Sales Team Structure, Roles and Rewards - Assignment Example

Sales Team Structure, Roles and Rewards Introduction Every organisation aims at earning maximum profit and market share through appropriate marketingand selling of its products and services. The paper aims at better understanding of sales management, its roles and rewards of sales personnel in an organisation. The organisation that has been considered in this paper is Australia based Nous Group. Prior discussing the role and remuneration of the company’s sales personnel, a brief introduction regarding the company’s existence and its activities has been provided in the following section. Besides introduction of the company, the paper critically assess role of internal, external and online sales in context of Nous Group so that the appropriate sales method can be determined for enhancing performance in a cost effective manner. Additionally, two incentive programs have also been proposed in the paper which can be implemented for motivational purposes. It is important to have knowledge of industry salary standards, prior proposing salary structure for the sales team of the organisation. For this purpose, the median salary package of the consultancy industry in Australian cities has been highlighted so that the sale team structure and salary of team members can be determined. Company profile Nous Group is one of the leading Australian management consulting firms engaged in delivering reports and playing an advisory role to various private and public companies in the country. The company was established in 1999 and since then the company is working towards long term benefits to clients and societal wellbeing. The primary reason for clients to approach Nous Group is that the organisation very efficiently recognised the key drivers of business performance related to a particular sector and provide tailored interventions regarding business strategy, organisational capability, public policy, executive management and talent development. The company is primarily present in six capital cities, namely, Melbourne, Brisbane, Sydney, Perth, Canberra and Adelaide and is successful in providing services to various companies all over the country. The various sectors that the company serves include financial services, education, human resource, health, environment, infrastructure and utilities, defence and intelligence and other government sectors. The value propositions of the company include idea generation, people engagement and delivery of solution. In the Australian marketplace, the company is considered as one of the top consultancy service provider due to its expertise in leadership and internal capabilities. In the organisation, project structure is followed where employees are assigned to work in the form of projects. The employees have opportunity to participate profit share scheme once they have completed a year of fulltime employment (Nous Group, 2014). Role of internal, external and online sale The primary function of internal sales personnel is to deliver direct support to sales manager (s) and other members of the sales department in development of existing as well as potential consumers of Nous Group so as to ensure that the sales and growth target of the company are achieved. Internal sales personnel work with various other personnel to represent the company to clients in an appropriate manner and provide accurate feedback to middle level managers. The internal sales personnel are responsible for performing various reporting functions and assist other members in completing sales projects including surveys and proposals. The internal sales personnel report directly to sales directors while providing supportive information to other middle level managers (Weitz and Bradford, 1999; Stanton, Buskirk and Spiro, 1991). Market intelligence is the primary function of external sales personnel and as Nous Group is a diversified company, it is natural to assume that the role of external sales is way beyond general activities of sales representatives. The key activities of external sales personnel include market research about a given situation, client base development and meeting budget and sales targets. The external or outside sales representatives are generally given the responsibility of selling corporate services by visiting client sites and conducting sales presentation regarding the company and its products. External sales representative not only represent products of the company but also reputation and brand image of the company to clients. The job profile of external sales personnel requires frequent travelling, exceptional communication skill and ability to develop strong long-term relationship with client. External sales personnel are generally monitored by sales supervisors (Weitz and Bradford, 1999; Stanton, Buskirk and Spiro, 1991). The reason behind implementation of online sale is that it saves time and cost on behalf of client as well as the company. Online sale provide facilities such as online briefing and discussion followed by report. This method reduces the cost related to physical visits on behalf of internal and external sales representative and therefore, is considered efficient. Online sales activities