Office Solutions Inc.

Faishal Alghi Fari (2019104715)

Identification
● In December 2014, Bob Mairena, president of Offi ce Solutions, Inc., an offi ce supply distributor
based inSouthern California, was considering making a signifi -cant change in the compensation
plan for his sales personnel.
● Over the years, Offi ce Solutions grew both organically and by acquisition. In 2014, it was
generating approximately $36 million in annual revenue. The company had 110 employees,
including 40 salespeople who sold four product lines: offi ce supplies, offi ce furniture, facility
supplies, and print services.
● Most of the products sold were delivered to them on the following morning and delivered to the
customer with a 98.5% fi ll ratio.
Problem & Solution

Problem

● Bob wanted the sales reps to generate more new businesses.

● The reps acted too much like independent contractors. And Bob
needed a better way to express dissatisfaction with job performance,
and he needed objective criteria for terminating underperforming
employees.
● The company was competing with big-box stores that had lower costs
of sales.
Problem & Solution

Solution

● The compensation mix for the account managers would change dramatically to a
targeted 70% base salary and 30% variable compensation, which included both
commission and bonus. The expected total compensation of the account
managers would be set to be slightly lower than the current compensation levels,
reflecting the reduced compensation risk.
● or the account manager, their task is to maintain good relations with customers.
So their bonuses must be earned by keeping those customers purchase all of their
supplies in Office Solution.
Problem & Solution

Solution

● or the account manager, their task is to maintain good relations with

customers. So their bonuses must be earned by keeping those
customers purchase all of their supplies in Office Solution.
● or the account manager, their task is to maintain good relations with
customers. So their bonuses must be earned by keeping those
customers purchase all of their supplies in Office Solution.
Problem & Solution
Solution

● Compensation assessed from the sale. The solution that can be done in
this problem is to change the way of assessing compensation. Because
if it is judged from the sales results, it is possible that there are naughty
employees who add regular customers to the new customer list, so it is
unfair to honest employees. Companies can judge by looking at the
quality of employees at work. Companies can also conduct random
interviews by telephone from random customer data to re-check
customer validity.
Thank You!