InterClean and EnviroTech have recently merged, amalgamating a pool of experienced sales staff at various levels within the team. The sales manager has been tasked with formulating a compensation plan for the sales team. He is to describe the new compensation plan to the HR manager. He must be persuasive to the HR manager as to why the compensation plan will work. He must touch on how the components chosen for the compensation plan will motivate employees. Finally, he will address the benefits to the company and the employee.
Employee Development Plan IV - Compensation
Proper and relevant employee compensation will be instrumental to the continued success of InterClean/EnviroTech’s sales force. There are a few things to be considered when developing a compensation package that is fair to each member of the sales team. The members of the sales team have different levels of experience and ability. They have different levels of education. What motivates one may not necessarily have the same affect on another. Therefore, how to standardize a fair compensation plan that will still motivate employees to greatness year over year is the challenge. It is not just monetary compensation that should be offered either. A total rewards package needs to be developed.
InterClean/EnviroTech’s sales team is made up of management and sales representatives. Employee reviews will play a large part as to where within the pay range an employee will fall. Actual fitting within the range set for the position will be based on experience, as well as performance. Burke and Hsieh (2006) note that likely an optimal point is reached where a specific “compensation mix” is adding the most value to the firm. Management should be given a standard salary, while sales representatives would be motivated better by and incentive/commission based pay structure. It will encourage the sales force to close more deals. If their income is directly related to their performance...