mod 6 (2nd part)
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TRANSCRIPT
- 1. Compensation for Special groups By: Akansha Badal Atisha Pradhan Preeti Agarwal Madhilika
2. Compensation Strategy for Special Groups
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- Supervisors
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- Top management
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- Board of Directors
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- Professional Employees
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- Sales Staff
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- Contingent Workers
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.
- SUPERVISORS
5. Issues:Supervisory Pay
- Caught betweendemandsof
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- Upper management in terms of production and
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- Employees in terms of rewards, reinforcements, and counseling
- Cash incentivescan entice nonexempt employees to accept challenges of being a supervisor
6. Strategies:Supervisory Pay
- Pay strategies
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- Base salaries of supervisors typically exceed highest paid employee
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- Evaluate need for payment for scheduled overtime
- Increased use of variable pay
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- More than half of companies have a variable pay component for supervisors
7.
- BOARD OF DIRECTORS AND
- TOP MANAGEMENT
8. Key Activities of Corporate Directors
- Review senior management actions to ensure congruency with organizational
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- 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
- Annual retainer
- Meeting attendance fees
- 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
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- Maximizing short-term gainsversus
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- Focusing on long-term
12. CEO Compensation Theories
- Social comparisons
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- Executive salaries bear a relationship to pay of lower-level employees
- Economic approach
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- Value of CEO should correspond to some measure of organizational success
- Agency theory
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- CEO compensation should ensure thatexecutives focus on best interests offirm and stockholders
13. Executive Compensation Packages
- Base salary
- Short-term (annual) incentives or bonuses
- Long-term incentives
- Executive benefits
- Executive perquisites
14. Perquisites Offered to Executives
- Low cost loans
- Company car
- Financial counseling
- Income tax preparation
- First-class air travel
- Company plane
- Country club membership
- Estate planning
- Personal liability insurance
- Spouse travel
- Chauffeur service
- Reserved parking
- Executive dining room
- Home security system
- Car phone
15.
- PROFESSIONALEMPLOYEES
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
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- Goals, objectives, and ethical standards of their professionand
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- Demands of an employer concerned more with profit motive
- Problems in designing pay
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- Salary plateaus due to knowledge obsolescence of mature professionals
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- Questions of equity
18. Reward Components: Professional Employees
- Dual-career ladders
- Performance-based incentives
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- Profit sharing
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- Stock ownership
- Bonuses
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- Completion of projects on or before deadlines
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- Patents
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- Publications
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- Attainment of professional licenses
- Perksbased on unique needs of professional employees
19.
- SALESSTAFF
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
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- Staying motivated
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- 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
- Guaranteed base salary + commission
- Guaranteed base salary + bonus
- Guaranteed base salary + commission + bonus
- Commission only
25. Performance Measures:Sales Force
- Overall territory volume
- Market share
- Product placements in retail stores
- New accounts
- Gross profit
- Percentage of list-price attainment (ASP)
- Consistency of sales results
- Expense control
- Product per square foot
- Bad debt attribution
26. Why is Sales Comp Special?
- Impact of performance on the company
- Nature of sales work
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- 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.
- CONTINGENTWORKERS
29. Contingent Workers
- Types include a person who works
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- Through a temporary help agency
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- On an on-call basis
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- As independent contractor
- Typical salary arrangements
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- Temporary and part time workers often earn less than workers in traditional arrangements
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- 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
- Boundaryless career
- Rapid development of skills
32. Summary: Design for success
- Pay design should complement work time horizon
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- Longer term focus for executives than others
- Pay design should complement risk tolerance
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- Sales people typically like to take risks and be rewarded handsomely for success
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- Assembly workers want a salary they can count on
33.
- THANKYOU