Rewarding Salesperson Performance

Two salespersons, call them 1 and 2, work for the same company in the same division.

The territory of salesperson 1 is large, and his quota is $1,000,000. Last year he sold $1,100,000 worth of merchandise.

The territory of salesperson 2 is small, and his quota is $100,000. Last year he sold $120,000 worth of merchandise.

The company policy is to give a 5% bonus for the amount of sale beyond the assigned quota.

A. Which salesperson will receive a larger bonus as measured in dollars?

B. Who do you think is the better salesperson? Why?

C. If the answers to parts A and B above are conflicting, what better reward system do you propose?