ASIAN CASE RESEARCH JOURNAL, VOL.
7, ISSUE 1, 1–16 (2003)
ACRJ
This case was prepared by
Associate Professor Wasif M.
Khan of the Graduate School
of Business Administration,
Lahore University of Man-
agement Sciences as a basis
for class discussion rather
than to illustrate either effec-
tive or ineffective handling of
an administrative or business
situation.
Please address all correspon-
dence to: A/P Wasif M.
Khan, Graduate School
of Business Administration,
Lahore University of Man-
agement Sciences, D.H.A.
Lahore, Cantt 54792,
Pakistan.
© 2003 by World Scientific Publishing Co.
Sales Compensation at Nirala
“What’s Ramzan doing at Waris Road,” asked the manage-
ment consultant as he discussed some management prob-
lems with Faisal Farooq in April 2000. “I thought he was the
store supervisor at Jail Road, at least last week when I went
to meet him.” The question was addressed to Faisal Farooq,
the 27-year old son of the owner Farooq Ahmad, and grand-
son of the founder of Nirala Sweets. Faisal, who was Head of
operations at Nirala replied: “Yes, you’re right, but we have
this system of scoring each shop and the manager of the
shop that stands last three consecutive months is transferred
to the factory as a rule and Ramzan is here because of that.”
“But I don’t understand the purpose of just transferring the
guy to the factory,” said the consultant. Faisal heard a few
more remarks and then said:
“This whole sales staff reward system was devised by
an accountant several years ago and may well be ready for
revision. I think we need to take a detailed look at it and
come up with a new system.” With that he asked an em-
ployee to bring in a scored sheet showing the ranking of the
shops and began to explain each item. He continued: “My
desire is to make the salesforce something that is as premium
as our mithai1, specially now that my expansion plans are
taking off. Just look at Pizza Hut and McDonalds; wherever
you are in the world they smile, they’re efficient and courte-
ous, and they all look the part. I don’t see why we can’t
achieve something similar. And you know how close the
reward system is to my father’s heart.”
1Traditional sweetmeats.
2 ACRJ

BACKGROUND

Taj Din started Nirala Sweets in Lahore in 1948 after he mi-

grated from India during the sub-continent’s division into In-
dia and Pakistan. He started a Puri-halwa2 shop on Fleming
Road, in the congested inner city. The shop mainly served
the fruit traders who flocked to the nearby wholesale fruit
market. He gradually introduced mithai (sweetmeats) at the
suggestion of friends and customers, which was an instant
success. As the shop’s reputation spread outside Fleming
Road, people from other areas of Lahore became customers
and sales showed a steady growth. With increasing conges-
tion and accompanying parking problems, business at the
Fleming Road location appeared to have limited growth po-
tential. In 1982, at Farooq Ahmad’s initiative, Nirala opened
another store in the suburbs of Lahore, on Jail Road, a rela-
tively posh commercial cum housing area. Sales grew imme-
diately as most customers now found great accessibility to
what was generally regarded as Lahore’s best mithai.
Following Taj Din’s demise in 1984, the management
of the venture passed to his son Farooq Mohammad who
had been helping his father for several years. Two younger
brothers of Farooq also helped with the business but it was
recognized that Farooq was now the man in charge. This was
not only because of his being the eldest, but also because he
clearly demonstrated a passion for the mithai business,
which his brothers did not necessarily share. They were still
trying their hand at different businesses ranging from trad-
ing to construction and admitted that the mithai business
was not socially appealing for them.
With the general populace of Lahore moving into
many newer residential suburbs, three more stores were
opened over the next ten years. These were located at Hafeez
Centre in Gulberg, Moon Market, Allama Iqbal Town, and
Sadiq Plaza on the Mall, all relatively posh locales. Nirala
management felt that these moves were necessary
to forestall any lost sales due to other shops in these areas

2Deep fried bread and local desert.