are often managed by internal sales personnel and they generally communicate with clients through email and telecommunication measures. Online sales are considered very effective because it is a very quick process and require minimum resources. Additionally, online sales report can be evaluated and compared very easily (Weitz and Bradford, 1999). Incentive programs The competition is growing in every sector and given the increasing complexity in the business world, it is important that companies employ innovative and competitive compensation packages to retain employees for long term purposes. In this context, it is important to note that a company should pay its employees a compensation package that has appropriate mix of variable as well as fixed component. Two incentive programs can be proposed in this regard which is appropriate for satisfying individual requirements and team perspective. Both the incentive programs are contrasting in nature and reflect overall compensation structure of the sales department of the company (G T Milkovich, Newman and C Milkovich, 1999). The first incentive program that can be proposed is risk compensation. The consultancy service industry is facing stiff competition from domestic as well as international consultancy firms. Keeping in view the situation, risk compensation focuses on rewarding sales personnel based on their sales performance based on physical and retail sales. Any kind of sales job involve risk taking and compensating the risk taking capabilities of employees motivate them and enhance their performance. The risk compensation should be monetary as well as non-monetary in nature (Bloom and Milkovich, 1998). The second approach to incentive disbursement is add-on incentives. Present day sales jobs are highly unconventional in nature and often require team and group efforts. The add-on incentives play an important role where performance is considered irrespective of sales target. Add-on incentives are bonus that is paid to employees based on team management, motivation, organising abilities, group performance and task delivering capabilities. According to many authors, add-on benefits represent hygiene factor as described in Herzberg’s two factor theory of motivation. It is noteworthy that risk compensation improves individual performance while add-on incentives improve overall organisational performance (Werner and Ward, 2004; Hendry, 2012). Industry standard of salary of sales personnel in Australian consultancy industry In this section, the salary of sales personnel in the consultancy industry of Australia has been assessed as per annual salary and bonus. In addition, the locations where Nous Group has its branches have also been taken in consideration. The overall industry standard of salary of consultancy sales personnel has been evaluated based on cities such as Melbourne, Sydney, Perth, Canberra, Adelaide and Brisbane. It is noteworthy that only permanent jobs have been considered in this paper for evaluation. According to Live Salary (2014), the upper quartile earns around $112,000 while the lower quartile earns around $65,000 annually in the Melbourne consultancy industry. The median base salary was found to be around $90,000. Additionally, about 36% of employees are provided other benefits such as phone allowance, flexible work hours, club membership, paid training and assistance programs, paternity or maternity leave and health care subsidies. It was observed in the study that compared to Melbourne, the upper quartile and lower quartile industry salary in Sydney are higher than Melbourne and the values are $120,000 and $70,000 respectively. It was further gather that the median base salary in Sydney is lower than Melbourne but the total salary package is comparatively high. Additionally, the proportion of employees that enjoyed various fringe benefits at the cost of company is as high as 37%. The industry standards for annual salary in management consultancies in Perth were found to be relatively higher than Melbourne and Sydney. The upper and lower quartiles are as high as $125,000 and $95,500 respectively. Moreover, about 50% of employees received bonuses and commissions. The median total salary package earned by employees in Perth is around $129,461. In Canberra, it was observed that the upper quartile and lower quartile comprise $110,000 and $92,000 respectively and the median total salary package was around $120,175. It was ascertained that the salary in this region is comparatively low with respect to other capitals. Additionally, it was also observed that only 33% of employees received bonuses and commissions in Canberra. In Brisbane, the figures were found to be more or less similar to that in Canberra. In Brisbane as well, the benefits were found to be received by only 33% of employees and median total salary package was around $112,112 while the upper quartile lies at $106,500 and lower quartile at $80,500. Brisbane was ascertained to be one of those locations where the median base salary was quite low. Lastly, in Adelaide the median total salary for the consultancy industry was found to be around $57,000. It can be suggested from this value that the cost of living in Adelaide is lower than that of other