Sales Force Compensation
HRM 533: Total Rewards
January 30, 2013
Abstract
Keeping the moral of sales force in high level is critical in recent economy. One of the factors that enhance the attitudes and the productivity of sales force is a rewards program that recognize and addresses their needs. To assists in understanding the influence and role played by rewards program, Starbucks’s compensation plan will be used as a guide in creating an effective workforce compensation program.
Sales Force Compensation
Throughout the decades, there has been evidence showing that best way to success and gains profits is to focus on rewarding employees not just pay and benefits. Motivating employees plays
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When employees get what they value this will motivate, retain, and attract them. 3. Measure and Manage Cost and Risk: creating balance between effectiveness and cost make a successful rewards plan. Companies also need to manage and identify total rewards- related risk. For example, companies should have a plan to manage funding risk related to defined benefit or stock plans. In addition, they need to be preparing if the plan did not motivate employees. 4. Strengthen Performance Management System: to adopt best practice plan and make it work, it essential to make sure that mangers are effectively carrying them out. Training managers will strengthen the connection between performance management and rewards and improve performance. 5. Sharply Differentiate between Top Performers and Everyone Else:
Employers need to be recognizing the top performers from others. Encourage, them by increasing their salary significantly and provide opportunities for development and learning. 6. Make Communication and Education a Priority: total rewards work effectively when the employees support and understand them. Poor communication may result in affecting employee’s choices from selecting the right rewards.
Describe the behaviors of the sales force that are targeted with the compensation plan.
For an organization to be effective, it must tackle the motivational
On the corporate level, a successful sales incentive plan should be a tool to support corporate strategy and objectives for product management. On the individual level, the sales goal should be challenging and realistic, and designed for the job rather than for people. Also, it should entail a simple mechanic, provide rewards that adequately impact the behaviors, and encourage people to overachieve. Since the company's main objective is not only about making the sales volume or gross margin, profit margin is not an effective indicator to calculate salespeople's monetary reward above basic salary. Instead, a point based system is more appropriate to reward the salespeople for conducting behaviors that are aligned to company objectives.
3. Total Rewards Strategy – This structure is very complex, yet comes with a lot of flexibility to allow for growth and internal satisfaction. The pitfalls with this structure come with the implementation, which could be treacherous and difficult to convey to our employees.
I’ve completed extensive research on various compensation strategies within similar types of organizations and have arrived at three specific strategies that our organization should consider adopting:
This report reviews three different compensation strategies PepsiCo can develop and implement within all of our PepsiCo. Brands and businesses for our employees. Compensation is one of the most important and rewarding factors for our employees based on our organizational health survey conducted in 2011, so a thoughtful and thorough approach should be taken as we think about
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 report reviews three different compensation strategies PepsiCo can develop and implement within all of our PepsiCo. Brands and businesses for our employees. Compensation is one of the most important and rewarding factors for our employees based on our organizational health survey conducted in 2011, so a thoughtful and thorough approach should be taken as we
Also, form career development plans and spot out important achievements within the business. Not only employee motivation should be worked on, but also set up a comprehensive rewards system. The
2. Formulate a total rewards strategy to encompass the fundamentals of compensation and the regulatory environments.
The key components to developing effective Reward Strategy is to ensure that there are clearly defined goals to meet business objectives, that the reward programme meets the needs of both the organisation and its employees, and to ensure that this is then supported by effective HR policies. In order to ensure these criteria are met there are a number of factors which influence how reward strategy is developed which include both internal factors within the organisation itself, as well as external factors outside the organisation.
The six features of an effective total rewards program include: focusing on alignment, taking the employees views into account, measuring / managing costs, the greater use of incentive based pay, having effective communication / education and managing the reward program. The combination of these factors is helping firms to more efficiently monitor the sales force.
Reward Management (RM) has been defined as the distribution of monetary and non-monetary rewards to employees in an effort to align the interests of the employees, the organisation, and its shareholders (O’Neil, 1998). In addition O’Neil (1998) also suggests that a RM system can serve the purpose of attracting prospective job applicants, retaining valuable employees, motivating employees, ensuring legal requirements relating to direct and indirect rewards are not violated, assisting the company in achieving human resource and business objectives, and ultimately assisting the organisation in obtaining a competitive advantage.
Reward and recognition programs must connect the needs and expectations of the workforce with the company’s overall goals and strategies. A program that reinforces important company values and goals will encourage employees to act in line with such goals and emphasize the importance of achieving these goals. Alternatively, rewards which do not connect with organizational goals may convey a misleading message and encourage employees to act in a manner that does not facilitate the
Although research generally confirms that pay-for-performance plans can influence greater outcomes, it is unclear how effective different pay plans are relative to each other (Park, 2012). Like most things in business, compensation is something that requires evaluation, study, assessment, strategy, modeling and integration. Achieving a pay for performance culture does not happen without paying attention to the behaviors, activities, rewards and motivations that have to be linked and reinforced through a well engineered and successfully executed process. Actually if that process does not tie rewards to shareholder financial objectives, employ the proper mix of compensation elements, result in meaningful dollars, embrace performance that employees can impact and are effectively communicated and reinforced, then the results it produces will likely fall short (Vision Link Advisory Group, 2013).
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.
Being rewarded and recognised for their work or contribution is what keeps an employee motivated to work towards achieving the organisational as well as personal goals. When the employees is motivated by rewards, they will have job satisfaction consequently increasing the productivity of the organisation. It necessitates the need of managers to pay more attention in understanding their employees and come up with suitable types of reward systems for the organisation so that the employees are intrinsically and extrinsically motivated all the time. The hypotheses that I put forward here is to support this statement that effective reward management is critical to