While still on the edge of its growth, United Facilities Inc. is establishing its first-ever outside sales position. John, the decision-maker, is responsible for formulating a reward structure package that ensures a new sales representative is driven to achieve the company’s goals and instills the subordinates’ motivation. In this essay, prepare to match the sales goals for the new representative, the contribution of compensation design to motivation, and a recommended sales incentive plan are discussed.
Sales Objectives for the New Sales Representative:
The initial sales objectives for the new employee include two opportunities to which John refers. One of the vital objectives in the process of enlarging the business is aggrandizement by the addition of new customers. This is not about securing new business but setting a foundation for future transactions. Secondly, acknowledging the potential in the field that is already such a customer base, the representative must continue the development of relations with existing customers. According to Liu and Liu (2022), both efforts require much time and hard work and don’t promise short-term sales. As a result, the sales representative serves as a double agent, looking for new accounts while continuing revenue-producing relationships with the existing contracts.
Role of Compensation Design in Motivation:
First, the compensation design is vital because it promotes the new sales representative by linking their rewards with the organization’s strategic business goals, as Demydyuk & Carlbäck (2023) stated. Since the two processes of customer acquisition and relationship development are prolonged, the payment structure for both processes should compromise between short-term delivery and long-term objectives. A carefully calibrated plan can motivate the representative to put themselves forward in activities that will not necessarily transact immediately but will give the company consistent results in the long run.
According to Liu & Liu (2022), the compensation design serves as a motivating tool that addresses the underlying problems found to be intrinsic in the selling position. The tie-in of at least a portion of the remuneration to actual revenue means the sales rep would take all necessary measures to promote sales, thus legitimizing the investment in the position. Establishing this correlation between effort and reward incentivizes the representative to engage in more activities that have a direct value deserving to the company’s financial success.
Recommended Sales Incentive Plan:
In United Facilities Inc., a sound yet tactical sales incentive strategy is essential. An appropriate plan can include paychecks that consist of base salary, commission models, and performance-based bonuses, according to Spieker (2020). By paying the base salary, the representative has a steady income that would give financial security to that representative. Nevertheless, a commission system on the actual sales outcome should be instituted to motivate proactive sales activity. First, this directly correlates with the representative’s efforts and financial results. It also provides consistency with the company’s need to track its salary budget.
Secondly, the organization may also consider performance incentives based on bonuses since they will help motivate the sales representative further. As stated by Demydyuk & Carlbäck (2023), these incentives may be linked to particular milestones, for instance, the recruitment of new customers who have reached a target level or clientele who have generated a defined amount of revenue. With such elements within the incentive program, the sales role is recognized for being a time-consuming role that only leads to wins either in the near term or having substantial beneficial returns in the long term.
Conclusion
In conclusion, designing the best sales effort compensation at United Facilities Inc. should be an outcome of a focused evaluation of both factors: acquiring customers and establishing a relationship with them. A sound action plan should ensure that the new salesperson dedicates their time to activities that aid short-term sales and long-term results. By effectively blending base salaries, commission incentivization, and performance-based bonuses, United Facilities Inc. can develop a compensation strategy that brings aboard the best talent and supports the vision by which the targeted company intends to grow and achieve success.
References
Demydyuk, G. V., & Carlbäck, M. (2023). Balancing short-term gains and long-term success in lodging: The role of customer satisfaction and price in hotel profitability model. Tourism Economics, 13548166231199156. https://journals.sagepub.com/doi/full/10.1177/13548166231199156
Liu, W., & Liu, Y. (2022). The Impact of Incentives on Job Performance, Business Cycle, and Population Health in Emerging Economies. Frontiers in Public Health, 9(778101). NCBI. https://doi.org/10.3389/fpubh.2021.778101
Spieker, N. (2020). The Business Case for Quality in Health Care (L. R. Marquez, Ed.). PubMed; Springer. https://www.ncbi.nlm.nih.gov/books/NBK565740/
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