Compensation Plan

Inter-Clean Career Development/Compensation Plan

HRM 531

April 6, 2011

Compensation Plan

“Compensation plans need to be tied to an organization’s strategic mission and should take direction from that mission.” [sic] Cascio, W. F. (2006). Managing Human Resources: ebook collection pg. 32.

Inter Clean’s strategic vision is to be among the first to introduce full service cleaning solutions in domestic and global sanitation markets. Inter-Clean will focus on its domestic base initially and branch into the global market within two (2) years.

In considering what type of compensation plan to offer in our newly formed company we addressed specific questions such as commission only, base only or a combination thereof. Research has shown that there is no specific, magic or “one size fits all” formula for developing effective compensation plans, the variance is dependent on the type of service or product offering sold. With that concept in mind, the Inter-Clean business mission to “offer services and solutions in an expanding market,” our compensation plan must mirror and support our charge. We have selected a compensation plan that grows as the company grows and generously compensates our sales team as far as they can reach.

Compensation Factors /Implementation

Objectives -

1. Parallel employee contribution/competencies relative to the sanitation market

2. Bring into line employees’ compensation with their respective work, relative to the market

3. Determine the market compensation rate

Base salary of $40kC

Commission : 8% for monthly gross profit up to $17,000

10% for monthly gross profit between $17,001 to $25,000

14% for monthly gross profit in excess of $25,000

Bonus: Pays out at year end additional 3% of gross profit for minimum goal of 400k

Sample: 30k gross profit over 12 month period = 360k

Annual comp would then be: Base salary: $40,000

Commission: ($ x * .10) + ($ x* .12) + ($ * .14)

Bonus: $0 if the employee does...