Running head: Compensation Plan
Career Development Plan IV – Compensation
Human Capital HRM/ 531
November 9, 2008
InterClean Compensation Plan
A sound compensation package enables the organization to focus activities towards desired results, and rewards these outcomes with compensation tied directly to the level of achievement. David Spencer, CEO of InterClean, Inc., has a new vision for the future of his company: an expanded, global company specializing in cleaning and sanitation. To this end, he seeks to steer InterClean, Inc.’s management into a business model the exploits new solutions and sales models, merges with the recently acquired EnviroTech, Inc., and increases revenue by 40% annually.
InterClean’s compensation plan will adopt EnviroTech’s policy to use a combination plan of straight salary plus commission on the performance basis. The following shall be the basic building blocks with options to choose from in each:
InterClean shall provide its employees a base salary that is dependent on their role in the organization. The strategy shall be to keep it low enough to allow room to create sufficient incentive and motivation, but high enough to give your reps some breathing room in meeting financial obligations. Our base salary structure will fall somewhere between 15 and 40 percent of total compensation.
Incentives will be available to the employees as commissions, bonuses, gifts, profit sharing and awards. Commissions will be based on sales or gross profit based on the performance of an employee or how well the company shall excel a particular year. Commissions will be reflected with the base pay in the month following the time when the sale was made. The commission on gross profit will be reflected at year-end if any.
Adding a bonus structure to a sales compensation plan can add incentive to reach new levels....