Salesforce compenation by ewghwehws

VIEWS: 11 PAGES: 8

									Salesforce compenation
    Objectives of an Effective Sales force
             Compensation Plan
•   Attract talent
•   Retain Talent
•   Ensure Equity
•   Improve productivity
•   Reward desired behaviour
•   Manage cost (Not over paid or under paid)
•   Comply with legal rules. (labor laws)
          Factors influencing the design of
                compensation plan
1. Relation with product life cycle
                           Training/promotions
             Salary+
             incentives



                   Approach
                   Market with                   Added Incentives
 Direct            renewed vigor
 salary




    Introduction     Growth   Maturity       Decline
   2.Compensation related to demographic
                variables
Age            Family Size Job                     Preferred
                           preference              compensati
                                                   on
20-28          Bachelor         High reward        Straight
                                high risk taking   commission/
                                                   incentives

29-35          Married with 1   Company            Basic + incentives
               or 2 young       stability          preferably higher
               children                            basic component

36 and above   Married with     Stability and      Preferably straight
               growing up       steady job         salary basis
               children
        Factors influencing the design of
              compensation plan
3.Financial ability of the company (MNCs)
4.Competitor’s Practice
5.Role of the salesman –order taker vs order
  getter
6.Nature of the product. High margins-High salary
  structures (Indian Oil Co, Reliance petro)
     Monetary Compensation
• Elements
  – Fixed comp
  – Variable component based on performance
  – Expenses
  – Fringe benefits
 Types of Compensation plans
• Monetary Compensation
  – Fixed Salary Used when its difficult to relate effort to
    results, fixed /flexible expenses (Close monitoring of
    salesperson required)
  – Full Commission Plan Flat rate/slab system
  – Salary plus Commission Plan
• Non Monetary Compensation
  – Promotions
  – Lateral movements
  – Recognition
  – Perks (car, driver, house, educational opportunities for self
    /children, club membership, parking space, sponsorships
    for training programs ), insurance
  – Fringe Benefits
      Gratuity
      PF
      LTA
      Medical Reimbursement
      SOPS (Stock options)

								
To top