PENSION PLANS FOR OUTSIDE SALESMEN

DISSERTATION

Preaented In Partial Fulfillment of the Requirement*

for the Degree Doctor of Philosophy in the Graduate School of The Ohio State Uhivarsity

By

PHILLIP MoVSY, A.B., I.A., M»B«A*

The Ohio State Chivarsity 1054

Approved by s

-- 1 * Advlser 1

TABLE OF CONTENTS

Chapter Page Number

1 INTRODUCTION 1 Pensions as a sales management problem 1 Plan of this study 5 Cooperation of National Sales Executives, Inc* 6 The questionnaire survey 9 2 OUTSIDE SALESMEN AND THE PROBLEM OF AGE 15 Number of persons employed as outside salesmen 15 Age factors In sales work 19 Preference for older salesmen In some lines 20 Brief work experience of most salesmen on current Jobs 22 Influence of young "marginal" sales workers 26 Loss of capacity* courage and desire In later years 27 Resistance of salesmen to old-age planning 29 3 SCOPE OF PENSION COVERAGE IN THE UNITED STATES 31 What Is a private pension plan? 31 Growth of pension plans since 1942 32 Outside salesmen and the Social Security Act 37 Internal Revenue Act of 1942 42 Outside salesmen under emergency wage and salary controls 43 Decision of the National Labor Relations Board 44 II

Chapter Page Number Forces indirectly stimulating the growth of pensions 47 Aging population 47 Shorter working life 48 Increasing maturity of men in management and marketing 49 Radiation of employee benefit plans 50 Values of pension plans to employers 51 4 MANAGEMENT PROBLEMS IN THE RETIREMENT OF OUTSIDE SALESMEN 52 Desire for special efforts and attitudes 52 Inability to apply usual administrative devices to salesmen 54 Nature of salesmen's earnings 55 Independent contractor status of salesmen 61 Desire for special controls over salesmen 62 5 FINDINGS OF THE NATIONAL SALES EXECUTIVES PENSION STUDY 65 Findings of earlier surveys 66 Arrangement of tabulations 67 Number and kind of firms sponsoring pensions for salesmen 69 Characteristics of covered sales forces 77 Relation of salesmen's pensions to old-age personnel policies 93 iii

Chapter Page Number Eligibility of salesmen for pensions 100 Special provisions in salesmen's pension plans 109 Financing the plan 114 Benefit payments to retired salesmen 119 Effect of pensions on sales management 128 Administration of the plan 137 Costs of the plan to employers 137 6 CONCLUSIONS 142 Trends in the Use of pensions for salesmen 143

Some of the unsolved problems 145 Model pension provisions for salesmen 148 Suggestions for additional studies 150 EIBLIOGRAPHY 152 APPENDIX A THE QUESTIONNAIRE FORM 159

APPENDIX B LIST OF CONTRIBUTING COMPANIES 160 AUTOBIOGRAPHY 184 lv

LIST OF TABLES

?able Humber Page Humber 1 Humber or Eiqplojed Persons by Major Occupation Group and by Age* United States* 1950 21 2 Expertenoe or Male Workers at their Current Jobs* by Major Ocoupatlon Group, united States* 1950 23

3 Experience or Sales Workers at their Current Jobs* by Sex* united States* January 1951 24

4 Humber or Pension and Profit Sharing Plans Approved by the Bureau of Internal Revenue* By Years* October 21* 1942 34

5 Humber of Companies Sponsoring Pension Plans ror Outside Salesmen* by Type or Conpany * among 508 Members of Hattonal Sales Execu­ tives* 1952 70

6 By Product Line 72

7 By Area of Distribution 73 8 By Age or Company 74 9 By Geographic Location and Humber of Salesmen 76 10 By Number or Salesmen 79 11 By Number or Employees 80 12 Number of Cong)antes Sponsoring Pension Plans for Outside Salesmen* by Average Annual Turnover of Salesmen* among 508 Members of National Sales Executives* 1949 - 1951 01 13 Humber of Companies Sponsoring Pension Plans for Outside Salesmen* by Type of Compensation Plan* among 508 Members of National Sales Executives* 1952 83 14 By Extent of Salesmen's union Membership 85 V

Table Number Page Number 15 Number of Companies Sponsoring Pension Plans for Outside Salesmen, by Influence of Collective Bargaining on Origin of 269 Plans Sponsored by Members of National Sales Executives, 1952 86 16 Number of Companies Sponsoring Pension Plans for Outside Salesmen, by Range of Salesmen's Ages, among 508 Members of National Sales Executives, 1952 8 7

17 By Preferred Age for Hiring New Salesmen 90 18 By Age at Which Salesmen Reach "Peak" Productivity 9 1 19 By Years of Selling Experience Required for "Peak" Productivity 9 2 20 Number of Companies Sponsoring Pension Plans for Outside Salesmen, by Percent of Sales Force Covered by Social Seourlty, among 493 U#S* Members of National Sales Executives, 1952 94 21 Number of Companies Sponsoring Pension Plans for Outside Salesmen, by Types of Personnel Involuntarily Retired, among 508 Members of National Sales Executives, 1952 95

22 By Action Taken when Salesmen Reach Old Age 9 7 23 Number of Conpanles Sponsoring Pension Plans for Outside Salesmen, by Action Taken to Prepare Salesmen for Retirement, among 115 Members of National Sales Executives Having a Compulsory Retirement Policy, 1952 99 24 Number of Companies Sponsoring Pension Plans for Outside Salesmen, by Percent of Sales Force Retired, 1947 - 1951, Among 508 Members of National Sales Executives ioi 25 By Percent of Sales Force Expected to Retire In 1952 1 0 2 vl

Table Number Page Number 26 Number of Companies Sponsoring Pension Plans for Outside Salesmen, by Type of Enqployeee Covered Under 269 Plans in Use by Members of National Sales Executives, 1952 104 27 Number of Conpanles Sponsoring Pension Plans for Outside Salesmen, by Age of 269 Flans in Use by Members of National Sales Executives, 1952 105 28 Number of Conv>anles Planning to Sponsor Pensions for Outside Salesmen, by Present Status of Plans, among 261 Members of National Sales Executives, 1952 106 29 Number of Companies Sponsoring Seven types of Enployee Benefits, by Groups of Employees Eligible, among 508 Members of National Sales Executives, 1952 107 30 Number of Companies Sponsoring Pension Plans for Outside Salesmen, by Types of Other Employee Benefits Sponsored for Salesmen, among 508 Members of National Sales Executives, 1952 108 31 Number of Cong>anles Not Sponsoring Pension Plans for Outside Salesmen, by Reasons for Refusing Coverage Stated by 261 Members of National Sales Executives, 1952 110 32 Number of Companies Sponsoring Pension Plans for Outside Salesmen, by Percent of Sales Force Participating, among 247 Menbers of National Sales Executives, 1952 112

33 By Eligibility Requirements 1 1 3 34 Number of Companies Sponsoring Pension Plans for Outside Salesmen, by Nature of the Retirement Fund In Use by 247 Members of National Sales Executives, 1952 115

35 Number of Companies Sponsoring Pension Plans for Outside Salesmen, by Method of Deter­ mining Salesmen's Contribution Used by 247 Members of National Sales Executives, 1952 117 vii

Table Number Page Number 36 Number of Companlea Sponsoring Pension Plans for Outside Salesmen* by Percent of Sales­ men's Gross Earnings Contributed* among 247 Members of National Sales Executives* 1951 118 37 Number of Cospanles Sponsoring Pension Plans for Outside Salesmen* by Size of Eiqployer's Contribution* among 247 Members of National Sales Executives* 1952 120 38 By Basis for Determining Amount of Benefits Due 122 39 Number of Coopanles Sponsoring Pension Plans for Outside Salesmen* by Adjustment Made for Social Security Benefits* among 239 U* S# Members of National Sales Executives* 1952 123 40 Number of Conqpanles Sponsoring Pension Flans for Outside Salesmen* by Types of Benefit Options Authorised* among 247 Members of National Sales Executives* 1952 124 41 By Types of Limitations on Benefits 127 42 Number of Conpanles Sponsoring Pension Flans for Outside Salesmen* by Number of Retired Salesmen Receiving Benefits from 247 Members of National Sales Executives* 1952 129 43 Number of Conq>anles Sponsoring Pension Plans for Outside Salesown* by Range of Annual Benefit Payments Per Retired Salesman* among 247 Members of National Sales Executives* 1952 130

44 By Significant Advantages Experienced 131 45 By Significant Disadvantages Experienced 133 46 By Iimprovements Desired In Present Plans 134

% viil

Table Number Page Number

47 Number of Companies Sponsoring Pension Plans for Outside Salesmen, by Nature of Admin­ istration In Use by 269 Members of National Sales Executives, 1952 130 48 Number of Companies Sponsoring Pension Plans for Outside Salesmen, by Officials Respon­ sible for Operation of 269 Plans In Use by Members of National Sales Executives, 1952 130 49 By Number of Employees Used to Operate 269 plans 140 50 Number of Companies Sponsoring Pension Plans for Outside Salesmen, by Annual Cost of Pensions per Covered Employee, among 269 Members of National Sales Executives, 1951 141 1

Chapter 1 INTRODUCTION

Are outside salesmen "different” from other employees? Or should they be treated as nearly as possible like office and factory vorkers? Do outside salesmen share In the growing demand of Asierican wage earners for economic security measures? Or do they prefer, according to the traditional story, the risks of fending for themselves, independently, aggres­ sively? Do company old-age pension systems destroy the Initi­ ative of sales forces? Or do they strengthen selling efforts? What has been their effect on reorultsmnt, turn­ over, morale, and public relations?

If the plans have value, how can they be flnanoed? Can they be fitted to the peculiar circumstances of sales­ men's pay and working conditions? The questions are Included In the scope of this study* It Is believed that factual Informatlon, taken from the experience of many conqpanies, can now be offered to replace the Intuitive judgment which has been relied upon In answering these problems* 2

Pension* >i a Sales Management Problem Success in modern sales management appears to hinge upon the breadth of vision, understanding, and inquis­ itiveness of the sales executive. There is no easily- defined limit to the topics in which he must be interested, particularly if his contact with outside salesmen is close, the nature of his work tends to prevent him from becoming a specialist. He has difficulty remaining within the boundaries of his department or function. He is unwilling to rely on technical experts In other fields to lsq>lement those portions of their programs which apply, or which could apply, to his salesmen. For example it would be convenient to leave the problems of salesmen's pay to treasurers and comptrollers, but the sales executive knows that a good ooao>ensatlon plan can be a positive force In the direction and oontrol of sales efforts* He demands, therefore, some authority over the plan and builds Into it as much sales guidance as practioal* The same rea­ soning is applied in connection with selection, training, and other personnel praotioes. By the same token employee-benefit plans in general and pension plans in particular are of concern to the sales executive, partly because of their direct effect on sales­ men's Incomes. If these plans can contain provisions which channel the salesmen's efforts before retirement into 3 activities that are profitable to the employer, then pen-

3 Iona are a sales managemant davlea. For example, aome Inauranoa oompanlaa raquira that a aalaaman attain a min­ imum annual quota of net policy salaa before the employer's annual contribution to hla retirement account is granted*

Other firms offer varying amounts of pension credit for performance of specified selling and service tasks

It would be a serious error to suggest that sales executives are interested In pensions ohlefly beoause of schemes like those Just mentioned* Using the mechanical features of a pension plan to supervise salesmen Is a dangerous praotice which is likely to complicate the plan unduly, defeat its purpose and weaken salesmen's responses to personal direction and advloe* Neither a pension plan nor a compensation plan can serve alone as an adequate substitute for management• Old age, retirement and pension incomes are of concern to sales executives ohlefly beoause these men are forever engrossed in the human problems of the sales force* Oranted that the human element is a problem to all areas of business management, It is believed to be a more crucial problem in sales management than In management as a whole* This Is true because of the personal nature of most outside selling.

Infra*, p* 113. depending as It does on successful motivation of the sales­ man. Sales executives are still in the process of search­ ing for the essential elements of selling or the specifio acta that result in sales* Some day these may be identified, classified, and translated into routine steps which can be performed meohanlcally* In some other types of work this goal has already been reached or at least approaohed* Salesmen, however, are as yet more Important than sales procedures* They rely upon inner resources fully as much as they rely upon Information about produots, prioea, and customers* The difference between a dull uninspired sales­ man and a district leader may have nothing to do with the knowledge or ability of either* In many oases the differ­ ence oan be traced to human problems that relate only lndlreotly to the Job* These problems all too frequently involve the home, family life, health, Income, and old age security* As a result, the sales executive must be able to look Into all of these matters for solutions to sales problems*

Ifrlters In the field of personnel administration have given only passing attention to the special characteris­ tics of outside salesmen's Jobs and working conditions* In a review of eleven recognised college textbooks in general personnel administration published since World War 5 II, it was found that only four2 devote attention specif-

ically to outside salesmen. The space thus consumed in

all of these books is less than five pages and is used principally for discussions of commission earnings. The authors of these books have, however. Inserted well-docu­ mented sections dealing with retirement policies and com­ pany pension plans as applied to employees generally. By

this treatment they have provided a useful background or

standard situation against which the situation of outside salesmen or any other class of employees may be compared in a sort of "analysis of variance." It will be found that such an analysis Is used throughout this research study. Only a minimum amount of attention is given to pension theory and to development, or to the operation and administration of company plans except In those matters where It Is believed the application of pensions to outside salesmen presents a special case. The major question Is, therefore, are outside salesmen "different" from other employees In so far as pensions are concerned?

3" ' ’ These books werej Juclua, M. J., Personnel Manage­ ment. Revised edition; Chicagoj R. D. Irwin Company, Inc., TTF5T; Mee, J. F*, editor, Personnel Handbook. New York* Ronald Press, 1951; Scott, W. D., R. C. Clothier, and W. R. Sprlegel, Personnel Management. Fourth edition; New Yorki McGraw-rtill Book Company, Inc., 1949; and Waite, W. W. • Personnel Administration. New Yorkj Ronald Press. 1952. 6 plan of this Study In an attenpt to answer the question posed In the preoedlng paragraph, this study has been organised on the following plans In Chapter 2 a statistical description of outside salesmen and their Jobs Is presented, with special enqphasls placed upon those factors In sales work on which age is believed to have a bearing* In Chapter 3 the scope of pension coverage In the Uhlted States is described and its history is briefly traced* The reasons why the planners of pension systems, both public and private, have tended to olroumvent the outside salesmen are identi­ fied and evaluated* Practical problems faoed In the com­ pulsory retirement of overage salesmen are analysed In Chapter 4, together with some oompany experiences on the feasibility of Including salesmen In private pension plans* In Chapter 5 is presented a summary of the findings of a recent questionnaire survey of companies represented In the membership of National Sales Executives, Incorporated* Characteristics of sales forces In which pensions are offered to salesmen are compared with those of sales forces without pensions* In addition the significant provisions of 247 pension plans which Include salesmen are tabulated, with Illustration drawn from pension manuals of specific firms* An appraisal of these plans by both sales executives and salesmen Is included* Finally, In Chapter 6, the survey Itself la summarized and evaluated. Apparent trends In thinking about salesnen's pensions and the pat­ terns of development up to the present time are traoed.

In this chapter, too. a model set of pension provisions for salesmen Is suggested.

Cooperation of National Sales Executives. Incorporated The study of ourrent praotloes in management of out­ side sales personnel Is a continuing project of National Sales Executives, Incorporated* This group Is an Inter­ national professional association of business men and

others whose work bears directly on various phases of

marketing. Membership at the time this study was conducted was 19,400. organized In affiliated clubs In principal cities* While no statistical breakdown of Its membership

has ever been made by National Sales Executives. Incor­ porated. It was estimated that It Includes represen­ tatives of approximately 7.000 companies whloh employ outside salesmen*3

The association maintains at Its New York City head­ quarters a director of eduoatlon supported by a speolal committee of which the chairman Is Dr* Dudley Maynard Phelps, professor of marketing at the University of

— — s — ...... ■ Letter of Patrick J* Reddington, assistant manager of club services. National Sales Executives, Incorporated. August 15. 1952* 8

Michigan, As * part or Its work this committee reviews proposals for research, projects In the field of sales man­ agement which have been submitted by doctoral candidates at leading universities. It approves those which appear promising for association sponsorship* In recent years studies on the supervision of outside salesmen,* sales­ men's compensation,6 special Incentives6 and other topics have been so sponsored* National Sales Executives, Incorporated, was therefore asked to assist In collecting statistical data which would provide a current cross section of retirement practices and company pension plans affecting outside salesmen* This group had previously collected some data on salesmen's pensions through local polling of Its affiliated clubs In New York City and Boston, and through Inclusion of a few questions on this topic In its study of salesmen's compen­ sation* The association president, Robert A* Whitney, approved the request In November 1951 and agreed to cooperate In a questionnaire survey of the companies Included In the association*s membership* Mr* C* Butler

^ Lapp, C* W*, Personal Supervision of Outside Salesmen* Columbusj Ohio State University, Bureau of Business Research, 1951* C Tosdal, H* R,, and W* Carson, Survey of Salesmen's Compensatlon* New Yorkj National Salea Executlvea, Tno•, 1951* 9 Jellinghaus, manager or member services, Indicated that the desires of National Sales Executives, Incorporated, were not entirely unbiased In connection with this researoh.

The study, he said, "should stimulate industry as a whole to give closer attention to the development of better pen­ sion plans with an eye on attracting the most capable man­ power to the selling profession."

The Questionnaire Survey The questionnaire was developed at the Ohio State University In cooperation with faculty members, insurance consultants, sales executives, and salesmen. Considerable teohnlcal advice was provided by the staff of the Ohio State University Bureau of Business Research. At all stages suggestions were offered by officials of National

Sales Executives, Incorporated, but these suggestions did not In any manner restrict the nature of the survey.

Two copies of the questionnaire and a covering letter were mailed on July 10, 1952 to every member of the asso­ ciation, without selection.7 The duplicate mailing was used because It was believed that returns would be more numerous If respondents were allowed to keep one copy of their own replies for comparison with a published summary of the findings of the survey. It was also recognized that

*7 See Appendix A. 10 the questionnaire forced a satisfactory check list of problems involved in planning a company pension system, which many respondents would want to keep* To encourage replies, a brief article on the alms of the study was printed in the August 1952 issue of N*S«E«

News, a monthly newspaper circulated to the membership of the association* No other "follow-up" was u&ed* Replies were received until December 51, 1952 when the files were closed* A total of 503 complete, usable questionnaires were received and are Included in the tabulations which are presented in Chapter 5 of this report* This is approxi­ mately a 7% sample of the companies represented in the membership of National Sales Executives, Incorporated, which employ outside salesmen* The total number of sales­ men reported by these companies was 56,214* All geogra­ phic regions of the nation are represented, as well as Canada, Mexico, and Hawaii* Businesses of nearly every size and type which employ outside salesmen are included} manufacturers, wholesalers, retailers, agents, service organizations, and others* Companies selling in local, regional, national, and export markets, offering a wide variety of products and services to ultimate consumers and to Industrial buyers, are represented* While data on 57 mammoth sales forces (with more than 200 salesmen each) 11 are Included, it is significant that well over half of the tabulated replies described experiences of small sales forces (with 25 salesmen or less)# The frequent question "What can a smaller company do about salesmen's pensions?" may therefore be answered at least in part# Whether the companies Included in this survey are truly representative of all American business firms with outside sales forces is a difficult question to answer# No attempt was made to Impart the characteristics of a random sample to the returns# No company's reply was omitted from the tabulations except where duplicate re­ plies were received covering the same salesmen, or where observable errors and inconsistencies in the data sub­ mitted made the reply useless# It is probable th~t membership in National Sales

Executives, Incorporated, Implies that a business man represents a company which is well established, more pro­ gressive than average, and more than passively concerned with solving the problems of its outside salesmen# In recruiting members, the affiliated clubs tend to prefer the widest possible coverage of the industries In their communities, rather than a proportionate representation from those industries# It is also probable that most of the respondents to the survey have a more or less active interest, either favorable or unfavorable, In pensions 12

and old age matters. Otherwise they would not have completed and returned the 15-page questionnaire which was sent to them. An "interest bias" of this type Is

encountered In most mailed questionnaire surveys. Bias of another sort may be Involved in that the questionnaires were addressed to saleo executives* rather than to individuals known to be in charge of company pen­ sions and their administration. Treasurers* comptrollers, personnel managers* and industrial relations directors are commonly assigned this task* according to the survey* while In only 10 reporting companies Is a pension plan

operated by a sales e x e c u t i v e .3 Instructions were to

"pass the questionnaire along to the executive who has the information at his fingertips*" but It Is probable that some of the findings may have been affected* par­ ticularly on a few questions relating to the working details of company pension plans. Despite the presence of these possibilities of bias* it Is significant to note that the general findings of this survey match well the trends Indicated by earlier studies on company pensions. These include Investigations of the U.S. Treasury Department,9 the U.S. Department of

8 » P* 139. 9 Letter of W. H. Shreve, Chief* Pension Trust Branch, Office of the Commissioner of Internal Revenue* September 16, 1953. 13 Labor-*-0 and the C ongresslonal Joint Committee on the Eco­ nomic Report • For these studies government officials obtained comprehensive data direct from pension adminis­ trators, and were not dependent on voluntary return of questionnaires. In these studies the percentage of firms sponsoring pensions for employees, the costs per employee of operating the plans, and other ratios are in satisfactory agreement with the data reported herein* It Is urged, how­ ever, that any quotation from the findings of the present study include the stipulation that these findings apply only to the group of 508 firms which contributed replies, and not to business firms generally*

There was evidence of meticulous care In supplying complete and accurate information on the great majority of questionnaires received* A number of companies are known to have spent many man-days of research time and effort to collect the information* Many executives accompanied their replies with detailed explanations of company pol­ icies, and wrote frank commentaries on their experiences and future planning with respect to pensions* Permission to identify companies by name was generously granted in

Howe, E* K., and T* H* Paine, "Pension Plans Under Collective Bargaining," Monthly Labor Review, 76:237-48, March, 1953. ^ Pensions in the United States. Washington* National Planning Association, 1952• 14 most of the replies, although the questionnaire touched on such matters as sales force size, turnover, unionization, pay, and morale, which are often treated as confidential* If this investigation has been of value, the credit for it should go principally to the companies which con­ tributed replies to the survey* Their cooperation, in spite of the length and complexity of the questionnaire, was especially gratifying* 15

Chapter 2 OUTSIDE SALESMEN AND THE PROBLEM OF AGE

The terms salesman and sales force as used throughout this study refer only to those full-time outside sales employees who operate as an Integral part of their employ­ er's organization, and who solicit business In his behalf by making calls on prospective buyers, usually away from the employer's establishment* Retail store clerks, agents, Independent contractors, and employers themselves cure excluded* The Intent of these exclusions Is to define a Job situation characterized by creative, persuasive, non- repetltlve work performed without constant surveillance yet with limited authority to change conditions and with financial dependence of the worker upon his employer* All of these aspects of sales work are involved in the question of whether pensions should be offered* It is the purpose of this chapter to place the problem In its proper order of magnitude* How many outside salesmen are there? What is their significance as an occupational group? To shat degree do special problems of age effect them and their work? How many of them are older persons?

Number of Persons Employed as Outside Salesmen According to the 1950 Census of Population 5,926,510 persons are employed In various selling occupations In the United States* This figure represents 6 »7% of a total civilian labor force of 56,225,340 employed at the time the census was prepared.12 However not all of these per­ sons are outside salesmen* The classification sales worker as applied by the Bureau of the Census Includes the occupations listed below

Advertising agents and salesmen 32,381 Auctioneers 5,280 Retail demonstrators 13,308 Hucksters and peddlers 21,950 Insurance agents and brokers 304,088 Newsboys 96,168 Real estate agents and brokers 140,602 Stock and bond salesmen 10,972 Salesmen and sales clerks (not elsewhere classified) 3,301,761 Manufacturing 320,723 Wholesale trade 406,819 Retail trade 2,445,436 Other Industries 128,783

Bureau of the Census, U.S. Census of Population, 1950* Volume II, Part 1* Washington, b*C*t United States Government Printing Office, 1951* I ^ Bureau of the Census, Statistical Abstract of the United States. 1953* Washington, D*C*s United States Government Printing Office, 1953, p* 200* 17 The largest of these categories, that of salesmen and sales clerks, would appear appropriate for this study If the re­ tail trade group were removed leaving 856,325 persons* How­ ever this category includes 87 diverse jobs ranging from manufacturers’ agent, missionary man, and house-to-house salesman to auto parts man, telephone solicitor, and even beggar* Also some portions of other categories listed above, particularly the advertising, insurance, real estate, and stock and bond groups, are made up of bona fide outside salesmen* In 1951 the Bureau of Labor Statistics published an estimate that 27*5# of the Bureau of Census total for sales workers could be classified as "traveling salesmen, sales agents, canvassers, and solicitors*"14 if this percentage is applied to the 1950 Census* the number of such salesmen is 1,079,790* In order that further use may be made of oensus data on sales workers, it is necessary to assume that the dis­ tribution of outside salesmen Is uniform throughout any breakdown of sales workers by age or work experience* Some interesting comparisons can be drawn between the number of outside salesmen and the number of workers in other occupations* This group is apparently smaller than

1 ? ------Bureau of Labor Statistics, Occupational Outlook Handbook* Washington, D*C*r United States Government Printing Office, 1951, p« 133* 18 many people believe It to be* The number of outeld® salea- i m q 1* roughly equal to the number of employed truck driv- •re, slightly smaller than the number or teachers, and con­ siderably smaller than the number of mechanics and repair­ men* Only one out of every six persons engaged in marketing is an outside salesman, provided the salaried managers, officials and proprietors of establishments engaged in marketing are added to those employed as sales workers* There are 16 persons engaged in manufacturing activities, and six in farming for every outside salesman In the nation**-5

On the other hand these salesmen provide as a body one of the primary energising forces of the economy not only in the United States, but In a large portion of the rest of the world as well* By maintaining the necessary liaison between buyers and sellers they are an isqportant factor in the ability of this nation to achieve Industrial efficiency through specialisation, standardisation and high volume* By activating demand all over the country among buyers with potential need, by stimulating desire for products, and by spreading Information of new solutions to buyers* problems, they help to raise living standards* It is a conservative estimate than an outside salesman is

rg ■ ■ — Statistical Abstract* o p * clt* * pp. 200-6* 19 Involved an average of at least once In the passage of every manufactured product from producer to ultimate c onsumer• The total annual payroll and costa of maintaining outside salesmen may be estimated at more than $6,900,000,000, on a basis provided by Professors Tosdal and Carson at Harvard University. In their recent study of salesmen's compensation^® it was learned that annual earnings average about $6,400 per salesman, while travel and business expenses are $1,000 or more* Thus the aggre­ gate amount paid to outside salesmen in 1950 was probably 23^6 greater than the $5,691,300,000 spent for advertising in all media in that same year.^

Age Factors in Sales Work: The statement sometimes heard that "selling is a young man's game" needs some qualification. It is not entirely true, and If used summarily to dismiss the need for old-age planning, retirement policies, and pensions for salesmen, it tends to confuse cause with effect. It may be that as sales work assumes more of the aspects of a profession, such pro­ grams will be found necessary to attract and hold manpower

_ Tosdal and Carson, op. olt., pp. 17 and 19. Duddy, E. A., and D. A. Revzan, Marketing, An Institutional Approach. Second edition;" New York* J^cGraw Jiill Book tompany, Inc., 1953, Table 23, p. 139. 20

of the age and experience that are required for effective performance• According to the figurea In Table 1, there are sub-

atantial numbers of salesmen In the upper age groups* Approximately one-third have passed age 45* while less than one-fourth are younger than 25 years* The propor­

tion of salesmen over 45 Is actually higher than that of clerical workers* operatives* and farm help* It approximates closely the proportion of older professional and technical

people* In the survey findings which are tabulated In

Chapter 5, it will be noted that 4 6 . 6 5 6 of the reporting

companies employ outside salesmen who are 60 years of age or older; 21*456 have salesmen past 65*^®

The older* mature salesman Is definitely preferred in some lines* Insurance* Investment* and real estate houses* as well as many producers of technical Industrial equip­ ment* recognize that a head of gray hair on the salesman often may be reassuring to prospective buyers*^-® it Is a particularly important asset in those firms which are in­ terested In establishing prestige* in obtaining repeat business* and In securing long-term supply contracts* On

rn------Infra., p. 07. 19 One survey respondent commented 1 "There is no age limit In our business* The longer a man stays In It* the better qualified he is*" The company Is an agency for cemetery plots* 2 1

TABLE it Number of Employed Persons by Major Occupation Group

And by Age, United states, 1950

Number of persons Major ooaipetion group age 16 and over Peroant of persons

Age Age Age Age 65 Thousands Percent 16-26 25-66 65-66 it over

Total employed persons 56,225 100*0 17*6 66*3 31.6 6.9

Farmers and farm managers 6*506 100*0 7*1 39.6 61.7 11.8 Managers, offioials and proprietors, exoept farm 5,017 100*0 5.3 66-9 66.6 7.6 Craftsmen, foremen and kindred workers 7,775 100.0 9.2 51.0 35.6 6.6 Professional, teohnioal and kindred workers 6,909 100,0 11.7 55.2 29.1 6.0 Clerioal snd kindred workers 6,896 100*0 50*1 66*6 21*6 1.7 Operatives and kindred workers 11,12* 100*0 18*6 52.8 26*5 2.5 Service workers, except private household 6,288 100*0 17.2 57.6 57.1 7.9

