Question: Bonus Decision Making Name: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Bonus Decision Making Name: _______________________________________ EXERCISE INTRODUCTION: You are a regional manager. You have four area managers that report directly to you. Each of these area managers has a staff of their own, and each area manager is evaluated on the performance and profit of his/her own unit. You are evaluated on the collective performance and profit of all four units. Dr. Becker is your supervisor. She has allocated $100,000 for bonuses for your area managers. This is bonus money, not salary or reoccurring money. YOUR ASSIGNMENT: You are to provide Dr. Becker with a breakdown of how the money will be distributed and your rationale. Remember your bonus is based upon the overall performance and profit of your units, and your performance impacts Dr. Beckers (your boss) attainment of her performance goals. Remember that this is a bonus and not a salary increase. Manger Available Information Bob Has been in this business for over 27 years and has spent the past 21 years with this company. Several years ago, his unit made the largest contribution to regional profits. More recently, however, it has brought in few new accounts and is now well below average in terms of its contribution to the company. Turnover in his unit is high, and Bob doesnt seem to have the same enthusiasm as he once did. He is 56 and is married with 5 kids (3 still at home). He has an AA degree and an industry-related certificate. Edward In the 2 years he has been a manager, his unit has brought in several major accounts and now stands as one of the top units in the country. He is well respected by his employees. At 29, he is the youngest manager in the region and one of the youngest in the country. He has an undergraduate business degree from a state university and worked for 5 years in this industry before joining this company. He is single, no kids. Lee Has been with this company for 7 years. The first 2 years were spent as a sales rep in the office she now manages. You rate her as about average. She earned an undergraduate degree in geography from a prestigious institution and worked as a sales rep for 4 years in this industry before joining this company. She is 40, divorced, no kids. She is very ambitious, but sometimes has problems working with her staff and other area managers. Sandy She is 47 and has been an area manager with this company for 17 years. 7 years ago, her unit made the lowest contribution to the regions profits, but her units profitability has steadily improved and is now slightly above average. She seems to have a mediocre attitude toward her job, but is well liked by her staff and other branch managers. Her experience in the business has been entirely with this company. She previously worked in a non-sales position, and it is not clear how she became an area manager without previous sales experience. She is married and has 3 kids. Several years ago she earned an AA degree by taking evening courses.

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