- 1. Compensation for Special groups By: Akansha Badal Atisha
Pradhan Preeti Agarwal Madhilika
2. Compensation Strategy for Special Groups
3. Characteristics of Special Groups
- Strategically important to the company
- Positions tend to have built-in conflict that arises because
different factions place incompatible demands on members of
group
4.
5. Issues:Supervisory Pay
-
- Upper management in terms of production and
-
- Employees in terms of rewards, reinforcements, and
counseling
- Cash incentivescan entice nonexempt employees to accept
challenges of being a supervisor
6. Strategies:Supervisory Pay
-
- Base salaries of supervisors typically exceed highest paid
employee
-
- Evaluate need for payment for scheduled overtime
- Increased use of variable pay
-
- More than half of companies have a variable pay component for
supervisors
7.
8. Key Activities of Corporate Directors
- Review senior management actions to ensure congruency with
organizational
-
- Mission, Vision, Strategies
- Review policies of key organizational operations to ensure
effective use of resources
- Ensure senior management acts properly
- >>Decisions have long-term implications
9. Conflicts Faced by Corporate Directors
- Help set strategic plans affecting profits
- Steep regulatory compliance requirements
- Disgruntled stockholders maysue or try to take overthe
company
10. Board of Directors Compensation
- Committee participation fees
- Rewards should link to company performance
- >>>Pay is both cash and stock-based (start ups may
only pay directors with stock)
11. Conflicts Faced by Top Management
- Stockholders want healthy returns on investment
- Government wants compliance with laws
- Must decide between strategies
-
- Maximizing short-term gainsversus
12. CEO Compensation Theories
-
- Executive salaries bear a relationship to pay of lower-level
employees
-
- Value of CEO should correspond to some measure of
organizational success
-
- CEO compensation should ensure thatexecutives focus on best
interests offirm and stockholders
13. Executive Compensation Packages
- Short-term (annual) incentives or bonuses
14. Perquisites Offered to Executives
- Personal liability insurance
15.
16. Professional employees
- Are those whose work involves the applications of learned
knowledge to the solutions of the employers problems.
- Include lawyers, doctors, economists and engineers.
- Making incentive pay decisions can be challenging.
- In some cases offering financial rewards to people like these
may actually diminish their intrinsic motivation not add to
it.
17. Issues:Professional Employees
- Conflict - May be torn between
-
- Goals, objectives, and ethical standards of their
professionand
-
- Demands of an employer concerned more with profit motive
- Problems in designing pay
-
- Salary plateaus due to knowledge obsolescence of mature
professionals
18. Reward Components: Professional Employees
- Performance-based incentives
-
- Completion of projects on or before deadlines
-
- Attainment of professional licenses
- Perksbased on unique needs of professional employees
19.
20. Conflicts Faced by Sales Staff
- Often go for extended periods in field with little
supervision
- Much reliance on incentive payment tied to individual
performance
21. Challenges
-
- Continuing to make sales calls despite little supervision
22. Average Salary for Sales Employees Annual Revenue of the
company Base Salary Bonus plus Commission % Bonus plusCommission
Total compensation Executive $ 87,178 $ 35,721 41 % $ 122, 899
Top-level Sales representative $78,483 $ 60,676 77 % $139,459 Mid
level sales representative $ 49,144 $ 28,035 57 % $ 77,179 Low
level sales representative $ 37,698 $ 14,294 38 % $ 51, 992 Average
of all representatives $ 54,452 $ 25,571 47 % $ 80,023 23. Key
Considerations in Sales Plan Design 1 Nature of people choosing
sales as career 2 Organizational strategy 3 Market maturity 4
Competitor practices 5 Size of company 6 Economic environment 7
Product sold 24. Alternative Sales Pay Plans
- Guaranteed base salary + commission
- Guaranteed base salary + bonus
- Guaranteed base salary + commission + bonus
25. Performance Measures:Sales Force
- Product placements in retail stores
- Percentage of list-price attainment (ASP)
- Consistency of sales results
26. Why is Sales Comp Special?
- Impact of performance on the company
-
- Length of time to close a sale
- Allowances, draws and quotas
27. Great Sales Comp Plans
- Have a solid plan design, well articulated rules and
expectations of performance
- Have upside reward and sufficient protection to allow the
employee to be focused on sales
- Support the business model and plant capacity
- Provide incentive to the sales force but also supports the
needs of the customer
28.
29. Contingent Workers
- Types include a person who works
-
- Through a temporary help agency
-
- As independent contractor
- Typical salary arrangements
-
- Temporary and part time workers often earn less than workers in
traditional arrangements
-
- Independent contractors often earn more
30. Benefits to the organization
- Employment status is temporary, flexible employment
- Employee benefit costs are about 50% less
- Wages at times may be somewhat higher to compensate
- View contingent workers as a pool of candidates for more
permanent hiring status
31. Benefits to Employees
- Series of opportunities to acquire valuable increments in
knowledge
- Rapid development of skills
32. Summary: Design for success
- Pay design should complement work time horizon
-
- Longer term focus for executives than others
- Pay design should complement risk tolerance
-
- Sales people typically like to take risks and be rewarded
handsomely for success
-
- Assembly workers want a salary they can count on
33.
