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Designing Incentive PlansAssume you have been hired as a consultant to an organization to help it structure an incentive system for its three basic categories of employees. The first category is the sales force composed of 25 salespeople all working on a straight commission. The second category is composed of 10 support employees (three secretaries and seven packers). All seven work on a straight hourly wage rate. The third category is made up of the three managers.
The managers like the straight commission system the salespeople are on, but they suspect that many of the salespeople tend to slack off once they have attained an acceptable level of sales for any given month. The seven support employees appear to be steady workers, but management believes their performance could be enhanced with the right incentive program. The managers are satisfied with their current salaries but would like to look for some tax shelter for any additional profits. Your job is to design an incentive plan that will be attractive to each of the three categories of employees.
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