 SALES COMPENSATION AT NIRALA 3

restricting Nirala customers from coming all the way to Jail

Road. All the shops were company owned, mainly to prevent
being dictated to by landlords of commercial property. All
mithai was prepared at the company-owned factory on Waris
Road, about five minutes drive from the Jail Road store.
While the Jail Road store had office space, Farooq Ahmad
and his son Faisal, who joined the business in 1996, preferred
sitting in the offices at the Waris Road factory.
Faisal was completing an MBA degree from a private
business school when his father contracted Parkinson’s dis-
ease. Thus Faisal had to leave the MBA programme to man-
age the business. Faisal recognized that his father had grown
the business from one store to four by 1994 and was also re-
sponsible for many new ideas such as the elegant packaging
for the products. Executives at the packaging company often
cited Farooq Ahmad as being a man with lots of new ideas
often obtained from numerous visits to industrial fairs
abroad. However, Faisal had certain differences with his fa-
ther regarding how the business should be run. He eagerly
wanted to improve the management of his company and
bring in some professional managers and systems. He had
also taken a keen interest in computerizing the record keep-
ing and wanted all the stores to be networked with the fac-
tory and head office. Faisal felt that the company needed to
be modernized quickly and though his priorities were some-
times different from those of his father, he often deferred to
his father’s wishes.
While there were many issues at Nirala that needed at-
tention, Farooq Ahmad was particularly concerned about the
motivation of his staff. He believed that the sales compensa-
tion system was to blame for what he considered poor atti-
tude and work habits. He had been urging Faisal to take a
fresh look at the compensation system and wanted him to
link it to the company’s profits. Faisal too wanted to make
some changes but wasn’t convinced exactly what to do. He
was quite sure though that the compensation could not be
linked directly to the company’s profits primarily for reasons
of financial secrecy. But he regarded the reward system as an
important part of his overall objective of improving the
salesforce’s performance.
4 ACRJ

MARKETS AND PRODUCTS

Mithai was a traditional sweet mainly served on festive occa-

sions such as Eid (the main Islamic festival) or to celebrate
important personal events such as a wedding, engagement,
passing an exam, promotion, or lately even the election or
removal of a political figure. Nirala management estimated
that almost 85% mithai was bought to present to someone
rather than to be consumed by the purchaser. This was par-
ticularly true of the more common sale volumes i.e., one or
two kilograms. The larger quantities such as 25 or 50 kilos
were intended for weddings and other such public ceremo-
nies. Apart from the wedding season and Eid that caused
demand to surge, some days of the week specially weekends
also contributed to higher sales. An important victory by the
national cricket team could cause similar sales peaks.
Though Nirala offered more than 50 varieties, mithai
could be broadly classified as khoya (milk cooked into a
semi-dry form ) based products such as barfi3, gulab jaman3,
rasgulla3 etc, sugar based such as jalebi3, and milk based
such as rasmalai3 which had to be stored and served cold. In
the opinion of one mithai salesman the majority of the
people believe that mithai is just sugar, khoya, and ghee 4 all
mixed up but it was really much more than that. Careful in-
gredient selection, strict preparation procedures and proper
transportation and storage were critical in ensuring that
mithai retained its appearance, flavour, freshness, and shape.
Virtually all the mithai producers of Lahore bought all the
ingredients from suppliers who were from the informal sec-
tor. Most of the mithai sold at Nirala’s stores was usually
sold the same day it was prepared except where some setting
time may be required or where the flavour was not adversely
affected by storing for a couple of days.
Though the basic recipes or preparation techniques for
mithai had not changed over several decades, innovations
had occured in the packaging, the size of the mithai, and the
appearance of the stores. Most of these innovations were

3Names for different varieties of sweetmeats.

4Saturated butterfat or oil.
 SALES COMPENSATION AT NIRALA 5

introduced by Nirala. By the year 2000, mithai buying was a

markedly different experience from that thirty years ago. At
that time, customers stood in sweltering, dimly lit stores and
came away with mithai packed in a rough, leaky cardboard
box tied with a coarse brown string to keep the lid in place.
The mithai fans of Lahore patronised either Nirala on
Fleming Road or Amritsari located near the Mall, the main
city thoroughfare that offered good parking facilities and
easy access.
Between 1975 and 2000, several new mithai shops
opened in Lahore, including a couple with multiple loca-
tions. Several popular bakeries also started offering mithai
along with baked products and common grocery items.
Though Nirala management and mithai aficionados felt that
Nirala still offered the best mithai in Lahore in terms of qual-
ity and variety, some new entrants were competing on the
basis of significantly lower prices. Nirala salesmen reported
anecdotes of several customers being concerned at Nirala’s
high prices. Nirala, with mithai priced at an average of
Rs 150 per kilogram was the price leader in the mithai
business.
Apart from competition from many new entrants, the
growing westernisation and health awareness among some
segments of the populace also seemed to be impacting mithai
sales. Some buyers had switched to presenting cakes rather
than mithai on festive occasions for reasons that had not
been well researched, but were generally associated with the
desire to appear modern.
Almost none of the major players in the Lahore mithai
market indulged in any sort of advertising or promotion.
Word of mouth was recognized to be the only, and in the
opinion of some, best form of advertising. While quality was
regarded as an important variable in mithai sales, Nirala had
introduced some improvements such as high quality packag-
ing, mithai salesmen wearing disposable gloves while han-
dling mithai, air-conditioned and well-appointed stores,
in-store microwaves for eatables such as samosas which are
to be served hot, and special individual packing for small
quantities of mithai that had to be distributed individually
on occasions such as that on weddings or engagements.
6 ACRJ

