* 1. The Managers are unhappy with the existing incentive plan due to the following reason:

* Commissions are based on sales rather than product * Different compensation structures for different products * Inconsistent sales forecasts * The incentive wasn’t introduced properly (Assitant forgot about bonus and was suprised when she got it. * The current plan is picking the commission on total area sales and not by sales rep. The telephone orders also becomes part of sales people commission

The performance of the business can be partially impacted due to the above factor. The other areas that will impact the business could be: * The current economic condition * Branding * Competition * Parallel importing

2. Evaluate the New Incentive Plan:

The Objective is that Commission based on product gross margins encourage salespeople to focus their where company profit potential was greatest.
The new incentive plan will factor in three perspective /key drivers of the business and these are the products gross margin, sales forecast and management by objective. 1. Commission based on product gross margin, but with no commissions paid until gross exceeded 70% of forecast; 2. A bonus paid on forecast accurancy; 3. A bonus paid on achievement of individual management by objetives MBO targets. a/ Adding a significant number of new costumers b/Co-ordinating well with production c/ Keeping annual travel expenses below forecats.

3. They will have some impediments to the successful implementation.
- Lack of motivation
- Hiring quality
- Follow up of the company’s culture

4. I would do some changes : * Open new markets * Sell in more profitable markets * More lead time for better operational planning

5. Goals should be SMART - specific, measurable, agreed upon, realistic and time-based.
A goal