Roush

Performanc
e
Group-4
1. Amit Prakash Singh (CGT21002)
2. Dipanjan Sengupta (CGT21005)
3. Indranil Ghosh (CGT21006)
4. Mohd Zinhar Uddin (CGT21010)
5. Bhargav Sri Dhavala (CGT21027)
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 INDUSTRY ANALYSIS

PARTS VEHICLES
• Fragmented Business • Consolidated market with
• Specialization by companies only 3 main competitors
• E-Commerce Business • Shifting Consumer
Booming Preferences towards SUVs
• Shorter Life-cycle of the and Trucks
product • Longer Product Life-Cycle

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 SWOT analysis

S W T
Weakness
O
Strength Threat
• Rewards
• Technical Opportunity
Structure • Changing
Competence • Possibility to
focused on short customer
• Innovative
termism shift to online preferences
• Focused Services
• Structural channels of towards trucks
• Brand Equity in
redundancy Retail and SUVs
Performance • Increased
between • High
Parts
divisions (Sales & demand in Ford Competitiveness
BD) F-150 in parts
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 Current Compensation System : 100% variable pay
with fixed commission

• Limited incentives to
acquire new accounts,
selling higher-margin
• Easy to understand products , developing
• Simple to operate long run
relationships , foray
• Immediate outcomes into new markets
• Low performers quick
burnout , turnover
• Fluctuating economic
protection

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Analysis 8a/8b: Base Salary + Commission
(Lower Fixed Pay than Variable Pay )
Common Different Commission rates Benchmarking Against
Competitors
•Commission
Differentiation based on Product • Differentiation based on • Fixed Wage meets the
lifecycle not possible: With same product lifecycle possible: With
commission on both products, minimum wage requirements
higher commission rates on • Competitors Use Fixed + Annual
sales force might choose product product with longer lifecycle
with shorter lifecycle to meet quota bonus
(Vehicle), sales force might be • Roush CleanTech uses similar
short term targets. motivated to target long term
• The plan is easier to understand structure to the competitors
relationship. • Less collaboration between
for the sales team • The Plan comparatively departments due to deferential
difficult to understand and targets between departments
implement because of different rewards
• Higher salary expense structure
expected than Common • Can be a part of Large
commission ecosystem based on security
needs

Pros Cons
• Long term relationships • Possible
• Income Stability Complacency
• Growth Focused from the sales
objectives force
• Dissatisfaction
for High
performing sales
force
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 Analysis 8c/8d: Base Salary + Commission
( Fixed Pay higher than Variable Pay)

Common Commission Different Commission rates Benchmarking Against Non- Financial Targets
Competitors

• Differentiation based on • Pros

• Differentiation based on • The Fixed salary in line • Salary competitive to
Product lifecycle not product lifecycle possible:
with the average salary of industry benchmarks
possible: With same With higher commission
a B2B sales person in • Long term relationships
commission on both rates on product with
United States. ($50,000) • Income Stability
products, sales force longer lifecycle (Vehicle),
sales force might be • Growth Focused
might choose product • Roush CleanTech uses objectives
with shorter lifecycle to motivated to target long
similar structure to the
meet short term targets. term relationship.
competitors • Cons
• The Plan comparatively • More Complacency from
• The plan is easier to • Less collaboration the sales force
understand for the sales difficult to understand
between departments • Dissatisfaction for High
team and implement
due to deferential targets performing sales force
between departments • Lesser incentivization as
• Overall Salary expense • Overall Salary expense
because of different the fixed pay is very high
higher than different lower than same
rewards structure
commission rates commission rates

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 Analysis Exhibit 9: Hybrid: Base Salary+
Commission + Quota
Base Salary + Quota Bonus
Bonus
Pros
Pros
Clear Target: Sales force
can aim to achieve Combining best from all
01
01 Pros strategies
Large Goals Achievable 01
01 Pros More Metrics to analyse
More Motivation for
Quota Bonuses performance and
incentivization

Cons
Possible Unethical
Behaviour: Manipulating the
timing of sales to meet the
Cons 02
02
quota targets
Manager need to spend
more time to monitoring the
Benchmarking
sales force activities. Against
Complex development of
quota for different sales Benchmar Competitors
regions, local economy etc. king Fixed Salary + Quota
Possible penalization for Bonus system followed
high historical sales 03
03 Against
by industry competitors
Competit
ors
Cons
Highly complex strategy Cons 02
02
Challenges Costly to monitor
Confusing for the sales
How Frequency the
quota should be Challeng force

revised? es 04
04
How to design bonus
amount for achieving
the quota
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 Recommendations

Base Salary + Commission (Lower Fixed Pay

than Variable Pay ) : Stable income under any
circumstances, performance-based incentives,
different commission rates for different margin
products , customer-centric approach , less
attrition rate , easy to understand , operate and
maintain compared to other alternatives

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 Thank you

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