Baxter Surgical Industries Case Study

Baxter Surgical Supplies Incorporated Case 3

Baxter Surgical Supplies Incorporated, the manufacturer and distributor of medical supplies and equipment is reviewing was reviewing their company’s method of compensation at the end of 1998. The sales force consisted of more than 600 people supervised by 60 sales managers. The company has a variety of products that required different levels of selling skills. The salesperson was expected to search for new accounts, service existing accounts, and maintain goodwill between the company and its clients. The compensation is straight salary of approximately $43,000 the first year with no commission. At first the new sales people were given smaller territories, with low sales but as they gain experience they were paid a larger base salary depending on the amount of time they have

This solution would include the standard starting salary and 25% commission per big sale, and afterward the commission increases by 5% per big sale, until they reach 100%. This will still allow for the good performers to shine and do well financially, and this will increase the sales team morale and competitiveness. The competitiveness will allow for everyone to strive for their best and not to be just mediocre. The benefits are stability, economic security, training, expenses, commissions, benefits, and retention (Rumbauskas, F, 2014).

Although this is a good solution, it is not flawless there are still some disadvantages. The disadvantages are it still is not as much commission as other companies unless you are salesperson bound to excel, but this technique may still be enough to retain more than the previous compensation package. Other disadvantages include less freedom, more taxes, and need for more time management because sales people need to spend more time snagging a sale in order to receive more money (Rumbauskas, F,