For the past decade, your company has encouraged sales teams to work together in a cooperative...

For the past decade, your company has encouraged sales teams to work together in a cooperative and cohesive manner. This initiative is closely aligned with one of the company’s core values: “Together, we achieve more.” To motivate sales associates to cooperate with one another in their respective teams, at the end of each fiscal year, team managers evaluate their respective teams by rating them on a number of behavioral dimensions related to cooperation and cohesion. Teams that receive high marks on their evaluations receive year-end bonuses, and this bonus program accounts for 10% of compensation for those working as salespeople; the remaining 90% of compensation is distributed in the form of a base salary. Thus far, the company has found this pay-for-performance system to be quite effective, as team cooperation and cohesion have improved demonstrably. Lately, your company has lost some of its top sales associates to competitors, and exit interviews revealed that some sales associates believed that they were not recognized and rewarded for their unique, individual contributions to the organization—namely, their sales productivity. To address this issue, the company has decided to implement a new pay-for-performance program designed to reward individual sales associates for their sales productivity; specifically, the company plans to implement a sales commission program. This new variable-pay program constitutes 40% of their compensation, and the remaining 60% will be distributed in the form of a base salary (50%) and a team bonus based on manager ratings of team cooperation and cohesion (10%). Ultimately, the organization wants to incentivize team cooperation and cohesion as well as individual sales productivity in an effort to encourage collaboration and individual contributions. Consider the entire compensation package from a systems perspective.

Do you have any concerns regarding the implementation of the new sales commission program? Do you think there will be any unintended consequences? Consider this decision using the following criteria. Please provide the rationale for your answer to each of the questions below.

Is the compensation package legal, ethical, and fair?

Is it evidence based/evidence informed?

Does it foster healthy employee–employer relationships?

Is it time and cost effective?

Does it take a systematic stakeholder perspective?

Considering your analysis, overall, do you think this would be an effective decision? Why or why not?

What, if anything, do you think should be done differently or considered to help make this decision more effective?

Expert Solution

The new performance structure is well defined, Agile and calibrated enough to global performance standards however it cn have minor downsides as employees may show individual contributions more rather than team based contributions which may decrease collaboration and support and induce rifts and clashes.

Compensation package is completely legal and ethical because of transparency and compliance to labor laws.

Its evidence based on performance and brijgs employment to employee fair relationships as managers get compensated well enough.

Its complexity is high however is efficacious amd effective due to combinations of team and individuals efforts.

However bringing long terms stock options for collaboration efforts may reduce turnover rate and enforce team work amd individual work both all at one go.

PLEASE UPVOTE INCASE YOU LIKED THE ANSWER WILL BE ENCOURAGING FOR US THANKYOU VERY MUCH ALL THE BEST IN FUTURE

keosha answered 2 weeks ago

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