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StepSmart Fitness Case Solution

Solution Id Length Case Author Case Publisher
1539 613 Words (3 Pages) Robert J. Dolan, Benson P. Shapiro, Alisa Zalosh Harvard Business School : 914509
This solution includes: A Word File A Word File

The sales performance is directly linked to the effectiveness of the sales force, no matter how good the products may be. In an organization like StepSmart Fitness, sales force become complacent over time to rely on low hanging fruit. To counter it, incentivizing the extra effort could turn out to be an effective strategy by restructuring the compensation by introducing more commission intensive payment with a lean fixed salary.

Following questions are answered in this case study solution

  1. Recommendations

  2. Basis for Recommendations

  3. Background

  4. Analysis

  5. Next Steps

Case Analysis for StepSmart Fitness

1. Recommendations

  1. Introduce new compensation plan for sales force with 30% lowered fixed salaries and proportionately increased commissions. 

  2. Failing to reach 6-months sales targets will result in probation with either to improve and sustain their employment or fail to get terminated. 

  3. Sales persons will get district sales director’s feedback and guidance to help improve results 

2. Basis for Recommendations

  1. The complacency of the salespeople is caused by the compensation structure which ensures salaries flowing in regardless of the individual performance. Therefore, the new structure will incentivize the results-driven efforts more and hence will encourage the salespeople to do their best to perform the best they can to earn the better compensations for themselves. 

  2. The sales are suffering from a laidback attitude of salespeople. Missing the yearly targets by a huge margin of 29% in the year 2011 is a serious threat to sustaining StepSmart Fitness’ market share, let alone increasing it. To match the purchasing potential of the District, the most important factor is to ensure increased effort and renewed strategies by each salesperson to exploit the true potential of their respective territory. Failing to achieve the target will cut result in a cut of 50% jobs anyway, so therefore, it is essential to clearly communicate the repercussions of underperformance for each individual. 

  3. Each salesperson seems to have unique issues which have caused them to underperform. A systematic employee feedback and development programme will assist salespersons to realize the overlooked issues and the help them align their focus for improved results.

3. Background

The guaranteed stable compensations have contributed to the complicacy of salesforce; therefore, salesforce does not tend to go beyond their comfort zones to earn their livelihood.

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