NIRALA OPERATIONS

All mithai was prepared at Nirala’s Waris Road facility. Pro-

duction was organized under four kitchens depending on the
type of mithai, i.e barfis and other khoya based mithai in
one, jalebis in another and so on. Each kitchen was headed
by an ustaaad who supervised several kaarigars. Production
involved one or more of the following operations: kneading
khoya, sugar and other ingredients into shapes appropriate
for deep frying, cooking, garnishing with almonds etc., cool-
ing, cutting (if required), immersing in sugar syrup (gulab
jamans), packing in steel trays and then transporting to the
Nirala stores where the trays were placed in display racks.
Mithai could be prepared in one to five hours, depending on
its type though some mithais had to be allowed to set for a
couple of days before they were ready for sale. The packed
trays of mithai were then transferred to the Supply Depart-
ment awaiting transport to the stores in company vans.

NIRALA STORES

By late 1994, Nirala had four retail stores of different

sizes and staff strength located in different parts of the city.
In mid-1999 Nirala had opened its first store outside Lahore.
This was located in Pakistan’s capital, Islamabad. See
Exhibit 1 for a sample of store statistics. The stores carried
basically the same product mix which was sent fresh in
company-owned vans from the factory at Warris Road a
couple of times per day or as needed. The completion of
Pakistan’s first motorway from Lahore to Islamabad had
even made delivery to the Islamabad store possible in four
hours from Lahore. All the stores had been designed to
project a quality image and salesmen wore gloves and used
tongs to handle mithai. They also wore standard uniforms
and identification cards, rather unique features for a tradi-
tional mithai business. The Islamabad store presented a very
high-tech look, something many customers found pleasantly
surprising.
 SALES COMPENSATION AT NIRALA 7

Exhibit 1
Nirala Retail Store Statistics

Average Monthly
Typical Staff Sales
Location Area in Sq. Ft
Strength
(Rs. in Million)

Jail Road 1,450 9–15 1.2

Hafeez Centre 900 6–8 1.0
Moon Market 604 4–5 0.4
Sadiq Plaza 480 4–5 0.4
Islamabad 800 6–8 0.3

The stores were each headed by a store supervisor. All

store supervisors had been with Nirala for several years.
They usually started with menial jobs such as washing uten-
sils, cleaning kitchens, packing. etc., then moved on to be-
come salesmen, and later cashiers. The cashier’s job was
highly regarded because as one store supervisor said, “This
shows how much the owners trust me.”
The store supervisor’s job involved placing the daily
demand for the amount and variety of mithai needed at the
store. This was usually done the prior night, though some-
times, depending on the sale and shelf capacity at the stores,
demand was placed during the day and resulted in up to
four supplies from the factory. Large order customers some
of whom expected overnight service also had to be handled
by the supervisor. He also had to ensure that the customers
were politely handled and proper procedures had been fol-
lowed in selecting and packing mithai. Sometimes, custom-
ers had specific questions about the ingredients of a
particular mithai, which a salesman was unable to answer
and thus had to be handled by the supervisor. All other
administrative tasks related to store management were also
under the supervisor’s control.
In addition to the supervisor and salesmen, each store
had two cashiers who shared the day’s duty. The cashier’s
job was considered to be quite important by Nirala manage-
ment as it required some dexterity in operating the electronic
cash register and ensuring that proper cash had been paid
and change returned to the customer. The cashier was also
8 ACRJ

responsible for counting the cash while handing over charge

to the next cashier. Usually, one of the salesmen was trained
for the cashier’s job. Since the job paid about 15–20% higher
salary, most salesmen also regarded it as a prize position. In
case of any problems, the store supervisors were all trained
in handling the cashier’s tasks.

