Mark and Maria are the top two performances. Mark generated sales of $ 327,540 while Maria generated sales of $ 284,012. On the other hand, the bottom two performers are Sally and Hector. Sally has sales of $ 122,059 while Hector obtained sales revenue of $ 126,484. 

Should Jane lower the base monthly compensation to $1,000 from $1,500? Are there any other changes she should make to the compensation plan? 

Jane should lower the base monthly salary to help improve the profit margin. It is evident that the profit margin for all the employees is below 50 % which is relatively low. The base salary of $ 1,500 is the major element that contributes to a low-profit-margin for the company. In many companies, the performance of salespeople is determined by their contribution to the revenue of the company. 

The rationale that the company used to determine the base salary is not justified and this makes it ineffective in meeting the aims and objective of the company. One benefit of lowering the base salary is that it will motivate the salesperson to work hard and achieve high sales target so as to benefit for high commision. When the base salary of the employees is lowered, the employes will become determined to sell more products and achieve high commision. As a result, the company will experience high revenues which will eventually translate to high-profit margin. 

Apart from lowering the base monthly salary, Jane should consider raising the commision of sales upon achieving a given target. In essence, Jane should come up with a monthly sales target that a salesperson should achieve to get additional commission and bonuses. Establishing such a sales target can help motivate the salesperson to make significant efforts towards meeting the sales target. The strategy to motivate employees by providing financial awards is effective towards improving the performance of employees and thus ensures that an organization accomplished its established aims and objectives (Buckingham & Goodall, 2015). The implementation of these strategies can, therefore, help Jane improve the sales and increase the profit margin. 

What should be the minimum performance that Jane should expect from her salespeople in order for them to retain their jobs? How soon should Jane decide if a salesperson should be retained or terminated? 

With the increasing competitiveness in the business environment, it is important that companies introduce specific and measurable targets. In essence, organizations typically hire employees based on their performance and this means that failure to meet the specified performance can lead to termination of contracts or demotion. In the case of Jane, there should be a minimal performance from each salesperson. The determination of the minimal performance should be based on the sales statistics. In order for Jane to come up with the minimal performance, she should calculate the average sales of the salesperson. From the data, the average sales of the employees can be determined by dividing the total sales by the number of salespeople. 

Thus the total sales = $ 1,920,724 and the number of sales people = 10. 

Therefore, the average sales = $ 1,920,725/ 10 = $ 192,072 

This implies that the company should set the minimal target to be $ 192,072. This target reflects the mean sales of all the population and thus it is unbiased and achievable by all the employees. The company should go with this target since sales can sometimes be seasonal. 

The decision regarding the termination of the employees should be based on the performance. Human resource managers often recruit and hire employees based on their contribution to the organization (Dunne et al., 2013). In essence, the company should put in place appropriate performance appraisal to assess the monthly contribution of the employees. The assessment of the performance of employees should be in a monthly period. The organization should evaluate the performance of employees for a period of six months to determine the salespeople who failed to meet the target. The employees who failed to meet the target based on the accumulated monthly sales should be warned and put on probation for one three months to meet the target. Failure to meet the target after the three months should lead to the dismissal of the employees. The method of using performance appraisal to dismiss salespeople who fail to meet the established target is unbiased and fair to all employees. In essence, it ensures that there is equality in the management of employees (Buckingham & Goodall, 2015). Such practice can enable the employees to improve their sales efforts and meet the set targets. 

References 

Buckingham, M., & Goodall, A. (2015). Reinventing performance management. Harvard Business Review , 93 (4), 40-50. 

Dunne, P. M., Lusch, R. F., & Carver, J. R. (2013). Retailing . Cengage Learning.