capital cities (Live Salary, 2014). Sales management Administration of various elements of personal selling within marketing strategy of a company is referred as sales management. Sales management comprises planning, implementation and controlling of different sales program. Additionally, it also includes activities such as recruitment, training, territory allocation and performance evaluation of sales force. The sales management activities are generally considered under the purview of sales manager in small companies. However, the chain of command gets distributed as the organisational structure grows. For instance, in a big organisation the sales team are supervised by sales supervisors who further report to sales managers and they reports to the sales director (Stanton, Buskirk and Spiro, 1991). The role of sales manager or sales director is multidisciplinary as their responsibilities range from goal setting to determination of budget. Goal setting involve appropriate description of role and responsibilities of various sales personnel as well as their target and the timeframe within which the target has to be achieved. The aggressiveness of goals and aims of sales force is affected by market potential and the number of players in the market. Once the sales goals are decided, the next step is to develop strategy to attain the same. For this purpose, the manager or director of sales department need to evaluate various sources of sales, namely, internal, external and online selling. An appropriate strategy in this context will be creating a proportionate mix of all the three kinds of sales. The effectiveness of the strategy should be further evaluated in context of the sales budget as it is not admissible to exceed budget while improving effectiveness of sales strategy (Stanton, Buskirk and Spiro, 1991). The budget is an essential component of sales management. It includes base salary as well as compensation of every member of the sales management including that of internal and external representatives, managers and the director. The budget takes in consideration various factors such as location of sales team, performance in terms of target achieved and number of team members. As it has already been observed that the industry average of salary in management consultancies varies from place to place in Australia, the budget requires to be planned accordingly (Stanton, Buskirk and Spiro, 1991). Sales compensation plan for Nous Group Total budget that is to be allocated among members of the sales team including the director is $7.5 million. Geographical location Melbourne Sydney Perth Canberra Adelaide Brisbane Number of staff 4 4 7 4 3 2 Kind of staff 1 Sales manager 1 Internal sales representatives 2 External sales representatives 1 Sales manager 1 Internal sales representatives 2 External sales representatives 1 Sales director 1 Sales manager 2 Internal sales representatives 3 External sales representatives 1 Sales manager 1 Internal sales representatives 2 External sales representatives 1Sale supervisor 2 External sales representatives 1 Sale supervisor 1 External sales representatives Role of staff Sales director: The sales director is responsible for overall management of nationwide sales force. Sales manager: When the number of members of sales force is high, they are directly supervised by the sales manager. Sales supervisor: Limited number of sales personnel are monitored by the supervisor and the supervisor directly report to either sales manager or sales director. Internal sales representative: Internal sales representatives are primarily responsible for in-house marketing and sometime online selling activities. External sales representative: Developing client base by visiting client location, delivering sales presentation and so on. Remuneration: Sales manager $35500 $35500 $38000 $35000 Sales supervisor $30000 $29000 Internal sales representative $24000 $24500 $26000 $24000 External sales representative $26000 $26500 $28000 $26500 $25000 $24000 The total remuneration that has been allocated to internal and external sales representatives annually is $4, 40,500. The total remuneration that has been allocated to sales managers and supervisors is equivalent to $2, 03,000. The calculated amount for Director’s salary is $56, 500. Reference list Bloom, M. and Milkovich, G. T., 1998. Relationships among risk, incentive pay, and organizational performance. Academy of Management Journal, 41(3), pp. 283-297. Hendry, C., 2012. Human Resource Management. London: Routledge. Live Salary, 2014. Search salaries. [online] Available at: [Accessed 12 September 2014]. Milkovich, G. T., Newman, J. M. and Milkovich, C., 1999. Compensation. New York: Irwin/McGraw-Hill. Nous Group, 2014. Company profile. [online] Available at: [Accessed 11 September 2014]. Stanton, W. J., Buskirk, R. H. and Spiro, R. L., 1991. Management of the sales force. Homewood, IL: Irwin. Weitz, B. A. and Bradford, K. D., 1999. Personal selling and sales management: a relationship marketing perspective. Journal of the Academy of Marketing Science, 27(2), pp. 241-254. Werner, S. and Ward, S. G., 2004. Recent compensation research: An eclectic review. Human Resource Management Review, 14(2), pp. 201-227. Read More