EVALUATION AND COMPENSATION

The store and factory staff’s compensation package com-

prised a basic salary, a commission and a prize. Exhibit 2
shows an example of the monthly compensation paid to
sample staff at one store (Jail Road). In Faisal’s opinion, sala-
ries for new employees were quite random and, like the
raises, depended very much on the personal whims of one of
the three owning brothers or a close relative. The process for
the other stores was quite similar to the example shown.
Most of the staff employed at Nirala had been referred by an
existing employee, a family member, or a friend. There were
four salary grades, 1 through 4 shown in Exhibit 3. In addi-
tion to the basic salary, each employee was given Rs 6 per
day for on-time arrival at the job. Those who did not take
any leave were paid the equivalent of 2.75 days salary for
working during the month. All calculations for salary, com-
missions, annual leaves, on time payments, and prize money
were done by the Accounts Department at Waris Road. Faisal
did not hide his view of the Accounts Department’s quality
of work:
“I don’t trust one number that goes in or out of that de-
partment. I’m unable to get any report that makes sense and when
you look at the way the prizes are being distributed you’ll under-
stand that the gaming by the store supervisors must be accompa-
nied by gaming by the accounts staff.”

THE COMMISSION

The commission was based on the company wide sales

achieved every month. The commission amount was paid at
 SALES COMPENSATION AT NIRALA 9

Exhibit 2
Compensation Components for Sales Staff at Jail Road Store

Monthly Sales Monthly

Years of Commission Annual Salary
Name Grade On-Time7
Service (Rs.) Leave8 (Rs.)

Bashir
2 17 600 156 142 1,600
Tiger

Abdul
2 17 742 168 133 1,500
Razaq

M. Boota 2 4 550 114 60 1,200

Saleem
2 4 800 186 88 1,000
Hameed
Zulfiqar
1 1 260 144 71 800
Ali

7Rs. 6 - per day present.

82.75 day salary for 30-days attende.

Exhibit 3
Salary Grades in Nirala

Grade Rupees per month

1 600 – 1,200
2 1,200– 2,000
3 2,000– 3,000
4 3,000 upwards

2% of net sales to all staff at the sales outlets, the factory, the
office and even those who worked at the owner’s house. The
total commission was divided proportionately by the Grade
in which an employee was placed. For example, a Grade 2
employee received twice the amount of commission com-
pared to a Grade 1 employee and similarly a Grade 3 em-
ployee received three times the amount. The formula for
calculating bonus payments for a store’s salesmen is shown
in Exhibit 4. Individual bonus payments to salesmen were
adjusted for the number of days they had been present and if
10 ACRJ

Exhibit 4
Sample Calculation of Sales Commission

1. Company sales this month = Rs. 3,000,000

2. Total commission amount at 2% = Rs. 60,000

3. Total employee strength and grades Grade 1 equivalents

( Number of employees × Grade)

Grade 1: 22 22 × 1 = 22
Grade 2: 20 20 × 2 = 40
Grade 3: 10 10 × 3 = 30
Grade 4: 8 8 × 4 = 32
124

4. Grade 1 Share = 60,000/124 = Rs. 484/-

Commission earned by sales at Jail Road

Grade No. of Employees Grade 1

Equivalent
Grade 1 1 1 × 1 = 1
Grade 2 3 2 × 3 = 6
Grade 3 2 3 × 2 = 6
Grade 4 0 4 × 0 = 0
Total of 13 Grade 1 Equivalent Employees

5. Total commission payable to Jail Road sales staff = 13/124 × 60,000 = Rs. 6,290/-

Standard Commission for: Division of Rs. 6,290/- at Jail Road

Grade 1 employee Rs. 484/- Rs. 484/- (1 Grade 1 employee)

Grade 2 Employee Rs. 968/- Rs. 2,904/- (3 Grade 2 employees)
Grade 3 Employee Rs. 1,452/- Rs. 2,904/- (2 Grade 3 employees)
Grade 4 Employee Rs. 1,936/- Rs. 0/- (0 Grade 4 employee)
Total commission payable at Jail Road Rs. 6,290/-

Note: Full Commission only payable for full month attendance.

 SALES COMPENSATION AT NIRALA 11

a salesman did not report for duty at his store he would lose
that day’s bonus payment. In addition, he would lose the en-
tire week’s bonus in case he did not show up on Saturday or
Sunday since the stores were much busier on those days.