Caies workers 5,927 100*0 22*1 66*2 27.0 6.7 Farm laborers and foremen 2,LtOO 100.0 6 i*o 31.0 22.9 5.1 laborers, exoept farm and mine 5,617 100.0 27.0 59.2 29.2 6.6

Private household workers 1,607 100,0 21,6 52.9 37.9 7.6

Occupation not reported 761 100,0 Data not available

Gouroei Bureau of labor Statist!os* Employment and Eoanomio Status of Older Men and Women* iVashington, D*C#i Government Printing Office, (May 1952J, Table 12, p* 23 (adapted). 22 the basis of this sort of reasoning J. C« Aspley, presi­ dent of the Dartnell Corporation, published the assertion that "all things considered, salesmen retain their useful- ness longer than any other group of employees." 20 The

statement is probably stronger than the facts warrant. Evidence of a different type of age situation is presented in Table 2. According to a special population sample study from which the Bureau of the Census derived these figures, the median time spent on the current job by men sales workers is only 2.6 years, a shorter period than for any occupational group exoept for two classes of laborers. A "job" was defined for purposes of this census study as a "continuous period of employment with a single employer." Less than one sales worker in every four was engaged at his current job on August 31, 1945, approximately the end of World war II. In Table 3 the same Information is tabulated in cumulative fashion, indicating the propor­ tion of the 1951 sales force which had been hired in current Jobs prior to any date in the column at left. The work experience of female sales workers is even shorter than that of men, as is Indicated in this table. It is possible to explain this turnover situation in part by noting that during the years in question many

575------Aspley, J. C*, editor, The Sales Managers1 Handbook. Sixth edition; Chioago: Dartnell Corporation, 1950, p. 5kS. TABLE 2: Experience of llale Workers at their Current Jobs, By Major Occupation Group, United States: January 1951

Percent on Median number current Job of years on prior to Major occupation group current Job Aug. 31, 'U5

All employed males 3*9 37.0 Fanners and farm managers 9*6 6U.5 Managers, officials, and propri­ etors, except farm 5*3 L7.7 Craftsmen, foremen, and kindred workers U.3 39*9 Professional, technical, and kindred workers L.3 39.U Clerical and kindred workers 3.9 36.0 Operatives and kindred workers 3*1 29.7 Service workers, except private household 2.9 30.0 Sales workers^ 2.6 2l».l Farm Laborers and foremen 2.h 27.6 Laborers, except farm and mine 1.6 22.8

# Tabulations above and in Table 3 are derived from a population sample of 25,000 households in 68 areas by the Bureau of the Census, as of January 1951. The following estimates of employ­ ment were usedi male sales workers 2,255,000; female sales workers 1,395,000; total sales workers 3,650,000; total employed persons 59,010,000. Source: Bureau of the Census. Current Population Reports, Labor Force. Washington, D.C.: Government Printing Office, P-5o, 36 (Dec. 5, 1951), p* 10 (adapted). 2k

TABLE 3• Experience of Sales Workers at the Current Jobs, By Sex, for the United States, January 1951

Percent Percent Percent Percent of male of female of total of total sales sales sales employed Date current job started workers workers workers persons

Total 100.0 100.0 100.0 100.0

Date not reported 2.8 3.5 3.0 2.k Prior to January 31, 1951 97.2 96.5 97.0 97.6

December 31* 1950 95.2 9k.7 95.1 9k.8 September 30, 1950 86.9 80.0 8k.3 86.3 June 30, 1950 79 .k 66.2 7k.k 78.5 December 31, 191:9 06,6 5k.1 61.9 68.6 December 31* 19k3 5k.1 kl.8 k9.5 59.5 December 31* 19k7 k2.5 32.8 38.9 50.9 August 31, 19k5 2k.1 18.6 22.1 33.6

November 30, 19kl 16.2 10.3 lk.O 22.0 December 31* 1939 12.8 7.7 10.9 17.6

Source* Bureau of the Census, Current Population Reports, Labor Force. Washington, D.C.: CovernmenV Printing OlTice, P-50, 36 (Dec, 5, 1951), p. 10 (adapted). salesmen were on duty In or returning from military ser­ vice. The period was on© of accelerated Job-to-Job shifting of workers generally. During this time sales forces were being rebuilt and expanded after several years of de-emphasis on selling efforts. However, the problem of rapid turnover of sales personnel has not yet disap­ peared. One insurance company with 200 outside salesmen reported in the National Sales Executives survey am average annual turnover of 9 0 $ of these men* A bottling company with 35 outside salesmen claimed 75# loss yearly. Fifty- five firms reported average annual turnover of more than 25# of the sales force.2-*-

The facts in Tables 2 and 5 are difficult to reconcile with the remarks which appeared on earlier pages about the desirability of mature, experienced, professional outside salesmen. Salesmen In many cases are not employed long enough to achieve such status* Median work experience on current Jobs of 2*6 years is obviously not long enough for the average salesman to build up substantial credits In the retirement fund of any one employer. It Is probably not even long enough for him to meet either buyers* or sellers* minimum requirements for competent sales performance* prom the survey tabulations in Chapter 5 It may be noted that the median estimate of the time required for an outside

21 Infra., p. 81. 26 salesman to reach "pa ale" productivity la 5 to 6 year a, roughly twioe the median work experience of aalaa worker a on current j o b s *22 Meaaurea aimed at keeping them ealloyed for longer periods would appear to be worthy of aerlouB attention* Sales work in many companies la an employment of relatively unreatrlcted entry* It therefore attracts young men and woaien who look on it as an Interim job between school and marriage, military service, or a oa- reer for which some sales work has been recommended as good preparatory experience* It also attracts many others who might be olassed as "floaters" whose intent is to return, as soon as there is opportunity, to their primary occupations* These people, much like the younger group, look on their sales jobs as temporary, sometimes as dis­ tasteful* It Is probably unfortunate for marketing that many sales organisations find it possible to operate with a continuous flow of these "marginal" salesmen* Their effect on outside selling as a career is harmful in so far as they are willing to aooept lower earnings, inadequate training, poor working conditions, and only vague promises of what will happen in later years* The young salesmen are

Infra*, p. 92 27 not concerned about far-off retirement* They resent de­ ductions from their earnings for pension fund purposes* despite assurances in most company plans that all enqployee contributions are to be refunded on separation* It is sig­ nificant that in the pension survey these problems of the very young salesmen attracted more comments from executives than any other issue which was raised*2®

Another important age factor affoots many salesment the loss of physical capacity* courage* and desire in later years* The activity level of selling is high; its mental pressures are severe* It is a heavy strain on the nerves and body of any man to spend long hours seeking out and persuading prospects who are* as often as not* non-com­ mittal* resistant* antagonistic* or even hostile* Travel Involves a great many serious hazards* especially for the older salesman* Even more serious are the subtle Influ­ ences of advancing age on the mind of the man* One popular textbook contains a warning that nas a salesman grows older he also grows set In his ways* Is less Inclined to cooper­ ate in Instituting changes of policy, and is more likely to crack up."24 Some managers believe that sales success is largely dependent on elusive qualities such as a "burn­ ing inner drive," a "nose for sales," or self-confidence

o'i Infra*, p* 0 0 • 24 Aspley, loc. clt* and that these may leave the salesman without warning or apparent cause* A vice-president of the Bigelow-Sanford Carpet Company has written; "Take the case of a salesman past 50, who In recent years has been exceedingly productive and by any yardstick has carried his own weight* Then suddenly management wakes up one morning to the fact that this man's boat has sailed* Whether he has slipped suddenly or whether his performance has deteriorated over a period of time Is unimportant* The question Is, what happens to him? He may be still 10 years away from normal retirement age* He has done nothing wrong; it Is not his fault that he is "burned out" prematurely* Selling Is a fast track nowadays*" 25 In the findings of a study made In 1950 of the members of the Sales Executives Club of New York City, similar attitudes were reported* Of 2,100 members who were polled, 776 or 37^ found among the outside salesmen in their com­ panies a fear of aging and of being unable to keep up with the younger men* This fear was similar to that which Is traditionally experienced by airline pilots, actors, and athletes**^® "Burned out" or fear-stricken salesmen are not a problem In every company, because not all of them place emphasis on aggressive, hustling, beat-the-competltion

get Robinson, S* J*, "Can Sales Management Solve Its Human Problems?" The Management Review. 43;176-77. "Retirement Plans Not Adequate, Sales Executives Club Finds," Sales Management, 64*09, May 20, 1950* 29 sales effort* Where such effort Is required, the Bigelow- Sanford executive quoted earlier is probably correct in his further assertion that "in sales organisations the rate of 'obsolescence1 or the speed at which men mature and pass their prime appears to be faster than in most other occupa­ tional groups*"27 Still another age problem is the common resistance of outside salesmen to long-term financial planning for them­ selves* As Professor Phelps has pointed out In his book, the "personal characteristics which lead to success in selling do not necessarily match those which lead a man to provide carefully for his future*"2® Salesmen are In gen­ eral intuitional, not analytical toward problems of their work and life* Dr* Samuel N* Stevens, president of Orlnnell College, has described salesmen as having "a high level of social intelligence and a relatively low level of abstract ability* They have a type of emotional detachment which enables them to use any situation without being too sensitive of the nuances of that situation*"29 If such detachment is habitual In their work, it must be common

Robinson, loc * olt♦ 2® Phelps, D* M*, Sales Management Policies and Pro­ cedures ♦ Chicago* Richard D* Irwin, Inc*, 1951, p7 Q5l* Stevens, S. N*, "Basic Values in the Making of a Salesman," in Proceedings of the Fifth Annual Conference of Sales Managers of Ohio Industries* October 14. 1^48* Columbus* The Ohio State University Publications, 1949, pp* 10-11, 30 also in their personal planning* The outside salesman as a rule is prone to emphasise the immediate objectives! the chance for an Immediate sale, although it may not be the largest or best for the customer; the immediate prospects, those closest and easiest to reach; and his immediate financial needs* Concerning the future, he is trained and encouraged by his company to be optlm! -tic# It is not surprising, therefore, that his interest in enployee benefit programs, including pensions, is in many cases weak* His need for these programs, on the other hand, may be greater than that of men in most other occupational groups* In summary, it may be said that older salesmen often have definite advantages for their professional experience and maturity, but circumstances which are typical of sales work are not encouraging to them unless special provisions are made* Older men tend to be driven out, or made less effective, by (1) the con$>etltlon of younger men, (2) the high rate of personnel turnover, (3) the physical and mental strains which are Imposed, and (4) their own tendency to resist old-age financial planning* Age factors in sales work have been presented in this chapter with principal stress on the problems of the indi­ vidual salesman* The ways in which some of these factors affect sales management and company policies are discussed in Chapter 4* 31

Chapter 3 SCOPE OF PENSION COVERAGE IN THE UNITED STATES

The suggestion that salesmen* too* should reoelve pensions Is similar to the suggestion that Industrial plants* too* oan use television* In both instances exten­ sion or present systems may be possible* but some or the dirricultles vhioh are raced arise merely beoause these present systems were developed with the needs or other groups in mind* To permit ready understanding or the dirrioulties Involved in extending pensions to outside salesmen* the recent history of pension planning Is brleriy traced in this chapter* Attention Is given to the rorces that have shaped the general pattern or coverage around certain occupational groups and have tended to exclude others* notably sales personnel*

What Is a Private Pension PlanT In the wording of the questionnaire used to oollect data Tor this study* the term retirement income plan was used throughout* It was believed to convey the broadest possible meaning while avoiding conTuslon with terms having a technical or limited meaning In insurance or law. Pen­ sion, old age benefit, and retirement annuity are generally considered to be synonymous terms. During the survey a few 32

cases of misunderstanding were found. In which retirement

Income was thought to refer only to terminal pay and sever­

ance allowances of a retiring salesman* The term pension apparently has wider acceptance and Is for that reason used throughout this study* It Includes any enjployer- sponsored program or policy according to which money Is

paid to a separated employee for the express purpose of supporting him and his family after he Is too old to work* Some of these plans are Informal dlsoretlonary arrange­ ments In which an employer merely provides a gratuity In individual cases so that his retired employees are not destitute* The majority of these plans, however, are formal; eligibility la determined by strict rules; ben­ efits are paid from funds credited to each employee's retirement account during the period of his employment and

are usually related to his earnings, although he does not always contribute to that account• It should be noted that this study Is concerned with private plans* Federal Old Age and Survivors' Insurance (Social Security) and other public-sponsored pension pro­ grams are mentioned here only In so far as they have had effect on private company systems*

Growth of Pension Plans Since 1942 There is probably no feature of personnel relations that has had more rapid growth than company-sponsored 33 pension plana for employees. The National Industrial

Conference Board has estimated that at the end of 1942 there were 1,600 group annuity contracts underwritten by life insurance companies, with coverage limited to 900,000 employees.30 In March 1953 the Department of Labor esti­ mated that about 9,400,000 workers, or of all civilians employed as of that date, were enrolled in 14,000 private plans.31 Tabulations of the Treasury Department which are shown in Table 4 Include 22,069 plans which have been sub­ mitted and approved under Section 165 (a) of the Internal Revenue Code. While these figures include deferred profit- sharing plans as well as pensions they are presented here to depict the unusual rate of increase which was experi­ enced. There was mild tapering off after the end of World

War II, but a strong resurgence after June 1950 when the Korean War began.

In 1952 approximately 500,000 pensioners received a total of $450,000,000 in benefit payments from private pension plans. In the same year, about $2,000,000,000 were contributed by employers to retirement funds. This sum Is believed to represent an average of 4.6^ of the total

5 0 ------Trends In Company Pension Plana. Studies in Personnel policy No. el. New York* National Industrial Conference Board, 1944, p. 8. 31 Rowe and Paine, loc. cit. 3b

TAbLE b: Number of Pension and Profit Sharing Plans AppiApproved By the Bureau of Internal Revenue, By Years, October 21, 19b2 to June 30, 1953

Number of Year in which approval was issued plans

October 21, 19b2 to December 31, 19bb^ 5,265 January 1, 19b5 to April 30, 19b5 l,b77 May 1, 19b5 to August 31, 19b6 2,812 September 1, 19b6 to June 30, 19b7 1,05b July 1, 19b7 to June 30, 19b8 1,131* July 1, 19b8 to June 30, 19b9 1,123 July 1, 19b9 to June 30, 1950 1,03b July 1, 1950 to June 30, 1951 1,897 July 1, 1951 to June 30, 1952 2,b93 July 1, 1952 to June 30, 1953 3,780

Total 22,069 ft No further breakdown available. Source: Pension Trust Branch, Office of the Commissioner of Internal Revenue. 35

annual payrolls of sponsoring companies. Divided by the

number of employees in these companies, it is equivalent

to $130 per employee per y e a r . 32

Among the many types of employee benefit plans, pen­ sions are not as numerous as group life Insurance or group hospitalisation arrangements for most types of workers. However, in most cases group life Insurance and group hospi­ talization are far simpler propositions for the sponsoring employer, involving no more than the purchase of an inex­ pensive insurance policy, and with participation by each employee conveniently ending when he is separated* A pen­ sion plan Is said to be the most expensive and most compli­ cated of all employee benefits. A majority of these plans Involve (1) cash transfers to a pension serve account or premium payments to a life Insurance company; (2) elaborate payroll accounting and record-keeping on employee*s pension contributions, periods of credited service and benefits due; and (3) individual commitments to employees and their fam­ ilies which may extend for an unknown number of years in the future. Some Insurance firms sell and operate group pension policies which can relieve employers of some of these prob­ lems, but these "package" plans may lack the flexibility desired In particular companies.

— t a ■■■ ■ — 1 ^ McConnell, J. W., "Present-Day Pension Plans," Management Record* 15i325-26, September, 1953. 36 Popularity of the pension Idea Is so widespread that

Insurance underwriters are freely predicting that present coverage will be doubled within the next few years.53

However, the number of persons retired and receiving ben­ efits will remain small for some time. Of the total number of persons covered by private plans only 5$ now draw ben- 34 ©fits. ’ Most persons over age 65 today do not have any kind of pension, public, or private. Relatively few of those now approaching that age have built up substantial

credits under any private plan, since most of these plans are new. It Is unlikely In the next decade that pensioners will number «s much as 10£ of covered employees. The move obvious reasons for the mushroom-like growth of private pension plans have little or nothing to do with welfarism, paternalism, or a sense of social responsibility on the part of individual enqployers. Much of the direct impetus has been provided by acts of the federal govern­ ment. The most noteworthy of these have been (1) the Social Security Act of 1935 and its amendments, (2) the Internal Revenue Act of 1942, (3) decisions of the emergency wage and salary control boards, and (4) rulings of the National Labor Relations Board.

S 3 ------Private Pension Funds. New York* Merrill Lynch, Pierce, tenner & Beane, 1^51, p. 4. 34 ^ McConnell, loc. clt. 37

Outside Sale amen and the Social Security Act The act of 1935 which created Federal Old Age and Sur­ vivors* Insurance la now credited with little more than hav­ ing whetted the appetites of millions of Americans for old age income* Its effect on private pension plans has been similar to the effect of the highway Improvement program in Louisiana under the late Qov* Huey Long* He used state funds to pave short, intermittent stretches of many roads, then shouted to the local commissioners: "Fill up the gaps I" Many company pensions have been originated beoause Social Security Is inadequate, and in some of them payments are integrated with Social Security in such a way as to bring the pensioners total benefits up to a livable income* Coverage of outside salesmen by Social Security is still a somewhat confused situation, although the 1950 amendments to the original act were intended to clarify eligibility rules and to bring most occupational groups under provisions of the system* The problem is not serious from a numerical point of view, if the survey tabulations in Chapter 5 may be considered representative* Only 16 firms, or 3*6^ of the total 0*S* firms studied, reported less-than-majority coverage of the sales force*35 Most of those not covered were (1) agents* and brokers' salesmen

5 Infra*, p. 94• 30 or (2) salesmen paid on a straight commission basis. Some of these salesmen undoubtedly pay Social Security taxes on a self-onqployed basis* Much authority for Interpreting coverage of the Social Security system is left to the Bureau of Internal Revenue* Under the law an employer must pay a tax on the earnings paid to his employees who are In covered employment* If the worker receiving the condensation is not an employee, no tax Is due from the 11 employer" but the worker pays his own tax at a higher rate as an Independent contractor under a different section of the act* In many cases It Is diffi­ cult to determine whether some kinds of salesmen are Inde­ pendent contractors or employees* Several years ago the Bureau of Internal Revenue ruled that under common law newsboys and certain other salesmen whose working habits were completely controlled by a second party were to be termed employees*^® until 1947 some courts followed a similar "control" test in reverse; that la* if one for whom work was done had no right to control the worker and the manner in which he did his work, then the worker was to be considered an Independent contractor*®^ The failure of this test to fit the case of thousands of outside

------T g ------Salisbury, P*, "Who's a Sales Employee Under Social Security?" Sales Management* 65*140, October 15, 1950* The 1950 Social Security Act — Explanation* New York! Prentice-Hall, Inc * , 1950, p! 16* 39 salesmen is obvious* Operating at great distances from the home office, many of them get almost no direction and may use discretion in choosing sales techniques, accepting orders, and committing their companies to delivery promises or credit terms* Yet they may consider themselves enployees and may be paid straight salaries* On the other hand some insurance firms exercise strict control briefly during the sale of certain policies over a type of salesman considered to be entirely independent* In 1947 the Supreme Court decided that control was only one factor to be considered in determining the status of a salesman* said the Court * the total situation sur­ rounding the work must be examined — the degree of con­ trol; whether the worker took a chance of profit or loss or made any investment; the length of the relationship be­ tween the two parties; and the skill required in the Job. If as a matter of neconomlc reality” the worker depended for his livelihood on the business for which he worked, he would be considered an employee* In 1948 the Bureau of Internal Revenue proposed several new rules in an attempt to create a workable definition of the term "employee*" But before these could become effective, the 80th Congress passed the Gearhart Amendment* This in effect vetoed the Supreme Court and declared that the common law control test was and always had been the only rule* 40

The 1950 amendmenta continue the control teat aa

Indicated by the following excerpt* "The term 'employee* means • . • any Individual who, under the usual common law rules applicable In determining the employer-employee relationship, has the status of an employee.” 38 As exceptions to this general rule, domestic workers and three classes of salesmen are mentioned specifically as being covered. The salesmen are described as follows*

(a) full-time life insurance salesmen, (b) agent-drivers or commission-drivers engaged In distributing meat products, vegetable products, fruit products, beverages other than milk, or laundry and dry cleaning services; (c) traveling or city salesmen other than agent- drlvers and commission-drlvers, engaged on a full-time basis In the solicitation on behalf of, and transmission to his principal (except for side line activities on behalf of some other person) of orders from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establish­ ments for merchandise for resale or supplies for use in their business operations,"

Ibid. 39 Salisbury, oj>. clt., pp. 141-2. 41 These descriptions are apparently aimed at general Inclusion of nearly all salesmen under Social Security* There Is

need, however, for better government definition of Inde­ pendent contractor, which might be Interpreted to Include anyone engaged In business* Informal submission of this question to the Bureau of Internal Revenue did little to clear the air* A contractor, said the Bureau, is one who makes a non-standardised product**0

More Important to salesmen than the question of Soolal Security eligibility is the question of Social Security adequacy* Although benefits were increased by the 1950

amendments, an employee with an average annual Income of $5,600 working for 50 years in covered employment would re­ ceive yearly a primary Insurance benefit of $960, or about 27# of his average salary* If he had a wife over 65 years of age, his annual benefits would amount to $1,440, or 40#

of his former earnings* Because the wages beyond the first $5,600 per year are not considered, the benefits of an employee In middle and upper Income brackets are even less attractive as compared with former earnings* For example If his salary had been $10,000 annually, his pen­ sion Income would be less than 10# of his former earnings*^

41 Strong, J. V*, Employee Benefit Plans In Operation* Washington, D*C*j The Bureau of National Affairs, Inc*, 1951, p. 4. 42

Internal Revenue Act of 1942 A second type of government inducement to private

pension plana was in the form of a tax exertion for retire­ ment funds* So desirous was Congress of encouraging pen­ sions as a matter of public policy that it provided in the

Internal Revenue Act of 1942: "If a pension plan or profit-sharing trust qualifies under Section 165(a) of the Internal Revenue Code and Regulations» then the employer la entitled to deduct his contributions into the trust from tax­ able income* The employee, moreover, is not subject to tax on the money thus deposited for his benefit until such time as his pension or other benefits are actually distributed to him*" 42 Earnings of the fund itself are not taxable* These provi­ sions are so favorable that over a 20-year period the cost of pension benefits In an approved plan Is less than half

the cost of the same benefits under an unqualified plan*4®

The Inducement was an especially strong lnoentlve to em­ ployers during the war years when maximum tax rates reached 85^* 44

Approval (Cf* Table 4) is granted only to legally- binding contractual trusts, having non-dlvertable funds.

IS------Bomar, F* et al* Handbook for Pension Planning* Washington, D*C.i Bureau of "Hat ional ArraTrs, Tno*, '1949, P * 51 * 43 The greatest number of unqualified plans Involve unfunded, pay-as-you-go benefit payments taken as a current expense for Income tax purposes* 44 Private Pension Funds, op * olt*, p* 2* 43 operated by certain minimum personnel Tor the exclusive benefit of eiqployees without dlsorlmlnation as to type or earnings level* In practice* plans excluding outside sales­ men (or other groups) have often been approved* so long as the discrimination was not held to be In favor of officers* stockholders* supervisors or highly-paid employees**5

Outside Salesmen under Emergencv Wage and Salary Controls A temporary but powerful advantage to companies having a private pension was afforded by decisions of the War Labor Board In World War II and again during the Korean War by the Wage and Salary Stabilisation Boards* Generally these decisions excepted pensions and other monetary em­ ployee benefits from the orders prohibiting Inoreases In pay* Even new pension plans could be adopted If they met certain requirements* including those of the Internal Revenue Code and other rules on benefit payments* Employ­ ers bidding competitively to attract or hold scarce man­ power turned to pensions as one of the few Inducements which could legally be used*

In 1951 the Salary Stabilisation Board was given jurisdiction over outside salesmen* both commission-paid and salaried* with the exception of driver-salesmen and those represented by a union* Rulings of this board did

55* 44

not directly concern these salesmen's sllglbillty for pensions, but at laast one daclalon indirectly increased

many salesmen's participation in retirement funds* To enable employers selling scarce civilian goods to maintain

sales forces, the board permitted payment to commission

salesmen of a salary or drawing account equal to 77% of

total 1950 earnings, unless current commissions were in

excess of that amount#*® Salesmen's contributions to pen­

sion accounts, if based on earnings, were in most cases

Increased by this rule#

Decision of the National Labor Relations Board

In the years following World war II several major labor unions have successfully negotiated pension plans#

The statement has been made In some bargaining sessions that neither labor nor management was Interested in pen­ sions per se, but only in the enqployers' contribution as a different form of wage concession# In 1946 and 1949

there was a levelling-off of the Consumers' Price Index, which is used as a determinant of cost-of-living Increases in pay# The case for another "round" of wage inoreases was less cDispelling than before# Pensions, on the other hand, were becoming easy to justify in the public eye, although the ultimate cost to employers might be greater than a

------T» ------Emergency Labor Law, Report 131# Chicago: Commerce Clearing House, Inc#, Nov# 20, 1952, p# 45, 501-2. 44

not directly concern these salesmen's eligibility for pen-

rlou3, but at least one decision Indirectly increased many

salesmen's participation in retirement funds* To enable employers selling scarce civilian goods to maintain sales forces, the board permitted payment to commission salesmen

of a salary or drawing account equal to 1 1 % of total 1950 earnings, unless current commissions were in excess of that A- ^ amount.Salesmen*s earnings were in many cases increased by this rule, and their contributions to pension accounts were made proportionately larger*

Decision of the National Labor Relations Board

In the years following World War II several major labor unions have successfully negotiated pension plans. The statement has been made in some bargaining sessions that neither labor nor management was interested In pensions per se, except to the extent that the employers' contri­ bution is a different form of wage concession. In 1948 and

1949 there was a levelling-off of the Consumers' Price Index, which is used as a determinant of cost-of-living increases in pay. These case for another "round” of wage Increases was less compelling than before. Pensions, cn the other hand, were becoming easy to justify In the public eye al­ though the ultimate cost to employers might be greater than a

Emergency Labor Law, Report 131. Chicago* Commerce Clearing House, inc., Nov. 20, 1952, p. 45, 501-2. 45 wage Increase would involve* Accordingly these plans were

4 7 selected as a major goal of unionism* ' On behalf of labor, claims were made that pensions were a form of "depreciation allowance" to "amortise" the value of workers who eventual­ ly, like machines, must be retired from service*48

The rule that management must bargain on pension plans and retirement rules was laid down by the national Labor Relations Board for the first time in the 1948 case of

Inland Steel Company, (1948) 77 NLRB 1* This ruling was affirmed by the U* S* Court of Appeals for the Seventh Circuit at Chloago in the case of Inland Steel Company vs* MLRB (1948) 170 Fed (2d) 247* The Supreme Court refused to review the latter case, thereby leaving it In effeot as the ourrent interpretation of the law*48 The duty to bar­ gain on pensions is enforceable even though a company may have established a pension before the union began to rep­ resent employees* Pension demands by unions are usually centered on five points* (1) adequate benefit payments, (2) costs borne entirely by e^>loyers, (3) reasonable retirement age, (4) special rights for employees who die, are disabled or

47 Bomar, op* clt*. pp. 272-3* 48 Private Pension Funds* op* clt*. p* 3* ■ — Labor Law Reports* Chicagot Conmeroe Clearing House, Inc*, Fourth Edition, 2, 1952, p. 5141* 46 discharged before retirement age, and (5) union partici­ pation in operation of the plan* Union membership among outside salesmen Is not numer­ ically strong, and unions composed exclusively of outside salesmen are uncommon* In the National Sales Executives survey which is tabulated in Chapter 5, only 17 companies, 3*3^2 of those reporting, had unionized sales forces, and only nine gave credit to any union for instigating a pen­

sion plan through collective bargalning*50 Unions In many Industries include salesmen, but in most of these the sales­ men are only "tagalongs" in groups primarily composed of and operated for production workers* Pension proposals placed on the bargaining table by these unions frequently include salesmen among eligible workers only by indirec­ tion; i*e*, by not specifically excluding them*®! Seldom is adequate attention given in provisions of these plans to the special characteristics of sales work, or to the difference In the mechanics of salesmen's pay from that of office and shop workers* It Is probable, however, that most of the outside salesmen now enrolled in com­ pany pension plans are In this manner nsquare pegs In round holes” inasmuch as their plans, whether union-

Infra. , p* 86* 51 Some negotiated plans are limited to members of the bargaining unit; outside salesmen who are not union members ere thereby excluded* 47 sponsored or not, were written expressly Tor other kinds or employees*

Forces Indirectly Stimulating the Growth of Pensions Acts of the federal government, discussed In the rore- going paragraphs, have had Important effects in bringing great numbers of company pensions into being* However, these acts would never have been passed had they not been a reflection of broader economic and social changes that have been taking place* Because some of these changes have strong relations to the work of outside salesmen, they are briefly noted here* Among the more widely recognized of these changes are: (1) &n Increase In the proportion of older persons In the population, (2) a shortening of the average working life of employees, (3) an Increase in the number of mature men In management and marketing, and (4) the development of a "radiation" principle in the offering of etqployee benefits by competing employers* It should be observed that these changes are inter-related and that all are identified as causes or effects in an even broader change: the growth of security consciousness in America*

Aging Population The fact that the United States is becoming a nation of older people Is well documented* During the period 1900- 1950 the entire population of the country was increased by 98^* The absolute number of persons in all age groups over 35 years was more than doubled* Tha nuraber of those over 65 was increased 297^6 • This age group now includes more

than 1 3 *0 0 0 , 0 0 0 persons, or approximately 9# of the pop­ ulation as compared with 4% in 1900* The annual net increment of the group is about 400,000 persons* By 1975, according to the Bureau of Labor Statistics, 21,000,000 persons or 10£ of the total population antic­ ipated at that time will be 65 or older*^2

For individuals in this age group, the retirement period is now considerably longer than it has been In the past* Life expectancy of a man who has reached age 65 is now about 14 years*^3 if his earnings stop at that age, he ought to have financial resouroes great enough to support him for almost one-fifth of his total life span* Casual savings during active years are seldom adequate*

Shorter Working Life Although his life may be longer, the Amerloan male is working a shorter period of time* Average length of em­ ployment has been shortened by 10£ since 1850, according to one estimate •*** Two age groups, young persons below 25 years and old persons over 65, are being withdrawn from

Employment and Koonomio status of Older Men and Women, op* oli*.oi Table 7. p* ±5* 5 3 t.v.-TTPhelps, loo* clt* 54 - ' " Shay, P* w*, "Making Effective Use of Older Workers," Management News, 26 (June, 1953), p* 7* 49 the labor force# The age at which young people start em­ ployment is rising because of the desire for more education* Compulsory retirement policies effective at age 65 have reduced the percentage of the men beyond that age who remain employed from 68^ in 1890 to 4 2 % in 1 9 5 0 * ^ As a result a smaller part of tho population is actually earning* Sell­ ers with mass markets are being forced to draw upon the purchasing power of non-earners, especially of retired persons* Means to increase that purchasing power, such as company pensions, are therefore of great importance not only to pensioners and their former employers but to busi­ ness generally*

Increasing Maturity of Men in Management and Marketing

There is considerable evidence that the average age of executives, other management personnel, and experienced outside salesmen has In recent years been advancing more rapidly than the average age of employed persons gener­ ally* Many firms are dealing now with the first really large group of "old timers*" Both management and mar­ keting, a3 specialized career activities, were late in receiving recognition* They were not commonly shown on compeny organization charts until after the turn of the

55 Ibid 50 present century. Many outside salesmen and others now reaching retirement age are those who were early pioneers in their firms (as well as in organized marketing) in the years 1910-1920. During and after World War II many older men were "kept in harness" to meet extreme shortages of management manpower. Together with normal increments of older employees during that time, they have swelled the number of persons now ready for retirement, and have increased the agitation for pension plans.

