Compensation of the sales people includes $3,500 as fixed draw amount along with bonus and straight commission plan. The commission plan is based on point system and quota performance. Bonus is paid to the sales people only when quota for each product is met. Besides this, the sales people need to accumulate 1,035 monthly points.
Bonuses of the employees are tied to their team performance that seems difficult to accomplish. Furthermore absence of rewards for individual performance decreases the motivation of employees and hinders their performance.
The company could fix the issue by adopting a plan where individual performance would also be added to the bonus. This plan would create a healthy competition within the team members and increase their motivational level. Hence, it would increase the performance and productivity of employees..
453811-16-10QP AID: 3806 | 18/05/2015
RID: 7798 | 28/05/2015
Compensation of any profile depends on the policies of the company and factors like the importance, nature and responsibilities of the profile in an organization. As it is known that sales drives the business and is the core activity to generate revenue, the compensation of sales people is somewhat higher in organizations. This should however not lead to jealousy and incompetency, as the companies must pay equitably well to all its employees. Also, the pay seems to be higher as they derive hefty incentives on the sales made.
The sales persons are in direct touch with the customers they represent companies directly and work with a focus to satisfy the customers. Some sales people even operate in a 24*7 environment just to meet the customer's expectations.
Every individual have different perspective but the company's efforts should be to provide fair, transparent and equitable compensation structure for all its employees.
Company is selling two products that are nearly similarly in features and usage apart from their speed. Lowering the compensation tied to the sales of these products would not influence their sales. As from the performance and number of calls made it can be seen that the sales persons have made maximum number of calls to sell smartmeter which even exceeded the quota of calls to be made. In case of flexmeter they have not even made the number of quota calls needed but still managed the number to be achieved.
Therefore, instead of changing the compensation plan, the company needs to strengthen their internal communications and partnerships. The company together with sales persons needs to identify the reasons of customer selection of smartmeter over flexmeter even when it has better speed.
The company needs to offer customization to meet the customer needs. They can design a compensation plan that would motivate all the team members to sell the optimum mix of products to achieve success. Only tying the incentive to a particular product might lead to sales person only fulfilling their number quota instead of meeting and satisfying customer's needs.