薪酬管理的工具和技术英文版课件

SalaryReviewGuidelinesGuidelinesonthedistributionofincrements anattempttoovercomethevaryingstandardsofjudgmentleadingtoan‘allmyducksareswans’approachtorewardingstaff.Thedistributionscalemayberelatedtoaguidelinelikethis:

Assessment

Increment(%)

Distribution

A–outstanding 9%–10% 10% B–good 7%–8% 20% C–satisfactory 4%–6% 50% D–needsimprovement 0% 10% E–unsatisfactory 0%

10%SalaryReviewGuidelinesGuidel1SalaryReviewGuidelinesGuidelinesonratesofprogression managersarehelpedtoplansalaryprogressionbybeinggivenanindicationofthenumberofyearsitshouldtakestaffatdifferentlevelsofperformancetoreachthetopofthegradeand,inzonesofsalaryrange,thelimitswithintherangewhichcanbereachaccordingtotheirperformance.

Assessment

LimitInGrade

TypicalLength

Learningzone 1to3years 2years Performingzone 4to6years 5years Exceedingzone 2to4years 3years - SalaryReviewGuidelinesGuidel2SalaryProblemsAbsorbingmarketratespressures

ariseswhengeneralandindividualsalaryreviewshavenotenabledthecompany’ssalarylevelstokeeppacewithincreaseinmarketrates. itisexacerbatedifthecompanyisexpandingandiscompelledtoobtainkeystaffwhoareinshortsupply.Wideningdifferentials

differentialsarewideningbetweenandwithincompaniesinthefollowingareas: -betweenhigh-andlow-payingorganizations–thevariations inprosperitybetweendifferingsectorsofindustryand commerceandbetweenregionsaremajorcontributorstothis problems. -betweencompaniespayingbonusesorincentivesandthose payingstraightsalaries.

SalaryProblemsAbsorbingmarke3SalaryProblems -betweentopandmiddlemanagementwithincompanies– thisispartlyincentiveled -betweenexecutivesrecruitedbysearchandthosewitha one-companycareer.Performancepay tendtofavourthefewwhoseresultscanbemeasured. merit-assessmentaretoooftenbasedonsubjectiveandbiasedjudgments. canbeavoidedonlybyintensivetrainingofassessorsandbycarefulmonitoringoftheappraisalscheme.SalaryProblems -betweentop4SalaryProblemsStaffreachingthetopoftheirsalaryleague

staffreachingthetopoftheirsalaryrangemayfeeldemotivatediftherearenoprospectsforpromotion itispossibletodealwiththisproblembyintroducingontopofthenormalsalaryrangeapremiumzonewhichisreservedforoutstandingstaffwhosepromotionisblocked.Startingsalaries

theproblemofstartingnewstaffathigherratesthanexistingemployeesshouldbeminimizedifinternalsalarylevelsareregularlyreviewedincomparisonwithmarketrates.SalaryProblemsStaffreaching5SalaryProblemsDeterioratingjobevaluationschemes