Radiation of Employee Benefit Flans

The principle which underlies the idea of community wage rates applies at least in part to pensions and other employee benefit plans. These plane may be considered a labor cost to the employer and a form of wage to the em­ ployees. Employees who consider themselves mobile as to the types of work they can perform may be attracted to companies where the total wage is highest. Because there are many outside sales Jobs for which skill and experience requirements are not high, many salesmen are in the mobile category and may take other work if the wage is attractive.

If a given company*s reasons for not pensioning salesmen

In such a case relate mainly to the Job and not to the men, It Is doubtful that the reasons are significant. A discussion of several of these reasons Is included in Chapter 4. 51

Values of pension plans to Employers In concluding the list of factors which have stimulated the growth of pension plans, the values of the plans them­ selves must be cited* According to the survey tabulations in Chapter 5, the greatest single advantage of a pension plan to an employer is in the promotion of loyalty, good­ will and public relations*5* Other beneficial results claimed by sales executives in their questionnaire replies were (in order of the number of mentions) the holding of older, more valuable men on the force; the orderly retire­ ment of those too old to perform efficiently; and the attraction of better Job applicants*

^ InfraTT p. 131 Chapter 4

MANAGEMENT p r o b l e m s i n THE RETIREMENT OF OUTSIDE SALESMEN

Although managements may concede the widespread popu­ larity of private pension plans and the possible values of applying them to outside salesmen, it is not always easy for them to disregard local administrative obstacles and conflicting management policies* In this chapter some of these obstacles and conflicting policies are examined in so far as they relate to both compulsory retirement and payment of benefits*

Assuming the financial ability of a company to provide a suitable pension plan for outside salesmen, it is possible to catalog under three headings most of the traditional management objections which may be raised before any plan is considered for adoption* These are: (1) a desire to generate special efforts and attitudes among salesmen;

(2 ) a belief that usual administrative devices will not apply to them; and (3) a desire for special controls over salesmen and their work*

Ceslre for Special Efforts and Attitudes

Outside selling frequently requires a high degree of loyalty, cooperation, erprlt de corps* Seldom does any other type of employee below the management level affect 53 ao directly the success of his firm, or accumulate as he matures a fund of regular business which he personally con­ trols# If stimulation of loyalty and retention of valuable men are results which can be expected of a pension scheme, there is good reason to enroll salesmen# However, in some few companies it is thought that pensions destroy sales­ men's initiative, that it is poor psychology to guarantee old-age security to them#^ Interviewers have been heard deploring the fact that young sales applicants have in­ quired about pension privileges# Anyone who does so lacks the Independence and aggressiveness needed by a good sales­ man, according to some recruiters# In a larger number of companies it is considered Important to generate an attitude of initiative and respon­ sibility in outside salesmen by treating them as something apart from the rank-and-file of en^loyees# This treatment has kept salesmen out of some pension rosters, possibly without specific intent to do so# Management's tendency has been to place outside sales­ men at a level vaguely half way between executives and laborers# The terms "associates", "representatives", "liaison men", and "managers" have been applied to them with numerous and subtle gradations implying a position

A n Infra., p. no. 54 just below that of president• Sometimes these titles have been bestowed only for the sales value of sending to pro­ spective customers an employee who is apparently an official of the company* In other Instances the titles enable exec­ utives to exact from salesmen extreme loyalty, personal sacrifice, long hours, and tireless energy with the sugges­ tion that they enjoy privileges that "mere employees" do not have*53 Being aligned with management, they are occa­ sionally barred from pension plans negotiated by unions for members of the bargaining unit, or sponsored by employers for persons listed as employees*

Inability to Apply Usual Administrative Devices to Salesmen Two administrative problems have been for several years mentioned as the principal obstacles to pensions for out­ side salesmen*^ Although other difficulties were mentioned more often in replies to the National Sales Executives s u r v e y , these two problems are Important and worthy of analysis* The first of these Involves the nature of sales­ men’s compensation* The usual methods of determining retirement credits, computing employee contributions, or

58 Cool, 0* C*, "Are Salesmen Employees?" Sales Management * 60*75, April 1, 1948* Compensation of the Sales Department* Report No* 584, Part I* Chicago* Dartnell Corporation, 1950, p* 18. fiO Infra*, p . 110. 55 fixing the amount of pension benefits Tor enployees in general may be incompatible with the variability and the

level of earnings received by outside salesmen* The second

of these problems is that because many salesmen are treated as independent contractors^ in business for themselves, they are not always brought into contact with the adminis­

trative mechanisms by which company pension plans are operated*

Nature of Salesmens Earnings Most pension plans are tied to earnings* With each paycheck Issued, the employer in nearly all cases deposits a proportionate sum to the enployee's retirement account, In much the same way in which he pays taxes for Federal Old-Age and Survivors' Insurance* In more than half of all company plans a two-way contributory scheme is used* This means that the employer also deducts a proportionate sum from the employee's pay* It Is difficult to compute the contributions of either the employer or the employee if the en$>loyee's earnings are variable* If an inconstant time lag occurs between the actual earning of compensation and the receipt of it, or if earnings tend to become con­ centrated In a brief selling season or period of good

~^L SupraTT P* 38 ff* 56 business* it Is difficult to determine what contributions should be required in a given payroll period* In some companies the concept of a "pension credit year" is used* Only those enployees who have received certain earnings in at least a minimum number of months during a year are entitled to subtract that year from the number of years employment required to qualify for pension benefits* Such rules are designed to exclude transient and part-time workers* but may also exclude outside salesmen whose earnings are irregularly received* Similarly* sales­ men are sometimes affected by rules which limit eligibility to those whose earnings are below a specified maximum In a single payroll period* Occasional concentration of com­ missions or bonuses In a single period may result In pay which Is only temporarily above that level*®^

Because simplicity In payroll accounting is an Impor­ tant requirement for contributory plans* the Insurance underwriters which sell various types of "package" plans usually try to persuade a company to enroll first only its salaried employees* After this group has been covered the underwriters may suggest the plan be extended to hourly workers* Later they may urge coverage of all others* By

In other Instances eligibility Is not denied but the salesman may not be allowed to base his contribution on the total amount of earnings received in the period* 57 this basis of classification these underwriters indicate no direct interest in what an employee does or what his needs are, but only in how he is paid. The problem of variation in earnings is also raised in those companies which are concerned with a comparison of the pension benefits to which various groups of esjployees are entitled. Benefits are in most instances slxqply a dis­ bursement of accumulated contributions, bearing the same relation to earnings as do these contributions* Therefore, according to one pension consultant t "The main problem has been to find an equitable base for pensions for the salesmen, due to the wide fluctuation in earnings between one man and another, and one year and the next, as well as between members of the plan who are salesmen and those who are not• " 63 For such an equitable base, several choices are open* Probably the easiest of these is to exclude outside sales­ men from the plan* Another choice Involves basing both contributions and benefits for salesmen on a formula which excludes all earnings other than salary or fixed or guar­ anteed Income. In some companies it la contended that com­ mission earnings are a share of profits, not available to non-sales employees* Salesmen should not, according to this reasoning, expect to receive with these commissions

Letter of George B. Harris, Jr., vice president, R . P. Burroughs Company, Inc., Manchester, N. H., 1952. 5G another share of profits in the form of an enqployer's con­ tribution to a pension fund* However, In those cases in which the base salary la only nominal "grocery money" — a small part of total earnings — the salesman Is at a dis­ advantage as compared with fellow salaried workers who are credited with all of their compensation. In the third choice which may be made, no earnings are excluded but fluctuations in the total are disregarded* This may be accomplished by either (1) basing contributions on the average earnings of each salesman over a period long enough to level out most of the fluctuations, or (2) fixing salesmen*s contributions at an arbitrary amount, with occa­ sional adjustments to the actual total earnings base, han­ dled in the form of a refund to or an assessment on the salesmen* A more serious problem Is Involved In the level of salesmen*s earnings* It was pointed out by 12 executives who replied In the National Sales Executives pension sur­ vey that salesmen may directly affect the level of their own earnings to such an extent that a straight percentage basis for computing contributions or benefits may be un­ fair to others* The view is sometimes expressed that since pension funds are limited, the most equitable scheme Is to spread these funds as widely as possible by reducing or eliminating entirely the participation of those in the upper Income brackets* Limits may be established by 59 specifying (1) the kind of earnings counted for pension purposes, (2) a maximum amount of earnings which will be counted, (3) a lower rate of contribution to salesmen's retirement accounts by either salesmen or employer, (4) a longer period of enqployment required of salesmen for pension eligibility, or (5) a maximum benefit to be paid regardless of accumulated contributions* Salesmen's pensions can be- come a severe financial burden to those companies in which employers attempt to match the contributions of each enployee dollar for dollar, regardless of how large the earnings base may be* The right of salesmen to unlimited earnings is zealously protected by many firms as an incentive measure, with the result that total annual earnings of salesmen are often higher than those of any other employees* In the Tosdal-Carson survey mentioned earlier®4 it was learned that in 453 sales foroes, 36*4^ of the total studied, total annual condensation of some of the salesmen is $10,000 or more • Executives may conclude that because salesmen's earn­ ings are so high, they can provide their own old age secu­ rity; no pension is necessary* They may point out that the amount of benefits which their companies could afford to pay would be so small in relation to these salesmen's income before retirement as to appear ridiculous* Pension

^ Tosdal and Carson, o£* cl t,, Table 16*, p*2i’* 60 consultants explain that to induce willing retirement of overage employees, a retirement Income of at least one-halT of final pay is required* For companies with some sales­ men enjoying very high Incomes this objective may be out of reach, and so the entire sales force Is often excluded from any pension privileges whatever. In blanket exclusions of this sort the fact may be overlooked that not all salesmen on the force receive high Incomes. Variations in total compensation within a single sales force have been known to be as high as 7 5 0 ^ and the typical range is probably greater than for employees In general. Some provision for lower Income salesmen may be necessary If unfairness and hardship are to be avoided. In summarizing the problem of fitting pension plans to salesmen's earnings, It can be said that the administration of these plans, like the administration of any enqployee program, is easiest when the participants are a homogeneous group of persons doing similar work at a uniform rate of progress and of pay. The costs of the plans, and the difficulties of training administrators, are increased when exceptions must be made for some of the participants. The actuarial risk of Insured plans is said to be improved by coverage of the largest possible number of employees,

gc Tosdal and Carson, 0£* clt«„ p. 1. 61 regardless of type* Accordingly, many company pension systems are designed and operated as If the aforementioned conditions of homogeneity existed throughout the entire organization, when in fact they do not*

Independent Contractor Status of Salesmen

In addition to the legal and managerial aspects of the independent contractor status, which are discussed else­ where In this study, the freedom accorded to outside sales­ men may Involve release from contact with the personnel services of a company* Frequently salesmen are the only group of employees In a company not hired and dismissed through the office of the personnel manager, or the only group not paid through the payroll department* They may not be Included on employee rosters from which pension eligibility is determined*

Many salesmen sell the products of more than one supplier* No one of these suppliers wants to assume the obligation for their support after retirement* These sales­ men's contributions to a retirement fund maintained by any one employer would probably be too small to secure worth­ while benefit payments, provided they were eligible to participate * 62

Desire for Special Controls over Sale amen Some executives have complained that they dare not retire salesmen* If they were to do so the salesmen would promptly begin working for a competitor and would take choice accounts with them* In a few cases this problem Is met by use of a mild subterfugei at age 65 a salesman Is not retired but Is given a ten-year assignment as a sales consultant or adviser* He Is paid a salary, usually about 40% of his average annual earnings for the preceding three years, with the understanding that he can be called upon for advice, and that In an emergency he will. If able, take over his old territory* In return, he remains a full-time employee and will not go to work for a competitor*®® Another Important asset of the mature salesman Is his training* The high cost of training is so Important among the problems of sales management that some companies be­ lieve It Is inoperative to reduce the turnover of salesmen by any possible means*®7 These conpanles look upon pen­ sions as devices for holding older men on the staff for a longer period than they would otherwise remain* Pension plans adopted with this objective in mind customarily Include provisions for only meager benefit entitlement to

®® Aspley, loc. clt* ciy " “ r Maynard, H. H., and H* C* Nolen, Sales Management* Revised edition; New York* Ronald Press, 1950, p* 401 * 63 those who voluntarily retire at or before age 65. For salesmen who remain beyond that age, rapidly increasing benefit rates are used to induce them not to retire, but to continue working in order to qualify for the larger amounts* In any contributory plan this inducement is put

Into effect whenever rules on compulsory retirement at a specific age are relaxed* On the other hand, when a company

looks upon pensions as a device for facilitating the orderly, willing retirement of salesmen believed too old to perform their work efficiently, it will enforce the compulsory re­ tirement age, offer sizeable benefits for voluntary early retirement, and may even stop making contributions to re­ tirement accounts of overage salesmen* In order further to control the energies and loyalties of outside salesmen, it may be thought wise to refuse auto­ matic eligibility for pensions to all of them* Instead the plan may be operated In an informal discretionary manner, with gratuities awarded only to especially faithful sales­ men of long service* In other cases, the eligibility requirements of a formal plan may include the stipulation that minimum sales volume must be attained before a sales­ man Is enrolled*60

In summarizing the relationship between pensions and the desire of management for special controls over salesmen.

^ ~ I n f r a « , p* 113 64 it can bo said that pension plans usually involve a codi­ fication of employees' privileges which management may not want to formalize in the case of outside salesmen. In order to utilize salesmen to best advantage during the important years of maturity, most companies would of course prefer to be free from self-imposed rules guaranteeing uni­ form treatment and automatic disposition of these men. On the other, if a specific type of control is desired and is to be applied to the entire sales force. It may in many instances be built Into the pension plan itself. 65

Chapter 5 FINDINGS OF THE NATIONAL SALES EXECUTIVES PENSION SURVEY

One of the principal objectives of this entire report Is to record the Information contained In this chapter -- the results of a questionnaire survey of salesmen*s pension practices In 508 companies represented In the membership of National Sales Executives, Incorporated* Against the back­ ground of Influencing forces, general trends, traditional problems and attitudes which are discussed In the earlier chapters, the findings of this survey are presented In an attempt to answer these questions} (1) how much use Is made of pension plans for outside salesmen among the companies studied, and (2) how well have these companies succeeded in achieving the values claimed for these plans and In avoiding the difficulties which were cited? The first of these questions is pursued In the pages which follow by frequent comparison of the characteristics of sales forces In which pensions are offered with the characteristics of sales forces without pensions* In answer to the second question, the significant working de­ tails of 247 pension plans which include salesmen are tab­ ulated, together with appraisals of results by sales exec­ utives and salesmen in the reporting firms* 66

Findings of Earlier Surveys At the outset It may be Interesting to compare the re­ sults of the present survey with the findings of five earlier surveys on a single question* what percentage of firms re­ ported pension plans for outside salesmen? Data from stud­ ies conducted by the Dartnell Corporation,69 the Boston Sales Managers Club,70 the National Industrial Conference

Board,71 and by Harvard University72 are shown below to­

gether with data on this question from the present survey*

DartneL. Corporation (l9lt7j: h3 of 11? corrpanies studied had pension? for salesmen boston bales Managers Club (19h7): 53 of 90 »■ " " (59.0%)

National Industrial Conference board (19i*7J: 235 of Ul5 " " " (bo.o^)

Dartnell Corporation (19iiHj: 5b of 187 ’’ ” " (jU.Ot)

Harvard University (1931): 398 of l,?h3 3ales forces " (U8.0*>)

.iational bales Exec­ utives tl932): of 3u8 companies " (UQ.bf.J

■ " " g f i 1 Pension Plans for Salesmen* Chicago* Dartnell Corporation, I9 4 V, p* 1; and Experience of 132 Companies with Employee Benefit Programs* Report No* 555. Chicago* t>artnelJL tiorporation, 1&4&, p* 5* 70 Salisbury, op* clt *, p* 140* rf \ Salesmen’s Compensation ' Plans* Studies in Personnel Policy No* 81* New York* National Industrial Conference Board, 1947, p* 20* Tosdal and Carson, loc. clt This comparison is useful only In that reasonable similarity is indicated In the results of the three most extensive sur­ veys. It has no vtiu- in marking trends, or in certifying to the accuracy of any of these studies*

Arrangement of Tabulations No summary of reasonable length could Include all of the minutely detailed information received on the question­ naires, in explanatory letters, and in the pension manuals which were contributed by many respondents* Likewise most of the almost unlimited possibilities for interesting cross- tabulations of answers to various questions have been reluc­ tantly discarded* Valuable sub-studies could be produced from the same data on questions such as the following} What bearing does the range of salesmen's ages have upon the costs of a pension plan? Is there negative correlation between the size of benefit payments and the annual rates of turnover among salesmen? What is the best method of compensating salesmen who are nearing retirement age? In this report are presented only the major tabula­ tions, in which all replies to each of the questions used in the survey have been distributed according to a double dichotomy} (1) Does the respondent's firm sponsor a pen­ sion plan for outside salesmen, or not? (2) Is the firm In the Insurance business, or not? This relatively simple 68 arrangement Is demonstrated In Table 7 and In most of the tables which follow it* The separate tabulation or repllos submitted by Insur­ ance firms was recommended by Insurance men. It was believed necessary not only to permit separate analysis of Insurance sales force experience, but also to prevent distortion of the data on conqpanies of all other types* For example, 82.4^ of the replying Insurance firms offer pensions to their own salesmen* For firms other than Insurance which were Included In this survey, the ratio is 46*2^6* As might be expected Insurance conpanles operate for the benefit of their own personnel some of the oldest and best-developed pension plans in existence* Their reasons for doing so are readily understandable* First, because of the large num­ bers of salesmen employed and because of their importance to the companies they represent, these firms have been obliged to adopt advanced personnel programs* Second, in­ surance men have a professional Interest in old-age secu­ rity* Third, as was mentioned earlier, older salesmen of many years experience are often preferred in Insurance sales* Fourth, the financial strength of large insurance companies is such as to permit a full-scale pension program* In the presentation of findings, the sequence followed Is the same as was used on the questionnaire, with few exceptions* The topics discussed on the following pages are, therefore, as follows: (1) How many and what kinds of 69 firms sponsor pension plans for salesmen? (2) What are the characteristics of sales forces covered by them? (3) how does pension coverage relate to personnel policies affecting salesmen? (4) How do salesmen compare with other employees in eligibility for pensions and other employee benefits? (5) What special provisions are contained in salesmen's pension plans? (6) How may these plans be financed? (7) How large are benefit payments to retired salesmen? (8) Are salesmen's pensions an aid or hindrance to sales management? (9) What is the cost of operating a plan? (10) What administrative organization is necessary?

Number and Kind of Firms Sponsoring Pensions for Salesmen Of the 508 firms which were Included in the tabula­ tions, 247 or 48 *6$ were sponsoring pensions for salesmen at the time of the survey* In addition 104 companies re­ ported that such plans are now under consideration* Only

22 firms in the group operate pension plans from which salesmen are specifically excluded*7*^

As is shown in Table 5, more than half of all the replies were received from manufacturers, and this group

See Tables 27 and 28* These findings apply only to the 506 companies which contributed replies to the sur­ vey, and not to business firms generally, except where otherwise noted* It should also be observed that a company Is classed as sponsoring pensions for salesmen even though only a part of the sales force may be eligible to partic­ ipate in the plan, and regardless of whether any salesmen have yet been retired under its provisions* 70

TABLE 5: Number of Companies Sponsoring Pension Plans for Outside Salesmen, By Type of Company, among 508 Members of National Sales Executives, 1952

Q. 1* "Check the description which best fits your company's MAJOR functions*" Number of Number of companies companies Total Type of company sponsoring without a compart a pension pension reportj plan for plan for salesmen salesmen Manufacturer 152 125 277 Wholesaler, jobber, or distributor 36 76 111* Retailer or dealer 7 19 26 Agent or broker 2 13 15 Service organisation* Insurance 20 6 31* Other than insurance 8 21 29 Other 12 0 12 No answer 0 1 1 Total 21*7 261 508

To the extent that identification was possible, manufacturers include bakeries, bottlers, brewers, dairies, distillers, fabricators, food processors, lithographers, mining companies, petroleum refiners, printers and publishers. Service organizations, other than insurance, include advertising agencies, airlines, banks, chambers of conmerce, clubs and associations, credit reporting agencies and travel associ­ ations. Public utilities are included as others. 71

sponsors 152 salesmen's pension plana, 61*5# of the 247 such plans which were reported. Among Insurance firms and

public utilities nearly all of the replying companies pro­ vide pensions for this group* Coverage of outside salesmen is not as common in wholesale and retail establishments,

agent or brokerage houses, or in service organizations*

Replies were almost evenly divided between firms sell­ ing consumers’ goods and those selling industrial goods, but the latter group operates a slightly higher percentage of the salesmen’s pension systems which were reported, according to the data in Table 6* Companies selling to

nation-wide markets are much more likely to provide these pensions than are regional or local sellers, as is indi­ cated in Table 7* Older conjpanies, in business 25 years or longer, con­ tributed nearly three-quarters of the questionnaire replies received, and they sponsor 87*4# of the salesmen’s plans tabulated* As Is shown in Table 8, the ratio of companies having these plans to the total number of companies sur­ veyed Is Increased markedly at each succeeding age level above 19 years* From this observation alone it might be concluded that pension plans for salesmen are losing popu­ larity, in as much as younger companies are not adopting them* However, at another point in these tabulations there is evidence that less than one plan of every six now in use 72

TABLE 6* Number of Companies Sponsoring Pension Plans for Outside Salesmen, By Product Line, Among 508 Members of National Sales Executives 1952 Q. 2: "Principal products aret" Number of Number of companies c cmpanies Total Principal product sponsoring without a companies line a pension pension reporting^- plan for plan for salesmen salesmen Industrial goods 116 100 216 Consumers1 goods 111 136 2U9 Services or intangibles] Insurance 28 6 3U

Other than insurance 23 35 58 No answer 0 1 1 Total 278 280 558 1 Fifty respondents claimed an equally-divided product line* 73

TABLE 7i Number of Companies Sponsoring Pension Plans for Outside Salesmen, By Area of Distribution, among 508 Members of National Sales Executives, 1952

3s "Area of distribution istN Number of Number of companies companies Total Area of distribution sponsoring without a compand a pension pension reportd plan for plan for salesmen salesmen All companiess total 2U7 261 508 Natioiwwlde 1U9 101 250 Two or more states 56 87 1U3 One state lis 17 31 Less than one entire state 27 55 82 No answer 1 1 2 Insurance companies t total 26 6 3U Nation-wide 17 3 20 Two or more states 6 2 8 One state U 1 5 Less than one entire state 1 0 1 No answer 0 0 0 Other than Insurances 219 255 U7ls Nation-wide 132 98 230 Two or more states 50 85 135 One state 10 16 26 Less than one entire state 26 55 81 No answer 1 1 2 TABLE 3: Number of Companies Sponsoring Pension Plans for Oirbside Salesmen, By Age of Company, among $0$ Members of National Sales Executives, 1952

Q, lit "For how maiy years has your company been In operation?" Number of Number of companies companies Total Age of company sponsoring without a companies a pension pension reporting plan for plan for salesmen salesmen All companiest total 2li7 261 508 Less than 5 years 5 to 9 years 10 to Hi years 15 to 19 years 20 to 2U years 25 to 29 years 30 to 39 years L0 or more years No answer Insurance companiest total 28 3U Less than 5 years 0 0 5 to 9 years 0 0 10 to lli years 2 X 3 15 to 19 years 2 3 20 to 2li years 0 25 to 29 years 2 4 c. 30 to 39 years 0 U0 or more years 2 No answer < 4 0 4 Other than insurances total 219 255 U7U Less than 5 years 0 Hi 5 to 9 years 3 32 10 to lli years 9 23 15 to 19 years 7 35 20 to 2li years 8 23 25 to 29 years 13 36 30 to 39 years liO or more years No answer Circled figures indicate range in which median falls 75 was originated prior to 1938#'^74 Thus a more reasonable conclusion is that the pension systems of older companies were not started in the early days of these firms, but were shelved until permanence and financial strength had been well established, and a group of employees had reached maturity# Some plans, it is true, began very early. One insur­ ance company had coverage for salesmen as early as 1896#

Six other firms claimed a plan for salesmen was in oper­ ation before 1917.

