Sample Sales Force Compensation Research Essay Introduction:
In today’s economy, keeping the morale of the sales force in a high gear is vital if a company is to achieve profitability. One of the factors that boost the morale and productivity of the sales force is a reward program that recognizes and addresses their needs.
It is in the company`s best interest to keep the sales force motivated for higher sales revenue and elevated levels of financial growth. To assist in understanding the impact and role played by reward programs, General Motor`s compensation plan will be used as a guide in creating an effective workforce compensation program (Hay Group., 2001).
An effective compensation program needs to incorporate the aspect of fairness .This means recognizing each employee`s worth and value contribution to the ultimate success of the company. The reward program needs to be impartial to all employees involved so that it can gain unfailing support from every member of the sales team. An unfair program will create conflict and division amongst employees and cause resentment and discontent amongst those who feel sidelined by the program(Clow & Baack, 2012). It will hinder the smooth running of operations as employees get involved in a battle to counter each other’s efforts thus leading to reduced levels of productivity.
The vision and mission of the company should also be considered when hatching a reward program. It is only by aligning it to the core values of the company that it will attain sustainability. The rewards program will be a reflection of the company’s goals and objectives thus utmost care should be taken so that the intended image is reflected to all interested stakeholders. If the program is not aligned to the company`s goals then it will be working against the very existence of that company and will produce undesirable effects.
The reward program should also receive the full backing of the management team and supervisors because they are the people who will be charged with the responsibility of its implementation. Lack of their support will create a gap between what the employees have been promised and what is actually happening leading to feelings of distrust and betrayal that are detrimental to the performance of the sales force (Cichelli, 2010).
Effective communication is key to the success of any reward program. The role of communication cannot be undermined because it is though communication the employees will lean about the program, how they stand to benefit and what is required of them. A company may come up with a very attractive reward program but if the communication channels are lacking in effectiveness, employees may remain unmotivated simply due to the fact that they have not been furnished with the relevant information. Effective communication clarifies all grey areas and avoids disappointment that may occur when the program is misinterpreted.
Even the most well thought out reward program needs to be reviewed and assessed for its effectiveness on a regular basis. This is because the workforce is very dynamic and keeps on evolving and presenting new unprecedented challenges that need to be addressed. Monitoring the program will make it more successful because shortcomings will be detected and quickly corrected before they spiral out of control. Employees will also be able to monitor their progress by analyzing the key performance indicators and consequently make changes when as the situation dictates.
Frequency of payment of the rewards motivates the employees improve their performance because they are assured of reaping the fruits of their efforts in the near future. When the rewards program is intermittent, the employees will be uncertain that their work will produce the desired reward thus demotivating them.
The sales force sets goals that they strive to achieve at the end of a given period. The compensation plan seeks to reward good performance. Performance is measured by analyzing the goals that had been set against the outcome and thus determining the success or failure.
The sales force is very persistent and do not give up when presented with obstacles. Convincing a customer to purchase requires a sales person to appeal to their senses and emotions pointing out attractive features of a product. The compensation plan targets persistence because this is the only thing that will generate a sale. Confidence is another characteristic that this plan is designed for. The members that form the sales team must be confident of their abilities and in the quality of the products that they promote. They should be organized in the sense that they have their targets and goals sets. They are also solution oriented. In every obstacle that comes in their way, they should see a challenge but not a problem (Gross, 2001).
General Motors Corporation perceives it’s EVP in a wider perspective much more than just benefits and salaries. It reflects the total employment experience including benefits, opportunities to develop of careers, rewards, culture and the style involved in employees’ management. The corporation appreciates the fact that the Employee Value Proposition should be aligned to the mission of the organization and must be absolutely reflected to the employees or else it would become a demotivating factor for the employees affecting their productivity. At General motors, it is the role of the human resources managers to provide tools and resources that are essential in motivating the employees. These tools include: training, benefit schemes, and compensation programs. At this company, EVP serves as an integral role in streaming the desires of the employees and the benefits that are provided by the company. GM holds an agreement with its employees of the minimum wage rates, harsh working conditions, and career advancement programs. Despite the fact that the company offers substantial number of benefits to its employees, there is a need to integrate other employees’ well-being benefits like work-life balance and time off into their EVP for them to set a better employee expectation.
