Hrm 531 Week Five - Total Rewards Plan

COMPENSATION PLAN

With a new sales team selected, training needs and requirements determined, and a process established for evaluating employee performance, consideration is now needed on how to compensate each team member. While the first thought is to the paycheck, employee compensation addresses more than just how much an employee get paid, it includes both financial and non-financial benefits or rewards. This is often referred to as a Total Rewards Package, or plan.

While a variety of direct payment methods exist and each has its strengths and weaknesses, the decision of the management team is to use multiple methods. Each member of the sales team will receive a base salary, commissions on sales, and bonuses based on individual performance, team performance and the overall performance of the company. Each person’s base salary will vary and reflective the years of experience in the industry. While providing each employee a known, static, but dependable base salary for essentially performing at the lowest level, the opportunity to earn more through outstanding performance will drive team members to perform at higher levels to receive higher wages.

An important element of this plan is that the base salary is considered nominal and insufficient to meet the financial needs of the employee. If the base salary were higher, the incentive to perform well in acquiring new customers and ensuring current customers stay happy would not be present. With three separate bonus plans, the incentive to perform well individually and as a team is real and will help drive members of the sales team to work diligently and efficiently. The individual and team bonus plans will be based on meeting sales targets, exceeding sales targets, customer retention, and customer satisfaction. As the sales team achieves a higher volume of sales and meets or exceeds customer expectations, thus retaining those customers, overall revenues and profitability of the company will...