theschememaynothavebeencontrolledproperly,sothatgradedriftoccursthroughunjustifiableupgradings. schememayhavelostcredibilitybecauseitnolongergivesacceptablesolutions. administrationmayhavebecomesobureaucraticthatthetimetakentoproduceanswersisundulyprolonged. thesolutionistomakeadeterminedefforttotightencontrolsandspeedupadministration,makingonlyminormodificationstothescheme.SalaryProblemsDeterioratingj6ObjectivesofPerformance-RelatedPay(PRP)Motivateallemployees,notjustthehigh-flyers.Increasethecommitmentofemployeesbyencouragingthemtoidentifywithitsmissionandvalues.Reinforceexistingculturesandvaluestofosterhighlevelsofperformance,innovationandteamwork.Helptochangecultureswheretheyneedtobecomemoreperformance-orientedandresults-oriented;orwheretheadoptionofothernewandkeyvaluesshouldberewarded.Discriminateconsistentlyandbeequitableonthedistributionofrewardstoemployeesaccordingtotheirperformanceresultsandcontributions.ObjectivesofPerformance-Rela7ObjectivesofPerformance-RelatedPay(PRP)Deliverapositivemessageaboutperformanceexpectationsofthecompany–focusesattentiononkeyperformanceissues.Directattentionandendeavourbyspecifyingtheorganization’sperformancegoalsandstandards.Emphasizeindividualperformanceorteamworkasappropriate.Improvetherecruitmentandretentionofhigh-qualitystaff.PRPcostswillbeinlinewithcompanyperformance.ObjectivesofPerformance-Rela8KeyFactorstoConsiderWhenIntroducingPRPMatchingtheculture successfulPRPschemesneedtomatchthecultureandcorevaluesoftheorganization.LinkingPRPtobusinessstrategy thefocusneedstobeonstrategicbusinessissueswhichemergefromthebusinessplanningprocess.Balancingquantitativeandqualitativemeasures whilemostPRPschemesrelyonquantitativemeasuresofperformance,qualitativefactorsneedtobeintroducedforthemeasurementofindividualbehaviouregbalancedscorecardsTheneedforflexibility flexibilityinmaking‘milestone’paymentswhichconveytherightmessagesforthefuture.Theneedtopromoteteamwork theimportanceofteamworkshouldberecognizedinstructuringtheschemeanddefiningcriticalsuccessfactorsandperformanceindicators.KeyFactorstoConsiderWhenI9KeyFactorstoConsiderWhenIntroducingPRPTheneedtoavoidshort-termthinking settinglong-termaswellasshort-termgoals,anddiscussingshort-termobjectivesintheiroverallcontext.Involvementinthedesignprocess designingPRPschemesshouldbeaniterativeprocess:tryingandtestingideasonmeasuresandstructureswiththosewhowilleventuallybeinvolvedinascheme.Gettingthemessageacross alltypesofPRPareverypowerfulformsofcommunication.Togettherightmessagesacrossforanyscheme,onemustmakekeydecisionsonthefollowing:

Howcantheschemeachievethebestpossiblelaunch? Isitbettertogivenopay-outratherthanalowpay-out? Whatisthebestpsychologicalmomentforpay-out? Whatcommunicationsshouldbeusedtogainmaximum motivationalimpactfrompayment? Howshouldcommunicationsbehandledwhenthescheme requireschanges?KeyFactorstoConsiderWhenI10CompetencebandsExcellentGoodSatisfactoryPerformanceLevelsPerformingLearning

NewEntryProfessional

CompetentProfessional

ExperiencedProfessional

CompetenceandPerformance-RelatedPayCurveSalary($)ExceedingCompetencebandsExcellentGoodS11Directlylinkindividualperformancewithsalaryprogression.Provideindividualizedprogressionrates.Recognizeincreasingcompetencegainedthroughexperience.AdvantagesofindividualMeritPaymentSchemeDirectlylinkindividualperfo12DisadvantagesofIndividualMeritPaymentSchemeDependentonthequalityofperformanceappraisal;whichcanbearbitrary,subjectiveorinconsistent.Unlesscarefullyconceivedandmanaged,itcandemotivatepeoplewho,althoughnotbedeliveringspectacularresultsarestillimportant.Meritpayment,asdistinctfrombonuses,createextrapayrollcostswhenbenefitssuchaspensionsarerelatedtobasepay.Ameritpaymentis,ineffect,apermanentincreaseinsalary,yetthequalityofperformanceinfutureyearsmaynotjustifythispayment.Meritpaycanresultinanupwarddriftinpayrollcostswithoutacommensurateimprovementinperformance.Meritpayiseffectiveasamotivatoronlyifrewardsareclearlyrelatedtoperformanceandareofasignificantvalue.DisadvantagesofIndividualMe13SalesIncentivePlanBusinessObjectivesMarketingStrategySalesStrategy&CoverageModelSalesJobDefinitionQuotaandCreditingCompensationPlanDesignSalesPlanImplementationTheSalesPlanSalesIncentivePlanBusinessO14TotalCompensationArchitectureBaseSalary/

