Term Paper on "Sales and Motivation"

Term Paper 4 pages (1223 words) Sources: 0

[EXCERPT] . . . .

FedEx is multidimensional and not necessarily a problem itself, but something that will help the company better develop and remain competitive in a tough market, where companies such as UPS are in for the same clients. First of all, the initial problem was that the sales strategy and approach was unbalanced between FedEx Express and FedEx Ground, from different perspectives.

On one hand, Express seemed the prestigious segment of the company and this is shown both by the compensation (particularly by access to perks such as the President's Club and the possibility to better advance in the company) and access to clients: as the case study shows, sales executives for Express would call potential clients that were already doing business with FedEx or, otherwise, large companies that would need transportation and expedition services anyhow. The accounts were also significantly large, giving way to better bonuses.

At Ground, salary accounts for 82% of the total compensation, which lowers the incentive of sales executives to be proactive in attracting new sales. Accounts are significantly smaller and new sales are also more difficult to attract, particularly because (1) UPS has a strong share of this market segment and is much more recognized in the industry and (2) the FedEx brand is not as strong as in the Express market.

This clear lack of balance between Express and Ground sales was the first problem. Other than the issues already presented, it created problems in the communication with clients, with multiple sales executives often calling on the same accounts. To deal with this problem, the company decided to implement Project ARISE. The key letter in ARISE that explains what this project is about is S: synergy. The idea of Project ARISE is to solve the unbalances in sales between Express and Ground by creating the necessary synergies between these branches.

This gives way to the second problem that will be discussed and for which recommendations will be made: ARISE implementation. There are several key segments where the project needs to be properly implemented: sales general, sales management, sales administration, operations and training. As Jerry Beyl pointed out, the most sensitive area is sales management, primarily compensation. Basically, the difficulty or problem arises from being able to blend the two compensation systems that are practiced at Express and Ground, respectively, into a cohesive system, by reaching a common denominator. So, the fundamental problem remains, inclusive of the implementation of Project ARISE, developing the new compensation plan.

2. Recommendation

Before addressing the issue of compensation, identified as the primary problem in the statement above, it is also useful to decide, first of all, the type of structure that ARISE should choose, something that would also impact the compensation plan. There are two alternative solutions that can be proposed. One is to integrate the sales forces into cohesive units that would combine Express and Ground. The other is to abstain from integration and to increase the coordination between the two levels, thus providing a greater flexibility within the entire organization.

The recommendation from this perspective is to integrate the two sales forces. As previously pointed out, the role of Project ARISE is to create synergies. One can argue that this can be better performed if there is one central command, a joint effort, common resources and objectives, rather than just a flexible structure, resulting from a coordinated solution.

Moving from this to the compensation plan, the recommendation would be to retain the best elements of both plans. One of these is, for example, the compensation plan for Express. The combination of a base salary of 70% and additional benefits, determined by sales, of 30% creates a more… READ MORE

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