InterClean Sales Department Compensation Report
This report is a follow-up to my report on the career management plan for the sales department presented to Senior Management on June 14th, and will present the new compensation plan for Sales Team. The research for this report has been conducted by me, Janet Durham and Carol Stanley.
InterClean Sales Department Compensation Report
Components and Objectives of Compensation Programs
According to Cascio (2005) “compensation includes both financial and nonfinancial rewards…. Nonfinancial rewards include everything in a work environment that enhances a worker’s sense of self-respect and esteem by others (e.g., work environments that are physically, socially, and mentally healthy; opportunities for training and personal development; effective supervision; recognition). (p. 418) and “To be effective…. systems should provide … equity with the external labor market” [and be] designed to attract, retain, and motivate employees.” (p. 419)
We believe that InterClean meets the demand for a suitable environment to meet these criteria.
Developing a pay structure
According to Cascio (2005) “Compensation plans need to be tied to an organization’s strategic mission and should take their direction from that mission” (p. 420) and that there are 9 major components to be considered when developing a compensation system;
• Linking Internal Pay Relationships to Market Data
• Market based pay
• Competency based pay
• Pay raises
• Performance Incentives
• Merit-pay systems
• Profit sharing
• Gain sharing
• Employee Stock Ownership Plans
Profit sharing, gain sharing and employee stock ownership were immediately discounted as these options are not part of the company strategy as a family-owned business.
Merit-pay was also considered but, according to Cascio “Surveys show that about 90 percent of U.S. employers use merit-pay systems....