HRM531 Career Development Plan Part IV
HRM531 Career Development Plan Part IV
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Date Created: 11/09/15
1 Compensation Career Development Plan Part IV – Compensation Holly L. Seppala 11/29/2010 HRM531 James Scholes 2 Compensation InterClean Incorporated understands the importance of compensating all employees fairly and in a timely matter and this is why InterClean can retain top employees in the sanitation product industry. To compensate an employee means to provide him or her with a financial or nonfinancial reward for the work or service that he or she has provided. Within an organization, compensation refers to the financial rewards such as direct payments in the form of salaries or indirect payments such as employee benefits, and nonfinancial rewards that include everything in a work environment that enhances a worker’s sense of selfrespect and esteem by others (Cascio, 2006). In previous reports I have discussed the sales team job analysis and the employees chosen to represent my sales team, the training and mentoring programs used to train these new employees, and how I, as the sales manager can help manage my employee’s careers. In this report I will be explaining the compensation plan I have developed for my employees, why the pay system will work, how the rewards I have chosen will motivate my employees, and how these rewards will benefit both the individual and the organization. I will begin by discussing the compensation plan I have developed for my sales team. The job descriptions of positions held at InterClean, especially in the sales department, do not fit the criteria of benchmark jobs typically found in the sanitation industry. Therefore, I had to implement a competencybased pay system so be sure that all of employees were paid fairly and competitively within the market. A competencybased pay system is one in which workers are paid not on the basis of the job he or she is currently doing but rather on the basis of skills or depth of knowledge (Cascio, 2006). Throughout the sales team training program I placed a large emphasis on knowing the products InterClean has to offer and knowing the rules and regulations enforced on InterClean and on the industries in which we do business. Therefore, I believe it is 3 Compensation only fair to compensate employees based on their depth of knowledge in these areas and not on the set rate found across the industry. Based on this system my sales manager Jim will rank in the highest salary pay scale ranging from $110,000$125,000, my two assistant managers, Tom and Eric will be in the midrange $75,000$90,000 and my four sales representatives Ving, Susan, Dennis and Terry will be in the lowest pay range which is $45,000$65,000. In addition to this competitive starting salary employees will also receive an annual raise ranging for 27% depending on semiannual appraisals. All employees will also have the opportunity to receive performancebased incentives for a job welldone that include both financial and nonfinancial rewards such as sales bonuses, commission on custom packages sold, better parking spaces, longer lunches, flextime schedules, and recognition for a job well done. I believe the compensation plan I have described above will be successful because it not only offers a fair and competitive annual salary, but it also give employees the opportunity to earn additional incentives when they exceed their individual and team goals. As previously mentioned, the pay system I have implemented is competencybased and therefore the annual raise percentage each employee receives is based on their depth of InterClean product knowledge, rules and regulations within clientele industries and on the retention of and acquisition of clients over the review period. The use of performancebased incentives also helps to reduce the issue of individual equity because incentives are based on the number of new clients attained, the number of custom packages sold, individual sales goals set by management, and therefore all incentives can be easily justified. According to Cascio (2006), linking compensation directly to individual contributions that make a difference to the organization, 4 Compensation allow a company to maintain the highest caliber of workers, which is exactly what I hope to achieve with the compensation system I have described. The components of my compensation plan most likely to motivate employees are the annual pay raises, nonfinancial rewards such as better parking spaces, and financial rewards such as commission on custom packages and cash bonuses when sales goals are exceeded. The annual pay raise range will motivate employees to work hard year round to receive a 7% annual raise versus the standard 2% raise and this increased motivation to do well both individually and as a team will lead to higher productivity and more sales. The nonfinancial rewards such as recognition for a job well done, employee of the month, and better parking spaces for a team that exceeds quarterly goals will increase employee selfrespect and esteem and give them a reason to keep up the good work and work even harder to achieve financial incentives. The financial rewards that include commission on custom packages and cash bonuses when sales goals are exceeded give employees a reason to work even harder than management expects and will most definitely result in more sales from each representative. Without these reward components my sales team would not be as driven to meet and exceed sales goals or to spend the time designing custom product packages. The individual benefits provided by my compensation plan include higher selfrespect and esteem for team members, a greater feeling of personal fulfillment, more money in the form of bonuses, commissions, and pay raises, and an increased respect for the InterClean organization. Conversely, the organizational benefits of my compensation plan include increased productivity, more sales, increased employee loyalty, and one of the best benefits of all is that many of the rewards suggested come at no cost to InterClean which is a winwin for everyone. 5 Compensation Therefore, I believe that if my compensation plan is implemented within the sales department at InterClean Incorporated we will not only be able to retain top talent within our organization, but we will also be able recruit top talent and reach our organizational goal of a 40% profit increase by the end of the year. 6 Compensation References Cascio, W. F. (2006). Managing human resources: Productivity, quality of work life, profits (7th ed.). New York: McGraw-Hill.
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