One of the most difficult problems that management faces in a growing company is adequately compensating salespeople. A sales or executive incentive scheme is a recommended method for businesses to implement their marketing plans. Which consists of non-monetary awards and monetary rewards earned by employees by their companies in exchange for services. In today's workplaces, pay programs can include a base wage, stock options, long-term bonuses, and benefits. Chingos and Peter (2004) To create a basic compensation plan, it is necessary to:
Put incentive plans in place that are in line with the goals of the company.
Determine the vision of your company and how these benefits and compensation packages get reflected.
Have a way of paying up the incentives.
Ensure your compensation conforms to federal and state laws.
Structure, Goals, and Requirements of the plan
The objectives of a compensation plan are to get a hold of people to work for an organization and also the retainment of those who are already working for it. Therefore, a suitable system of paying the workers facilitates the service to customers because the employees are more contented.
In setting up an executive compensation plan, it is essential to consider:
Compensation plan can be used by managers to improve satisfaction, motivation, and morale among the stuff.
It should be confident enough to attract the most exceptional personnel for the job.
Impacts on Motivation, Productivity, and Organizational Results
Compensation gets used as a motivation to improve their working morale in addition to working at their highest performance. Workers who get compensated relatively tend to provide better services to their clients which consequently leads to the development and growth of an organization.
Executive compensation plans help in improving the results in organizations on a daily basis. The more employees get motivated, the more they will want to work hard so that they can receive more bonuses and incentives. It is, therefore, safe to say that this plan impacts the productivity and results of an organization positively.
Recommendations to Enhance Effectiveness
Executive compensation plans have grown to be more involved as years grow by, with most of the corporations seeking the right balance of performance-based salaries vs. guarantee to appease company leaders and stakeholders (Milkovich, George & Jerry, 2005).
Companies that perform very well rely on these compensation plans as their tool of sales performance management to achieve the tactical objectives and goals. To enhance its effectiveness, it helps the company to:
i. Creating links in the minds of the staff between the strategies, business models and visions of the company.
ii. Reward performance that is exceptional.
iii. Executive compensation plans help in communicating what is significant in organizations.
iv. Help in defining the financial partnership of the company with its people, specifically, with the main talent.
References
Chingos, Peter T., ed. Responsible Executive Compensation for a New Era of Accountability. Hoboken, N.J.: John Wiley & Sons, Inc., 2004.
Martocchio, Joseph J. Strategic Compensation: A Human Resource Management Approach 3rd ed. Upper Saddle River, NJ: Pearson Prentice Hall, 2004.
Milkovich, George T., and Jerry M. Newman. Compensation. 8th ed. New York: McGraw-Hill Irwin, 2005.
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