Geographical distribution of the survey contributors is shown in Table 9. The largest number of replies from any section was received from the East North Central States; the second largest was from the Middle Atlantic area. New York state alone was the source of 71 replies, or 13*9$ of the total. Among these 71 New York firms, 44 or nearly two-thirds had salesmen1s pension plans In oper­ ation. The highest proportion of sponsoring companies in any region was actually found in the Mountain states (60.0$) but because the number of replies received from these states was only ten, this percentage has no significance. The second highest proportion was in the Middle Atlantic area (58.1$); the lowest was in the East South Central states (26#9$). Companies in nine states: Massachusetts, New

wz------See Table 27# 76

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0 4 Is rt it c n« 5 Sn,vS R i f l e d mrtnmo »o oo ^ moh »p-h hconqh 4Nv\rto OV\rlH« r|04©ff>MJn® 4N01A 3nr|Nt" IAOA (J\nrt4 HON •H 0 UJ gft n o O' © n p» 4004 o^oa-osO Nu\®ft 1 rto Onu\» n onnn 0h4hn ovoh 4 ^ h nN i> 5 9^** «M« M M M c «» >c » K «« #rH 0 l/\ rl OONlArlONlArl IAJIA4 sOON N 0 _t N.ff\ -J _lrt rt r\n nm 11) n ft U\ U\ rl H rt 0 h 0 0 I?ftrt 4 o 0 1. 0 § 0 0 ft ft 0 1 * rt J) d U h 0 5 ^rtN4 nrlONlAO Orllf\0\NrlN NNOMOnrinS- 0 lA4 0 rt ONlAOvN 0 4 0 OlArlN OnNrt 1? j 4 0 J n n rjr-NN ^nrtnNrt 4n 4 h n rt n n h n n rtrt h m 0 H Is (0 H ■rl & | 3 H 3 0 t 0 35 u t I ■H ft 3d V •H 0 0 0 0 (I 4ft fi rlil I) p # c 5 #fl 4 4 1 0 1 0 rt&B g '5> 0 ^0 « X th 3 0 » 1» l!i A i l - . C rt 0 0 3 « Srt0 S B jij B * Ortrti 0 IJiilrtrt h 3 00 JSM •H'Ort 0 ID Xrt ft w ftU d 00 “! " C Ort dssd d OZZft sfldSS ®slh3^ 1 Mi.lOOrt 3 00 c(EOO rtO © 0 0 f: 0 1 ft 5 77 York, New Jersey, Pennsylvania, Ohio, Illinois, Minnesota,

Texas, and California supplied 66*056 of all the replies which were received, and sponsor 63*956 of the salesmen's pension plans tabulated* While it is probably safe to con­

clude from these observations that these plans are most prevalent in heavily populated industrial areas, it must be recalled that the members of National Sales Executives, Incorporated, are organised In affiliated clubs in prin­ cipal cities only* Small town and rural membership is slight, except in the suburbs of club-olties*

Characteristics of Covered Sales Forces A total of 56,214 salesmen are employed by oompanles which submitted questionnaires* Of these, 44,693 or 79*556 are in companies which provide pensions to at least part of the sales force* Care must be exercised, however, in the use of these figures* It is obviously inoorreot to state that four out of five outside salesmen will get com­ pany pensions upon retirement* Thousands of these salesmen are doubtless ineligible, or prefer not to participate in the plans offered by their companies* That the survey results are heavily weighted by re­ plies from large companies la indicated by the following figures on average slse of sales forces, obtained from Table 9| for companies sponsoring salesmen's pensions, 160*9 men; for coiqpanles with no salesmen's pensions, 44*1 78 men; for all companies replying, 110*6 men* Nevertheless, pensions were found In sales forces of every size, from the largest to the smallest one-man organizations* In 273 com­ panies with 25 salesmen or less, 87 or 31*8^ offer some post-retlrement pay to salesmen* In the middle group of 145 companies with 26 to 200 salesmen, pensions are pro­ vided by 96 or 66*2£* When the sales force is larger than 200 men, coverage is almost always extended* Of the 57 sales forces surveyed in the latter group, 45 or 78*9£ re­ ported pension plans operating* A complete classification of replying companies according to the number of salesmen employed, is contained in Table 10* The total number of employees in a company bears an even more pronounced relation to the offering of salesmen’s pensions than does the number of salesmen, according to the data in Table 11* Larger oonqpanies, having more than 250 employees, submitted almost exactly one-half of the ques­ tionnaires received, but these oonqpanles operate 175 or 70.8J6 of the 247 salesmen's pension plans reported* Of 137 companies with more than 1,000 eiqployees, 114 or 83*2^ offer pension coverage to sales personnel* It is Interesting to speculate on the findings in Table 12* Turnover of salesmen in moderate amounts per year was reported by more firms with salesmen's pension plans than by those without them* Seventy companies in the latter group were reported to have lost no salesmen during lO * Number* of Companies Sponsoring Pension plans for putside Salesmen,

r y N ' j m b e r oi salesmen, Among 508 Members of JJational Sales Executives,

1952 Q« 5 s " H o w man;.* full-time outside salesmen do you e m p loy?" NumberN u m b e r of NumberN u m b e r of Number of full-time companies companies T o t a l outside salesmen s p o n s o r i n g wit hout a c o m p a n i e s e m p l o y e d a pension pension r e p o r t i n g p l a n for p l a n for s a l e s m e n s a l e s m e n

All companies* total 2L7 261 508

1 t o lO L3 xx 9 11 t o 25 26 t o 50 M > 2 5 51 t o 75 2L 8 76 t o I O O 10 6 IOI t o 200 2L 7 201 to 300 13 L 3 0 1 t o L O O 7 3 L O l t o 500 1 1 501 t o 750 11 2 751 to 1,000 5 O 1,001 o r m o r e 8 2 No a n s w e r 19 1L

Insurance companies: total 28 6 3L

1 t o lO 2 2 11 to 25 1 1 26 to 50 LO 51 t o 75 2 O 76 t o IOC 1 O IOI t o 200 1 1 201 to 300 O 301 to L O O O L Ol t o 500 0 O 501 t o 750 5 1 751 t o 1,000 2 O 1,OOl or more 3 1 No a n s w e r 2 O

Other than insurances total 219 255 I to lO II t o 25 26 t o 50 28 51 t o 75 8 7c> t o I OO 0 IOI t o 200 6 201 to 300 L 3 01 to LOO 3 L O l t o 500 1 501 t o 750 1 751 to 1,000 0 1,001 or m o r e 1 No a n s w e r 111 Circled figures indicate range in which median falls. TABLE Humber of Companies Sponsoring Pension Plans for Outside Salesmen, By Number of Employees, among 500 Members of National Sales Executives, 1952 Q. 6* "How many employees are there in all departments and divisions of your company?" Humber of Humber of companies companies Total Humber of employees sponsoring without a companies a pension pension reporting plan for plan for salesmen salesmen All companies: total 2JL7 261 508 C o 1 to 20 3 31 O 21 to 50 15 51 51 to IOO 16 ]f)| 101 to 250 37 f 5 5 ) 251 to 500 31 jT 5oi to 750 19 751 to 1,000 L 1.001 to 2,000 3 T 13 2.001 or more 81 10 No answer 1 3 Insurance companies: total 28 6 3L 1 to 20 O O o 21 to 50 1 1 2 51 to 100 0 3 3 IOI to 250 3 0 3 251 to 500 L o L 501 to 750 2 0 2 751 to 1,000 o 1.001 to 2,000 ( b o 2.001 or more 8 2 10 Ho answer 0 u 0 Other than insurance: total 219 255 L7U 1 to 20 3 31 21 to 50 11* 50 51 to IOO 16 Li 101 to 250 3L 251 to 500 27 3i 501 to 750 J k 19 751 to 1,000 L 1.001 to 2,000 27 13 2.001 or more 73 8 No answer 1 3 Circled figures indicate the range in which median falls. ett«j cttTP** LfOTMJt uf aSoM ai»o *Mn3TJ ^I^TO *8 ' 0 0 u > v * v n U ) 0 0 ' < > ^ - J \ 0 V I H V ^ O v ' J M t r ^ / T| TW H U i N H U C V I ^ t ' ^ t ' 0 j wO s OHHOO aco-«i(N)aoatjR)^i03 £ H O H O O O 0 O O H H sn O 00-jaw O' HHWPOVA^IMBH "I jj§§l S S m S S o r U i U ) N M P H V ^ H ( OsnOvnowO 6 8 H H U i Q a U )H O f r C f l g j f - J S A'WO O f O I \ J H V * t f \ J ^ } U U > V * JCO UM ) O S A S H ^ < M N ) > 0 0 UMo -J 9 £ $ 35

9 ET & d f OAVOO » OVOAVO ft aOOVAOSAOVlO » • 0 OOVAOVnOWO *^C*U)WrOMHHVAHN *yjrU)^MNHH\AHN 3 - * * ® *5 m f s- c Q u r u i p -) £8® M ' j w 0 ' O ^ \ n Q w S) ! & . ^ f\ o HHvJbhuj £r ro H I s I t I % s S i 3 5 * « «

19 u> g-r1 cr» $38“ © » H 13 5 so I H-*i I V I I * i I *

*u9oe»TTg apxB^no j o j su»u ao-psuaj So-piosaods sapffdapo jo j*qni *2X TISTI 82 the past few years* From these facts It might be reasoned that pensions aggravate the turnover problem instead of easing it* However, this reasoning possibly confuses cause with effeot* Salesmen's pension plans may have been insti­ tuted because the turnover rate was high and employers were anxious to reduce it* It is likely that managements willing to bear the financial burden of a pension plan will give close attention to turnover* and may be more accurate in calculation of turnover rates than are those who have not yet been impressed by this problem* It is probably fortu­ nate that the sponsors of pensions do not claim them to be a turnover cure-all* Another conclusion on turnover should not be over­ looked in Table 12* It is that the rate of turnover is not so frequently severe where pensions for salesmen are used* Only 34 companies with pensions reported annual turnover of 20# or more of the sales force* while 51 companies with­ out pensions did so* However* it has already been noted that the average size of sales organisations in the latter group la smaller than in the former* The percentage of men lost may therefore be large* while the absolute number is small*

Almost every conceivable type of compensation plan for salesmen is somewhere used as a basis for accumulating re­ tirement funds* According to the data in Table 13* variable earnings of salesmen do not pose Insurmountable obstacles* TABLE 13* Humber of Companies Sponsoring Pension Plans for Outside Salesmen, By Type of Compensation Plan, Among 508 Me ibffs of National Sales Executives 1952 Q. 8* "Which of the following compensation plans is now used to pay outside salesmen? If more than one plan is used, please check only the plan which affects the greatest number of salesmen. ■ Number of Number of companies companies Total Type of ccapenastion plan sponsoring without a campani< a pension pension report! plan for plan for salesmen salesmen All companies! total 21*7 261 508 Straight salary only 1*5 30 75 Salary plus commission on 1 sales 28 1*1* 72 Salary plus comisaion on si 1 sales above quota 28 26 51* Salary and bonus 6b 1*2 108 Salary, coasaission and bonus 19 7 26 Commission only 20 1*1 61 Cowl ssion with drawing account 27 55 82 Coasaission and bonus 3 6 9 Other 7 8 15 ■0 answer 1* 2 6 Insurance companies t total 28 6 3U Straight salary only 5 1 6 Salary plus coasaission on all sales U 1 5 Salary plus commission on all sales above quota 1 O 1 Salary and bonus U 1 5 Salary, commission and bonus 1 1 2 Commission only 10 1 11 Comission with drawing account 2 1 3 Commission and bonus OOO Other O OO No answer 1 O 1 Other than insurance* total 219 255 1*71* Straight salary only 1*0 29 69 Salary plus commission on all sales 21* 1*3 67 Salary plus commission on all sales above quota 27 26 53 Salary and bonus 62 1*1 103 Salary, coasission and bonus 18 t> 21* Commis sion only lO 1*0 50 Commission with drawing account 25 51* 79 Cawmil n sion and bonus 3 6 9 Other 7 8 15 No answer 3 2 5 84 It la true that 111 or 44*9# of the 247 salesmen'a pension systems which were reported are tied to a straight-salary or salary-bonus plan* But in 75 companies or 30*4£, sal­ ary -commissi on plans are used with pensions, and In 50 cases or 20.2#, commission-only, commission-and-drawing

account, or commission-bonus plans are involved* Labor union activity is spotty among the sales forces survey, and it was accorded surprisingly little Influence in starting pension programs* It may be seen in Tables 14 and 15 that only 17 firms (3*3#) reported unionised sales­ men, and only nine gave credit to collective bargaining for originating salesmen's pension plans* Six of the unionised sales forces have no pension arrangements* A publisher with a union-negotiated pension plan commented on his questionnaire * WA considerable propor­ tion of our employees are females of low age, whose average term of enployment is not long enough to enable them to qualify for pensions* This group will probably exert enough pressure within the union to keep maximum pension benefits as low as $40 per month, since their preferenoe is for a high current salary** Ages of salesmen were found to range both lower and higher In those companies with pensions than in those with­ out them* This tendency may be seen upon close examination of Table 16* Apparently payroll deductions for retirement funds are not a serious deterrent to young men* One 8 5

TABLE lUt Number of Companies Sponsoring Pension Plans for Outside Salesmen, By Extent of Salesmen's Union Membership, Among 508 Members of National Sales Executives

1952 Q. 9* "What percent of your outside saiesmen are members of a union?"

Number of Number of companies companies Total Percentage of salesmen sponsoring without a companies who are union members a pension pension reporting plan for plan for salesmen salesmen

Nonel 236 255 L91 1 to 2h% 5 0 5 25 to h9% 3 1 b 50 to 7b* 0 0 o 75 to 100* 3 5 8 No answer 0 0 0

Total 2b7 261 508

^None of the 3b insurance companies which were studied have unionised salesmen. 86

TABLE 15» Number of Companies Sponsoring Pension Plans for Outside Salesmen By Influence of Collective Bargaining on Origin of 269 Plans Sponsored by Members of National Sales Executives 1952 Q. 10* "If you company has a retirement income plan, was it originated as a result of collective bargaining with a labor union?" Number of Number of Influence of collective companies companies Total bargaining on company's sponsoring sponsoring companies decision to originate a a pension a pension sponsoring pension plan plan for plan which pension salesmen excludes plans salesmen Collective bargaining was*

Responsible 6 1 7 Partly responsible 3 1 a

Not responsible^* 23U 13 2U7 No answer U 7 11 Total 2U7 22 269

^Of the 29 plans reported by insurance companies, none was negotiated with a union. One of these plans excludes salesmen. TAELE 16t Number of Companies Sponsoring Pension Plans for Outside Salesmen, By Range of Salesmen* s Ages, Among $08 Members of National Sales BsecutiYes, 1952 lit "What is the range of ages of your outside sales in? Check closest age bracket for both youngest and oldest sales

Number of companies Number of companies sponsoring a pension without a pension Total companies plan for salesmen plan for salesmen r e p o r t i n g A g e o f salesman youngest O l d e s t Y o u n g e s t O l d e s t Y o u n g e s t O l d e s t s a l e s m a n s a l e s m a n s a l e s m a n s a l e s m a n s a l e s m a n All companies * total 21*7 261 506 15 t o 19 1 2 20 to 2l* Lift 1 3 8 2$ to 1 2 30 to pc* 3 5 21* 1 31* 11 Ho to ££ 9 l O 27 IE 36 1*5 to 1*9 9 6 33 7 1*2 50 to 5U 2 9 (11 ( 2) 63 55 to 5? 60 to 61* 65 to 69 22 7 0 o r o n e r 15 21* 39 N o 13 21* 11 37 Insurance companies: total 28 31* 15 to 19 1 20 to 2l* 2 25 to 29 3 30 to 31* 3 3 35 to 39 1 1 U.O to III* 1 1*5 to 1*9 5o to 51* 2 2 55 to 59 5 8 60 to 61* 6$ to 69 2 70 o r error 1 No a n s w e r Other than insurance* total 219 255 1*71* 15 to 19 20 to 21* 75 25 to 29 02} 1 30 to 31* 2-1 3 # 35 to 39 9 6 33 1*0 to 1*1* 1* 27 11* 1*5 to 1*9 1 33 7 50 to 51* (1) h ( 2 ^ 55 to 59 60 to 61* 65 to 69 20 70 or oTer 23 No answer 6 21* 11 Circled figures indicate the range in which the median falls, F i g u r e s i n () b e l o n g w i t h i n the indicated age bracket or higher. executive wrote on hie questionnairet nWe note a marked Interest of young college graduates, among whom we recruit virtually all of our salesmen, in pension plans and the adequacy thereof." It should be noted, however, that young college graduates probably have a different attitude toward pen­ sions than is typical of the bulk of Job applicants. While college men do not as a rule remain permanently in the first jobs they obtain, an Important fact is that these men are career-minded. They tend to think of the companies which they join as life-time employers. They are thus concerned with long term aspects of the work, such as pen­ sion privileges. The great mass of young employees, on the other hand, are Interested primarily In short term matters, as Indicated by comments such as the following, which appeared on many repliest "The very young enqployees are not much Im­ pressed with any pension plan. They seem to consider themselves too far away from the need for such benefits. They would much prefer to have their share of a pen­ sion plan in the form of current Income." "Many of the younger folks have little In­ terest in planning so far ahead. The chief value of the program to such employees is that they can say 1 We have a pension plan too.'" "A number of the younger employees (below 40 years of age), particularly women, would prefer to have the amount paid by the com­ pany for the plan added to their annual income rather than have any plan at all." 09 "Of the 1,000 employees in our company, only 121 qualified and participated in the plan last year, due mainly to high percentage of girl3 under 30 and rather rapid expansion of personnel. At least 95# of those eli­ gible participate•" The preferred age for hiring new men who are to become outside salesmen is slightly lower among those firms which offer pensions, according to the replies recorded in Table 17. However, the time necessary for a new man to reach peak sales productivity is one to three years shorter in a majority of firms without pensions. Therefore the actual age at which salesmen attain peak performance is much the same, whether pensions are offered or not. This conclusion Is supported by Tables 16 and 19. These tables, however, contain no Information on what constitutes peak productivity in various sales Jobs. The quantity and quality of effort needed for best sales results differs so widely from man to man and from task to task that the term "peak productivity" means very little* On the average, companies with pensions obtain at least seven more years total service from salesmen, and at least four more years service after peak productivity is reached than is true of companies with no pensions* Men past age 65 are enqployed by 109 companies, or 21.4# of the total companies surveyed. In 63 of these companies, slightly more than half, a pension plan for salesmen is in operation. TABLE 17* Humber of Companies Sponsoring Pension Plans for Outside Salesmen,

By Preferred Age for Hiring New Salesmen

Among 508 Hesters of National Sales Executives

1952

Q - 12* "In what, age bracket, does your company usually hire new men who are to become outside salesmen?"

N u m b e r o f Nu m b e r o f Preferred age for c o m p a n i e s c o m p a n i e s T o t a l hiring new salesmen ■ p o n s o r i n g w i t h o u t a c o m p a n i e s a p e n s i o n p e n s i o n r e p o r t i n g p l a n f o r p l a n for m e n s a l e s m e n

All companies* total 21x7 2 fcl

B e l o w 20 Ix 20 t o 2l* 25 t o 29 3 0 t o 31* 35 t o 39 lix 27 1x0 t o lxl* 6 1* 1x5 to 1x9 3 7 5 0 or o v e r 2 1 Ho a n s w e r 6 8 Insurance companies: total 28 B e l o w 20 1 2 0 to 21* O 25 t o 29 3 0 t o 31* G2) 9 35 t o 39 2 o 1x0 t o Ixix 2 o 1x5 t o 1x9 2 o 50 o r o v e r 1 o H o a n s w e r 1 o

Other than insurance: total 219 255 1*71*

B e l o w 20 3 20 t o 21* 25 t o 29 3 0 t o 31* 3 5 t o 3 9 27 1x0 to lxlx lx 1x5 t o 1x9 7 50 or o v e r 1 No a n s w e r Circled figures Indicate the range in which median falls.

Some respondents marked more than one age bracket. Only the highest ras recorded. TABLE 18i Number of Companies Sponsoring Pension. Flans for Outside Salesmen

By Age at. which Salesmen Reach "Peak" Productivity

Among 508 Members of National Sales Executives

1952 Q. 13* "At what age do you consider your outside salesmen usually reach 1 peak' productivity?"

N u m b e r o f Number of c o m p a n i e s c o m p a n i e s Total Age of reaching s p o n s o r i n g w i t h o u t a com p a n i e s "peak" productivity a p e nsi on p e n s i o n r e p o r t i n g p l a n for p l a n for s a l e s m e n s a l e s m e n All compandess total 21*7 2fol 508 25 t o 29 3 0 t o 3ii 35 t o 39 ItO t o U U It 5 t o U9 50 t o 5li 55 t o 59 2 1*5 t o li9 3 1 50 to 5L 3 O 3 55 t o 59 1 o 1 6 0 to 61* o o O 6 5 o r over o o o N o a n s w e r 3 o 3

Other than insurances total 219 255 li7L

25 t o 29 3 I* 7 3 0 t o 31* 29 2ii 53 35 t o 39 63 6 1*0 t o lilt c H > 1x5 t o ii9 h o 50 t o 51i 10 17 27 55 to 59 5 9 lli 60 t o 61t 1 O 1 65 o r o v e r 1 1 2 No a n s w e r 11 lli 25 Circled figures indicate range in which median falls. No respondent claimed "peak" productivity for salesmen less than 25 years o f age. TABLE 19* Number of Companies Sponsoring Pension Plans for Outside Salesmen^

By Tears of Selling Experience Required for "Peak" Productivity

Among 508 Members of National Sales Executives

1952 Q. Ill* "How aar^r years after beginning work as outside salesmen do your men usually reach 'peak* productivity?"

N u m b e r of N u m b e r o f Number of years of selling c o m p a n i e s c o m p a n i e s T o t a l experience required for s p o n s o r i n g w i t h o u t a c o m p a n i e s "peak" productivity a pension pension r e p o r t i n g p l a n f o r p l a n f or s a l e s m e n s a l e s m e n

All companies * total 21*7 261 5 0 8

Less than 1 O 1* 1 t o 2 21 lik 3 t o t 2 5 t o 6 <8?by 7 t o 9 2 o 26 I O t o H i 53 27 15 t o 19 15 8 2 0 t o 2 li 1* O 25 o r m o r e O O No 15 6

Insurance companies* total 28 6 31* Less than 1 O 1 1 t o 2 1 O 3 t o li 8 5 t o 6 9 7 t o 9 1 IO t o ll* 7 1 15 t o 19 2 O 20 t o 21* 1 O 25 or m o r e 0 O N o a n s w e r 0 O

Other than insurance: total 219 255 L 7 U Less than 1 3 1 t o 2 fc>L. 3 t o U 128 5 t o 6 9 7 t o 9 25 IO t o 111 26 72 15 t o 1 9 8 21 20 t o 21* O 3 25 o r m o r e o O No a n s w e r 6 21 Circled figures Indicate range in which median falls. 93

Relation of Salesmen*s Pensions to Old-Age Personnel Policing Seldom does a company enforce a compulsory retirement age without offering aged etqployees a pension plan* In only two of the 508 sales forces studied in this survey do sales­ men face Involuntary retirement without some type of pension arrangement* On the other hand 134 firms or 26.3# of those reporting, offer pensions to salesmen without requiring them to leave at any predetermined age* A total of 115 com­ panies or 22*6£ enforce a specific age limit for salesmen* Application of compulsory retirement rules to various types of personnel Is detailed In Table 21* In using this table it is necessary to add the figures opposite "all per­ sonnel" to the figures for outside salesmen to obtain cor­ rect totals*

Little variation from the traditional retirement age of 65 was noted* Some plans speoify "normal" or voluntary retirement at 65 and "automatic" Involuntary retirement at 70* In ten reported cases, women face Involuntary retire­ ment at 60, five years earlier than men* Only two com­ panies specified a higher compulsory retirement age for salesmen than for other personnel; while In one firm sales­ men must retire at age 60 although other employees may continue until 65* Easing the salesman*s Job as old age approaches Is a policy followed by only a scant few companies* Acoordlng 9U

TABLE 20t Number of Companies Sponsoring Pension Plans for Outside Salesmen, By Percent of Sales Force Covered by Social Security, Amo rtf U93 U.S* Members of National Sales Executives^-

1952 Q. 15* "What percent of your outside salesmen are covered by Social Security (Federal Old Age and Survivors Insurance)?" Number of Number of companies companies Total Percent of salesforce sponsoring without a companies covered by Social Security a pension pension reporting plan for plan far salesmen salesmen

None 1 12 13 1 to 2k% 1 k 5 25 to U9* 0 0 0 50 to 7k% 1 k 5 75 to 100* 235 229 h6Li No answer 1 5 6 Total 239 25U U93

^All Canadian and Mexican replies have been omitted* One insurance company reported Social Security coverage of 25 to U9* of its sales force. All other insurance companies indicated 75 to 100* coverage* TABLE 21: Humber of Companies Sponsoring Pension Plans for Outside Salesmen, li I 4 1 m I $ S,c ftu 0 it n o J m V M lOMbl p I I I ! I l 95 rjt*j ^ a " a ! S “ " 4 ®w ^'0HOJ«nOHO H® ®WHO ih 3 S 4* t 1 t 0000 flOWCMQcownwr^O s O D Orn n HIV n OsOOOD OOWrinH C M C O H O O ^ ' O V U J O- 3nHO OUHH M M lHp r H Orj H rl CM H CM pH OOUVHWH rl ® n 00 '-HuOJ OiCO^oOO^JOsO 'O-dHOuvOHJO O 0

-NOOHO vu v\<*ifcoo

96 to Table 22, a total or 245 firms, 52*0# of those supplying data on this question, take no action so long as salesmen are fit for work. A smaller territory of smaller selling task Is assigned to older salesmen by 51 companies, or 6*6^, while In 19 others, or 4.0£, aged men are customarily trans­ ferred to non-selling work. Part-time selling Is an old-age practioe in 19 companies, or 4.0£. In one lnstanoe, retired salesmen are paid 1 to 2# commission on sales to their former accounts by new sales­ men. It should be noted that In some firms a salesman may "retire”, drawing full pension benefits, yet continue his selling work as usual. One Insurance offiolal noted on his questionnaire t

"Actually many agents are even more pro­ ductive after retirement than before*” Sales forces with a small number of older men are sometimes offered Informal pension programs. In which each case Is treated Individually at the employer*s discretion.

Payments are usually based on an analysis of needs, and are not guaranteed to the etqployee* Descriptions of a few such arrangements which were reported in the survey are repro­ duced heret "The plan is a very informal one* It is based on the idea that any enployee who has served the company for a number of years shall not be left destitute after passing his time of usefulness. That time may be before the employee reaches the age of 65. We frankly discuss with the retiring employee his savings, his other 1 3 Hlfe'db'if ^ >0 «44HH0r»0« 0> O^Of"Ot^H(vJ-4nH i a I t f i H ; HVCllhO B « H

I CM HOOOOHOOHO H HOOOOOOOHO H OOOOOrlOOOO h i 6 £ 4» si h 5 Lo1

■ ® -P *i0 0 Is B h iLs 1

, ; i t S Vh ! i ipi Q H r iJo IX” . ” « ! « B aTJ • - * H -0 B . S vi !» 3 i h 0*- +» I 3f i & i { r i. •« -b AS

■p a H i ? 3ot8S°?2 II

I S i l l ! l i t S a s ! 13 t f- MOV 0 S C H a ii I i S i f t III M t i $ ! S 33sg 98

Income, and his minimum needs Tor living modestly but respectably* we supplement his other Income to the extent the com­ pany deems necessary to acconpllsh that minimum* If some crisis comes along where a faithful old retired eng>loyee is in actual need of additional help, we try never to let him down* This feature of the plan is very much appreciated by all enployees, particularly those in the middle and older age braokets**1 "Our plan is really no 'plan* at all* In the few cases where our representatives grow too old or sick to deliver the volume we want or to properly servloe an area, we try to work out informally a plan to encourage them to turn over the area and their development work on a cordial basis and at the same time to provide some Income and something to occupy their time at the game with the customers they know so well*" "Our plan proposes the perpetuation of in­ come of accounts originated by the sales­ man for a specified period of time after termination of employment or retirement* Amount of retirement Income will obviously hinge upon his productivity while with the company*" "Our plan of 'taking care of our own* is okay as long as the management or ownership does not ohange, drastically* The salesmen know that the past and present owners and managers will see that they are provided for but they miss the security of a plan*" Preparation for retirement Is a much-neglected phase of sales personnel polioy* Although 115 of the sales forces surveyed enforce compulsory retirement of sales­ men, only 58 or 50*4^ take any routine steps to ease the men's transfer to inactive life* As is shown in Table 23, review of personal finances, interviews, and advice by TABLE 23* Number of Companies Sponsoring Pension Plans for Out,si ie Salesmen, By Action Taken when Salesmen Reach Old Age, Among 506 Members of National Sales Executives

1952

17s 14Which of the following actions is customarily taken when one of your outside salesmen reaches old age7 Please check only one.

N umber of Number of companies companies Total Company action when salesmen reach old age sponsor! ng w i t h o u t a companies a p e n s i o n p e n s i o n r e p o r t i n g p l a n for p l a n for s a l e s m e n s a l e s m e n

All companies* total 2b 7 261 508 VO<3 No action if salesman is still fit for work 87 158 2b5 Complete severance from employment 9b 2 96 Continued employments in non—selling work 5 lb 19 in smaller territory or smaller selling task 15 16 31 on part— time basis in selling work 5 lb. 19 Other action 8 7 15 "Have not faced this problem yet” 17 29 L6 No 16 21 37 Insurance companies* total 28 3b No action if salesman is still fit for work 9 1 IO Complete severance from employment 8 1 9 Continued employment* in non-selling work 0 2 2 in smaller territory or smaller selling task 2 O 2 on part-time basis in selling work 3 2 5 Other action 3 O 3 "Have not faced this problem yet" 2 o 2 No answer 1 0 1

Other than insurances total 219 255 L7b

No action if salesman is still fit for work 78 157 235 Complete severance from employment 86 1 87 Continued employments in non—selling work 5 12 17 in smaller territory or smaller selling task 13 16 29 on part-time basis in selling work 2 12 lb Other action 5 7 12 "Have not faced this problem yet" 15 29 bb No a n swer 15 21 36 100 company executives are offered In 41 caaes or 35*6^* A "tapered off" work load la arranged by 30 companies or 26*0g. Loans, recreation or hobby activity, literature on old-age opportunities, professional counsel, and the like are rarely used* Loss of one or more salesmen through retirement has occurred since January 1, 1947 in 175 or 34*4# of the com­ panies surveyed* In 1952 alone, 116 companies or 22*8# expected to retire sales personnel* In Tables 24 and 25, the six-year experience of the responding companies in re­

tiring salesmen is shown* A pattern much like that of Table 12 on the turnover of salesmen is readily apparent* Cosg>anles with pension plans have retired salesmen more often than those without these plans, but they have not so frequently lost significant portions of the sales force In that manner*

Eligibility of Salesmen for Pensions Only 22 coapanles were reported to be using pension plans In which salesmen are not eligible to participate* In general these 22 are older establishments with small sales forces paid by commission or commission-combination arrangements• Their reasons for refusing coverage to salesmen are in most cases that salesmen*s earnings are high, or that they are considered to be Independent con­ tractors* Five of these companies plan to extend coverage to sales personnel at a later date* T A B L E 2lit Number of Companies Sponsoring Pension Plans for Outside Salesmen,

By Percent of Sales Force Retired, 19U7 — 1951

Among 508 Members of National Sales Executives

Q. 18: "What percent of your outside salesmen retired during calendar year 1951? (Divide number retired by average number on sales force in 19 51.)"