FixedPayVariableFixedTargetSalesIncentiveforQuotaAchievementProfitSharingRecognitionAcceleratedIncentivesforQuotaOver-achievementTotalPotentialRewardsPerformance$EarningsFAT/MBOStockOptions**Selectiveusebasedonpositionandperformance,competencyandfuturegrowthpotentialAbovequotaachievement+=TotalCompensationArchitectur15IncentiveSchemesForSalesStaff

Whereitisfeltthatsalesstaffneedtobemotivatedbyanincentivecommissionschemethemajorityofcompaniesfindthatthebestapproachisabasiccommissiononsalesvolumeor,inmoresophisticatedfirms,onthecontributiontofixedcostsandprofitsofthesalesofeachproductgrouporproduct.Thestandardcommissionistypicallysetataboutone-thirdofsalarytoprovideanoticeableincentivewithoutadverselyaffectingfeelingsofsecurity.Asuccessfulsalescommissionplanshouldsatisfyallthecriterialistedaboveforbonusschemes.Butitisparticularlynecessarytoensurethefollowing:IncentiveSchemesForSalesS16IncentiveSchemesForSalesStaff

A)Therewardisfairinrelationtotheeffortsofthesalesrepresentative.Thismeansthatattentionhastobepaidtosettingandagreeingrealisticandequitabletargets,makingallowancesforspecialcircumstancesoutsidethecontrolofthesalesrepresentativewhichmightaffectsales,andsplittingcommissionfairlywhenmorethanonepersonhascontributedtothesale;B)Theschemedirectssaleseffortinaccordancewithmanagement’spolicyontheproductmixanddoesnotencouragetherepresentativetoconcentrateonwhatiseasiesttosell;C)Theschemedoesnotencouragehighpressuresellingwhichresultsinanunacceptablelevelofreturns,cancellationsandcomplaints;D)Theschemedoesnotencouragerepresentativestoneglecttheirindirectsellingactivities,suchasservicingcustomers.IncentiveSchemesForSalesS17CriteriaforSuccessofIncentiveSchemeItshouldbeappropriatetothetypeofworkcarriedoutandtheworkersemployed.Therewardshouldbeclearlyandcloselylinkedtotheeffortoftheindividualorgroup.Individualsorgroupsshouldbeabletocalculatetherewardtheygetateachofthelevelofoutputtheyarecapableofachieving.Individualsorgroupsshouldhaveareasonableamountofcontrolovertheireffortsandthereforetheirrewards.Theschemeshouldoperatebymeansofadefinedandeasilyunderstoodformula.Theschemeshouldbeproperlyinstalledandmaintained.Provisionshouldbemadeforcontrollingtheamountspaidtoensurethattheyareproportionatetoeffort.Provisionshouldbemadeforamendingratesindefinedcircumstances.CriteriaforSuccessofIncent18IndividualIncentiveSchemesStraightpiece-work paymentofauniformpriceperunitofproduction. canbeexpressedintwomainforms:

-moneypiecework -timepieceworkDifferentialpiecework thewagecostperunitisadjustedinrelationtooutput.IndividualIncentiveSchemesSt19IndividualIncentiveSchemesMeasureddaywork

