Question

Suppose a construction equipment manufacturer uses hybrid pay for their domestic and international sales teams, but their international sales are much lower this year due to recent tariffs imposed by the US and Chinese governments.  At other times in the past, domestic sales were lower than international sales due to other economic events. Should the firm adjust the terms of the hybrid pay system to provide some safety for the international sales team (which may alienate members of the domestic sales team)? Alternatively, should the firm maintain the same hybrid pay program because all members of the sales team will experience good and bad selling environments over time

Answer 1

Hybrid pay structure means a payment system where the employees of a particular firm or organization are paid bonus’s according to their performance over a particular period of time. In a hybrid payment system, the employees are paid very handsome bonus for contributing highly towards organizational requirements and are paid less bonus if the organization is not able to earn good amount of profit from their contribution. Such a payment structure usually exists in the sales jobs or organizations which deal with sale of various goods or services. Here, the employees who can offer better sales for the organization are paid handsome bonus, and those with lesser sales performance are paid lower bonus.

                                               In the situation here, where, the construction equipment manufacturer uses hybrid payment structure for its domestic and International sales employees, and recently the profit from International sales has gone down drastically in comparison to its domestic sales, the reason being the tariffs imposed by the US and the Chinese Governments, here, the Construction company should exercise some restraint before any drastic change in its hybrid payment policy. This is because of two reasons, firstly, any major change in the hybrid payment structure to suit the present condition of the International sales team will lead to a situation where, the company will be expected to maintain the same standards when any such future situation arises with either the International or the Domestic sales teams, moreover, secondly, any special hybrid change in the structure for the International sales representatives would dishearten the domestic sales guys. Here, the organization should wait for a period of time to see if the situation with the Trade tariffs improves by providing the International sales team a balanced bonus structure which not only gives the impression to the International sales team that the organization stands with them and understands the issue at hand, but also provides them a small amount of token bonus as a remuneration to keep them interested and ever ready for the future, thereby also not disheartening the domestic sales team. This balanced approach will save the organization from any undue blames in the future and also keep its resource group energetic and happy.