Q. 19* "What percent of your outside salesmen have retired since January 1, 19U7? (Divide number retired by average number on sales force during the 5—year period.)"

Number of companies Number of companies Total companies sponsoring a pension without a pension r e p o r t i n g Percent of sales force plan for salesmen plan for salesmen r e t i r e d 1 9 U 7 - 1 9 5 1 1 9 5 1 19li7— 1 9 5 1 1951 19U7-1931 1951

All companies: total 2li7 261 508

Z e r o 117 15 7 185 218 302 3 7 5 1 t o h % 78 72 3h 21 112 93 5 t o 9 % 22 5 Uu 1 3 6 6 IO t o l U i IO 2 8 1* 18 6 1 5 t o 195C 5 5 20 t o 2 h % 1 1 2 25 t o 2 9 % 1 1 30 t o 3 h % 35 t o 3936 1 1 No a n s w e r lL 11 17 15 31 27 Insurance companies: total 28 3li

Z e r o 11 15 U 15 21 1 t o IO 11 1 11 11 5 t o 9 % 2 2 10 t o llx% 1 2 15 t o 195C 1 1 2 0 t o 2 h % 25 t o 29% 30 t o 3 h % 3 5 t o 3 9 % No a n s w e r

Other than insurance: total 219 255 U7li

Z e r o iot> 11x2 181 212 287 3 5 U 1 t o Lx% 08 61 33 21 IOI 82 3 t o 956 20 5 lli 1 3k 6 I O t o H x % 9 2 7 L 16 6 15 t o 193C ii k 2 0 t o 2lx% 1 1 2 25 t o 2 9 * 1 1 3 0 t o 3 h% 35 t o 3936 l 1 No a n s w e r 11 17 16 23 25 TABLE 25* Number of Companies Sponsoring Pension Plans for Outside Salesmen,

By Percent of Sales Force Expected, to Retire in 19 52,

Among 506 Members of National Sales Executives

Q„ 20* "What percent of your outside salesmen are expected to retire in 1952? (Divide number expected to retire by number now on sales force.)"

N u m b e r o f N u m b e r o f c o m p a n i e s c o m p a n i e s T o t a l Percent of sales force s p o n s o r i n g w i t h o u t a c o m p a n i e s expected to retire in a p e n s i o n p e n s i o n r e p o r t i n g 1 9 5 2 p l a n for p l a n for s a l e s m e n s a l e s m e n

All companies: total 2li7 261 508

c N o n e 1 5L 211 365 fO 1 t o U * 71 23 9U 5 t o 9 * 11 5 16 1 0 t o lli* 2 2 ii 15 t o 1 9 * 20 t o 2 h% 1 1 25 t o 29* 1 1 No a n s w e r 9 18 27

Insurance companies: total 28 3U

None 11 17 1 t o ii* 15 15 5 t o 9 * I O t o U U * 15 t o 1 9* 20 t o 2 U * 25 to 29* No a n s w e r 2

Other than insurance: total 219 255 L 7L

None lLi3 205 3lip 1 t o U * 56 23 79 5 t o 9 * 11 5 16 I O t o H i* 2 2 li 15 t o 1 9 * 20 t o 2li* 1 1 25 t o 29* 1 1 N o a n s w e r 18 25 103

Aa 1b shown In Table 26, salesmen are most often covered by those conqpanles which also provide pensions for sales executives, other executives, and office workers. Salesmen are Included in 89 *0# of all plans tabulated which were originated since 1642. According to Table 27 the period from 1942 to the outbreak of the Korean War In 1950 was an era of great growth for pension plans for all types of esployees among the companies surveyed. More than half of the plans now In use by respondents to this survey were originated during that period* Pensions lag well behind other types of employee bene­ fits In sales force participation according to Tables 29 and 30* Paid vacations are granted to salesmen by 73* of the 508 companies reporting, hospitalisation Is spon­ sored by 73*4^, group life Insurance by 72*4%', medical and surgical Insurance by 60*6f£, and sick leave by 52* A complete distribution of the data In Table 29 between companies which sponsor salesmen's pensions and those which do not has been omitted from this report* The only striking result of such a distribution is thlst there Is little apparent relationship between the offering of pensions to salesmen and the offering of any of these other benefits to anyone, not even to salesmen* Of the companies enrolling salesmen in group life insurance, 55*4^ offer pensions to the sales force; of those offering hospitalisa­ tion, 49,0%; accident Insurance, 51*8£; medical and surgical TABLE 26* Number or Co«ipanies Sponsoring Pension Plans for Outside Salesmen, By Type of Bnplqyees Covered Under 2o9 plans Xn Use by Members or National Sales Executives 1952 Q, 21* "Does your coapaiy sponsor or participate in any kind or private retirement 1 nrome plan (or pension) for any employees? ir yes, in which or -the Toll owing groups are a MAJORITY or employees cowered? For example« check: office workers only ir most or your office workers are eligible to participate in a retirement income plan." ■umber or ■umber or Total companies companies companies Type or employees cowered in which in which sponsoring salesmen salesmen a pension are not plan cowered *d *11 companies s tot al1 21*7 22 269 Sales executives 155 13 168 Other executives 156 11* 170 Outside salesman 178 O 178 Retail store salespeople 21 O 21 Office workers 151* IO 161* Factory workers 97 9 106 Others 26 2 28 "All personnel"2 57 O 57 No answer2 12 O 12 Insurance companies* total1 28 1 29 Sales executives 15 1 16 Other executives 15 1 16 Outside salesmen 22 O 22 Retail store salespeople O O O Office workers 17 O 17 Factory workers O O O Others 0 o o "AH personnel*2 5 0 5 No answer2 1 O 1 Other than insurance* total1 219 21 21*0 Sales executives 11*0 12 152 Other executives 1L1 13 151* Outside salesmen 156 o 156 Retail store salespeople 21 O 21 Office workers 137 IO 11*7 Factory workers 97 9 106 Others 26 2 28 "All personnel"2 52 O 52 No answer2 11 O 11 1Figure* on this 1 •! n« will not equal the sum of the figures for types of employees listed below, since many firms sponsor pension plans for more than one type.

2 P e n s ion plans in these companies cower salesmen. TABLE 2 7 * Number of Companies Sponsoring Pension Plans for- Outside i a l e : . E e n ,

By Age of 2t>9 Plans Xn Use by Members of National Sales Executives 1952 Q. 22* plan been In

Q. 26* "For how many years h a w outside salesmen been core red?" Number of companies N u m b e r o f in which salesmen c o m p a n i e s To t a l are cowered i n » M c h c o m p a n i e s Number of years of operation s a l e s m e n sp o n s o r i n g C o v e r a g e C o v e rage a r e not a p e n s i o n f or a n y f o r c o v e r e d p l a n e m p l o y e e s s a l e s m e n o t companies* total 21*7 22 269 L e s s t h a n 1 y e a r 13 1 t o 2 18 3 t o 1* 5 t o 9 i 10 t o ll* 3 1 5 t o 19 21 20 t o 21* 6 25 t o 29 3 30 to 3 1 * 1* 3 5 t o 39 3 1*0 o r 8 No 1 1 Insurance companies x total 28 1 29 Less than 1 year 1 t o 2 3 t o 1* I 5 t o 9 <3> IO t o li* 7 1 5 t o 1 9 4 3 1* 2G t o 2li 2 1 2 25 t o 29 1 1 30 t o 31* 35 t o 39 1*0 o r No Other than insurance* total 219 21 21*0 L e s s t h a n 1 y e a r 3 1 t o 2 3 t o 1* 5 t o 9 IO t o ll* 3 1 5 t o 1 9 20 to 2 1 * 25 t o 29 30 t o 3 U 35 t o 39 1*0 o r mo3 No Circled figures indicate range in which the median falls. Figures in () belong within the indicated age bracket or older. 106

TABLE 28i Number of Companies Planning to Sponsor Pensions for Outside Salesmen, By Present Status of Plans Among 2bl Members of National Sales Executives 1952 Q. 23* "If outside salesmen are not now covered by a retirement income plan, is your company considering a plan for them? If yes, is the plan ready to be put in operation in 1952?" Number of companies without a pension plan for salesmen Status of Planning for Salesmen's Pensions Insurance Other Total companies companies

Plan now being considered* total 5 99 10U

Plan ready for operation in 1952 0 5 5 Plan ready for operation after 1952 1 L8 U9 Ready date uncertain U U6 50 No intention to sponsor a pension plan 1 131 132

No answer 0 25 25 Total 6 255 261 TABLE 29* Number of Companies Sponsoring Seven Types of Einployee Benefits, By Groups of Baployees Eligible Among 508 Members of National Sales Executives 1952 Q. 2Us "Does your company sponsor or participate in ANY of the following* group life insurance, hospitalisation, accident insurance, medical and surgical insurance, health Insurance, sick leave pay, or vacations with pay for any employees? If yes, in which of the following groups are a MAJORITY of employees covered?"

Number of companies sponsoring:

Bnplpyee group eligible Group M e d i c a l & L i f e Hospital— Accident Surgical Health Sick P a i d Insuranci isation Insurance Insurance Insurance L e a v e V a c a t i o n

All companies: (508) Sales executives 3LU 331 189 271 170 2U8 375 Other executives 336 32b 186 2o8 169 2U5 369 Outside salesmen 329 329 193 268 167 233 329 Retail store salespeople 51 50 20 33 22 38 62 Office workers 333 337 18U 273 168 2L7 3 o9 Factory workers 232 233 137 198 133 132 252 O t h e r s 63 61 32 50 28 U3 7U "All personnel" 39 UU 21 UO 25 35 U5 Insurance companies* (3U) Sales executives 21 22 12 20 10 15 21 Other executives 19 23 13 21 11 19 22 Outside salesmen 22 2U 12 22 9 17 1U Retail store salespeople O O O O O O O Office workers 2U 26 111 2U 12 22 2L Factory workers O O O 0 O O o O t h e r s 2 2 o 1 O 2 2 "All personnel" 3 U 2 u 3 Lt L Other than insurance* (L7U)

Sal es executives 323 309 177 251 160 230 35U Other executives 317 303 173 2U7 158 226 3U7 Outside salesmen 307 305 181 2U6 158 216 315 Retail store salespeople 51 50 26 33 22 38 62 Office workers 309 311 1 7 0 219 156 225 3U5 Factory workers 232 233 137 198 133 132 252 O t h e r s 61 59 32 U9 28 U1 72 "All personnel" 36 Uo 19 36 22 31 Ul

A total of 22 firms reported that no employees receive any of the benefits listed above. TABLE 30* Number of Companies Sponsoring Pension Plans for Outside Salesmen,

By Types of Other Ekployee Benefits Sponsored for Salesmen

Among 508 Members of National Seles Executives,

1952

Number of companies Number of companies Type of employee benefit sponsoring a pension without a pension Total companies sponsored for salesmenl plan for salesmen plan for salesmen r e p o r t i n g

N u m b e r P e r c e n t N u m b e r Percent Number P erc e n t All companies: total2 2U7 I O O . 0 % 261 I O O . 0% 508 1 0 0 . 0 %

Group life insurance 20li 8 2 . 5 % 1 6 a 62 .8* 368 7 2 . as Hospitalization 1 8 6 7 5.3 187 7 1 . 6 3 7 3 73.a o Accident insurance 111 W L . 9 103 39 .a 2m L2.1 0 0 Medical & surgical insurance 162 6 5 . 3 1 L 6 55.9 308 6 0 . 6 Health insurance 98 3 9 . 6 9a 3 6 . c 192 3 7 . 7 S i c k l e a v e 1 61 6 5 . 1 107 6 3 . 3 268 52.7 Paid vacation 1 97 7 9 . 7 1 7 7 6 7.8 3?a 73.6 N o n e O 0 . 0 22 a.a 22 a . 3 N o a n s w e r O 0 . 0 5 1.9 5 .9

Insurance companiesz total^ 28 — if 6 — 3a —

Group life insurance 2 0 __ 5 _____ 25 __ Hospitalization 22 — 6 — 28 — Accident insurance 11 — 3 ____ _ ia Medical & surgical insurance 21 — 5 — 26 — Health insurance 9 — 3 — 12 _____ Sick leave 16 — 5 — 21 — Paid vacation lli — a — 18 _____ N o n e O — 0 — O — No a n s w e r O — 0 — O —

Other than insurance! total2 219 IOO. 0% 255 1 0 0 . 0 % a 7a 1 0 0 . 0 %

Group life insurance 1 8 U 8 6 . 0 % 159 6 2 .3% 3a3 7 2 . 3 % Hospital!zation 1 6 U 7 a . 8 181 70.9 3a 5 7 2.7 Accident insurance I O O a 5 . 6 100 3 9 . 2 200 62.1 M e d i c a l & surgical Insurance m i 66.3 m i 5 5.2 282 59 .a Health insurance 89 a o .6 91 3 5 . 6 180 3 7. 9 S i c k l e a v e 11x5 6 6 .2 102 a o .o 2a 7 5 2 .1 Paid vacation 1 83 8 3 . 5 173 6 7. 8 3 5 6 75.1 Norte O 0 . 0 22 8 . 6 22 a . 6 No a n s w e r O 0 . 0 5 1.9 5 1 .0

Replies which specified that "all personnel" are covered are included in this tabulation.

Figures on this line will not equal the sum of figures for the benefits listed below, since many companies sponsor more than one type of benefit for salesmen.

^Percentages are omitted because of small totals involved. 109 insurance, 52*5#; health insuranoe, 51.0^; sick leave, 60.0#; and paid vacation, 52*6^* As indioated in Table 30, companies which sponsor pensions are only somewhat more likely to offer any one of the other benefits to salesmen than are companies without pension plana* Lack of funds for a suitable retirement plan Is the obstacle most commonly cited by the 261 companies which do not provide pensions for salesmen* This reason was mentioned by 93 of these companies, or 35*656* Other possible reasons suggested on the printed questionnaire form received little attention as may be noted In Table 31* High earnings of sale sown stake pensions unnecessary, according to 30 replies, or 11*4£* In 22 other companies, or 8*4# salesmen are omitted because they are considered to be a special type of employee or independent contrac­ tor* It Is significant that only two of the responding companies refuse coverage to salesmen ohiefly because salesmen's variable earnings would create difficulties in accounting for retirement fund contributions* Prior to this survey, this problem was sometimes cited as a major deterrent•

Special Provisions In Salesmens Pension Plana

When salesmen have a choice, they readily enroll In a pension plan* Of the 247 salesmen's pension plans tabu­ lated, 226 or 91*4^ are supported by 75^6 or more of the T A B L E 31 * Number of Companies Not. Sponsoring Pension Plans for Out.side Salesmen,

By Reasons for Refusing Corerage

Stated by 261 Uembers of National Sales Executives 1952 Q. 25* "If outside salesmen are not covered by a retirement Income plan, which of the following statements best explains why? Please check only one."

Number of companies without a pension plan for salesmen Reason for refusing coverage I n s u r a n c e O t h e r t h a n T o t a l c o m p a n i e s i n s u r a n c e Salesmen's earnings are high; additional security Is unnecessary 3 0 30 Salesmen are apparent, ly not Interested In retirement Income plans O 8 8 Salesmen are not usually employed long enough o 8 8 The company believes it is poor psychology to guarantee security for salesmen; it wants "go—getters" 7 7 V arlable earnings of salesmen would create clerical difflenities 1 2 The company believes it cannot at present finance a suitable retirement income plan for salesmen 3 9 0 93 Salesmen are not ibers of a union o o O Salesmen are considered to be a special type of employee or independent contractor 22 22 Salesmen sell products or services of other c o m p a n i es o 2 2 "Have not faced the problem yet" o U a O t h e r o 18 18

No a n s w e r 2 65 o7 T o t a l 6 255 261 Ill eligible salesmen according to the replies compiled In Table 32* Only 116 of these plans, or 46*9%, are of the type In which salesmen must enroll regardless of their preferences* The latter figure includes non-contributory plans, in which menfcershlp might be considered "automatic11 rather than coiqpulsory«

While unrestricted membership loqproves the actuarial basis of private pension plans, many cojqpanles exclude very young salesmen, short-term and part-time employees, and late-comers who Join the organization near the retire­ ment age* As shown In Table 33 the most popular barrier Is a minimum employment period, usually five years, en­ forced by 196 companies, or 80*l£, of those with salesmen's pensions* A minimum age limit, customarily 30 to 35 years, is used in 34 cases, or 13*T£* Salesmen who have passed a maximum age limit, usually 50 to 55 years, may not enroll in plans sponsored by 45 conqpanles, or 18*2^* Eight insur­ ance firms reported that salesmen must attain a minimum volume of sales to remain eligible* A "different" pension plan for sales personnel is seldom required* In only 24 replies, including 11 from Insurance companies, special procedures or rules affecting salesmen but not affecting others were cited* In half of these an adjustment is made for the high level or irreg­ ularity of salesmen's earnings In computing employee con­ tributions or benefits* One manufacturer reported on his 112

TAbLE 321 Number of Companies Sponsoring Pension Plans for Outside Salesmen, By Percent of Sales Force Participating Among 21*7 Members of National Sales Executives 1952 Q. 27* "la participation in the retirement income plan COMPULSORY for outside salesmen? If not, what percent of the salesmen do participate?" Number of companies sponsoring a pension plan for salesmen Percent of sales force participating Insurance Other than Total companies insurance Participation compulsory1 12 101* 116 Participation not compulsory* total 16 107 123 1 to h% 1 0 1 5 to 9* 0 0 0 10 to 11** 0 1 1 15 to 21** 0 0 0 25 to 1*9* 1 2 3 50 to 7ii* 1 3 1* 75 to 100* 13 97 110 Percent not specified 0 1* 1* No answer 0 8 8 Total 28 219 21*7

^Includes companies sponsoring non-contributory plans, in which parti­ cipation might be said to be automatic, rather than compulsory. TABLE 33* Number of Companies Sponsoring Pension Plans for Outside Salesmen* By Eligibility Requirements Among 2U7 Member* of National Sales Executives 1952 3* 28s "Mhat eligibility requirements must be met by outside salesmen in order to participate in the plan?"

Number of companies sponsoring a pension plan for salesmen Eligibility requirement Insurance Other than Total companies insurance Payment of membership or initiation fee 0 3 3 Completion of training or probationary period 0 8 8

Minimum length of service to company 23 175 198

Age at time of hiring below specified limit 6 39 U5 Age above specified limit^ 2 32 3U ESnployment at time plan was originated 1 2 3 Minimum volume of sales 8 0 8 Level of earnings below specified limit 2 3 5 No set requirements; discretion of employer 0 11 11 Other 1 lii 15 No answer 0 8 8

Total2 28 219 2U7

^Not on questionnaire

^Figures on this line will not equal the sum of the figures for the requirements listed above* since many companies enforce more than one requirement. 114 questionnaire a direct incentive to the 24 salesmen in his plan* If a specified annual sales volume is reached, the employer pays $450 to the man*s pension aooount; if not, he pays $250* In other oases special provisions relate to computation of service credits, employer contributions, or retirement date* These are discussed elsewhere in this report*

Financing the Plan

A retirement fund which is Independent of company earnings is preferred by most sponsors* Of the 247 plans studied only 31, or 12*5^, are funded by a profit-sharing formula based on earnings according to Table 34* In 11 other oases, or 4*5^, pensions are paid from self-admin­ istered funds* Regular fixed amounts are paid to a life insurance company by 129 ootqpanles, or 52*2£, and to a trust by 78 companies, or 31*5£* The apparent overlap in these percentage figures is a result of the frequent use of two or more pension plans, or two or more financing methods in the same firm* A pension contract with a life insurance company or trust typloally guarantees certain minimum bene­ fits* Thus a great majority of the salesmen covered are assured of some retirement income if they are employed long enough* Salesmen*s contributions are used to swell the retire­ ment fund in 138, or 55*9£, of the plans reported* These TABLE 3Ut Number of Companies Sponsoring Pension Plans for Outside Salesmen,

By Nature of the Retirement Fund

In Use by 2li7 Members of National Sales Executives

1952

Q* 30* "Is the retirement income fund for outside salesmen (one or more of the following types)?"

Number of companies sponsoring a pension plan for salesmen Nature of retirement fund Insurance Other than Total companies Insurance

Funded with regular payments to a trust k 7k 76 'JT. Funded with regular payments to a life insurance company 19 110 129 Funded by credits to a company reserve account, without Involving a trust or life insurance company 5 11 A profit-sharing plan funded with a trust or life insurance company with payments into the fund dependent entirely on company earnings 31 31

An informal gratuity granted at the company*3 discretion after a review of circumstances in each case 0 h k

Other 1 9 10

Total1 26 219 2L7

^Figures on this line will not equal the sum of figures for the types of funds listed above, since several companies use more than one fund. 116 contributions! usually collected by payroll deductIon* average betveen 3# and 4$ of each eligible salesman's gross earnings* However, as shown In Table 35, not all sponsors base the contribution on total earnings* In 53 cases* or 21*456, only salary (or other fixed or guaranteed Inoome) Is counted for contribution purposes* Where com­ missions* bonuses* or other variable earnings are also counted* the method most often used to avoid difficult clerical problems Is to base the salesman's contribution on his Income from a preceding period* not the current one* The contribution Is not confuted until actual earnings for that period are known*

Aooordlng to Table 36 non-contributory plans were re­ ported by 109 ooiqpanles* These plans enable the sponsors to avoid the many olerloal problems oonneoted with collec­ ting and aooountlng for employee contributions* but the employees usually reoelve lower benefits and no vested Interest* One executive wrote on his questionnaire t "The reason that the salesmen were put In the retirement plan on a basis of their drawing aooount was the fact that they oould Increase their annual Inoome by their personal efforts and the rest of the group were somewhat statlo* Salesmen who are presently covered by this plan are making Incomes of from four to fifteen thousand dollars per year* But their contributions are based on drawing aooount only and not on gross inoome* so the per­ centage of eaoh salesman's gross earnings contributed to the plan Is quite small*'' TABLE 35* Number of Companies Sponsoring Pension Flans for Outside Salesmen, By Method of Determining Salesmen's Contribution Used by 21x7 Members of National Sales Executives 1952 Q. 31* "Do outside salesmen contribute to a retirement income fund?"

Q. 32: "Are each salesman's contributions based on his earnings? If yes, which types of earnings are counted for contribution purposes?" Q. 33* "If earnings other than salary or fixed or guaranteed earnings are counted in computing outside salesmen's contributions, how is the computation made?" Number of companies sponsoring a pension plan for salesmen Method of determining salesmen's contribution Insurance Other than T o ta l companies insurance Total 28 219 21x7 Non—contributory plans 7 102 109 Contributory plans* total 21 117 138 Contribution not based on earnings 0 1* lx Contribution based on earnings* total 21 113 131* Salary or fixed or guaranteed earnings only 1* 1x9 53 Variable earnings included* total1 17 6ix 81 Contribution based on earnings for previous month or previous year; not computed until actual earnings for that period are known 10 27 37 Earnings averaged over several previous months or years; corrtritxition based on that average 1 7 Regular contribution based on anticipated earn­ ings; adjustment is made when actual earnings are known 3 Regular contribution based on anticipated earn­ ings; there is no later adjustment 0 1 1

Other 1 6 I Not specified 1* 22 26

^"Of the 17 insurance companies which base contributions on variable earnings, 16 include earnings of all types. Among the 81 companies other than insurance, 56 count all earnings, 8 include a portion of commission or other additional earnings. ne

TABLE 36t Number of Companies Sponsoring Pension Plans for Outside Salesmen, By Percent of Salesmen's Gross Earnings Contributed Among 2hl Members of National Sales Executives,

1951 1 Q. Approximately what percent of each salesman's gross earnings to the retirement income fund? (Divide the average annual contribution in 1951 by the average of gross earnings before payroll deductions in 1951*)" Number of companies sponsoring Percent of salesmen's a pension plan for salesmen gross earnings contributed Insurance Other than Total companies insurance

Zero (non-contributory plan) 7 102 109 More than zero but less than 1% 3 8 11 1 to 2% h 21 25

3 to h% © ( 57) © 5 to 6% 2 21 23 7 to 8* 0 3 3 9 to 11* 0 2 2 12 to lU* 0 0 0

15 to 19* 0 1 1 No answer 0 h h

Total 28 219 2h7

Circled figures indicate range in which median falls (for contri­ butory plans only). No company reported a contribution of more than 19* of gross earnings. 119

Another commentedt "Outside salesmen were the only employees not included In our plan from the beginning* A few years ago some misguided person put the matter of our inclusion up to a vote and it was voted down on the basis that since we're on commission we are already reaping a harvest of large Incomes or ■profits'* About a year ago the matter was again voted on and salesmen are now included*" In operating non-contributory plans, it is sometimes necessary to oonvlnoe employees of the true purpose of the system* One annoyed manager stateds "Our pension system has been generally accepted with a great deal of enthusiasm inasmuch as the employees do not make any contributions and consider the plan as additional income*"

Employers bear the heavier load in financing retire­ ment plans, despite the frequent use of employee contri­ butions* As shown in Table 37, the practice of merely matching the salesman's contribution, which is the rule in Federal Old Age and Survivors' Insurance, is used In only 30, or 21*8jC, of the 137 contributory plans tabulated* In only seven oases does the salesman contribute more* Sponsors of the 98 other contributory plans claimed that their contributions are greater than those of sales employees*

Benefit Payments to Retired Salesmen Some retired salesmen now receive annual benefit pay­ ments as high *s $25,000* However, only 78 companies 120

TABLE 37* Number of Companies Sponsoring; Tension Flans for Outside Salesmen, By Size of Employer's Contribution Among

2li7 Members of National Sales Executives 1952 Q. 35* "Does the employer contribute to a retirement income fund for outside salesmen? If yes, is the employer's contribution greater than, equal to, or less than the salesman's contri­ bution?"

Number of companies sponsoring a pension plan for salesmen Size of employer's contribution Insurance Other than Total companies insurance Qnployer does not contribute 0 3 3 Employer's contribution is* Less than salesman's contribution 2 2 h

Equal to salesman's contribution 5 25 30 Greater than salesman's contribution 13 85 98 Employer contributes; salesman does not 7 102 109 No answer 1 2 3

Total 28 219 2U7 1 2 1 reported payments of more than $1*000 per year to any one salesman, and only 42 of these paid more than $3,000 to any one man. The data which was obtained on benefit payments may not be conclusive, since only 120 reporting companies, or 48*5^, of those sponsoring pensions for salesmen, now have retired salesmen who are receiving benefits* Within this group some benefit payments are very low* Federal Old Age and Survivors Insurance is applied to salesmen in nearly all of the 497 U*S* companies from which questionnaires were received* Nineteen firms, or 3*8^, reported less-than-majority coverage, although it Is prob­ able that in some of these, salesmen pay Social Security taxes on a self-employed basisin 55 cases, according to Table 39, Social Security benefits are deducted from the total benefits payable to retired salesmen under a private pension plan* The plans Included in this survey offer to retiring salesmen an average of three choices as to the receipt of benefit payments* As shown in Table 40, most companies apparently prefer to pay a regular income for the remain­ ing life of the salesman after bona fide retirement or disability, or to his dependents after his death* Less frequently offered are vesting provisions, in which a salesman who leaves the employ of the sponsor before

^ See Table 20, 122

TABLE 38* Number of Companies Sponsoring; Pension Plans for Outside

Salesmen, By Basis for Determining; Amount of Benefits Due Among 2h7 Members of National Sales Executives 1952 Q. 3b: "Are benefits paid to a retired salesman based entirely upon the amount of his contributions? If not, describe briefly how the amount of benefits is determined." Number of companies sponsoring a pension plan for salesmen Basis for determining amount of benefits due to salesmen Insurance Other than Total companies insurance

Total 28 219 2ii7 Benefits based entirely on salesmen's contributions lli Six 68 Benefits not based entirely on salesman's contributions: total lli 165 179 Salesman makes no contribution^ 7 102 109 Benefits based on: 2

Salesman's length of service 3 21 21* Salesman's earnings 2 15 17 Salesman's age 0 5 5 Company earnings 1 10 11

Earnings of pension fund 0 7 7 Other basis 1 2 3 No answer 0 3 3

Question 36 did not require an answer from sponsors of non-contributory plans. Of the 38 of these companies which did supply data, 17 base benefits on a combination of salesmen's earnings and years of service, 11 on salesmen's earnings only, 5 on service credits, and 5 on other arrangements.

Entirely or in part. 123

TABLE 39* Number of Companies Sponsoring Pension Plans for Outside Salesmen, By Adjustment Made for Social Security Benefits Among 239 U.S. Members of National Sales Executives^

1952 Q. 37* "Are benefits paid by your company adjusted according to the amount of Social Security benefits received by the retired salesman?”