thepayofemployeesisfixedontheunderstandingthattheywillmaintainaspecifiedlevelofperformance,butthepaydoesnotfluctuateintheshorttermwiththeirperformance. thecriteriaforsuccessinoperatingitarethefollowing:totalcommitmentofmanagement,employeesandunions.aneffectiveworkmeasurementsystem,andefficientproductionplanningandcontrolandinventorycontrolprocedures.theestablishmentofalogicalpaystructurewithappropriatedifferentialsfromthebeginningofthescheme’soperation.themaintenanceofgoodcontrolsystemstoensurethat correctiveactionistakenquicklyifthereareanyshortfallontargets.IndividualIncentiveSchemesMe20GroupIncentiveSchemeProvideforthepaymentofabonuseitherequallyorproportionatelytoindividualswithinagrouporteam.Bonusisrelatedtotheoutputachievedoveranagreedstandardortothetimesavedonajob.Groupbonusschemeareinsomerespectsequivalenttoindividualincentiveschemes.Itencouragesteamspirit,breaksdowndemarcationlines,andenablesthegrouptodisciplineitselfinachievingtargets.Potentialdisadvantagesarethatmanagementislessincontrolofproduction–thegroupdecideswhatearningsaretobeachievedandcanrestrictoutput.GroupIncentiveSchemeProvide21DesigninganIncentiveSchemeHowperformancewillbemeasured.Theemployeeswhowilltakepartintheschemeandwhowillthereforehavepartoftheirpaydirectlylinkedtotheirownperformanceorgroup.Theemployeeswhowillnottakepartintheschemeandhowtheywillbecompensated.Whetherornottheschemewillbeanindividualoneoronelinkedtogroupperformanceorrelatedtoplantperformance.Whetherthebonuspaymentswillberelatedtobasicpay.Theproportionofpaywhichcanbeearnedasbonus.DesigninganIncentiveSchemeH22DesigninganIncentiveSchemeThefullbasicrate.Therelationshipbetweenoutput/effortandreward,egtheextenttowhich,ifatall,thereisadifferentialbuiltintotheschemewhichsharestheresultsofhigherproductivitybetweenthecompanyandtheworkers.Thebasisuponwhichemployeesnotearningbonuseswillbepaid.Thetimingsofbonuspaymentsandthelapseoftimebeforepaymentsaremade.Thearrangements,ifany,toalleviatetheproblemsoflargefluctuationsinbonuspayments.ThemethodstobeusedtomaintaintheschemeandtoinformemployeesoftheirearningsDesigninganIncentiveSchemeT23AimsofBonusSchemesTheprincipalaimofabonusschemeistoprovideanincentiveandarewardforeffortandachievement.Executivebonusschemeslinkedtocompanyprofitscanalsoaimtomakeseniormanagersfeelthattheirpersonalprosperityislinkedtotheperformanceoftheircompanyorunit.Bonusschemesaresupplementarytobasicsalaryandaremostappropriatewheretheyapplytoentrepreneurialtypessuchaschiefexecutives,marketingmenandsalesstaffwho,itisassumed,willstriveformaterialreward,andwhoseresultsuponwhichtheirbonusdependscanbeclearlylinkedtotheirpersonaleffortsandachievements.AimsofBonusSchemesTheprinc24BonusSchemesCriteriaTheamountoftheawardreceivedaftertaxshouldbesufficientlyhightoencouragestafftoacceptexactingtargetsandstandardsofperformance.Standardbonusesshouldnotbelessthan10%ofthebasicsalaryand,ifaneffectiveincentiveiswanted,thestandardbonusshouldbearound20%to30%ofsalaryTheincentiveshouldberelatedtoquantitativecriteriaoverwhichtheindividualhasasubstantialmeasureofcontrolTheschemeshouldbesensitiveenoughtoensurethatrewardsareproportionatetoachievementsTheindividualshouldbeabletocalculatetherewardhecangetforagivenlevelofachievementBonusSchemesCriteriaTheamou25BonusSchemesCriteriaTheformulaforcalculatingthebonusandtheconditionsunderwhichitispaidshouldbeclearlydefinedConstraintsshouldbebuiltintotheschemewhichensurethatstaffcannotreceiveinflatedbonuseswhichmaynotreflecttheirowneffortsTheschemeshouldcontainprovisionsforaregularreview,say,everytwoorthreeyears,whichcouldresultinitsbeingchangedordiscontinuedTheschemeshouldbeeasytoadministerandunderstand,anditshouldbetailoredtomeettherequirementsofthecompanyBonusSchemesCriteriaTheform26ExecutiveBonusSchemes

