Sales Force Compensation - Essay Example

Sales Force Compensation

Needless to say, that the majority of companies around the world sales appear to be at the core of their success in business. The growing number of sales is usually considered a proof of a company's stability, growth, and profitability. Proceeding from this, it becomes clear that sales people are those employees success of a company depends on. That is why, it is so immensely important for all managers to make sure that their employees working for sales department are motivated, encouraged, and deeply involved in the working process of their company. The major goal of this paper is to discuss in detail an effective rewards program taking into consideration such aspects as compensation plan, value proposition, as well as the level of engagement this plan is supposed to create among employees working for the sales department.

Speaking of the role of total rewards programs, it needs to be pointed out that in the recent years, organizations of different stripes have made a step from accepting the importance of these programs to actually starting to implement them (Heneman, 2007). Although it is hardly possible to find one general system that can be applied to any company with an equal success, still the majority of such reward programs have many things in common. It needs to be pointed out that introduction of a total reward strategy is usually associated with improvement of employees' efficiencies, their level of job satisfaction and performance in the workplace. Apart from it, implementation of the strategy is expected to have a positive impact on employees' psychological contract as well as on their organizational behavior (Jiang, Xiao, et al., 2009).

When it comes to implementation of total reward systems, there are six steps that are associated with the optimization of this process. The following part of this paper is to be dedicated to a detailed description of each of these steps. The first step is known as understanding organization's business strategy. In other words, the first and foremost thing that needs to be done is to consider a business strategy of our company taking into account such aspects as its mission, values, corporate culture, and vision. This needs to be done mostly because the general business strategy of the company should always be aligned with rewards strategy. Such working aspects as mergers, global expansion, downsizing, or any other business process should determine a selection of the most appropriate types of employees' rewards.

The second step to be taken is to align our people strategy to the overall business strategy of the company. Within a framework of this step, there is a need to divide all the working force into different segments with a purpose of identification of the competencies necessary for helping the company to accomplish its goals. This step not only helps to determine which skills, behaviors, and attitudes are going to be in use for an accomplishment of strategic goals of the company, but it also helps to detect any gaps that should be fulfilled. It is also necessary to mention that this step involves an analysis of employees' gender, age, education, tenure, and even marital status – which are the aspects to be taken into account during the process of structuring rewards programs.

The third and the next step that should be taken is associated with a development of a total rewards road map. Within a framework of this step, it is necessary to formulate the total rewards strategy keeping in mind the major areas of focus. This step is also associated with a development of a rewards portfolio that is equally aligned with an overall business strategy and people strategy. For example, it usually appears to be necessary to detect system of rewards that might help to attract the right employees with rare and outstanding skills, to motivate those talented people who already work for the company, as well as become successful in terms of retention of the best performers.

The fourth step to be taken is to identify all financial applications as well as get top-management buying. As soon as a reward portfolio program is already identified, it becomes necessary to calculate an expected financial impact of this program in order to make sure that a significant investment will arrive. Needless to say that the process of management buy-in is immensely important when it comes to becoming successful with the strategy.

The fifth yet not the last step is about an implementation of a total rewards strategy. The phase of implementation contains a set of different activities in order to ensure that an outlined strategy succeeds in terms of reaching its goals and objectives. At this stage, effective communication appears to be one of the most critical aspects. Apart from traditional types of communication and coordination between management and employees, it also makes sense to use a variety of administrative guidelines as well as program training focused on details and most tricky parts of a program.

The sixth step is focused on monitoring and evaluation of success. There is no need to explain that a total rewards strategy should be monitored and assessed on a regular basis in order to make sure that it keeps on meeting business objectives and goals of our company. It is also important to check if it continues to match with our company’s vision, mission, and values. For the purpose of assessment, plan designs can be used to establish a balance between the value and cost of a program. Apart from it, it might be great to use feedback from employees in order to detect issues and problems that should be addressed. Hence, it is safe to say that the last step is mainly focused on maximization of effectiveness (Kaplan, 2005).

Since each of six steps has already been considered in detail, it is time to move forward to a description of behaviors of salespeople that are to be targeted with a compensation plan. The first and foremost thing that needs to be mentioned is the fact that the compensation plan of our company is going to be effective because its primary goal is to increase sales performance. Speaking of the particular behaviors that are targeted by the plan, one should mention such as trusted relationships with employees, positive thinking, transparent communication process, effective time management, just to name a few (Coughlan and Joseph, 1992). Each of the behaviors mentioned above can contribute the overall performance in a unique way. Thus, for example, positive thinking makes people more prone to accumulation of new skills. Transparent communication process, in its turn, helps to save a lot of time when making decisions. Trusted relationships among employees help them to work efficiently as a team.

The next aspect to be considered within a framework of this paper is an assessment if a value proposition expected for both current and prospective employees in the outlined compensation plan. Needless to say, that a proposed compensation plan is focused on a creation of valuable proposition for both current and future employees of our company. At the outset, it is necessary to mention that a total rewards system is rather flexible, which provides each and every employee with an opportunity to benefit from a variety of its components including social packages, rewards, and even opportunities for their career development. Moreover, it should obviously be taken into account the fact that just an existence of a total rewards plan itself may serve as a source of motivation and engagement for the majority of employees. This can be explained by the fact that the primary objective of a compensation plan of our company is to build a new level of loyalty and confidence among the employees, to improve recruitment and retention processes within our organization, as well as to achieve a new level of overall performance and productivity.

Considering the type of plan created for our company, it is possible to make suggestions about the most likely affect this plan might have on our employees. It should be pointed out that the major goal of any total rewards system lies in attraction, engagement, and retention of employees. Apart from it, compensation plans usually play an important role when employees make their decisions to stay in a company or to accept a new job offer. As far as I can see, the proposed compensation plan and total rewards system will help our company keep its employees motivated, engaged, and involved. Apart from it, there are reasonable grounds to assume that our new compensation plan will help us attract a significant amount of sales professionals. This suggestion is based on a number of reasons. To begin with, our compensation plan will motivate sales force to do their best in the workplace. Next to that, our opportunities for professional growth and advancement are going to help our company to recruit only the best employees available on the market of labor force (Kwon, and Hein. 2013).

In order to make a conclusion to all said above, it should be said that sales force compensation plan is what plays a crucial role in the total rewards system. Sales compensation, in its turn, appears to be a major component of a sales plan and strategy of any company. As a result, companies with a well thought-out compensation plan appear to be more successful in comparison to its competitors. Proceeding from this, one can conclude that compensation plans and total rewards system in general is a great tool for improving productivity and efficiency of sales department.