THE PRIZE MONEY

Apart from the commission paid to each staff member (ex-

cluding the owners) for overall company performance, there
were special incentives for individual effort and for store
performance. Individual salesmen were rewarded with a
cash incentive of Rs 1,000 for making the maximum sale each
month among salesmen at each store. Each salesman was
assigned a code that had to be punched in as the sale was
entered in the cash register. At the end of the month the
salesman with the greatest sales in value would be judged
the best salesman and paid the Rs 1,000 cash prize. In reality
however, the cashier or the manager attributed sales to sales-
men in a manner such that at the end of each month a differ-
ent salesman would stand first in each store. The entire sales
staff at each store agreed with this arrangement, and the
store supervisor and cashier did it with their full approval.
Similarly, the supervisor of the best store each month
evaluated along the dimensions shown in Exhibit 5 would be
given a cash prize of Rs 1,000, the second best store’s super-
visor a prize of Rs 800 and the third best store’s supervisor a
prize of Rs 600. This would leave just one store whose man-
ager did not get a prize that month. This too was gamed by
the store managers in connivance with the Supply and Ac-
counting staff to show a different store winning each time.
The cashiers were also awarded first, second, and third
prizes based on the amount of cash handled during their
shift. Here again, it was normal for a regular pattern of dif-
ferent cashiers winning the prize.
The quantitative part of the store evaluation was
handled by the Accounts Department at the Head Office,
which compiled the performance statistics and came out
with a ranking. For the qualitative part, the company sent a
staff member from the main office to personally visit and
12 ACRJ

Exhibit 5
Scoresheet for Grading Retail Outlets

1. Percentage increase/decrease in sales (present month vs. same

month last year)

Increase/Decrease

2. Percentage increase/decrease in sales (present month vs.

previous month)

Increase/Decrease

3. Increase/decrease in weight sale since same month last year

Present
Past

Increase/Decrease

4. Increase/decrease in weight sales since last month

Present
Past

Increase/Decrease

5. Comparison of increase/decrease in sweets (profit description)

Sweets in weights
Supply
6. Turnover

Increase/Decrease

7. Countable Sweets
Supply
Turnover

Increase/Decrease

8. Sweets Return (Sale basis)

9. i) Least percentage of sales return from stores
ii) Sheera—————— (Sugar syrup)
iii) Choora—————— (crumbled product)
10. Least usage of box packing
11. Least usage of packing material
12. Monthly labor expenses
13. Electricity expense
 SALES COMPENSATION AT NIRALA 13

14. Telephone expense

15. Miscellaneous expense
16. Least percentage of discounts
17. Total dispatched weight
18. Individual sales weight
19. Personal taste sweets’ weight in box sales (sweets chosen by
customer rather than standard 1 kilogram or 2 kilogram mix,
which is chosen by the salesman)
20. Per unit cost
21. Number of mistakes by cashier
22. Comparison of percentage increase/decrease in # of customers
Present
Past

Increase/Decrease

23. Level of cleanliness of floor

24. Level of cleanliness of show-cases
25. Quality of packing
26. Standard of packing
27. Customer’s complaints
28. Cleanliness of salesman
29. Standard of reporting
30. Computer capabilities

evaluate the stores at least a couple of times each month.

Each store would be rated from best to worst on all the mea-
sures in Exhibit 5. The best store would get 3 points, the sec-
ond best 2, the third 1 and the last zero. The totals would
then determine the best store.
Apart from all the systematic rewards, Farooq Ahmed
sometimes declared a day’s bonus salary if the Pakistan
cricket team won an important match. Sometimes he would
send the more senior employees on Hajj5 at the company’s
expense. It was also not unusual for some employees to ask
him or one of his close relatives for a loan. More often than
not he was known to look kindly upon these requests, spe-
cially in the case of employees who had been at Nirala for a
long time.

5Annual Muslim pilgrimage to Mecca obligatory once in a lifetime.