According to the plan, outlined above, a fair and equitable plan is integral in development of the feeling of worthiness of an employee to an organization. Employees who feel that they are treated fair are bound to respect the company’s objectives, operation codes and the mission statement of the corporation. By endorsing fair treatment of employees, it implies that benefits are provided equally and the rules that underlie the provision of the same are not discriminative. It places all the employees on a common ground and hence motivating them to work harder whilst they are in the organization. If a company or an organization becomes reputable in fair and equal treatment of employees, there are higher chances of it becoming an employment firm of choice for the best and most skilled employees in the industry.
A positive plan is a plan that provides an active participation of employees and in return, additional benefits are provided. By providing extra benefits for continual dedication by the employees, a company will be able to enhance its brand image as it will be providing high quality products and services channeled by the active and motivated workforce. In addition, if the plan is monitored and calculated by both the employers and the employees, the employees will be able to carry out self evaluation test to see how they can impact their progress in the company. This will act as a self motivation tool which has the potential of encouraging both parties to work extra harder.
A plan that focuses on both the current and the future prospects of the company is promising to the employees as it suppresses the wariness of losing their jobs if the market fails. This motivates them to provide better services and coupled with other benefit programs, the company benefits by getting better services and expansion in client base-which comes with advancing company or brand image, while the employees enjoy job security and other provided benefits (Burke & Society for Human Resource Management (U.S.), 2005).
A plan that pays employees’ compensations frequently is better in bringing the balance between the benefits that a company provides and the services it receives from its employees. Motivated employees are known to provide better services to the company. If a company pays the benefits in small intervals, the employees become motivated and they are able to provide high quality services which in turns create a positive company’s image and hence placing the company at better grounds of expanding its customer base and hence making more sales. It is also worth to note that a compensation plan that changes frequently, more so a negatively changing plan, demotivates the employees in the sense that they live on anticipating a drop or a negative change in their benefit package, the energies that could have been used in promoting the image of the company (Blattberg, Kim, & Neslin, 2008).
The outline plan is very attractive to future sales workforce. A plan that is positive is bound to attract more sales people in the sense that the more they become actively involved in marketing the company’s products, the better they are remunerated. Most sales people work on commission which implies that, if the more they work, the higher the commission, they would strive in bringing in more customers compared to the situation when the commissions are constant. Also, by paying the sales commission frequently, sales people are motivated to work harder and receive substantial amount of money during each payout. If the compensation plan is not negatively changing, this might attract more sales people since they are assured that their commissions will never go below a certain level. Also, sales people requires a compensation plan that has a future, hence, since this plan targets both the current and the future sales there is job security for the sales people.
References
Blattberg, Robert C., Kim, Pyŏng-do, & Neslin, Scott A. (2008). Database marketing : analyzing and managing customers. New York: Springer.
Burke, Mary Elizabeth, & Society for Human Resource Management (U.S.). (2005). 2005 reward programs and incentive compensation : survey report. Alexandria, VA: Society for Human Resource Management.
Cichelli, David J. (2010). Compensating the sales force : a practical guide to designing winning sales reward programs (2nd ed.). New York: McGraw-Hill.
Clow, Kenneth E., & Baack, Donald. (2012). Cases in marketing management. Thousand Oaks, Calif.: SAGE.
Gross, Steven E. (2001). Compensation for teams : how to design and implement team-based reward programs. New York: AMACOM.
Hay Group. (2001). Reward management : the impact of current economic conditions on reward programs. Philadelphia, PA: Hay Group.

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