Question

Julissa's Bakery is a relatively small company that makes pies, cakes, and cookies sold in supermarkets. Sales employees' bonuses are determined based on meeting or exceeding the budget. For the coming year, sales employees have set a budget target of 3 percent of sales growth. The market has been growing at 6 percent, and the company has averaged 10 percent growth for the last two years. What is the problem here, and how can it be fixed?

Answer 1

Answer:

The problem is that the employees budget hasn´t been growing enough in comparison to the market budget.

Explanation:

The market budget determines (in resume) the costs of the living such as the price of the food, the services and the general stuff. Julissa´s Bakery has been growing and so its market budget, as it should be.

However, the employees budget has just been growing 3 percent in comparison with the 6 percent of the market. If is lower it means that the employees budget isn´t gonna be enough to cover all their needs because always is gonna be lower to the market budget.

If the store is reaching a 10 percent budget growing, it has the money to increase the employees budget at least to the 6 percentthat the market is reaching.