Valley Winery
Essay title: Valley Winery
The high turnover rate and its effects are causing excessive training and recruitment costs. Table 1 illustrates the tangible employee turnover costs. In addition, a loss in sales due to the representative not being available to manage the accounts and the time it takes for a new representative to gain rapport with buyers is also a factor leading to high turnover.
Table 1
Type of Cost
Number of Employees
Cost Per Employee
Total Amount
Training Costs
$25,000
$1,250,000
Hiring Costs
$2,000
$40,000
Total
$1,290,000
What causes Pat Wallers problems?
Unrealistic quotas and poor management prompts the sales representatives into misrepresenting, or “stretching”, their sales figures to meet their quotas. Working in fear of missing quotas and perhaps losing
their jobs can perhaps lead the sales force to look for alternate employment, contributing to high turnover. Sales quotas are oddly patterned and add stress to sales representatives that are under pressure to meet an unrealistic number one month, and none the next.
Compensation strategy