Motivation by Commission Based Pay

To respect better the sales objective, there is in the new incentive plan a commission which is paid on the sales forecast accuracy . So this new commission is something really good to improve the operating process buisnessand not only the potential sales objective. And also with this new rule salesperson will forecast the minimum target in order to reach their target.

1. When it is difficult to determine the effect of a salesperson’s effort son sales rather than pay any incentive through commission it is better to use a bonus with salary as part of the compensation package

The new sales force will also have to be able to; create new working relationships, develop new business, create a personal atmosphere for customers, and promote new business. After the sales force creates new business, the team must be able to retain these newly established customers. They will have to create small, obtainable, measurable goals for themselves in order to create and sustain new business. The salespeople will have a sales quota of thirty units per month and the commission will go up in increments of ten percent after

The right compensation program will depend on the organization’s business strategy and goals. To achieve these, an organization must recruit and select the best possible employees. To attract such employees, there must be an attractive compensation plan. Competitors will be offering different payment options, this may be based on pay rate or special perks, and a company’s stock options. Organizations must be aggressive yet reasonable to compete with competitors. Retaining and encouraging employees to perform at their best may be achieved through an immediate incentive award

Summary: Commission based employment can appear to be a transparent reward structure based on success and is a common way to reward top performers. “Commission based pay can make the employee feels they are sharing in the organizations success which motivates the individual to maximize their success” (Clark, Robert, and Sylvester Schieber Fourth Quarter 2000). This compensation strategy allows employees to work hard and get further. The theory with harder work more pay will occur. The employee is paid based on how they perform or how much they sale. If they sale or make more the more they will be

In the same context above, a question that would guide pure research is: “What influence does commission based compensation plans have on employee motivation?”

Summary: Commission based employment can appear to be a transparent reward structure based on success and is a common way to reward top performers. “Commission based pay can make the employee feels they are sharing in the organizations success which motivates the individual to maximize their success” (Clark, Robert, and Sylvester Schieber Fourth Quarter 2000). This compensation strategy allows employees to work hard and get further. The theory with harder work more pay will occur. The employee is paid based on how they perform or how much they sale. If they sale

An organization’s management roles can be quite different and diverse, depending on the industry, its culture and the ultimate goals of the organization. Managers on different levels of an organization play several roles and exercise multiple skills as they effectively and efficiently, integrate the work of people through planning, organizing, leading and controlling. Historically, there are three key management viewpoints: classical, behavioral and quantitative. To be an exceptional manager, it is essential to embrace a viewpoint

There are numerous motivational theories that explain why people do what they do. When viewed collectively, these theories suggest people’s actions are driven by the following factors: economic, social, and self-construct. Economic factors include not only money, but health protection, security, wealth, physical safety, and purchasing power. Sales commissions fit most of these needs, but do not fully meet the needs for security and physical safety. When people think about and act upon what others think of them, they are being influenced by social factors. Most people will work harder for positive feedback and avoid performance that garners negative feedback. For example, some people are eager to conform to the norms of a sales team and are positively motivated by the performance of the entire team. Self-construct is the inner voice that drives an individual to perform and differs in every individual. Some people are driven in the pursuit of self-accomplishment, while others are driven by the need for power or acceptance. Each of these factors are combined in varying degrees in all individuals, whether salespeople or not.

.. Sales agents tend to be used for more highly specialized goods that require implementation,

In reviewing Manheim’s compensation plan for their sales representative, we examined the commission component. Incentive compensation is subject to ongoing changes and adjustments that exist to shape and direct the sales force. Manheim’s current structure pays employees a monthly commission based on the number of vehicles bought and sold through their consignment sales. Examining the extensive data revealed that there are a multitude of factors involved in establishing commission plans and actually earning a commission payout. Beginning with 2015 sales data, acquired through Manheim’s customer relationship management (CRM) software, 124 field sales rep commission payments were analyzed. Specifically pulling the data from the months of

The SWOT-Analysis exhibits, that the occurring threats can all be shunned, when adapting the compensation structure as mentioned above (for a more detailed delineation see KPI-Analysis). The opportunity of having a greater pool of prospective recruits to choose from is positive. As this implies, if DBK manages to successfully employ plenty new sales representatives, it will have a good basis of jobholders to further grow its business, due to the fact that DBK’s attrition rate is very low. DBK needs to reduce its weakness, that most of their sales representatives have no experience in sales by make use of trainers (see KPI-Analysis), in order to share in the high potential of direct sales customers.

Now let’s take some time to conclude some major issues: first of all can straight commission actually motivate salespeople and is it the best incentive plan. Secondly, Mr. McDonald should also consider is

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.

Today, competition between the businesses is extremely high thus companies need to find ways to be competitive. Organizations prepare the best market strategy to increase the company performance and the ways to keep their employee motivation on the highest level to perform well within the competition. At that time, several incentive pay programs play an important role for every organization to perform well within the competition.