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New Sales Team Compensation Proposal Essay

One goal as an organization is to attract qualified employees, to retain those employees and to motivate employees to direct their efforts towards achieving the goals of the organization. With the reorganization this is the perfect opportunity to move away from current outdated “salary entitlement” philosophy to a “pay for performance” method of rewarding employees (Casio, 2006, p. 415). A properly designed compensation plan is based on two principles: (1) increased motivation improves performance and (2) recognition is a major factor in motivation (Casio, p.437).

The four key elements were used in developing this proposal, be simple, be specific, be attainable, and be measurable (Casio, p. 437). Compensation Plan The proposed compensation plan for sales representatives will be comprised of base salary, individual objectives, team objectives, quarterly and annual bonuses, and spot bonuses. The main difference between our current sales structure and the new proposal is to do away with the straight commission and move towards objective based criteria.

Base salary will be evaluated annually and adjustments made for inflation were necessary and financially feasible. It will be important that InterClean does not fall behind in salaries in order to stay competitive recruiting, retaining, and motivating employees (Casio, 2006, p. 433). ndividual

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Objectives – Monthly objectives will be assigned to each sales representative to achieve. Criteria will be based on but not limited to new accounts opened, new product placements, customer service satisfaction, and increase in sales. Maximum payout monthly is $2000 for 100% achievement.

Based on the percentage of goals reached will determine percentage of payout. Team Objectives – Team goals will be established based on the same criteria as monthly objectives and will be paid out quarterly. Payout will be $1000 if all team objectives are met at least at 90% else payout is forfeited. Quarterly/Annually Bonuses – Based on the organizations financial strength and profitability bonuses will be paid out quarterly and annually. Overall individual and team evaluations will be factored in. Typical ranges for quarterly will be $500-$1500 and annually from $1000-$5000.

Spot Bonuses – If employee’s performance has been exceptional he or she has gone above and beyond, small bonuses will be used to recognize and reward that employee for noteworthy actions (Casio, 2006, p. 441). These recognition rewards will range from $50-$100 and will typically be a gift card. An ideal compensation system works best when adopted by the employees when they have participated in the performance management process (U. S. Office of Personnel Management [OPM], 2007, p. 1). This compensation proposal was designed based on input from employees and supervisors during meeting and surveys when asked “what is important to them.

” This helps the employees understand the goals of the organization, what needs to be done, why it needs to be done, and how well it needs to be done. A motivator for employees is to be compensated fairly bases on their contributions to the organizations success. This plan is designed to be performance based providing opportunities for employees to be compensated based on their skills and knowledge and merit. Another key factor is providing employee’s security by incorporating an “income floor. ” This guarantees a minimum amount of compensation that the salesperson earns within a specified period (HR Answers Inc [HRI], n.d. , p. 1).

Total Rewards Package Compensation has become a more complicated issue than just deciding how to pay employees. In addition to salary, employers must consider many other components in order to motivate and to maximize performance (All Business [D&B], 2009, p. 1). In today’s work environment employees are concerned with improving their quality of life. As long as employees perceive that their total compensation is equitable and that their benefit options are fair, benefit programs can provide employees with a genuine level of satisfaction (Casio, 2006, p. 493).

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