Number of companies sponsoring a pension plan for salesmen Adjustment made for Social Security benefits Insurance Other than Total companies insurance

Social Security benefits deducted from total earned benefits under company plan 3 52 55 Social Security benefits not deducted 25 155 180 No answer 0 h a

Total 28 211 239

1,All Canadian and Mexican replies have been omitted. TABLE 1*0* Number of Companies Sponsoring Pension Plans for Outside Salesmen,

By Types of Benefit Options Authorised Among

2l*7 Members of National Sales Executives 1952 Q. 38* "Which of the following options does the outside salesman have in receiving retirement benefits? Check all those permitted by your company.*1

Number of companies sponsoring a pension plan for salesmen Authorized benefit option Insurance Other than Total companies Insurance

Lump sum 6 o3 69

Periodic payments for life of the salesman 27 171 201

Periodic payments for a specified number of years 5 56 61 Periodic payments for life of the salesman, after his death to dependents or estate 19 112 131 If disability or death occurs before retirement, salesman's accumulated contributions are refunded to him or to his beneficiary 19 113 132 If disability or death occurs before retirement, employer's accumulated contributions are given to the salesman, or to his beneficiary 9 77 86 If the salesman leaves the employ of the company before retirement, his accumulated contributions and part of the employer's accumulated contri­ butions are given to him 8 78 86

Other 13 65 78 No answer 0 0 6

Total1 28 219 217

^"Figures on this line will not equal the sum of the figures for the options listed above, since many companies authorize more than one option. 125 retirement Is entitled to all or part or the fund built up on his behalf, In addition to his own contributions. Still less frequent is the choice of receiving all bene­ fits in one luuqp sum, or in a short term pay-off during a specified number of years*

Among other options which were described* the following types appeared most frequently! (1) a life insurance feature* with benefits payable in full if the employee dies either before or after retirement; (2) a deferred annuity plan* in which a salesman who retires or quits the employ of the sponsor before the retirement age leaves his account untouched* and begins to draw pension benefits after he reaches the required age;

(3) an Interest-bearing feature* in which an enployee who leaves before retirement collects his accum­ ulated contributions* plus interest;

(4) a "JoInt-or-survivorw option* guaranteeing a pen­ sion for at least ten years* although the retired salesman may have died; (5) lower monthly pension benefits in the event of voluntary early retirement; and (6) a Social Security adjustment* which may be chosen if the salesman retires before age 65* 126 In many plans, salesmen may qualify for full rights un­ der some of these options only after a specified number of years service* One respondent wrote * "Each employee is allowed to borrow against funds he has In plan* This is watched by the sales manager* He can purchase homes and other worthwhile items only* He is not allowed to purchase new cars, television, radio, etc* He can borrow in case of medical needs* About 80£ of the employees have borrowed against plan* This must be paid back on a monthly payment plan plus 3356 interest* The Interest is divided evenly for all in plan*”

Another voted against a wide variety of options with this comment s "Our employees understand that the objective of the plan Is to provide the maximum amount of retirement Income at 65, rather than ■frills1 with options to get interest, pay survivor's benefits, or other costly trim­ mings •"

A celling on benefit payments to retired salesmen is

Imposed by 90 plans, or 36*4^ of the total studied* As described in Table 41, a celling may be lng>osed directly by setting a maximum dollar benefit payment regardless of accumulated contributions or service credits, or by limiting payments to a fixed percent of the salesman's earnings at or near his retirement date* A ceiling may be imposed indirectly by limiting the earnings on which contributions will be paid into the fund, or by setting a maximum contribution which may be paid* TABLE hi* Number of Companies Sponsoring Pension Flans for Outside Salesmen,

By Types of Limitations on Benefits Among 21*7 Members of National Sales Executives 1952 Q. 39 s "Is any limitation placed on the amount of benefits which will be paid to any one retired salesman? If yes, please describe the limitation."

Number of companies sponsoring a pension plan for salesmen Type of limitation on benefits Insurance Other than Total companies insurance Total 28 219 21*7

Benefits not limited 11* 130 11*1* No answer 1 12 13 Benefits limited* total 13 77 90 Type of limitation not specified 0 10 10 Fixed percent of salesman's earnings at or near retirement date 2 15 17 Ceiling on earnings on which salesman may contribute I* 10 Contributions by salesman limited to maximum dollar amount annually

Monthly benefit payments limited to maximum dollar amounts total 1*5 51 Less than $100 per month 0 ui 1* $100 to 199 0 7 $200 to 299 u 1* $300 to 399 2 $1*00 to 1*99 d > $500 to 71*9 2 $750 to 999 0 2 2 $1,000 to 1,1*99 1 9 10 $1,500 to 1,999 0 1* I* $2,000 or more 0 2 2 Amount not specified o 1 1 Circled figures indicate range in which median falls- 128 Of the 247 firms with pension plans for salesmen, 120 or 48*6^ are now paying benefits according to the data in

Table 42* Five companies reported more than 50 salesmen now receiving retirement income* Two companies are making payments to more than 100*

Effect of Pensions on Sales Management Promotion of loyalty, goodwill, and public relations was most frequently cited as the chief advantage experienced by companies using salesmen1s pension plans* Other signi­ ficant advantages, listed in order of the number of men­

tions, are as followss holding of older, valuable men on the sales force; lng>roved morale; easier retirement of over­ age salesmen; attraction of better sales applicants; and

lower personnel turnover* It should be noted in Table 44 that only a handful of conpanles gave credit to pension plans for improving sales productivity or for reduolng labor union aotivity* Less common advantages were noted by several executives; "We feel that the plan definitely stabilises employment, that it improves employee mor­ ale and loyalty, and that it also stimulates productivity among non-selling employees** "The early vesting provision of our pension plan probably enoourages some few senior men to resign for other employment but in our estimation this is offset by the fact that we are free to dispense with an employee*s services after some years of employment without our feeling that we thereby are depriving him of pension cre­ dit •** 129

TABLE h2t Number of Companies Sponsoring Pension Flans for Outside Salesmen, By Number of Retired Salesmen Receiving Benefits „ From 2U7 Members of National Sales Executives

1952 Q. hOt "How many retired outside salesmen are now receiving benefits?"

Number of companies sponsoring Number of retired salesmen a pension plan for salesmen receiving pension benefits Insurance Other than Total companies insurance Zero 8 10U 112 1 to 10 11 75 86 11 to 20 2 Ih 16

21 to 25 1 5 6 2b to 30 0 1 1 31 to liO 0 2 2

Ul to 50 1 3 u 51 to 75 0 3 3 76 to 100 0 0 0

101 or more 2 0 2

No answer 3 12 15 Total 28 219 2U7 TABLE 1*3* Number of Companies Sponsoring Pension Plans for Outside Salesmen, By Range of Annual Benefit Payments Per Retired Salesman, Among 2l*7 Members of National Sales Executives 1952 Q. 1*1* "Xf periodic payment of benefits is permitted by your company, what is the range of annual benefits, per retired salesman? Check closest dollar bracket for both highest paid and lowest paid salesman."

0 U 0 «

Number 1 sponsoring a pension plan for salesmen Annual benefit paid Insurance companies Other than ;insurance Total companies per retired salesman Lowest Highest Lowest Highest Lowest Highest payment payment payment payment payment payment Less than $50. per year 3 10 13 $50 to 99 11* 11* $ 100 to Ui9 3 12 15 $150 to 199 1 1 7 10 8 11 $200 to 21*9 1 1* 5 $250 to 299 1 1 6 1 7 1* $300 to 399 1 1 © 3 © $1*00 to 1*99 1 3 1* 3 5 $500 to 71*9 3 11* 6 17 6 $750 to 999 (2 ) (21*) 2 (2 6 ) 2 $1,000 to 1,999 2 1* (23) 6 (23) $2,000 to 2,999 2 13 2 13 $3,000 or more 13 1 29 1 1*2 Periodic benefits not permitted 11* 11* Hi 11* No answer 12 11 103 109 115 120 Total 20 219 2l*7 Circled figures indicate range where the median falls. Figures in () belong within the indicated dollar range or higher. TABLE Number of Companies Sponsoring Pension Plans for Outside Salesmen,

By Significant Advantages Experienced, Among

2li7 Members of National Sales Executives

1952 Q. U2: "Based on your company's experience only, what do you consider the most significant advantage to the company of a retirement income plan for outside salesmen? Please check only one."

Number of companies sponsoring a pension plan for salesmen Advantage of pensions to the company Insurance Other than Total companies insurance Lower turnover of salesmen 2 10 12 Improved morale 5 28 33 Greater productivity 0 3 3 Easier retirement of over—age salesmen 2 22 2k

Reduction of salesmen's desire to join a labor union 1 0 1

Reduction of labor union troubles 0 0 0

Attraction of better qualified sales applicants 3 16 19 Holding of older, more valuable men on the sales force 6 36 k2 Promotion of loyalty, goodwill, or public relations 5 5C 6C

Other 0 0 0

No answer1 h h9 53

Total 28 219 2h7

■^Includes 35 answers voided because more than one advantage was checked. 132

"All real salesmen want to be self-suffi­ cient and a good pension plan contributes toward thls« If business does not act, the problem will force itself into the hands of socialistic politicians*"

Much company pride and esprit de corps attaches to pension plans* As shown in Table 45, a total of 93 respon­ dents, representing 37*6$g of the plans studied, refused to answer a question asking for significant disadvantages of salesmen's pensions* Of these, 45 wrote on the question­ naire! "There are no disadvantages!" In 191 cases, or 77*3% the plan now in use was said to be satlsfaotory* Where disadvantages were cited, the problem most frequently listed as being of greatest significance was the high cost of current financing* Other disadvantages, noted in order of the number of mentions, are as follows! the commitment of company funds in future years; the loss of useful, though over-age salesmen; and the tendency of some sales forces to fill up with older, less valuable personnel* Little attention was given, according to Table 45, to any reduotlon in salesmen's Initiative or drive, to a clerical burden posed by retirement fund accounting, or to objections of younger salesmen or non-sales employees*

Improvements most frequently desired are, as indloated in

Table 46, an Increase In the amount of benefits and modern­ ization of the plans to fit current earning scales and costs of living* 'ABLE u5* Number of Companies 5; or.sorin? Pension Plans for Outside Salermen, by Significant Disadvantages Experienced Among 2ia7 Members of National Sales Executives

1952 I. Ii3s "Based on your company's experience only, eh at do you consider the most significant disadvantage to the company of a retirement income plan for outside salesmen? Please check only one." Number of companies sponsoring a pension plan for salesmen Disadvantage of pensions to the company Insurance Other than Total c ompani es insurance Reduction of initiative or drive 2 6 8 Sales force tends t"> fill up with older, less valuable workers 2 15 17 High cost of current financing for the plan 39 k6 Serious commitment of company funds in future years 2 UO U2 Clerical burden 0 2 2 Objections of younger salesmen 0 6 6 Objections of non-sales employees 0 0 0 Loss of useful, though over—age salesmen 3 18 21 Less interest in advancement to management positl ons 1 3 h "There are no disadvantages 7 33 Ll5 Other 1 2 3 No answer^ 3 5o 53 Total 20 219 2U7

1Not on questionnaire

Includes 5 answers voided because more than one disadvantage was checked. TAJ-IE U6* Number of Companies Sponsoring Pension F lans for Outside Salesmen, By Improvements Desired in Present Plans Among 2i»7 Members Of National Sales Executives 1952 Q. iilit "Are you satisfied with your company's present retirement income plan as it affects outside salesmen? If not, which of the following statements explain why? Check more than one, if necessary,"

Number of companies sponsoring a pension plan for salesmen Improvement desired in plan Insurance Other than Total companies insurance

Total 28 219 2U7 Present plan is satisfactory 2 0 171 191 No answer 0 h L Present plan is not satisfactory: total1 8 hh 52 Sales executives should have more control over the plan 0 1 1 Benefits are too small 6 29 35 Details of the plan are too compli­ cated for some employees to under­ stand 0 U L Not all employee groups are treated uniformly under the plan 1 1 1 Plan needs to be modernised to fit current earnings scales 2 12 lli Other U 16 2 0

Figures on this line will not equal the sum of the figures for the improvements listed below, since some respondents cited more than one needed improvement. 135 Specific Improvements needed in existing plans were noted on numerous questionnairesj "In the case of salesmen the plan should be changed because a man has to reach 65 years of age to obtain full benefits* The average salesman In our business cannot produoe enough from ages 55 to 65 to stay on the sales team* But the benefits he can collect at age 55 are too small to be of much help* Unless the present plan is changed it looks like a lot of good older salesmen will be out of Jobs*” "It is a mistake when putting a plan such as ours into effeot not to thoroughly Inform personnel regarding the plan and to sell them on it* No matter how good the plan, personnel are Inclined to be suspicious that management Is trying to put something over on them*" "Benefits are not as large as we would like for people retiring during first 15-20 years of the plan**1 "Host higher paid salesmen would like to be permitted to Increase that part of their contribution which the company matches*" "Twenty-seven amendments have been made to the plan since its inception on September 1, 1945* It is constantly being studied and reviewed in the light of current economic and social conditions to keep it abreast of the times*" Employee reactions, both favorable and unfavorable, were discussed on many questionnairest "The president of the company personally started the plan about 16 years ago and found it hard to *8 0 1 1 ' to eng>loyees then* Now he is frequently thanked for his fore- sighted planning that makes retirement possible now without financial hardship*" 136

"Our pension plan, even though It carries a death benefit of $100 for each year of service, is not too popular for the simple reason that most employees take the atti­ tude that they may not live to receive a pension* They feel they have a complete vestment in our profit sharing plan, but only a potential gain from the pension trust* However, the employees now on re­ tirement and those approaching retirement are sold on the pension plan and can see its v a l u e • "

"The plan is well liked but not fully appre­ ciated* It has not helped a bit in holding enqployess • "

"Our plan is liked pretty well but doesn't seem to generate too much enthusiasm* Gnqployees are getting more Interested as they realise their equity in plan is increasing year after year*"

"We haven't had too many comments recently, as many are probably wondering shat infla­ tion will do to their benefits in later years* The principle, however, is con­ sidered very sound*"

"What will the dollar be worth?"

"The plan is not generally liked or disliked* It is considered satisfactory and equal to plans existing elsewhere, by those who under­ stand it* It is not understood by a great many people in the area between organised labor and upper management* It has no appreciable affect upon the opinions of the female enqployee who generally doesn't look forward to retirement* Among the generation born and educated in a period of government paternalism, I believe it Is generally considered as nothing more than the individual Is entitled to*" 137

Administration of the Plan Use or an outside firm to administrate the pension plan is preferred by a majority of the companies surveyed. In only 86 or 3 4 . 8 # of the plans covering salesmen Is the work handled entirely by the sponsor's own personnel according to Table 47. Of the 22 plans which exclude salesmen, 13 make use of outside administrators, such as Insurance com­ panies, employee benefit consultants, and the like. The sponsor's treasurer Is the official most frequently respon­ sible for operation of the plans, while in only 10 reported cases is this responsibility assigned to a sales executive. Pension plan operation usually requires only a small expenditure of manhours. Only 103 or 38 .2£ of the spon­ soring companies reported a full-time pension staff of one or more persons. In only 19 cases are five or more employ­ ees used for this work. As shown In Table 49, three com­ panies reported a staff of more than 30 persons.

Costs of the Plan to Employers The median cost of maintaining a pension plan was between $200 and $299 per covered employee in 1951, among the sponsoring companies which submitted cost data. These costs, as noted In Table 50, Include administrative and operational costs, employers' contributions, and Interest paid, but do not Include employees' contributions. In 31 companies, costs were more than $500 per covered employee. 1 3 8

TABLE U7» Number of Companies Sponsoring Pension plans for Outside Salesmen, By Nature of Administration In Use by 269 Members of National Sales Executives 1952 L5* '’Is the administration of the retirement income plan handled bv an insurance company or anyone else outside of your company?" Number of Number of companies companies Total Nature of administration in which in which companies salesmen salesmen sponsoring are are not a pension covered covered plan

A H companies* total 21*7 22 269

Handled by outside firm entirely 97 11 108

Handled by outside firm in part 60 2 t>2

Handled entirely by sponsor 8o 5 91 No answer a a 8 Insurance companies* total 28 i 29 Handled by outside firm entirely 10 i 11

Handled by outside firm in part h o a

Handled entirely by sponsor Hi o ia No answer 0 0 0

Other than insurance* total 219 21 2h0

Handled by outside firm entirely 87 1 ° 97 Handled by outside firm in part 56 2 58

Handled entirely by sponsor 72 5 77 No answer a a 8

i TABLE lt£t Number of Companies Sponsoring Pension Plans for Outside Salesmen, By Officials Responsible for Operation of 269 Plans In Use by Members of National Sales Executives 1952 Q. Ut>: "Which of the following officials or departments is mainly responsible for the operation of the plan?" Number of Number of companies companies Total in which in which companies Official responsible for salesmen salesmen sponsoring operation of pension plan are are not a pension covered covered plan

All companiesi total ?U7 22 269

Personnel manager 33 1 3U Treasurer 71 13 814 Comptroller 36 1 37 Sales executive 10 0 lO Industrial relations director 13 0 13 Other 71 1 72 No answer1 13 6 19 Insurance companies! total 28 1 29 Personnel manager h 0 h Treasurer 3 1 a Comptroller 6 0 6 Sales executive SOS Industrial relations director 0 0 0 Other 9 0 9 No answer 1 0 1

Other than insurance: total 2 19 21 2U0

Personnel manager 29 1 30 Treasurer 98 12 8 0 Comptroller 3 0 1 31 Sales executive 5 0 5 Industrial relations director 13 0 13 Other 62 1 63 No answer 12 6 18

^Includes 15 answers voided because more than one official was checked. Among the other officials listed were the following: president, by 7 companies; trustee, 6; secrettrv, 6; general manager, It; actuary, 2 ; and a special committee, 21. H*o

TAblb 1*9: Number of Companies Sponsoring Pension Plans for Outside

Salesmen, By Number of Employees Used to Operate 2t>9 Plans

In Use by Members of National Sales Executives 1952 h7* "How many employees of your company devote a major portion of their working hours to the retirement income plan?" Number of Number of companies companies Total Number of employees in which in which companies salesmen salesmen sponsoring are are not a pension covered covered plan

All companies: total 21:7 22 269 None 13U 13 11*7 I to U 78 6 8L 5 to 7 11 0 11 8 to 10 2 0 2 II to 15 1 0 1 16 to 20 2 0 2 21 to 25 0 0 0 20 to 30 0 0 0 31 or more 3 0 3 No answer 16 3 19 Insurance companies: total 28 29 None 15 0 15 I to h 5 1 6 5 to 7 1 0 1 8 to 10 0 0 0 II to 15 1 o 1 16 to 20 o 0 0 21 to 25 o o 0 2b to 30 o 0 o 31 or more 2 0 2 No answer h o h

Other than insurance: total 219 21 21*0 None 119 13 132 I to U 73 5 78 ^ to 7 10 0 10 8 to 10 2 o 2 II to 15 o o 0 Lo to 20 2 0 2 21 to 25 0 0 0 2d' to 30 0 o 0 31 or more 1 0 1 No answer 12 3 15 a y Annual Cost o 1 Pensions per Covered Siiployee A mo n g 209 Members of National Sales rixecutivsa 1951 1*7s "What m s the annual cost in 1951 per covered employee of maintain­ ing the retirement income plan? Divide total annual costs in 1951 by the number of employees then participating. Include all adminis­ trative and operational costs, employer's contributions, and interest paid, but do not Include employee's contributions.)" Number of ■umber of companies companies Total in which in which companies Cost per covered employee salesmen salesmen sponsoring are are not a pension covered covered plan ell companies! total 21*7 22 269 $ O to 9 12 O 1 2 $ lO to 19 3 O 3 * 20 to 1*9 6 1 7 * SO t o 99 7 1 8 $, lOO to 11*9 1 5 o 1 5 * 150 to 199 9 o 9 * 200 to 299 < ? I 2SS to 1*99 21 1 2 2 $ 500 or more 29 2 31 No 87 ll* l O l Insurance companiesi total 28 1 29 O to 9 3 o 3 l O to 19 o o O I 20 to i*9 o o o * 50 to 99 1 o 1 * lOO to 11*9 1 o 1 * 150 to 199 o * 200 to 299 & o s ♦ 300 to 399 1 o 1 * 1*00 to 1*99 3 o 3 * 500 or sure 1 o 1 No 1 3 1 11* Other than insurance* total 219 21 21*0 * O to 9 9 O * lO to 19 3 0 $, 20 to 1*9 6 1 S 50 to 99 6 1 % lOO to 11*9 11* o t 150 to 199 o t 200 to 299 G> % 300 to 399 2 0 * 1*00 to 1*99 18 1 $ SCO or more 28 2 No 71* 13 Circled figures indicate range in which median falls. 142

Chapter 6 CONCLUSIONS

Appraisal or survey results is seldom an easy task for those who have been close to such a project in all of its phases* They are susceptible on the one hand to prejudice and to a desire to "prove something*" On the other hand they may acquire a defensive attitude and an unwillingness to let their results be used, as they must, to infer about the huge group of people or things that was not surveyed the same characteristics found In the small group that was* Throughout the present study of pension plans for out­ side salesmen, the possibilities of bias, inadequacy, and non-representativeness in the data have been repeatedly pointed out* The most inqportant of these possibilities center around the mailing list of National Sales Executives, Incorporated, a devioe without which a survey of this mag­ nitude would probably not have been conducted* The results obtained from the 508 respondents have been checked wherever possible with the results of other surveys, with a few sales executives and pension consultants, and above all with common sense* It is believed that these results may be endorsed as acceptable, and that some useful generalizations may be made from them* 143 In this chapter some or the more Important findings of the survey are summarised, and trends in the use of pen­ sions for salesmen are indicated* In addition, a number of unsolved problems are defined, model pension prlvisions for salesmen are proposed, and some suggestions for further studies are made*

Trends in the Use of Pensions for Salesmen A faot which was made clear in all areas of this study Is that company pension plans can be, and are, applied to outside salesmen with increasing frequency* However, the problems of fitting these plans to the circumstances of salesmen's pay and working conditions have not been solved so much as they have been disregarded* In nearly all cases coverage of salesmen was merely the result of blanket inclusion of all the employees in a company• There were few instances of plans for sales forces only, or of special pension policies fitted to the needs of salesmen* It is not clear whether differential treatment of salesmen Is necessary in pension planning because It has not been tried* Administrative practices reported In Chapter 5 were admittedly devised with another type of employee in mind*

It is perhaps unfortunate that many sales executives are so well accustomed to using expedients throughout their work — advertising media, sales presentations, call report 144 forms and the like often do not quite fit the situation at hand, but are used nevertheless* When expediency Is applied to personnel practices on the sales force, and the individual salesman is made to reooncile an ill-fitting pension plan with his own work situation, he undoubtedly suffers some loss of effectiveness* There is plenty of evidence that outside salesmen want to participate in pension plans, except for those who are very young or transients* When enrollment in plans re­ ported In the survey was voluntary, salesmen were said to participate unanimously in almost every case*76 An edito­ rial in Sales Management magazine summarized the matter as follows I " • • • where the sales force is fully a part of the concern there will be little to be gained and muoh to be lost by attesting to keep sales people out of a pension system* Sales people are human enough to want to share in the benefits accorded to all other company enployees even though they treasure their freedom and responsibilities as sales­ men*" 77 It cannot be said that the advantages of salesmen's pensions whloh were ranked highest by the survey respondents are particularly impressive* An eop 1oyer who values the loyalty, good will, and public relations aspects of a pen­ sion plan may be concerned less with the enrolled employees

See Table 32* 77 nThe salesmen. Too, Will Get Pensions," Sales Management* 64i112, February 1, 1950* 145 than ha la with the Impact hia humanity and generosity will have upon outsiders* Enthusiasm and pride on the part of salesmen are not always genuine, for these men have been trained to display these attitudes about almost anything* Before salesmen's pensions can be considered truly signif­ icant to sales management, more attention will have to be dlreoted to their effect upon sales productivity* In the present survey only three executives mentioned it*78 The dollar amounts Involved In typloal pension bene­ fits are not large enough for them to be meaningful to any class of enqployees* It is Important to note that large benefit payments are the exception rather than the rule* To date most company plans have been only a slight Improve­ ment over Federal Old-Age and Survivors Insurance, In which meager percentages of normal income are offered to those now earning more than $3600 per year* The great majority of experienced salesmen have Incomes well above that figure* Few of these men. If still capable of producing at the retirement age, will be Interested In leaving their jobs for the small benefit payments now available*

Some of the Unsolved Problems In designing pension plans, insurance underwriters are usually anxious to reduce the actuarial risk on the

70 See Table 44* 146 sponsoring employer by enrolling as many persons as possible under Identical provisions* The same procedure also reduces the problems or administering the plan and therefore its cost is lover* The so-called blanket plan is a source of diffi­ culty, however, when company executives wish to use discre­ tion in directing the efforts of older salesmen to best advantage* Occasionally employees near the retirement age become more preoccupied with meeting the requirements for a pension than with meeting the requirements of their jobs* Salesmen, for example, may refuse to travel during this period* To achieve flexibility in handling sales employees at this critical time, it may be necessary to re-examine the blanket plan in the light of its true costs* A perennial problem in pension matters is the concept of benefit payments as a matter of need* Retirement income tends to be looked upon as a gratuity of the employer, even though It may be in some cases nothing more than deferred earnings of the employee* Limits on monthly payments are placed so low in some companies79 as to resemble publlo charities, if not to make pensioners dependent on those very institutions 1 Retired persons frequently complain that their former employers are meddling in their personal finances, and are gearing benefit payments to a subsis­ tence level* Surely in a sales organization this idea

79 See Table 43. 147 would be found Inconsistent with the objective of improved

living standards through more consumption rather than less* Guaranteeing the adequacy of future benefit payments is, of course, a perplexing problem since a contributory pension plan represents a long-term investment in cash which may depreciate in value* In some cases the employ­ ee 1s frequent questlont "What will the dollar be worth when I retire?" is met by investing the retirement account in securities* However, the safety of such arrangements is as much in doubt as are those pension plans in which bene­ fit payments are to be paid from current profits, if any, of the enployer* Of lesser scope but equal importance in many companies is the problem of stimulating Interest in company pension plans, particularly among sales executives* Many of these men, judging by their replies on questionnaires, do not understand the objectives of their own oompany plan, and are unable to explain its provisions without the aid of a manual issued by an underwriter* The manuals themselves are often crammed with technical jargon of the Insurance field, and difficult to follow* There is need for simpli­ fying and standardizing terminology, rules, and rates before general understanding and acceptance can be secured* Lastly, the methods of preparing older salesmen for retirement have apparently received little attention*®^

See Table 23* 143 Some means or easing the transfer to Inactive life should be especially helpful in the case of those who are in more strenuous, exacting sales work* Furthermore, It should be possible to "taper off" the work load of aging salesmen, reduce their travel, and devote company time to developing new Interests In these men* For some employees, such as machinists whose work must always be performed at peak rates of speed or not at all, such a slow-down would be imprac­ tical* Few salesmen, however, work under these conditions*

Model Pension Provisions for Salesmen Based on the foregoing dlsousslons, some model pension provisions for outside salesmen are presented in this section However, it should be noted that stereotyped rules are not here recommended* The brevity and simplicity of these statements is intentional*

(1) An outside salesman shall have the same pension privileges as any other ezqployee, Including the right to decline participation If he desires, except that s (2) A salesman who has been employed less than 5 consecutive years will not receive the employers' accumulated contributions to his retirement account or the interest on such contributions If he should leave the company's employ before the end of 5 years* 149 (3) The employer shall deduct from any and all earn­ ings paid to a salesman a sum equal to 5 depos­ iting this amount In the salesman*s retirement account at the time the payroll voucher Is Issued* Simultaneously the employer shall deposit an equal amount to the same account which shall be the employers* contribution, except thatj (4) A salesman who receives any portion or his earn­ ings In the form or commissions or bonus may elect to base his contribution with respect to these earnings on the arithmetical average or his earnings or the same type over the preceding 3 years* (5) A pension reserve shall be established which shall be runded by regular premium payments to a repu­ table trust company, this rund to be non-divert- able and under the guardianship or a permanent committee or trustees* (6) All amounts In a salesman's retirement account plus accumulated Interest at Z/% compounded semi­ annually, shall become due to him in lump sum whenever he shall t (a) reach age 60 and elect to be terminated, or (b) leave the employ or the company perma#- nently ror any reason, subject to the reservation in rule (2) except that j (7) A salesman may elect to receive his accumulated amount in equal installments each month until the balance is depleted, the amount of the install­ ments to be specified by him, and the unpaid balance continuing to draw interest* (6) If a salesman dies while a balance exists In his retirement account, the amount shall become due, with Interest, to his named beneficiary or to his estate* Rights under rule 7 are likewise transferred* (9) There shall be no limitation of the amount permitted in a salesman1s retirement account, or in the amount of his monthly installments* (10) A salesman who reaches age 70 while in the employ of the company shall be terminated automatically* There shall be no exceptions*

Suggestions for Additional Studies If this study may be to state adequately the present situation of pension plans for outside salesmen, there is ample opportunity for research on any of the unsolved problems mentioned earlier in this chapter* In addition, two other suggestions may have merit* 151

First, there is need for study of outside salesmen and tneir jobs by advanced students of personnel administration*

