Hr Department Manager

Hr Department Manager

December 15, 2008


TO: HR Department Manager

FROM: Jason Smith

SUBJECT: Compensation Plan

It has been exciting to watch the development of our new sales team. Over the last few weeks, our company has put together a formula for success. We have saved the best for last. It is my great pleasure to introduce our new company compensation plan. This proposal for the new Sales Compensation Plan will detail the pay system, effects on employee motivation, and the benefits to the company and individual employee.

The system I have designed is a performance based system. Interclean understands that in today’s global economy, competition is fierce for talented individuals. Therefore, it is vital that our company has a formal compensation system in place. Our performance based compensation system is designed to “attract, retain, and motivate employees” (Cascio, 2006, p.419).
Our company chose the performance based system because of its alignment with our overall company philosophy and objectives. Dan Jensen, a compensation plan specialist, states “your business model is the single most important factor in determining the type of compensation approach you follow” (2007, p.4). Interclean operates off a Retail Customer Model. Therefore, our compensation plan will be based on the following:
Strong incentives for higher levels of personal sales
Strong incentives for training others to achieve high personal sales
Consistency is selling is highly rewarded
A well designed recognition system complements the compensation plan to offset a higher level of discouragement found in a stronger selling environment.

All team members will receive a base salary according to their job position. The base salary will be complimented and enhanced with an aggressive incentive bonus plan and other rewards. We have established a compensation committee to evaluate employee performance and keep our compensation plan current. Employees who meet and...

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