Thereareinnumerableformulaeforexecutivebonusschemes,andeachcompanymustadoptonewhichsuitsitsowncircumstances.ThesimplestformulaisforapercentageoutofnetprofitsbeforetaxtobepaidPro-Ratatotheexecutive’sbasicsalary.Insomeschemes,dividendpaymentsandprovisionsforreservesaredeductedfromnetprofitsbeforethedistributionofbonusesandthereisusuallyanupperlimittotheamountofbonusthatcanbepaid.Theseschemesarecrudebutprovideadirectincentiveaslongasresultsaredirectlyinfluencedbytheactionsoftheexecutivesinthescheme.Theycangetoutofhandunlessanupperlimitisstrictlyapplied,andtheiremphasisonprofitsmaymakesomeexecutivesseekshorttermgainsattheexpenseofthelongertermdevelopmentofthecompany.ExecutiveBonusSchemes The27ExecutiveBonusSchemes

Otherschemesarebasedonaformulawhichmeasurescompanyperformance.Bonusesarepaidwhenatargetfigureisattainedincreasedfurtherasthetargetfigureisexceeded.Theincreaseofbonusmaybeonastraight-linebasis,ie.directlyproportionatetotheimprovementinresults.Alternatively,itmaybegearedeitherbydecreasingtherateofbonusthemorethetargetisexceeded,whichisgenerallyregardedaspoorpractice,orbyincreasingtherate,whichcouldbeanexpensivedevice.Astraight-lineprogressionistobepreferred. Theformulainsomeschemesisdirectlyappliedtotheexecutive’ssalary.Inotherschemes,apercentageofprofitsonanincreasingscaleisreleasedintoabonuspoolwhichisdistributedinproportiontosalary.ExecutiveBonusSchemes28BenefitsPoliciesRangeofbenefitsprovided -benefitssuchaspensionsandholidaysaremandatory;whilstpermanenthealthinsuranceareoptionalextras.Scaleofbenefitsprovided -takingintoaccountitscosttothecompanyanditsperceivedvaluetoemployees.Proportionofbenefitstototalremuneration -adecisionhastobemadeontheproportionoftotalremunerationtobeallocatedtootherbenefitswhichincurexpenditureofcashbythecompany. -thispolicydecisionisrelatedtodecisionsontherangeandscaleofbenefitsprovided.BenefitsPoliciesRangeofbene29BenefitsPoliciesAllowingchoice apolicyisrequiredontheextenttowhichthecompanyshouldallowitsemployeestochoosethebenefitstheywant.Allocationofbenefits thepolicyontheallocationofbenefitsdeterminestheextenttowhichitisdecidedthatasinglestatuscompanyshouldbecreate.BenefitsPoliciesAllowingchoi30SalaryReviewGuidelinesGuidelinesonthedistributionofincrements anattempttoovercomethevaryingstandardsofjudgmentleadingtoan‘allmyducksareswans’approachtorewardingstaff.Thedistributionscalemayberelatedtoaguidelinelikethis:

Assessment

Increment(%)

Distribution

A–outstanding 9%–10% 10% B–good 7%–8% 20% C–satisfactory 4%–6% 50% D–needsimprovement 0% 10% E–unsatisfactory 0%

10%SalaryReviewGuidelinesGuidel31SalaryReviewGuidelinesGuidelinesonratesofprogression managersarehelpedtoplansalaryprogressionbybeinggivenanindicationofthenumberofyearsitshouldtakestaffatdifferentlevelsofperformancetoreachthetopofthegradeand,inzonesofsalaryrange,thelimitswithintherangewhichcanbereachaccordingtotheirperformance.

