Career Development Plan Part Iv
Now that we have structured our new team, identified their roles, identified ways to manage their performance and created an appraisal system we are now proposing a new compensation plan. This part will outline the plan, describe how it will help motivate employee performance, describe our total rewards program and outline how this program will benefit the individual and InterClean.
Account Executive Financial Compensation Plan Compensation structures can be broken down into two distinct categories, financial and non-financial (Cascio, 2006).
This section overviews the financial compensation plan for account executives, which includes pay and benefits. Account executive pay will be primarily commission based. Each account executive will receive a base salary at minimum wage, with the rest of their salary coming from commission. We feel that a generous commission structure will motivate performance because pay will have a direct correlation with sales volume. We structured our proposed commission plan to reflect InterClean new strategic direction (University of Phoenix, 2007), and how employees are rated in their quarterly appraisal.
This means a focus on retention, up-selling and volume. Account executives will receive 8% commission on sales for the first six-months of revenue. 10% commission on sales after six-months of continuous revenue. 13% commission on sales after one-year of continuous revenue. 13% commission on up-sells and account executives that meet their quarterly sales volume will also receive a bonus equaling 3% of total revenue earned. New Business Account Executive, The New Business Account Executive has different goals, and therefore a different pay scale will apply.
He or she will receive a base salary of $30,000 per year, plus a 3% quarterly commission on revenues earned from the accounts he or she acquired. We feel that this structure will adequately reflect the difference between new account acquisition and account retention. Cumulatively, the maximum amount of commission paid on revenues to account executives would be 19%. In related to the benefits Account Executives will receive the standard benefits due to all InterClean employees, including; • Health Insurance with employee share of cost • 401k match 14 days paid vacation • 6 days sick time • Health, Financial, Stress and Motivational Counseling through our employee wellness program. Managerial Financial Compensation Plan The managerial financial compensation plan will focus on overall team performance.
We feel that creating a plan that rewards managers for team performance helps ensure management’s focus on creating a strong team that meets financial objectives. Managers will receive a base salary dependent on their pay grade, ranging from $50,000 annual for the solution expert and $65,000 annually for the sales manager.
The rest of their salary will be based on team performance as 3% commission on total revenues per quarter of all account executives that have met his or her goal, and 2% on total revenues per quarter if all account executives meet their goals. We feel that paying based on meeting objectives, and sharing in total revenues accomplishes two important things such as rewards managers who ensure account executives meet their goals by providing the tools and support they need. And it encourages over-achieving by not setting a limit on revenue sharing.
In terms of the benefits, managerial employees share in the aforementioned benefits, and are given one additional week of paid vacation (five days) per year. As mentioned, compensation does not only include financial compensation; there are certain non-financial rewards that motivate employee performance, increase loyalty and decrease turnover. The following non-financial rewards were chosen based on a survey conducted in the United Kingdom (Employee Benefits, 2006) as additional “perks” for employees. Sales Employees, All sales employees are eligible the following reward package flexible working arrangements.
Employees can work at home when appropriate on dates arranged between them and their manager.
Flexible work time is the top-rated non-financial reward in the UK survey (Employee Benefits, 2006) and offering such an arrangement can increase productivity by diminishing stress caused by work-life conflicts. And corporate gym membership also ranked high on the survey, and using our corporate pull to offer a free membership not only encourages wellness, but exercise has countless benefits such as stress relief, increased creativity, and energy. Also, we will include employee discount at restaurants.
Using the promise of higher volume by internally promoting local restaurants to our employees, HR has arranged for employee discounts at local restaurants. This benefit decreases the costs of lunch for our employees and gives them another reason to value InterClean.
Managerial Rewards, The following rewards are available to managers in addition to the preceding rewards available to all employees such as use of company vehicle: Surprisingly, the UK survey listed “sports car as company vehicle” as the number one “benefit they don’t receive but wish they had” (Employee Benefits, 2006, para4. . Company gas card, not only should our sales manager ride in prestige, but we understand that the majority of driving they do benefits our company, so they also have use of our company gas card. The compensation and rewards system outlined in this plan are geared to motivate performance by tying pay directly to the revenue gained for InterClean. Our new strategy of focusing on solution-based selling (University of Phoenix, 2007) means we must grow retention, up selling, and total volume.
This plan rewards all three by reducing the base pay of account executives, increasing commission and tiering commission based on retention and up selling. We reward achievers and not low-performers. Tying managerial pay directly to the performance of the team rewards good managers (Vigoda-Gadot ; Angert, 2007. ) Finally, offering a substantial but not overly high base pay takes into account fluctuating economic and environmental constraints. Offering bonuses quarterly rather than annual avoids penalizing employees for one bad quarter, which can happen to even the best sales person.
Finally, our reward system is built to make InterClean a great place to work, that values the employees well-being and offers perks as part of the job. Offering this reward system can help InterClean retain the best possible account executives and managers (Cascio, 2006). Because we offer competitive pay and creative rewards that ease the work-life conundrum, and add a certain level of prestige to those who work for InterClean.