Career Development Plan Part IV 531 HRM 3 March 2010 Career Development Plan Part IV: Compensation Introduction: The final stages of formalizing the career development plan for the sales department is almost complete with the exception of the approved compensation proposal. This compensation plan will promote attracting the industries most talented employees, retaining the company’s most experienced performers, and motivating each individual to meet the company’s strategic goals in the process.
The objective in describing this compensation package is for senior leadership to approve these methods behind employee compensation and to appropriate the required resources to execute this plan. Compensation Plan The new compensation plan for the sales team is founded on labor research and statistics to establish a market-based pay structure for the employees. In understanding the specific details of the job requirements along with needing to retain a core of experienced personnel management determined to implement a three-tier pay system to establish different experience levels of salespeople.
Apprentice: 0 – 3 years the annual base salary is $25,000 Journeyman: 3 – 5 years the annual base salary is $30,000 Craftsman: 5 years and up the annual base salary is $35,000 Another area that is part of the compensation plan is an incentive program to motivate employees to perform at high levels for the sales department. A sales commission program will be directly tied to the employee’s base salary that will increase his or her ability to earn a substantial amount above the base salary amount through performance.
This commission incentive is built around a mix of 100% of the base salary plus a 10% commission rate for all monthly sales. The plan is designed around the best performers with unlimited earning capabilities while allowing those reaching the targeted base-line sales to earn a fair salary. To illustrate this plan a typical apprentice earning $25,000 a year with a 10% commission rate on $25,000 worth of transaction every month can earn up to $55,000 annual salary. The last area of the compensation package will include quarterly bonuses based upon performance measures reached for the sales team.
In order for each team member to receive a 3% performance bonus the department must reach a minimal target of $750,000 in total transaction sales for the quarter. The additional earning potential will solicit team motivation and encourage full participation of every team member in meeting this specific dollar amount goal. Justification of Compensation Plan The decision to institute a market-based pay system versus other systems is based upon a pay system that promotes an external equity concept that provides competitive wages for a specific job within the demands of the market.
InterClean’s employee skill sets are directly dependent upon the market pay scale and the external labor markets in the industry. Once financial resources are committed to paying market value for the labor than the company can attract and retain the employees to succeed in this business. The incentive-based compensation packages are widely used throughout the industry, which puts an emphasis on performance and recruitment of the best talent.
In providing commissions to the base salary this structure will significantly motivate employees to become highly productive and reach organization goals. Anytime a company provides an incentive system like a commission-based pay structure and performance measures the employees will find a way to increase his or her salary and to maximize productivity. In providing the right mix of a base salary and sales commission rates the company will attract and retain the top salespeople without squelching any motivational or productive factors with the employees.
Last, linking a team’s bonuses to producing results will make the employee’s aware of the company’s bottom line without disrupting the cohesive team building environment because of the combined team interests and objective in meeting the established goal in sales. Total Rewards Package The three most influential components of any total rewards package is the total compensation, benefits, and work-life balance for motivate employees in the workplace. An employee’s quality of life is dependent upon a well-orchestrated total compensation that includes the base pay and incentives.
Research studies support that every employee’s standard of living starts and ends around that biweekly paycheck so management needs to consider this component of the rewards package most carefully. The second area of the total compensation is the incentives payments received for a measured output of work. The next component of the total rewards model is the benefits, which composes approximately 80% of any companies total rewards package to attract, retain, and motivate employees.
Some employers are providing benefit choices to employees to control cost and help employee’s receive only those benefits needed. The final area is the work-life balance component. Some of these features include flexible scheduling, childcare, eldercare, and tuition reimbursement. In providing the total rewards package InterClean demonstrates to every employee the importance he or she plays in the company. The total rewards pays dividends through motivated and dedicated employees who champion the company’s business goals. Compensation Plan’s Benefits
This new compensation plan will provide benefits to the employees as well as to the company. The company will benefit through positive behavior in the form of improved productivity, increased revenues, diminishing losses of experienced performers, and senior leadership understanding the importance of tying compensation to the business strategy. All employees will directly benefit with a compensation package that pays those that produce results and believe he or she is equally compensated to those of similar or equivalent jobs.
This fairness will allow the employees to work harmoniously within the team environment for the good of the company. Conclusion A well-thought out and developed compensation plan is key if employees are to remain properly motivated and compensated. In this compensation plan the employees are provided a competitive salary with the potential to earn a descent living, which will help attract, retain, and motivate the best employees for the company.
The strategic goals are aligned to this compensation plan that contribute to the company’s bottom line and competitiveness in the future. References Cascio, W. (2006). Managing Human Resources: Productivity, Quality of Work Life, Profits. Retrieved from Cascio, W, HRM531 – Human Captial Management website. University of Phoenix. (2010). InterClean, Inc. [Scenario]. Retrieved from University of Phoenix, Simulation, HRM531 – Human Captial Management website. Compensation Consulting Consortium. (n. d. ).
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