Such a study would reverse the point of view of this invest­ igation, in which a student of sales management had been involved* It would be valuable to examine critically the characteristics of outside salesmen as employees to deter­ mine which personnel measures including various employee benefit programs can be applied without exception, and which, if Indeed any, cannot* Second, there will undoubtedly be increasing Interest in coining years in the problems of the older salesman, just as there has been In the case of older employees generally* A study of the relationship between age and sales produc­ tivity would be of value in helping sales executives deter­ mine when and how to retire these men* 152

BIBLIOGRAPHY"

A. BOOKS

Aspley, J* C., editor, The Sales Managers' Handbook* Sixth edition; Chicago; DartnellCorporttlon, 1950* 1140 pp* Eomar, F., W* W* Fellers, A* II* Fisher, D* B* Maduro, J* £• St* John, Q* Simona, and N* M* Gottesmann, Handbook for Penalon Planning* Washington, D*C*; Bureau of National AfPairs, Inc*, 1940* 363 pp. Canfield, B* R*, Sales ■tratlon Principles and Problems * Revised edition; Mew York; Prentice-Hall, Inc*, 1&47* 606 pp* Duddy, E* A*, and D* A* Revsan, Marketing* An Institutional Approach* Second edition; iev York; McGraw-Hill Boot Company” Inc*, 1953* 644 pp* Emergency Labor Law (a loose-leaf service)* Chicago* Commerce Clearing House, Inc*, 1952* Juclua, M* J*, Personnel Management* Revised edition; Chicago; Richard D* Irwin con£>any, Inc*, 1951* 734 pp* Labor Law Reports (a loose-leaf servloe)* Fourth edition. Volume 2; chloago; Commerce Clearing House, Inc*, 1952* Lapp, C. W*, Personal Supervision of Outside Salesmen* Columbus; Ohio state u’niverslty , Bureau or business Research, 1951* 300 pp* Mee, J* F*, editor. Personnel Handbook* Hew York; Ronald Press, 19S1* 1167 pp• Maynard, H* H*, and H* C* Nolen, Sales Management* Revised edition; New York; Ronald Press, 1 9 6 0 * pp* O'Neill, Hugh, Modern Pension Plans* New Yorks Prentloe- Hall, Inc*, Tg47 :— ygB"pp~*---- Phelps, D* M*, Sales Management Policies and Procedures* Chicago; Richard D* irwin, Tnc*, 1951* ^02 pp• 153

Scott * W* D*, R* D* Clothier, end W. R* Spriegel, Personnel Management» Fourth edition; New York: McGraw-hlll book Company, Inc., 1949* 646 pp*

Strong, J* V*, Enyloyee Benefit Plans In Operation* Washington, D.C.i Bureau of National Affairs, Inc., 1951* 348 pp*

Waite, W* W*, Personnel Administration* New Yorkj Ronald PreSB, 195b* 683 pp*

Williamson, W* R*, Employee Insurance Plana* New Yorkj Funk and Wagnalls Cong) any, 1943H 5ft pp •

Winslow, C# L., Profit Sharing and Pension Plana* New Yorkj Commeroe Clearing House, Inc*, 194$* 261 pp*

B. GOVERNMENT PUBLICATIONS

Bureau of Internal Revenue, Integration of Pension Plans of Employers with the Retirement Benefits of the boolal Security Act* Uemo bo* b539* Washington, D*C*j United states Government Printing Offloe, July 8, 1943* 7 pp. Bureau of Labor Statistics, Digest of Selected Health. Insurance. Welfare, and Retirement rIans Under ffolleoiive Bargaining* Speoial Series No* 6* Washington, b*c*i Wilted States Government Printing Office, 1961* 52 pp* Bureau of Labor Statistics, Employment and Economic Status of Older Men y d Women* Bulletin do* lo5g* Washington, D.C.j bnlteci States Government Printing Office, May, 1962* 58 pp* Bureau of Labor Statistics, Occupational Outlook Handbook* Bulletin No. 998* Washington, b*C*j xJhited States Government Printing Office, 1951* 574 pp*

Bureau of Labor Statistics, Pension Plans Under Collective Bargaining* Bulletin No* 1147* Washington, D*C*i United States Government Printing Offloe, 1953* 23 pp* 154

Bureau of the Census* Current Population Reports- Labor Force• Series P-50, N*o* 36* Washington* D*C*i United States GoveriUMnt Printing Office, December 5* 1951* 11 pp* Bureau of the Census* 1950 Census of Populations Classified Index of Occupations and Industries* Washington, b*C*i l/nited States Government Printing Of floe, 1950* 228 pp* Bureau of the Census* Statistical Abstract of the United States* Washington* D*C*s Uhited States doverrunsnt Printing Office* 1955* 1041 pp* Bureau of the Census* U* S* Census of Population* 1950* Volume II* Part 1* Washington* D*C.i United States Government Printing Office* 1951* 338 pp*

C. MAGAZINE ARTICLES

"A Pension Plan Is Applied to a Conaniasloned Salesman*" Sales Management, 59j48-50* July 15* 1947* Cool* 0* C** "Are Salesmen Employees?" Sales Management * 60*75-77* April 1, 1948* David* D* £•* "The Human Factor In Retirement*" The Management Review* 40*95-96* February* 1951* "Does the Man We Call a Salesman Need Another Name?" Sales Management* 64*56-59* January 1* 1950* "Federal Social Security Act Amendments of I960*" Monthly Labor Review* 71|457-60* October* I960* "General Mills Sets Up Pension Plan Covering 1*000 Salesmen*" Sales Management * 59j101-4* October 1* 1947* Oerheart* E* C** "Is the Agent an Eng>loyee?" Life Insurance Courant* 55*37-40* March* 1950* "How Many Will Receive Company Pensions?" Management Record* 14*191* May* 1952* ' "How the Government Defines a Salesman*” Sales Management* 64 j61-63* June 1* I960*

1 155

MoConnell, J* W., "Present-Day Pension Plans," Management Record, 15:325-26, September, 1053* "Pensions: A Problem or Payment and InvestmentNewsweek, 35:72-5, March 27, 1950* "Pensions Don't Orow on Trees," The Kiplinger Magazine. 3:22-6, December, 1949* "Pensions Freed Prom 10% Ceiling," Management Record, 14 f99, March, 1952• "Pensions: Not If But How," Fortune, 40:81-3 and 218-25, Noveofcer, 1949, "Retirement Plans not Adequate, Sales Executives Club Finds," Sales Management, 64:89, May 20, 1950, Robinson, S. J,, "Can Sales Management Solve Its Human Problems?" The Management Review, 43:176-77* Rowe, E. X., and T. H, Paine, "Pension Plans under Collec­ tive Bargaining," Monthly Labor Review, 76:237-48, March, 1953. Salisbury, P., "Mho's a Sales Employee under Social Security?" Sales Management, 65:140-42, October 16, 1950. Shay, P. V., "Making Effeotlve Use of Older Workers," Management Hews, 26:7-8, June, 1953. "The Salesmen, Too, Will Oet Pensions," Sales Management, 64:112, February 1, I960. "What About Pensions and Welfare Plans?" Mill and Factory. 45:87-6, Noveafcer, 1949. "When the Salesman Gets Old," Printer's Ink. 180:61-65, June 22 , 1937 • — — —

"Why Salesmen's Pensions Are Gaining in Popularity," Sales Management. 56:97-100, June 1, 1947. 156

D. PAMPHLETS

Company Practice a Regarding Older Workers and R

Social Security In Indiwtrri Extent and Cost of Voluntary Services In Selected Industries• Publication No« 45* Chicago: Research Council for Economic Security, 1948* 12 pp*

Su t t i t of EuploT»« B«P»flt Fl«n«, Mliwit 3m*aarr of Six Cities*Publication Ho* 6 2 * Chicago: Research Council ror Economic Security, 1949* 28 pp* The Hew Vase and Hour Lav* Washington: Bureau or National ----- JCffalrS y TTn o ;; T g<77 320 pp.

The 1950 Social Security Aot »■ With Explanation* New York: HFrentIce-Hall, Inc*,1960* 28 pp* Toadal, H* R*, and W* Carson, Surrey of Salesmen's Compen- satIon* Nev York: National sales Executives, Inc•, 1951. 73 pp* Trends In Company Pension plans* Studies In personnel Policy No* oi* Aew y'ork: National Industrial Con­ ference Board, 1944* 52 pp* 289 Retirement irasr:— 105 Plans*pp." Nev York: Bankers Trust Company, What la This Social Sec unity T Publication No* 2* Chicago: Hesearon Council ror Soononlo Security, 1943* 7 pp*

B • PROCEEDINGS

Stevens, S* N*, "Basic Values In the Making of a Salesman," in Proceedings of the Fifth Annual Conference of Sales Columbusj TheOhio State University Publications, 1949* Pp* 6-19*

F. UNPUBLISHED MATERIALS

Foster, william 0*, Retirement Pension Plans for Salesmen* Unpublished MBA Thesis, ^he Ohio State University, 1950* 82 pp* 158

Q. COMPANY' PENSION MANUALS

Details of Pension Trust Plan For Contract Commission Salesmen. Colorado Springs, Coloradot The Alexander Film Company, 1945* 5 pp.

How To Read Tour Future. Minneapolis! General Mills* Inc., 1947.' "'"Z5"pp* Retirement AnnultT Plan For LeTourneau Employeea. Peoria, Illinoisf ft. G. LeTourneau, Inc., 1944. 16 pp.

Retirement Plan For Employees. Columbus, Ohio* The Ohio Company, 1946. io pp. OHIO STATE UNIVERSITY BUREAU OF BUSINESS RESEARCH RETIREMENT INCOME PLANS FOR OUTSIDE SALESMEN NATIONAL SALES EXECUTIVES QUESTIONNAIRE SURVEY INTERNATIONAL

IF YOUR COMPANY employs full-time outside salesmen, your answers to the questions below are wanted, regardless of whether your company participates in any form of pension or retirement income plan. Please answer all of the questions; in most cases a check mark is all that is needed. Your additional comments in the margins or on the last page of the questionnaire will be welcomed. Instructions for mailing the completed questionnaire may be found on page 15.

"Salesman” and "sales force" as used here refer only to those full-time outside sales employees who operate as an integral pan of their employer's organization, and who solicit business by making calls on prospective buyers. Thus salesmen who are independent contractors or retail store clerks are not included.

I. Gmtoral Information.

1. Check the description which best fds your company's MAJOR functions: [6-1] ...... Manufacturer [6-6] Other (please specify) 2 ]...... Wholesaler, jobber or distributor 3 ]...... Retailer or dealer 4 ]...... Agent or broker ...... 5 ] ...... Service organization

Principal products are: [7-1]...... Industrial goods [7-3]...... Services or intangibles 2 ]...... Consumers’ goods

3. Area of distribution is: [8-1]...... Nation-wide [8-3] One state 2 ]...... Two or more states 4] Less than one entire state

4. For bow many years has your company been in operation? [9-11...... Less than 5 19-5] ...... 20-24 ?1...... 5-9 M ...... 25-29 31...... 10-14 " | ...... 30-39 41...... 15-19 8 ] ...... 40 or more 2

II. So Im Fore*. 5. How many full-time outside salesmen do you mploy? Please do NOT include retail store sales people.

[10-13]......

6. How many employees are there in all departments and divisions of your company? [14-1]...... 1-20 [14-71...... 751-1.000 2 ]...... 21-50 81...... 1,001-2,000 3 ]...... 51-100 91...... 2,001 or more 4 ]...... 101-250 5 ] ...... 251-500 61 ...... 501-750

7 What has been the average annual turnover of your outside salesmen during the past three years? (Diviae total num­ ber of men dropped between January 1, 1949 and December 31. 1931 by she average number on sales force during the same period. Then divide answer by 3.) [15-1] ...... Zero [.15-81 ...... 30-34% 2 ]...... 1-4% 9 ]...... 35-39% 3!...... 5-9% 0 ] ...... 40-49% I I 10-14% x ]...... 50 or more (please specify) 5 ] ...... 15-19% % 6 ] ...... 20-24% ...... 7 ]...... 25-29%

Which of she following compensation plans is now used by your company to pay outside Ifsalesman? more than one plan is used, please check only the plan which affects the greatest number of salesmen, [16-1] ...... Straight salary only [16-7] ...... Commission with drawing account 2 ] ...... Salary plus commission on all sales 8 |...... Commission and bonus 3 ] ...... Salary plus commission on all sales 9 |...... Other (please specify) above quota 4 ] ...... Salary and bonus 5 ] ...... Salary, commission and bonus 6 ] ...... Commission only

9. What percent of your outside salesmen are members of a union? [17-11...... None...... [17-41...... 50-74% 2 ]...... 1-24% 5 ] ...... 75-100% 3 ] ...... 25-49%

10. If your company has a retirement income plan, was it originated as a result of collective bargaining with a labor union? [18 I] Yes [18-3]...... Partly 2 ]...... No Old-Ago Policy. What is the range of ages of your outside salesmen? Check closest age bracket for both youngest end oldest salesmen: Youngest is: Oldest is: [19-1]...... 15-19 [20-11...... 25-29 2 ] ...... 20-24 21...... 30-34 31...... 25-29 3 ]...... 35-39 41...... 30-54 41...... 40-44 51 ...... 35-39 5 1 ...... 45-49 6 ] ...... 40-44 61 ...... 50-54 71...... 45-49 71...... 55-59 «]...... 50 or over (please specify)...... Hi...... 60-64 9 ]...... 65-69 0 J ...... 70 or over (please specify)......

In what age bracket does your company usually hire newmen who are to become outside salesmen? [21-11...... Below 20 [21-51 ...... 35-39 21...... 20-24 61 ...... 40-44 3 ]...... 25-29 7 ]...... 45-49 4 ] ...... 30-34 8 ]...... ,. 50 or over

At what age do you consider your outside salesmenusually reach "peak" productivity? [22-11...... Below 20 [22-71...... 45-49 21...... 20-24 81...... 50-54 3 !...... 25-29 91...... 55-59 41...... 30-34 0 | ...... 60-64 51 ...... 35-39 x]...... 65 or over 6 ] ...... 40-44

How many years after beginning work as outside salesmen do your men usually reach "peak” productivity? [23-11...... less than 1 [23-6| ...... 10-14 21...... 1-2 71...... 15-19 31...... 3-4 81...... 20-24 41...... 5 6 9 |...... 25 or more 5 ] ...... 7-9

What percent of your outside salesmen are covered by Social Security (Federal Old Age and Survivors Insurance)? [24-11...... None [24-41...... 50-74% 2 ! ...... 1-24% 51 ...... 75-100% 3]...... 25-49% [25-X1

16. Does your company require compulsory retirement ofpersonnel any when a specific age is reached? [26-1] ...... Yes [26-2] ...... No If yes, please indicate which of the following types ofpersonnel are affected. State aho the compulsory retirement age for each group: _ . ° r Cr/nipuhii'y Retirement Age

[27-28]...... Sales executives [29-50] ...... Other executives ...... j.51-32] ...... Outside salesmen [33-34]...... Retail store sales people [35-36] ...... Office workers 137-38]...... Factory workers ...... [39-40]...... Others (please specify) 4

Which of the following atHorn is customarily taken when one of your outside salesmen reaches old age? Please check only one: [41-1]...... No action provided salesman is still 141-51 ...... Continued employment on part-time fit for work basis in selling work 2j...... Complete severance from M ...... Other (please specify) employment M...... Continued employment in non-selling work 4]...... Continued employment in smaller territory or on smaller selling task

If compulsory retirement of salesmen is required, what steps are taken to prepare aging salesmen for retirement? Check MORE THAN ONE, if necessary; [42-1]...... Company has no regular activities for [42-6] ...... Salesmen are offered company loans this purpose or other aids to "get settled" 2]...... Salesmen's work is carefully "tapered 7 ]...... Salesmen are counselled on old-age off" to avoid abrupt change job opportunities 3J...... Salesmens own plans and financial 8 ]...... Company participates in recreation condition are reviewed in informal or hobby activities open to retired interviews; advice is given by com­ personnel pany executives 9 ]...... Other (please specify) 4 ] ... fessional men: physicians, clergymen, psychiatrists, and the like M- ...... Salesmen are urged to read appro­ priate literature on old-age activities

What percent of your outside salesmen retired duringcalendar year 1951? (Divide number retired by average number on sales force in 1951.} [43-1]...... Zero [43-6] ...... 20-24% 2j...... 1-4'7 7 ]...... 25-29% 3 1 - ...... 5-9% 8 ]...... 30-34% 4 1...... 10-14% 9 ]...... 35%. or more (Please specify) 51...... 15-19% ...... %

What percent of your outside salesmen have retired since January 1, 1947? iDivide number retired by average number on sates force during the 5 -year period.) [44-1 |...... Zero [44-7]...... 25-29% 2 1...... 1-4% 8 ]...... 30-34% 3 ] - ...... 5-9% 9 ]...... 35-39% 4|...... 10-14% <>l...... 40-49% H- ...... 15-19% *1 ...... 50% or more (please specify) 61...... 20-24% ...... %

What percent' of your outside salesmen are expected to retire in 1952?(Divide number expected to retire by number nowon sales force.) [45-11...... Zero [45-6] ...... 20-24% ...... 2 1 ... 1-4% 7 ]...... 25-29% 5-9' f 3 1 - 8 ]...... 30-34% 4]...... 10-14% 9] ...... 35% or more (please specify) 5]..., ...... 15-19%

[46-X] IV. Provisions for Rotlromonf Incomo. 21. Does your company sponsor or participate in any kind of private retirement income plan (or pension) for any em ployees? [6-1] ...... Yes [6-2] ...... No

If yes, in which of the following groups are a M AJORITY of employees covered? For example, check office workers only if most of your office workers are eligible to participate in a retirement tncome plan; [7 -1 ]...... Sales Executives [7-6] ...... Factory workers 2 ]...... Other executives...... 7 ]...... Others (please specify) 3 ] ...... Outside salesmen 4 ]...... Retail store sales people 5 ] Office workers ......

22. For how many years has your company’s retirement income plan been in operation? (Omit this question if you checked "no" in answering Question 21.) [8-1]...... less than 1 [8-71...... 20-24 21...... 12 81...... 25-29 31...... 3-4 9 ]...... 30-34 4 ] ...... 3-9 0 ] ...... 35-39 51 ...... 10-14 x ]...... 40 or 6 ] ...... 15-19

23. If outside salesmen are not now covered by a retirement income plan, is your company considering a plan for them? [9-1] Yes [9-2]...... No

If yet, is the plan ready to be put in operation in 1952? [10-1]...... Yes r 10-3]...... Uncertain !!• N o

24. Does your company sponsor or participate in A N Y of the following; group life insurance, hospitalization, accident insurance, medical and surgical insurance, health insurance, sick leave pay, or vacations with pay for any employees? [11-1]...... Yes [11-2]...... No If yes, in which of the following groups are a MAJORITY of employees covered? Check the appropriate columns;

Croup H otp. Acc. Med. Health Sick Paid Life Ins. Int. Int. Surg. Ins. I^ate Vacation [ 1 1 [21 [ 3 ] [41 [5 ] f 6] [71

Sales executives [12]

Other executives [13] Outside salesmen [14]

Retail store sales people [15] Office workers [16]

Factory workers [17] Others (please specify) [181

I 6

25. If out suit talesmen are not covered by a retirement income plan, which of the following statements best explains why? Please check only one:

I'M 1...... Salesmen's earnings are high; addi­ [19-8]...... Salesmen are considered to be a tional security is unnecessary special type of employee or inde­ pendent contractor 21 ...... Salesmen are apparently not inter­ ested in retirement income plans 9]. Salesmen sell products or services of other companies 3 | ... Salesmen are not usually employed long enough 0]. Other (please specify) 41...... 'Die company believes it is poor psychology to guarantee security for salesmen; it wants "go-getters" M- ... Variable earnings of salesmen would create clerical difficulties 61. ... The company believes it cannot at present finance a suitable retirement income plan for salesmen 7 ]...... Salesmen arc not members of a union

[20-X] PfM i rafully ^ thm paragraph bmlowi

| Questions 26 to 44 apply only to companies whose outside salesmen are covered by a retirement income plan. j If you I did not check "Outside salesmen” in answering Question 21, please omit Questions 26 to 44 and proceed to QuestionI L dS, page 12. J

V. Participation of Salotmon.

26. For how many years have outside salesmen been covered by your company's retirement planP

[ 2 i - n ...... less than 1 [21-7]...... 20-24 21...... 1-2 8 ]...... 25-29 31...... 3-4 9 ]...... 30-34 41...... 5-9 0 ] ...... 35 or 3 ]...... 10-14 61 .. 15-19

trticipationin the retirement income plan COMPULSORY for outsidesalesmen?

122-1]...... Yes [22-2]...... N o

If not, uhat percent of the salesmen do participate? (25-1] ...... 1-4 Tc > [23-5] ...... 25-490'. 2 | ...... 5-9% 6 | ...... 50-74% 5 ] ...... 10- 14^ ; 7 ]...... 75-100% 4 ] ...... 15-24% 7

28. What eligibility requirementt must be met by out tale talesmen ft r.-ier to participate in the plan? [2*1-11...... Payment of membership or initiation [24-8]...... No set requirements; discretion of fee employer 2 ]...... Completion of training or proba- 9]...... Other (please specify) tionary period 3 ]...... Minimum length of service to com- ...... pany 4]...... Age at time of hiring below specified limit 51 ...... Employment at time plan was orig­ inated ...... 6 ] ...... Minimum volume of sales 7 ]...... Level of earnings below specified limit ......

29. Does the retirement income plan for outside salesmen differ from the plan covering other employees? [25-1] Yes [25-2]...... No If y*t, please describe the major differences: ......

30. Is the retirement income plan for outside salesmen: [26-1] ...... Funded with regular payments to a [26-6] ...... Financed by other methods? (Please trust? specify) 2 ] ...... Funded with regular payments to a life insurance company? ...... 3 ] ...... Funded by credits to a company re­ serve account, without involving a trust or life insurance company? 4 ]...... A profit-sharing plan funded with a trust or life insurance company with ...... payments into the fund dependent entirely on company earnings? ...... 5 ] ...... An informal gratuity, granted at the company's discretion after a review of circumstances in each case?...... s

VI. Contributions.

si. />'■ •miu.ii lultu-iin mntnbhtc to a retirement income fund?

i -1 | ...... Yes [27-2 j No

i.' Arc i.ii h i.lit 1 in .lit i contribution! based on his turnings?

|.- S 1 |...... Yes [28-21...... No

If )ri, ubtih of the following types of earningi arc counted for contribution purposes? 129-1 |...... Total earnings I -9 -1|...... Other (please specify) J | ...... Salary or hxed or guaranteed earn­ ings only s| ...... Salary and a portion of commission ...... or other additional earnings

If earning! other than salary or fixed or guaranteed earnings are counted in computing outside salesmen’s contribu­ tioni, how ir this computation made?

SO I | ...... Contribution is based on earnings for [ W-5 j Other (please specify) the previous month or previous year. It is not computed until actual earn­ ings for that period are known. 21 ...... Warnings are averaged over several previous months or years. Contribu­ tion is based on that average. M Salesman makes regular contribution based on anticipated earnings. When actual earnings are known, an adjust­ ment is made. 11...... Salesman makes regular contribution based on anticipated earnings. There is no later adjustment.

v( Approximately what percent of each salesman's gross earningi it contributed to the retirement income fund? Please aiKucr thii question even though you may have checked "No" in answer to Question 32. i Divide the average annual contribution in 1931 by the average of gross earnings before payroll deductions in 1931.)

>1II...... I.ess than 1 rh h i-? ]. 10-11% .'1 1 -2% «]■...... 12-14% V-P7 M ...... u ...... 15-19% •il...... 5-6% 0].

•I ...... 7-K'V '•[...... 8-9%

th, t mplcu r c iifitnhuti In a rttinmcnt Him me fund for nutudcsalesmen?

v i | Yes r^ -2 i...... No

. o the ei’.ph )cr'\ I'utrtbutton:

V l | ...... l'qual to the salesman's contribution'-1 1 v M- ...... I.ess than the ' 1 ■ ... drearer than salesman's contribution? tion? VII. 3(3. Are benefits paid to a retired salesman based entirely on the amount of his c'>ntnbutions? | VI-1 ] ...... Yes [Vi ’ 1...... No

If nor, please describe briefly hose the amount nf benefits /, determined.

37. Are benefits paid by your company adjusted according to the amount of Social Security benefits rcceired by the retired salesman? [35-1] ...... Yes [35-2] ...... No

38. Which of the following options does the outside salesmanhat e in receiving retirement benefits? Check all those per milled by your company: [ 3(>-l ]...... I ump sum [ 36-t I ...... If the salesman leaves the employ of the company before retirement, his 2 ]...... Periodic payments for life of the accumulated contributions and part salesman of the employer's accumulated con­ tributions are given to him. 3 ] ...... Periodic payments for a specified number of years 8 ]...... Other options (Please specify) 4 ] ...... Periodic payments for life of the salesman, continued after his death to dependents or estate. 5 ] ...... If disability or death occurs before retirement, salesmans accumulated contributions are refunded to him or to his beneficiary. 6 ] ...... If disability or death occurs before retirement, employer's accumulated contributions are given to the sales­ man, or to his beneficiary. If)

V). /( any It nut at ion placed on the amount of benefits which will be paid to any one retired salesman? [r-l]...... Y « f 37-21...... No

If yci, plcaie describe the limitation:

40. flout many retired outside salesmen are now receiving benefits? Check closest bracket:

h s - n ...... Zero [38-71...... 41-50 21...... MO 81...... 51-75 31 ...... 11-20 91 ...... 76-100 41 ...... 21-25 0 ]...... 101 or 51...... 26-50 6 ]...... 31-40

41. If periodic payments of benefits is permitted by your company, what is the range of annual benefits, per retired salesman? Check closest dollar bracket for BOTH highest paid and lowest paid salesman: Lowest: Highest: >9-1]...... Less than $50 [40-1]...... Less than $100 2 1 ...... $50-99 2 ]...... $100-199 '1 ...... $100-149 3 ]...... $200-299 •ii...... $150-199 4 ]...... $300-399 5 ] ...... $200-249 5] ...... $400-499 01...... $250-299 61 ...... $500-749 71...... $300-399 7 ]...... $750-999 8 1...... $400-499 81...... $1,000-1,999 9 ]...... $500-749 91...... *$2,000-2,999

0 ] ...... $750 or more (Please specify) 01 ...... $3,000 or more (Please specify) * ...... S 1

VIII. lUiults. 42. Based on your company's experience only, what do you consider the MOST SIGNIFICANT ADVANTAGE to the company of a retirement income plan for outside salesmen? PLEASE ( HECK ONLY ONE: [41-1]...... Lower turnover of salesmen ...... [41-9]...... Promotion of loyalty, goodwill, or i , . < , i '.,Wu relations J ! ...... Improved morale ' =i | ...... Greater productivity °! Other < Please spcGfv . F.asier retirement of over-age sales­ men Reduction of salesmen's desire to join a labor union ft | ...... Reduction of labor union troubles 7 ] Attraction of better qualified sales applicants 8 |...... Holding of older, more valuable men on sales force

43. Based on your company’s experience only, what do you consider the MOST SIGNIFICANT DISADVANTAGF. to the company of a retirement income plan for outside salesmen? PLEASE CHECK ONLY ONE: [42-1]...... Reduction initiative or drive [42-9] Less interest in advancement to man- 21 ...... Sales force tends to fill up with older, a*cmc,U P°*itioOS less valuable workers 0 ] ...... Other (please specify) 3 I...... High cost of current financing for the plan 4 ]...... Serious commitment of company funds in future years ...... 51 ...... Clerical burden 6 ] ...... Objections of younger salesmen 7 ]...... Objections of non-sales employees 8 ]...... Loss of useful, though over-age, salesmen ......

44. Are you satisfied with your company's present retirement income plan as it affects outside salesmen? [43-1]...... Yes [43-2]...... No

If not, which of the following statements explain why? Check MORE TH AN ONF., if necessary. [44-1]...... Sales executives should have more [44-f>] ...... Other (please specify, indicating par- control over the plan titular provisions of the plan which , ,, you consider unsatisfactory) 2 ]...... Benefits are too small 3 ] ...... Details of the plan arc too compli­ cated for some employees to under­ stand 41...... Not all employee groups are treated uniformly under the plan 5 ] ...... Plan needs to be modernized to fit current earnings scales I 2

IX. Adminlfttration. 45. Is the administration of the retirement income plan bandied by an insurance company or any one else outside of your company7 [4e'-1 ]...... Yes [45-3] ...... Partly 21...... No

Kv Which one of the following officials or departments is mainly responsible for the operation of the plan? [4(5-11 ...... Personnel manager [46-51 ...... Industrial relations director 2 ]...... Treasurer 6] ...... Other (please specify) 5 | ...... Comptroller 4 ] ...... Sales manager (or other sales executive) ......

