Beruflich Dokumente
Kultur Dokumente
Group 2
Dheeraj
Richa
Arun parkash
Shibashish
Ramesh
Introduction
Compensation is a systematic approach
to providing monetary value to
employees in return for their
contribution to the organization, that is,
for doing their job.
The objectives of compensation
plan:
o Balancing the need of personnel.
- secure income and security
- desire for personal recognition and
status
- reinforcement for doing good work.
Characteristics
Fairness to all
Flexibility
Provide incentive and motivation
Lead to direction of efforts towards
company objectives
Ease of administration
Types of Compensation
Plans 1.Straight salary
Salesperson paid a set amount of
money based upon hours or days
worked.
Often adopted when salesperson must
devote significant amounts of time to
other duties.
e.g. Market research, customer
service, administration.
Simple to administer by sales manager
and provides regular income to the
sales force.
There is no direct link between
performance and reward and it does
not distinguish between efficient and
2.Straight Commission
Adopted by performance-oriented firms
that pay salesperson for their
achievements. The income is
proportional to the sales volume
achieved by a sales person.
Each person is paid a percentage of
their total sales.
It helps in setting targets for the sales
force.
It’s a measure to judge the
performance.
Focus is entirely on increasing sales so
client relationship suffers as there will
be short term relationships not long
3.Combination Pay Plan
It includes combination of salary,
incentives, commissions.
It is suitable for the organization with a
wide range of products.
It provides greater control as the plan
can be tailored to suit the sales force.
It provides advantage of both fixed
salary and variable income.
It involves lot of cost in calculation
because of the number of
combinations.
Designing Compensation
Plans
Determine specific objectives
Income and security
Equity
Flexibility
Economy
Establish desired levels of earnings
Methods of payment
Methods of payments
Salary
Commission
Bonus
Employee stock options
Special prize
Drawing account
Special cash incentives
Implementing
compensation plans
Pre testing
Periodic monitoring
Sales Force Expenses
Expense Plans
Company pays all Expenses
Sales person pays all Expenses
Company partially pays expenses
Fringe Benefits
Social Security
Pension and retirement Programs
Insurance
Holidays
Time off with pay
Other benefits