Assessment

LimitInGrade

TypicalLength

Learningzone 1to3years 2years Performingzone 4to6years 5years Exceedingzone 2to4years 3years - SalaryReviewGuidelinesGuidel32SalaryProblemsAbsorbingmarketratespressures

ariseswhengeneralandindividualsalaryreviewshavenotenabledthecompany’ssalarylevelstokeeppacewithincreaseinmarketrates. itisexacerbatedifthecompanyisexpandingandiscompelledtoobtainkeystaffwhoareinshortsupply.Wideningdifferentials

differentialsarewideningbetweenandwithincompaniesinthefollowingareas: -betweenhigh-andlow-payingorganizations–thevariations inprosperitybetweendifferingsectorsofindustryand commerceandbetweenregionsaremajorcontributorstothis problems. -betweencompaniespayingbonusesorincentivesandthose payingstraightsalaries.

SalaryProblemsAbsorbingmarke33SalaryProblems -betweentopandmiddlemanagementwithincompanies– thisispartlyincentiveled -betweenexecutivesrecruitedbysearchandthosewitha one-companycareer.Performancepay tendtofavourthefewwhoseresultscanbemeasured. merit-assessmentaretoooftenbasedonsubjectiveandbiasedjudgments. canbeavoidedonlybyintensivetrainingofassessorsandbycarefulmonitoringoftheappraisalscheme.SalaryProblems -betweentop34SalaryProblemsStaffreachingthetopoftheirsalaryleague

staffreachingthetopoftheirsalaryrangemayfeeldemotivatediftherearenoprospectsforpromotion itispossibletodealwiththisproblembyintroducingontopofthenormalsalaryrangeapremiumzonewhichisreservedforoutstandingstaffwhosepromotionisblocked.Startingsalaries

theproblemofstartingnewstaffathigherratesthanexistingemployeesshouldbeminimizedifinternalsalarylevelsareregularlyreviewedincomparisonwithmarketrates.SalaryProblemsStaffreaching35SalaryProblemsDeterioratingjobevaluationschemes

theschememaynothavebeencontrolledproperly,sothatgradedriftoccursthroughunjustifiableupgradings. schememayhavelostcredibilitybecauseitnolongergivesacceptablesolutions. administrationmayhavebecomesobureaucraticthatthetimetakentoproduceanswersisundulyprolonged. thesolutionistomakeadeterminedefforttotightencontrolsandspeedupadministration,makingonlyminormodificationstothescheme.SalaryProblemsDeterioratingj36ObjectivesofPerformance-RelatedPay(PRP)Motivateallemployees,notjustthehigh-flyers.Increasethecommitmentofemployeesbyencouragingthemtoidentifywithitsmissionandvalues.Reinforceexistingculturesandvaluestofosterhighlevelsofperformance,innovationandteamwork.Helptochangecultureswheretheyneedtobecomemoreperformance-orientedandresults-oriented;orwheretheadoptionofothernewandkeyvaluesshouldberewarded.Discriminateconsistentlyandbeequitableonthedistributionofrewardstoemployeesaccordingtotheirperformanceresultsandcontributions.ObjectivesofPerformance-Rela37ObjectivesofPerformance-RelatedPay(PRP)Deliverapositivemessageaboutperformanceexpectationsofthecompany–focusesattentiononkeyperformanceissues.Directattentionandendeavourbyspecifyingtheorganization’sperformancegoalsandstandards.Emphasizeindividualperformanceorteamworkasappropriate.Improvetherecruitmentandretentionofhigh-qualitystaff.PRPcostswillbeinlinewithcompanyperformance.ObjectivesofPerformance-Rela38KeyFactorstoConsiderWhenIntroducingPRPMatchingtheculture successfulPRPschemesneedtomatchthecultureandcorevaluesoftheorganization.LinkingPRPtobusinessstrategy thefocusneedstobeonstrategicbusinessissueswhichemergefromthebusinessplanningprocess.Balancingquantitativeandqualitativemeasures whilemostPRPschemesrelyonquantitativemeasuresofperformance,qualitativefactorsneedtobeintroducedforthemeasurementofindividualbehaviouregbalancedscorecardsTheneedforflexibility flexibilityinmaking‘milestone’paymentswhichconveytherightmessagesforthefuture.Theneedtopromoteteamwork theimportanceofteamworkshouldberecognizedinstructuringtheschemeanddefiningcriticalsuccessfactorsandperformanceindicators.KeyFactorstoConsiderWhenI39KeyFactorstoConsiderWhenIntroducingPRPTheneedtoavoidshort-termthinking settinglong-termaswellasshort-termgoals,anddiscussingshort-termobjectivesintheiroverallcontext.Involvementinthedesignprocess designingPRPschemesshouldbeaniterativeprocess:tryingandtestingideasonmeasuresandstructureswiththosewhowilleventuallybeinvolvedinascheme.Gettingthemessageacross alltypesofPRPareverypowerfulformsofcommunication.Togettherightmessagesacrossforanyscheme,onemustmakekeydecisionsonthefollowing:

Howcantheschemeachievethebestpossiblelaunch? Isitbettertogivenopay-outratherthanalowpay-out? Whatisthebestpsychologicalmomentforpay-out? Whatcommunicationsshouldbeusedtogainmaximum motivationalimpactfrompayment? Howshouldcommunicationsbehandledwhenthescheme requireschanges?KeyFactorstoConsiderWhenI40CompetencebandsExcellentGoodSatisfactoryPerformanceLevelsPerformingLearning

NewEntryProfessional

CompetentProfessional

ExperiencedProfessional

CompetenceandPerformance-RelatedPayCurveSalary($)ExceedingCompetencebandsExcellentGoodS41Directlylinkindividualperformancewithsalaryprogression.Provideindividualizedprogressionrates.Recognizeincreasingcompetencegainedthroughexperience.AdvantagesofindividualMeritPaymentSchemeDirectlylinkindividualperfo42DisadvantagesofIndividualMeritPaymentSchemeDependentonthequalityofperformanceappraisal;whichcanbearbitrary,subjectiveorinconsistent.Unlesscarefullyconceivedandmanaged,itcandemotivatepeoplewho,althoughnotbedeliveringspectacularresultsarestillimportant.Meritpayment,asdistinctfrombonuses,createextrapayrollcostswhenbenefitssuchaspensionsarerelatedtobasepay.Ameritpaymentis,ineffect,apermanentincreaseinsalary,yetthequalityofperformanceinfutureyearsmaynotjustifythispayment.Meritpaycanresultinanupwarddriftinpayrollcostswithoutacommensurateimprovementinperformance.Meritpayiseffectiveasamotivatoronlyifrewardsareclearlyrelatedtoperformanceandareofasignificantvalue.DisadvantagesofIndividualMe43SalesIncentivePlanBusinessObjectivesMarketingStrategySalesStrategy&CoverageModelSalesJobDefinitionQuotaandCreditingCompensationPlanDesignSalesPlanImplementationTheSalesPlanSalesIncentivePlanBusinessO44TotalCompensationArchitectureBaseSalary/

FixedPayVariableFixedTargetSalesIncentiveforQuotaAchievementProfitSharingRecognitionAcceleratedIncentivesforQuotaOver-achievementTotalPotentialRewardsPerformance$EarningsFAT/MBOStockOptions**Selectiveusebasedonpositionandperformance,competencyandfuturegrowthpotentialAbovequotaachievement+=TotalCompensationArchitectur45IncentiveSchemesForSalesStaff

Whereitisfeltthatsalesstaffneedtobemotivatedbyanincentivecommissionschemethemajorityofcompaniesfindthatthebestapproachisabasiccommissiononsalesvolumeor,inmoresophisticatedfirms,onthecontributiontofixedcostsandprofitsofthesalesofeachproductgrouporproduct.Thestandardcommissionistypicallysetataboutone-thirdofsalarytopro