47. How many employees of your company devote a major portion of their working hours to the retirement income plan? [47-1]...... None r47.fi]...... 16-20 2 ]...... 1-4 7 ]...... 21-25 3] ...... 5-7 81...... 26-30 4 ] ...... 8-10 9 ] ...... 31 or 5 ]...... 11-15

48. What was the annual cost in 1951 per covered employee of maintaining the retirement income plan? (Divide total annual costs in 1951 to the company by the number of employees then participating. Include all administrative and operational costs, employer's contributions, .and interest paid, but do not include employee's contributions.) [48-11...... *0-9 [48-71...... $200-299 21...... $10-19 81 ...... $300-399 \] ...... $20-49 91 ...... $400-499 4 | ...... $50-99 0 ] ...... $500 or more (please specify) si $100-149 M S1S0-199

49. Docs this report cover your entire company? [49-1]...... Yes...... [49-2]...... No

If not, please specify which portion is covered (as, FOR EXAMPLE: "Eastern division only"; "Industrial sales only"; "Driver salesmen only"; "All except Chicago branch"; or "Does not include Jones Radio Company, a subsidiary").

I Additional copies of this questionnaire will be supplied gladly for any separate reports you wish to submit.) If you have no objection, please give the full name of the company for which you are reporting:

(Permission to me your company's name will add much to the usefulness of this surrey.) 1 *

C om m ents.

Please use this section for any comments or additional information which you believe will he helpful in understanding vour company's retirement income policies: Is the plan generally well liked? What changes have been made in the plan since its origin? What changes are being considered? W hat comments have been heard from employees? From executives?

\ If a printed or typed description of your retirement income plan is available, we would appreciate receiving a copy. Please attach it to this questionnaire and check here: Q

Mail to: Salesmen's Retirement Survey National Sales Executives, Inc. Hagcrty Hall The Ohio State University Columbus 10, Ohio

Thank you for your cooperation.

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Title 160

APPENDIX B LIST OF CONTRIBUTING COMPANIES

Executives of the following companies submitted questionnaire replies used in the survey tabulations presented in Chapter 5* No company has been specifically identified with any findings except by permission*

Abbott-Stansell Motor Co* Houston Acme Quality Paints, Inc* Detroit Acme Steel Co* Chloago Aetna Casualty & Surety Co* Hartford Alford Cartons Ridgefield Park (N.J*) Allen-Bradley Co* Milwaukee William Allen Sons Co* Worcester (Mass*) Allis on-Erwln Co* Charlotte (N*C*) Alloy Fabricators Perth Amboy (N*J*) (Dlv* of Continental Copper & Steel Industries, Inc*) Allstate Insurance Co* Menlo Park (Calif*) American Air Filter Co* Moline (111*) (Herman Nelson Dlv*) American Automobile Assoo* Washington American Box Board Co* Grand Rapids Amerloan Chicle Co* Long Island City 161 American Greetings Corp. Cleveland American Hoiat & Derrick Co* St* Paul

American Laundry Machinery Co* Cincinnati American Liberty Oil Co* Dallas American Linen Supply Co* Minneapolis (Minneapolis bran oh. & sub-atatIona) American Manufacturing Co*, Inc* Montgomery (Ala•) Aster loan MonoRall Co* Charlotte (N*C») American Seal-Kap Corp* Long Island City (N • Y•)

American Tag Co* Chicago American Transfer & Storage Co* Dallas Ames Conqpany , Inc* Mew York City

Arkansas Power A Light Co* Pine Bluff (Ark*) Armstrong Cork Cospany Lanoaster (Pa*)

Ben Arnold Co*, Inc* Columbia (S*C•) Atlantlo Chemicals, Inc* Orlando (Fla*)

Atlantis Sales Corp* Rochester Authomatlo pencil Sharpener Co* Beverly Hills (Dlv* of Spengler-Loomis Mfg* Co*)

B

Hugh J* Baker A Co* Indianapolis Baker Refrigeration Corp* South Windham ( Me • )

Barwlok A Co* Salt Lake City Bausoh A Lomb Optical Co* Rochester R* R* Beatty Charlotte (M*C*) 162

Belair Road Chevrolet Co., Inc. Baltimore Belknap Hardware & Ufg* Louisville Co., Inc*

B e n n e t t 1 a Salt Lake City L* M• Berry and Co* D a y t o n

Blnswanger & Co., Inc* Richmond W. H. Bints Co* Salt Lake CIty Black Brothers, Ltd* Vancouver (B.C., Can*)

Blackwell Wlelandy Co* St* Louis Bloosirield Co* Cleveland W* L* Bodey Co* Reading (Fa*) Bodlne Electric Co* Chicago Bond Industrial Equipment Hew York City Sales Co*, Inc* Bonita insulation Co* Greensboro Bill Bonalb Advertising Agenoy D e n v e r BorbeIn-Young and Co* St* Louis Bostltoh, Inc* Westerly (R*I*) Bowes "Seal-Fast” Corp* Indlanap oila Boyle & Co* Los Angeles Brace-Mueller-Huntley, Inc* Rochester King Braeger Chevrolet Co* Milwaukee Braun Corp* Los Angeles

Brighton Plaee Dairy Roche stex* (Dlv* or General Ice Cream Corp*) British Columbia Electric Vancouver (B*C*) Railway Co*, Ltd* 163 Brown it Bigelow St* Paul Buch Manufacturing Co* Elisabethtown (Pa*) Buffalo Chaafeer of Commerce Buffalo (N.Y*) Bulova watch. Co* New York City Bureau of national Affaira, Inc Washington Burge Hardware & Appllanoe Fort Worth Burroughs Adding Machine Co* Detroit Butler Manufacturing Co* Kansas City

California Packing Corp* San Frand sco California Spray Chemical Corp* Washington Canteen Service Co* Grand Rapids Capewell Manufacturing Co* Hartford Carborundum Co* Niagara Falls Carolina Motor Club Charlotte (N*C*) Carpenter Visual Servioe, Inc* Cleveland M* E* Carter it Co* Menqphls Cascade Petrolevun Co* Denver Cedar Hill Memorial Park Allentown (Pa*) Centllvre Brewing Corp* Fort Wayne Central Mutual Insurance Co* Van Wert (0*) Century Electrlo Co* St* Loula Challenge Cream & Butter Assoc* Los Angeles Chase Brass ft Copper Co** Ino* Waterbury (Conn*) (Dlv* of Kennecott Copper* Corp ) 164

Chicago & Southern Air Lines* Inc* Jackson (Miss*) (Jackson* Miss** cffioe) Chicago Seven-Up Bottling Co* Chloago (Dlv* of Joyce Seven-Up Bottlers* Inc*) Chioopes Mills* Ino* Hew fork City Chipman Meroantlle Co* Amerloan Fork (Utah) Christmas Club* A Corporation Hew Yo r k City

Churchill Manufacturing Co* Galesburg (111*) Cities Servioe Oil Co* Hew York City Citizens Realty and Insurance Evansville (Ind*) Agency* Ino* Colgate-Palmollve-Feet Co* Jersey City B* W* Collins Co* San Diego Colonial Fuel Co* Washington Colonial Life Insurance East Orange (H*J*) Company of Amerlea Colson Equipment & Supply Co* Los Angeles Columbia Paper Co** Ino* Hew Orleans Coamerclal Controls Corp* San Francisco Compo Shoe Machinery Corp* Boston Conmar Products Corp* Hewark (H*J*) Connecticut General Life Newark Insurance Co* Connecticut Mutual Life CInclnnatl Insurance Co* Connecticut Printers* Ino* Hartford (Kellogg & Bulksley Litho­ graphic Dlv* ) Consolidated Lithographing Corp* Carle Place (L*I*) 165

Continental Coffee Co. Chicago A1 Cook Desk & Offloe Supply Co. Oklahoma City

Cralne, Inc* Norwich (N*Y*)

Crawford Door Co* Detroit Cresoent Paper Co* Indianapolis

Crown Zellerbach Corp* San Franclsoo Cupples Conparty, Manufacturers St • Louis

D

J* M* Pain & Co* St* Paul Davidson Plywood & Lumber Co* Los Angeles

Davis-Howland Oil Corp* Roohester ( N *Y•)

Dayton Power and Light Co* Dayton Dayton Sash & Door Co* Dayton

Dearborn Stove Co* Dallas Delaware Importers, Ino* Wilmington Deloo Products Dayton (Dlv* of General Motors Corp*) Densoo, Ino* Denver

Detrex Corp* Detroit Johnson deVou, Ino* Worcester (Mass*) Dewey and Almy Chemloal Co* Cambridge (Mass*) Diamond Milk Products, Inc* C olumbus Dlebold, Inc* Canton (O*) Dr* Pepper Co* Dallas Doeskin Products, Ino* New York City 166 Dominion Paper Box Co., Ltd* Toronto (Ont*, Can*) Donahue Sales Corp* New York City H • J * Dowd Co*, Inc * East Cambridge (Mass*) Drug Trading Co*, Ltd* Toronto Drumstick, Ino* Port Worth Duffy*s, Ino* Long Island City Dun & Braaatreet, Ino* New York City £• I* duPont de Nemours & Co*, Ino Wilmington

Eclipse Fuel Engineering Co* Rookford (111*) Economics Laboratory, Ino* St* Paul Eleotra Supply Co*, Ino* Poughkeepsie (N*Y») Eleotrlo Corp* of California Los Angeles Eleotrloal Engineering Des Moines & Equipment Co* Eleotrloal Supply Corp* Dallas El Paso Saw 8c Belting Supply El Paso (Tex*) Co*, Ino* Emery Industries, Ino* Cincinnati (Sanltone Dlv*) Employers Mutuals of Wausau Wausau (Wlso*) Enger-Krets Co* West Bend (Wlso*)

Equipment for Industry Brooklyn

Equitable Life Insurance Des Moines C ompany of Iowa

Erlokson Tools Cleveland (Dlv* of Erlokson Steel Co«) 167

Esterbrook Pan Co. C amden (N.J.) Ethicon Sutura Laboratories, Ino. Hew Brunswick (N.J

John T* Everett & Co* Memphis Exact Weight Seal a Co* Columbus (0*) Expanded Metal Engineering Co* Long Island City

F

Fairmont Foods Co* Omaha Famous Brands, Inc• Minneapolis

Farm Journal, Ino• Philadelphia Farwell, Oznun, Kirk & Co* St* Paul Federal Eleotrlo Products Co* Newark (N •J•)

Fetter Printing Co*, Ino* Louisville Fidelity & Casualty Co* of N*Y* Wlohlta (Kans*) (Dulaney, Johnston & Priest) Fidelity Trust Co* Baltimore Firestone Tire dt Rubber Co* Fargo (H*D* (Fargo distrlot) J* A* Folger San Francisco Food Machinery and Chemical Corp* San Jose (Calif*) (John Bean Western Dlv*) Fosco Refrigeration & Diet* Corp* Hagerstown (Md*) Fort Wayne Builders Supply Co* Fort Wayne Fort Worth paper Co* Fort Worth Frankenmuth Brewing Co* Frankenmuth (Mich* Fraser Paper, Ltd* New York City Frey Planing Mill Co., Ino* Louisville 168

Pried* Osternann Co. Milwaukee Fromm and Slchel, Ino. New York City

G

Gable-Tlte product* Co.* Ino. Miami Robert Gair Co., Ino. New York City Gallon Iron Works ft Mfg. Co. Gallon (0.) General Electric Simply Co. Chicago (Chicago district) General Eleotrlo Supply Co. Clnolnnatl (Clnolnnatl district) General Poods Corp. New York City (General Foods Sales Dlv.) General Mills, Inc. Minneapolis Gibson Art Co. Clnolnnatl Glerston Tool Co., Ino. Elmira (N.Y.) Gillette Safety Raxor Co. Boston Gold Bond Stamp Co. Minneapolis Goldenberg Brothers Duluth Goodin Co. Minneapolis C ompanla Hulera Euxkadl Mexloo City (Goodrich) S.A. Gorham Co. Provldenoe (R.I.) Gould pumps, Ino. Seneoa Palls (N.Y.) Grand Rapids Brass Co. Grand Rapids Graton ft Knight Co. Worcester (Mass.) Gravea-Humphreya Hardvard Co. Roanoke Graybar Eleotrlo Co., Ino. New York City 169

Griffith Distributing Corp. Clnolnnatl Gulling Auto Eleotrlo, Ino* Indianapolis

H

Hamilton watch Co* Lancaster (Pa*) P* H* Hanes Knitting Co* Winston-Salem (N*C•) Hanover Neon Eleotrlo Corp* C olumbus Hardware Mutual & Hardward Minneapolis Indemnity Imuranoe Companles of Minnesota Hartford Bulck Co* Hartford Hartcl Petroleum Corp* New York City Hatfield Motors* Inc* Indianapolis Hell Co* Milwaukee Heller Brothers Co* of Ohio Newoomerstown (0*) Henning and Cheadle* Ino* Detroit J* Henry Helaer & Co* Riverside (Calif*) Henkel-Clausa Co* Fremont (0*) Hevl Duty Electric Co* Milwaukee J* Edward Hlbllne* Ino* Baltimore Hill-Smith Termite Control Co* Memphis Hobart Manufacturing Co* Troy (0*) R* Hoe & Co*, Ino* New York City Holoomb & Hoke Manufacturing Indianapolis Co** Ino * J* I* Holoomb Manufacturing Co* Indianapolis Hollymatlo Corp* Chicago 170

Honeywell-Brown* S*A«* Mexico Mexico City (Subsidiary or Minneapolis- Honeywell Regulator Co*) HonorBilt Products* Ino* Philadelphia Home-Wilson, Ino* Charlotte (N*C*) (Charlotte Branch) Hospital Service Association Wilkes-Barre or Northeastern Pennsylvania Hough Shade Corp* Janesville (Wlso*) Hoviand and Howland* Ino* New York City Hubbs 9c Howe Co* Brie (Pa*) (Erie Dlv*) Hudson Pulp & Paper Corp New York City Hunter Douglas Corp* Chloago

I

Ideal Industries, Ino* Sycamore (111•) Imperial Candy Co* Seattle Industrial Indemnity Co* San Franolsoo Industrial Tape Corp* New Brunswick (N*J*) Insley MTg* Corp* Indianapolis Irvington Varnish 9c Insulator Hamilton (Ont•) Company or Canada* Ltd*

J

Jack's Cookie Company* Inc* Baton Rouge Jaokson Manufacturing Co** Inc* Chattanooga Jacksonville Paint Co** Ino* Jacksonville (Fla*) (Dlv* of Mobile Paint MTg* Co** Ino*) 171

James Brokerage Co* Houston

Jaqua Co* Grand Rapids Jefferson Standard Life Orlando (Fla*) Insurance Co* Jewel T*a Co*, Ino* Barrington (111*) Johannesen Electric Co*, Ino* Greensboro (N*C•) Johna -Manvi 11 e Denver (Inter-Mountain District) Jones Metal Products Co* West Lafayette (0*) Junior Achievement, Ino* New York City

K

A* Marcher Candy Co* Little Hook Kasoo Mills, Ino* Toledo Kawneer Co* Cleveland Spenoer Kellogg & Sons, Ino* Buffalo Kendall Mills ~~ Walpole (Maas*) (Dlv* of The Kendall Co*) T* C* Kennan Oklahoma City Kenrow, Ino* Atlanta Valter Kidde & Co* Belleville (N*J*) A* Kimball Co. New York Kimberly-Clark Corp* Neenah (Wlso*) King Candy Co* Fort Worth Knight Advertising, Inc* Columbus (0*) Samuel Knight & Sons Co* Beverly Farms (Mass*) Koppers Company, Inc* Pittsburgh 172

Kraft Foods Co* Chicago Fetor Kramer & Son* Inc* W* Somerville (Mass*) W* H« Kranz Co* Raolne (Wlso*) W* A* Krueger Co* Milwaukee Otto L* Kuehn Co* Milwaukee

L

Lams on Corp* Syraouse La Premlata Maroaroni Corp* Connellsvllle (Pa*) Sidney L* Lee Co* San Franolsoo Charles Leloh & Co* Evansville Lifetime Stainless Steel* Ino* South Bend Henry Lindenmeyr & Sons Hartford (Conn*) Thomas J* Lipton* Ino* San Franolsoo D* H* Litter Co** Ino* New York City City of Los Angeles Dept* of Los Angeles Water and Power (Business Agent’s Division) Losey ft Co** Ino* Easton (Pa*) Lowman & Hanford Co* Seattle Ludman Corp* Miami (Fla*) Lumbermens Mutual Insurance Co* Mansfield (0*)

M

Magnolia Paper Co* Dallas F* B* Mallory* Ino* Springfield (Mass*) Maltbie Laboratories* Inc* Newark 1 7 3

Martln-Senour Co* Chloago Massachusetts Hospital Service, Boston Ino* Master Builders Co. Cleveland Maytag Co* Newton (Iowa) C* 11* MoClung 4 Co., Ino* Knoxville McGarvey C of fee Co*, Inc * Minneapolis McKesson Bt Robbins, Ino* New York City MoWharter-Wsaver & Co* Nashville Michigan Catholic Co* Detroit Michigan Consolidated Gas Co* Grand Rapids (Grand Rapids dist.) Michigan Hospital Service Detroit Michigan Mutual Liability Co* Detroit Mill Ac Textile Supply, Inc* Birmingham (Ala*) Mill Creek Produsts Co*, Inc* New York City Mlllhlser Bag Co*, Ino* Richmond Mine Safety Appliances Co* Pittsburgh Minneapolis-Honeywell Regulator Cleveland Co* (Central Region) Minnesota Mutual Life Insurance St* Paul o o •

Minnesota & Ontario Paper Co* Minneapolis Minnesota Paints, Inc* Minneapolis Mobile Paint Manufacturing Mobile (Ala*) Co*, Ino* Modern Woodmen of Amerloa Rock Island (111*) Moore Business Forms Western, Ltd* Winnipeg 174

Moore Business Forms, Ino* Seattle (Pacific dlv*) Edgar Morris Sales Co* Washington Mosher Steel Co* Dallas Motor Carrier Insurance Agency Austin (Tex*) Motorola, Inc* Chicago Mott Brothers Co* Rockford (111*) Multi-Clean Products, Inc* St* Paul Murphue Mortgage Co* Nashville A* B* Murray Co*, Inc* Elizabeth (N*J*) Mutual Benefit Life Insurance Co* Newark (N •J•)

N

Nash-Flnch Co* Minneapolis National Cash Register Co* Jacksonville (Fla*) (Jacksonville Branch) National Eleotrlo Coll Co* Columbus (O*) National Life Insurance Co* of Buffalo Vermont National Underwriter Co* Clnolnnatl New England Grooer Supply Co* Worcester (Mass*) New Haven Pulp and Board Co* New Haven (Conn*) New Orleans Public Service, Inc* New Orleans New York Life Insurance Co* New York City Newsweek Magazine New York City Newth-Morrls Box Corp* Baltimore New York Coal Sales Co* Columbus (0*) (Superior Cement Dlv* - Portsmouth, 0*) 175

Northern States Power Co. Minneapolis Northgrave, Ltd. Toronto Northwest Hospital Service Portland (Oregon)

Norton Co. Worcester (Mass.)

0

O'Day Equipment, Inc. Fargo (N.D.) Chlo Boxboard Co. Rlttman (0.) Ohio Fuel Gas Co. Fremont (0.) Old Domini on Paper Co. Norfolk 0*Mara & Ormsbee, Inc. New York D. W. Onan & Sons, Ino. Minneapolis Orley Corp. Detroit Orth Pharmaceutical Corp. Columbus (0.) (Oreat Lakes Dlv.) Ortho Pharmaceutical Corp., Ltd. Toronto Oshkosh Paper Co. Oshkosh (Wise.) Owens •'Illinois Class Co. Toledo Ox Fibre Brush Co., Ino. New York City Oxford Filing Supply Co., Ino. Garden City (N.Y.)

P

Paolflc Lumber Co. San Francisco Pacific Mutual Life Insurance Co. Oklahoma City (Oklahoma agency) Pacific Outdoor Advertising Co. Los Angeles Pacific Telephone & Telegraph Co. Los Angeles 176

Paisley Products, Inc* New York City (Div. of Morningstar- Nlcol, Inc.) Palmar Supply Co* Seattie Pan American Life Insurance Houston (Houa t on agency) Paper Art Co*, Ino* Indianapolis Paper Package Co* Indianapolis Frank Parsons Paper Co*, Inc* Washington Pelton 8c Crane Co* Detroit Pemco Corp* Baltimore Penn Controls, Inc* Goshen (Ind.) Personal Products Corp* Ml11town (N*J*) Petroleum Heat & Power Co*, Ino* New York City Pfaudler Co* Rochester Phoenix Hosiery Co* Milwaukee Pigott Motors, Ltd* Wlnnepeg (Man*, Can*) Pltney-Bowes, Inc* San Antonio (San Antonio branch) Pittsburgh Steel Products Co* New York City Porter Burgess Co* Dallas Porter Paint Co*, Inc* Louisville S» Posner Sons, Ino* Long Island City Found A Moore Co* Charlotte (N*C*) Powers Regulator Co* Skokie (111.) Product Presentation, Inc* Cincinnati Protection products Mfg* Co* Kalamasoo 177 Provident Life & Accident Chattanooga Insurance Co. Provincial Paper, Ltd* Toronto Prudential Insuranoe Co* of Newark (N*J*) America Public Service Company of Oklahoma Tula a Public Servioe Electric and Newark (N*J*) Gas Co* Fubllahera Digest* Inc* Chicago Furolator Products* Inc* Rahway (N*J*) Joseph T* Pyerson & Son* Inc* Chicago

Quincy Compressor Co* Qulnoy (111*)

E* Rablnowe & Co* Yonkers (N.Y*) Radio Station WBIR Knoxvllie Radio Supply Co** Inc* Norfolk Ralston Purina Co* St* Louis Ramsey Corp* St* Louis Colu mbus (0*)Ranoo* Ino* Columbus (0*)Ranoo* Rapids Handling Equipment Co** Inc* Grand Rapids Louis Rathman Agency* Inc* Milwaukee Red Jacket Coal Corp* Columbus (0*) Refinery Engineering Co* Tulsa Reynolds-Fltsgerald* Inc* New York City Reynolds Metals Co* Richmond Ft. J. Reynolds Tobacco Co* Wlnston-salem (N*C* Rice Barton Corp* Worcester (Mass*) Rlcbardson Corp* Rochester Rlgo Manufacturlng Co*, Inc* Nashville Ritter Co*f Inc* Rochester H* H* Robertson Co* Pittsburgh Rogers Corp* Manchester (Conn*) Rotary Lift Co* Menqphls Rountree Olds-Cadillac Co* Shrevep ort (La * )

S

Sackner Products, Inc* Grand Rapids Sales Tools, Inc* Chicago Sanders Brothers Co* Richmond Sands, Taylor & Wood Co* Somerville (Mass*) W* B* Saunders Co* Philadelphia Harry P* Scbaub, Inc* Newark Science Research Associates Chicago Scott Paper Co* Pittsburgh Sealy, Inc* Chicago Sears Roebuck & Co* Memphis (Memphis retail store) Shaw-Barton, Inc* Coshocton (0*) Shelby Spring Hinge Co* Shelby (0*) Shovel Supply Co* Dallas 179 Sibley, Lindsay, it Curr Co* Rochester Sleg Co. Davenport (Iowa) R. A. Siegel Co. of Atlanta Atlanta Clarke Simpldna, Ltd. Vancouver (B.C.) Sliok Airways, Inc. Park Ridge (111.) Alexander Smith, Inc. New York City J. Hunger?ord Smith Co. Rochester Southern Comfort Corp. St. Louis Southern Life Insurance Co. Greensboro (it.C . ) Southland Paper Converting Co. Los Angeles Southwest Steel Supply Co. St. Louis Spenoer Turbine Co. Hartford (Conn.) E. R. Squibb it Sons New York City Squirt Co. Beverly Hills Standard Oil Co. {Indiana) Wlohlta (Kans.) Standard Oil Co. (Indiana) Chicago Standard Oil Co. (Kentucky) Louisville Standard Oil Co. (Ohio) Cleveland Stanley Home Products, Inc. Easthaaqpton (Mass.) State Capital Life Insurance Co. Raleigh (N.C.) Stayfomn Co. Chicago Elton B. Stephens it Associates Birmingham (Ala.) John B. Stetson Co. Philadelphla Sterling Eleotrlo Motors, Inc. Los Angeles Stewart Office Supply Co. Dallas Stolper Steel Products Corp. Menomonee Palls (Wise.) 180 F • J* Stokes Machine Co* Philadelphia Strevell-Paterson Hardward Co* Salt Lake City Stucky Brother® Fort Wayne Sunset-McKee Co* Oakland (Call!•) Superior Feed Mills# Inc. Oklahoma City Sweet*8 Catalog Service New York City (Dlv. or F* W* Dodge) Jno* H* Swisher & Son# Inc* Jacksonville (Fla*)

T

Tappan Stove Co* Mansfield (0*) Tasty Baking Co* Philadelphia Taylor Instrument Companies Rochester A* Lynn Thosias Co*# Inc* Rlohmond Thomas Mimeograph Co* Detroit Thosqpson* s Honor Dairy Washlngt on Tidy House Products Co* Shenandoah (Iowa) Tinnerman Products# Inc* Chicago Todd Co*# Inc* Rochester Toledo Scale Co* Toledo Tool Supply & Engineering Co* Dallas Towmotor Sales & Service# Inc* Chicago Treadwell Engineering Co* Easton (Pa*) A* Fred Treher Easton (Pa*) Trimble# Inc* Rochester Tru-Stltch Mocc• Corp* Malone (N•Y •) 181 J* II* Tull Metal & Supply Co., Atlanta Ino * Tulsa Equipment Co*, Ino* Tulsa (Okla*) Turner Dairies, Inc* Anniston (Ala*) H* W* Tuttle & Go* Adrian (Mich*) W* A* Tydeman & Son Easton (Fa*)

U

Uncle Johnny Kills Houston Union Paste Co* Hyde Park (Mass*) United-Amerloan Soda Fountain Watertown (Mass*) Corp* United Chromium, Ino* Detroit United Clay Mines Corp* Trent on united Life & Accident Concord (N*H«) Insurance Co* United Securities Agency Oklahoma City United States Plywood Corp* Hew York City Upjohn Co* Kalamazoo Utioa-Duxbak Corp* Utica (H.Y.) Utility Trailer Sales Co* Los Angeles

V

Van-Packer Corp* Chicago Vlokers Petroleum Co., Ino* Wichita (Kans*) Vlotor Adding Machine Co* Chicago Volco Brass & Copper Co* Newark 182 Vulcan Copper 8e Snpply Co. Cincinnati

W

Walther-Boland Associates San Franc1soo Walther Brother# Co., Ino* Hew Orleans Watts, Payne-Advertising, Ino* Tulsa (Okla*) Weather-Seal Distributors, Ino* Indianapolis F* S. Webster Co* Cambridge (Mass*) Edward Week St Co*, Ino* Brooklyn Henry Weis Manufacturing Co* Elkhart (Ind*) Welding St Industrial Products, Honolulu (T*H*) Ltd • Wesleyan University Press, Ino* Columbus (0*) West Coast Grocery Co* Tacoma Western Audograph, Ino* San Francisco Weston Blsoult Co* Passalo (N.J.) Will Corp* Rochester Williams * Co*, Ino* Cincinnati Williams and Marcus Co* Philadelphia C • Ft* Williams and Son Winston Salem (H*C*) Wilson Paper Co* Los Angeles W1Ison-Weeaner-Wilkinson Co* Nashville C • H* Wood St Co*, Ltd* Toronto John Wood Co* St* Paul (Superior Metalware Dlv.) Write, Inc* New York City Wurzburg Brothers, Ino* Memphis 1 8 3

Wyandotte Chemloals Corp* Wyandotte (Mich.)

Y

Yellding Brothers Co. Birmingham (Ala.)

York Corp. Philadelphia York Supply Co. Dayton

Z

Z C M I Wholesale Distributors Salt Lake City Zonollte Co. Dearborn (Mloh.) 184

AUTOBIOGRAPHY

I, Phillip McVey, was born In Wichita, Kansas, August 19, 1921* I received ray secondary school education In the public schools of that city. My undergraduate training was obtained at The Municipal University of Wichita, from which I received the degree Bachelor of Arts In 1942. From the Graduate School of Business Administration at

Harvard University I received the degree Industrial Administrator in 1943 and the degree Master of Business Administration in 1947. In tho same year I was appointed Instructor In Marketing in the College of Commerce, Ohio University, a position which I held until 1951. At that time I resigned to complete residence requirements for the degree Doctor of Philosophy at The Ohio State University. In 1952 I was appointed Professorial Lecturer in the Department of Engineering Administration at Case Institute of Technology. One year later my appointment was changed to Assistant Professor of Engineering Administration, in which capacity I have served while completing requirements for the degree Doctor of Philosophy. 184

AUTOBIOGRAPHY

I, Phillip McVey, was born In Wichita, Kansas, August 19, 1921* I received ray secondary school education In the public schools of that city. My undergraduate training was obtained at The Municipal University of Wichita, from which I received the degree Bachelor of Arts In 1942. From the Graduate School of Business Administration at

Harvard University I received the degree Industrial Administrator in 1943 and the degree Master of Business Administration in 1947. In tho same year I was appointed Instructor In Marketing in the College of Commerce, Ohio University, a position which I held until 1951. At that time I resigned to complete residence requirements for the degree Doctor of Philosophy at The Ohio State University. In 1952 I was appointed Professorial Lecturer in the Department of Engineering Administration at Case Institute of Technology. One year later my appointment was changed to Assistant Professor of Engineering Administration, in which capacity I have served while completing requirements for the degree Doctor of Philosophy.