14 ACRJ

STORE SUPERVISOR’S IMPRESSIONS

In evaluating his job as the store supervisor and the salesmen

compensation, Tasavvar, the supervisor of the Hafeez Center,
Gulberg, store said:
“I joined after I responded to a P.O Box ad placed by
Nirala. Started as a salesman in Jail Road. Next month they
made me telephone operator and for a year I just attended
telephones at Jail Road. I used to carry out orders immedi-
ately and Haji Sahab (Farooq Ahmad’s younger brother)
liked that and raised my monthly salary to Rs. 1,900 from
1,600. Then I was a salesman at Jail Road for a year and be-
came a cashier for about a year and a half. Then they had to
accommodate some sifarash6i and I was back as salesman.
However, the chap used to make lots of errors and just go
away from the job and I was again made cashier. I took a
6 day leave, the maximum leave I’ve ever taken to go to
Karachi and when I returned I was informed at the gate that
I am now the Store supervisor at Hafeez Center. The man-
ager can do a lot. I can’t afford to lose temper with any sales-
man. I’ve told them they can’t be rude even if the customer is
unreasonable. Apart from this I need to order the stuff de-
pending on the day of the week so it can be fresh in the
morning and do all the other control jobs at the store.
They (the management) have made it someone’s duty
to check the packaging and wastages and to come inspect the
store for the store performance report. Though there is no
clear person specified, I know when he has to come so one
can easily clean up the store 5 minutes before he arrives.
I don’t see why the commissions are based on com-
pany sales. They should be based on store sales; after all,
why should our commission go down if someone else is not
doing well. The overall reward should be increased but it
must be based on store sales.”
Ramzan, the former Supervisor of the Jail Road store
featured in the case opening, who had just been transferred
to the factory said:

6Candidate recommended by an influential source, e.g. government officer, etc.

 SALES COMPENSATION AT NIRALA 15

“I started by emptying vans, opening boxes, and

making cartons and then became a salesman at Jail Road.
After 3 months I became cashier. In the owner’s opinion,
trust is vital for the cashier; besides people also think that
this person is honest, that’s why they made him the cashier.
After three years or so I became the supervisor and I have
served as store supervisor at Jail Road, then Moon Market
for about 3 years...it’s the closest to my house, and Sadiq
Plaza for about 6 months prior to the last 4 months at Jail
Road again. I’ve been transferred to Waris Road because of
low sales for the last three months. I try to do my job well, to
increase the sales, to look after the customer but maybe they
don’t like the price. It may not be a problem for the other
stores but I have Fazal Sweets selling mithai at Rs 90 per kg.
very close to Jail Road.
I know the evaluation system as does every store su-
pervisor. I don’t think any evaluator sent by the owners is
unfair. He checks everything but he doesn’t tell me how
many points I got after each visit. Most points are lost be-
cause of poor sales. I don’t know when he will come or who
will come. Sales of course are known each day but the com-
puter in the Headquarters generates it. When they’re adding
in the computer we don’t know what errors they may have
made. We do know what we’ve sold from the cash we have.”
The person sent to replace Ramzan at the Jail Road
Store, Abdus Salam, had come from the factory, but had
served as store supervisor at another store previously. Abdus
Salam thought the idea of sending a store supervisor to the
factory was quite a good one since it allowed one to truly un-
derstand operations and think about all the operational im-
pacts of one’s decisions as a store manager.
Abdus Salam, in the management consultant’s view,
seemed more assertive than Ramzan and in response to the
management consultant’s opinion about excessive man-
power at the Jail Road store said: “Yes, when I used to be at
Jail Road there were nine people there, now there are nine-
teen. Plus, everyone seems to come and use the phone at Jail
Road and all the free orders for the police and bureaucracy
also have to be sent from Jail Road. So it is a much more dif-
ficult operation to control than the others. And I think the
16 ACRJ

bonus should be related to each store’s performance rather

than to the total company sales.”
Depending on the location of the store, supervisors at-
tributed different reasons for the relative decline in sales
with some supervisors claiming that Nirala’s prices were too
high while at least one supervisor (Hafeez Center Gulberg
store) said he could not sell even one instance of a customer
ever mentioning price. As another example, the Jail Road
store supervisor thought his sales were falling because of the
opening of Fazal Sweets about three kilometres away. Fazal
Sweets, which had built up a good reputation just selling
barfi in the inner city, had ventured out into the suburbs
with a location offering mithai at Rs 90 a kilo though his
product line was quite restricted compared to Nirala’s. The
Jail Road supervisor claimed that his customers were being
attracted to Fazal in large numbers even though the majority
had recognized that Fazal’s mithai was clearly inferior to
Nirala’s.
At each weekly review meeting conducted by either
Farooq Ahmad or by Faisal the issue of declining sales
would come up without any resolution. All the sales supervi-
sors and the Head Office staff would get together once a
month to hear the prizewinners for the month. It was ob-
served by the management consultant that almost none of
them had any real interest in the multiple criteria scorecard
as it was projected on to a screen. Farooq Ahmad believed
that if the entire compensation or at least the commissions
were linked to profits rather than sales, the staff would be
much better motivated. Faisal advised him that they ought to
do some careful analysis of the options before changing the
evaluation and reward system at Nirala.