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Collegiate Promotions Case

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According to Noe, Hollenbeck, Gerhart, & Wright (2011), pay is a powerful tool for meeting organizational goals. It has a very huge impact on employee attitudes and behaviors, which influences which kinds of employees are attracted to (and remain with) the organization (Noe, Hollenbeck, Gerhart, & Wright, 2011). An effective compensation plan plays a dynamic role in all organizations. When an ideal compensation system is designed, it will have a positive impact on the efficiency and results produced by employees. Evaluate whether or not the compensation system at Collegiate Promotions is effective. The compensation system at Collegiate Promotions is highly effective as it is designed to attract, retain, motivate and reward a quality work force of independent sales representatives.
They employ independent sales representatives to achieve more sales, faster, and at a lower cost than other recruiting methods. According to Simon (2010), in today's economy with the rising costs of employee benefits and increasing pressure from international competition, U.S. manufacturers are looking for every advantage they can get. Collegiate Promotions is able to save a tremendous amount of money by alleviating the expenses of employee benefits, compensation and all of the overhead costs associated with recruiting employees. The greatest benefit for this option is that it reduces financial risk for the company dramatically. Since the independent sales representatives work on commission, they are only paid when they complete a sale. Compensation Master (2011) states that more experienced sales associates, confident in their ability to generate sales, prefer to maximize their income with high commission plans – witness the success of 100% plans. As independent contractors, they are accustomed to directing their own activities and prefer to handle their

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