Compensation plans at Roush Performance

1. What are the pros and cons of the current and proposed compensation plans at Roush Performance? List pros and cons for each plan separately.
2. Would you make a change to the sales compensation plan? Which plan would you choose - 1) current, 2) salary + commission, 3) salary + quota bonus, or 4) salary + commission + quota bonus? Justify your decision by highlighting positive impacts on salespeople's behavior, ease of implementation, fairness (among salespeople or across departments), achieving company goals, etc.
3. If you were to choose a salary + commission plan, which among the four plans in Case Exhibit 8 would you implement? Justify your decision.

Sample Solution