Reviewing Manheim's Compensation Plan For Their Sales Representative

Managers in many cases are presented with sales incentives in a retail environment. These incentives may range from free products, to cash prizes, to trips, bonuses, etc.

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.

One of the important aspects of business management is having a proper compensation system. Compensation ensures that the staff of the company obtains the results of their efforts. Compensation is a cost to the enterprise and, therefore, a proper remuneration model must demonstrate its ability to produce returns. Also, since compensation is what the employees get in exchange for their services, the type used must be one that will motivate the employees (Belcourt & McBey, 2015). Henderson printing company is a mid-level company. Therefore, it requires a very critical remuneration system that will help it to survive. This memo explores the compensation models that Henderson printing operates as well as suggests the necessary changes.

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

If the cause of the decrease is because of product, the company should work with the implementation of new products or maybe establishing a new image for the product in sale decrease. If the product is still on demand and the decrease is because economy they should establish a new marketing for the offer of the product. This could be discount offers in product or quantity discounts for product bought. Discovering the reason why the product is decreasing in sales is an advantage for both the company and its sales rep. Making loans to sales rep on commissions that haven’t been earned could lead to greater losses for the company, turning the solution into a problem. Why? Simple, the problem could rely on sales reps that are not doing the job as they should. As the questions state, there are some sales rep that still making a good commission, the task must be to find why the other that have lower the sales. If the fact is that the company hasn’t evaluated commissions percentage for their sales rep in a long time to cover the high cost of living is simply, evaluate commissions based on cost of living and increase the percentage for the sales rep. Also they could work with encouraging the sales department with bonuses per sales goal; every sales rep that goes beyond its monthly sales goal will receive a bonus for this. This could encourage the sales rep and thus increase the sales because everyone wants the bonus.

Higher Margins – I would measure the sales results on a weekly basis to ascertain whether the incentive is effective.

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.

National sales rep: All the benefits and reward systems the company provided made a huge impact on job performance. The

c) Arbill, a Philadelphia-based workplace-safety consultancy, takes that observation to heart. The company boosts morale by giving the troops more responsibility. "We created employee committees to do things like set up a health fair, a food co-op and other [projects]," says chief executive Julie Copeland.

Columbus Custom Carpentry is a relatively small family-owned business that was started in 1946. The organization is rooted in the Midwest area of the country and focuses mainly on the production of antique and custom contemporary style doorwork. The organization currently has four locations and employs 135 employees. Even though the company operates in a niche market, Columbus Custom Carpentry has experienced great success resulting in annual sales of 15 million dollars. The organization is composed of several different departments, which are grouped into four different units. These units are administration, marketing, manufacturing and warehousing. Columbus Custom Carpentry has numerous problems dealing with internal and external compensation equity. The following team research conducted will examine identified human resource management issues dealing with topics such as pay equity, turnover rates, market pricing, and pay structure. The research will offer

A well-articulated compensation philosophy drives organizational success by aligning pay and other rewards with business strategy. It provides the foundation for plan design and administration and anchors current and future plans to the company's culture and values (Kaplan, 2006, p.32). Recognizing and rewarding achievement is the cornerstone of the company A’s compensation philosophy. The mission of the company is to attract, select, place and promote all individuals based on their qualifications. The company believes that performance-based compensation helps attract, develop and retain talented professionals. In addition to base pay which based upon local market conditions and targeted to be above market, the company provides the following types of potential compensation to reward performance:

Manheim’s current incentive program is based on both year over year sales, and an established overall corporate goal that is cascaded down through the organization. The process is quite difficult to fully understand and often times employees joke about commissions and bonuses, referring to them as Manheim Mystery Money. Numerous sales personnel are commissioned monthly, however a portion are commissioned quarterly, and others are on an annual bonus plan. As an company we have an overall annual sales goal, however individual sales representatives are not provided annual goals. Sales representatives are instead provided with monthly goals that are sent out on a quarterly basis, meaning our second quarter goals should in theory be given to

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.

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

Planning system weaknesses: To begin with, fundamental assumptions, such as new plants, inventory carryovers, packaging trends, etc., which are used for initial sales forecast, are entirely made by corporate headquarters. However, the divisional managers assume full responsibility for the estimates they submitted to the corporate head office. As a result, they have to make efforts to increase the overall accuracy of forecast and avoid making changes in subsequent reviews of the budget. Moreover, each product line uses the same forecasting method. It is ineffective for the company to make accurate budget since factors affecting each product line are different, such as industry trends, customer preferences and so on. Lastly, instead of plant managers, the district sale managers raise the sales budgets. However, the plant managers are held accountable for this budgeted profit number, which is connected with their performance and is not controlled by them.