Case Study Of Sales Management Of Maruti Suzuki

Therefore, we think Deutsche Brauerei have to do something to ensure that Oleg does not leave to a competitor. According to old compensation package, he will receive EUR40,000 base salary and incentive payment which is calculated by 0.5% of the annual sales increase in Ukraine. Uncle Lukas proposed his base salary up to EUR48,500 and also increase incentive payment up to 0.6% of the annual sales increase. In our opinion, we agree with increasing in base salary up to EUR48,500 (21.25% increase), but we prefer to retain the incentive payment at 0.5% of the annual sales increase because we think that this plan(increasing incentive payment up to 0.6% of the annual sales increase) may fail to maximize shareholders’ wealth. The reason is that when subject to this formula, Oleg Pinchunck may tempt to accelerate sales as much as he can without concerning about cost such as extending more credit or spending more advertising to boost sales. We would like to recommend giving him more bonus if he can reduce the accounts receivables and inventories or using Economic Value Added to tie his compensation to the firm residual income instead of tie his compensation with sales growth.

So this a very good news that in the new incentive plan there is a management by objective , it will permit to salespersons team to be more efficient , and they will

Compensating the organizations sales staff through the use properly designed performance pay will lead to profitable sales for the organization. Once again linking compensation to performance will benefit the organization in its ability to pay. It is important to design the compensation of the sales staff in a manner that encompasses all of the organizations goals as communicating with production staff will be a key component of the High Involvement Strategy, and it is important for the organization to demonstrate a commitment to the sales team that the relationship is not just purely financial. Therefore direct compensation for them should consist of a minimum base salary upon which their commissions are added.

Clear compensation practices tied to identifiable markets and employee performance should be established to improve employee understanding of how their compensation is determined.

Remote access – Employees working remotely using laptops may not be given access to sensitive data.

Firstly, the president and other management team members may get a higher overall salary by putting next year’s revenue to this year and transferring current year expenses to next year. The division’s management team’s salary and bonus may be based on the earnings of the division. By increasing revenue and decreasing expenses, they will be able to fake a higher operating income and thus receive higher compensation.

With the constant change in today’s business world, to have a competitive advantage makes it difficult for employers to attract and retain the most talented employees. Identifying the company’s compensation strategy ensures the organization offers the right pay and manages the pay increases to retain top talents. When we hear the word compensation we think about compensating an employee for their work performed, but there

This paper is provided to create, organize, and manage a total rewards program for an insurance company. First, it indicates the requirement of a total rewards system for the company. Then, it formulates a competitive strategy and explains it. Since the communication of a strategy is as important as the strategy itself, the paper includes a communication plan of the strategy. And last but not least it studies devising a competitive pay structure.

This paper will examine setting the stage for strategic compensation and bases for pay. There are three main goals of compensation departments: internal consistency, market competitiveness, and recognition of individual contributions. Internally consistent compensation systems define the relative value of each job among all jobs within a company. (Martocchio, pg. 22, 2011) With this system companies want employees to be paid more based on their qualifications and responsibilities. They believe someone with less experience should be paid differently. To determine such evaluation companies use job analysis in order to provide job descriptions. The job evaluation is to determine pay according to a particular position. Market-competitive

Having buy-in from key stakeholders is crucial for the success of an incentive pay system. For example, if top management does not support such a program, lower-level managers will place little importance on effectively administering the program. Hence, a lack of top management support often leads to a lack of accountability. (Gordon, Kaswin)

It wasn’t until Mynor began to review the compensation plan for Lux salespeople that he realized that he may have more of challenge managing the Lux sales team. The Lux Sales compensation package was vastly different than the Arck’s. Lux’s compensation package included accelerators, which increased the percentage commission a salesperson could earn based upon quarterly sales. A salesperson could potentially earn 24% commission. Arck’s compensation package included a standard 9% base commission paid after the quota was met. There was also a $50,000 bonus if the $6 million sales cap is reached.

Keeping employees motivated in addition to creating incentives and/or additional ways for employees to receive more compensation will create better performance overall within an organization. Contrary if company B gives their employees incentives to perform, without any motivational tactics they probably will not have as many top performances as company A, in addition the company may only seek short term rewards verses have long term success. Lack of motivation for employees within an organization, can cause long term damage for the company’s success. Different things motivate everyone; therefore there should be a system in place to keep employees motivated for the long term success of the company. In the MBM textbook under the concept of incentives, compensation, and motivation, there are a couple of different views of how it should be applied within an organization. We will discuss The Social Role of Profit, Personal Profit and Losses, and the way Market-Based Management view how incentives, compensation, and motivation should be applied and the things that effectively drive employees’ actions while at work.

This term paper exercise is designed to have you study the specific sales practices of a company

The main issue in case study 4-7 focuses on what the Japan company Nippon Cash Machines and their recent US merger National Office Machines should do to their Japanese sales force who has always followed a salary based payment plan and lifetime job security because they are quickly loosing market share in a highly competitive market. Therefore, the main statement for the case is as follows:

An incentive pay program can reward employees who continue to produce superior work or encourage employees who already produce good work to best. Sometimes, use an incentive system when employees are lack of enthusiasm of getting down to work and improving things. If everyone in the same job classification gets the same pay, there is no real incentive to do an outstanding job (French, 1990). Various incentive plans used to motivate all employees such as production staff, sales staff, administrative staff and managerial and professional staff on an individual basis. To be improved employee work performance, the incentive pay programs need to be fairly matched with the employees’ expectation. Properly designed and maintained incentive pay program has the potential to increase employees’ productivity and work performance.