Abstract

In July 2010, GlaxoSmithKline Plc (GSK), one of the world’s leading pharmaceutical companies, announced that it would replace its existing system of evaluating and compensating its sales professionals in the US. As part of the new system, the bonuses of the sales professionals would be based on customer feedback and adherence to company policy rather than the widely used practice of focusing on individual achievement of sales targets. Industry observers viewed GSK’s new sales force compensation plan as a radical change and their opinion was divided regarding the effectiveness of the new sales force compensation system.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• To understand the various issues and challenges associated with evaluating and compensating a sales force. To understand the pharma selling environment in the US
• To analyze the new sales force compensation system of GSK in the US and discuss the pros and cons of the system Explore ways in which the system can be improved further.

Keywords

Sales Force Compensation, Sales Force Evaluation, Sales compensation system, Pharma selling environment, Sales productivity, Sales force profitability, Base salaries, Bonuses, Incentives, Reward, Overtime pay, Sales targets, Transactional product-focused model, Dialogue focused model, The Fair Labor Standards Act (FLSA) , GlaxoSmithKline