Question

Assume you have been hired as a consultant to a medium-size sales organization to help it structure an incentive system for its three basic categories of employees. This first category is the sales force, composed of 20 sales people all working on a straight commission. The second category is composed of seven support employees (two secretaries and five packers/shippers). All seven work on a straight hourly wage rate. The third category is made up of the two owner/managers. The owner/managers like the straight commission system the salespeople are on, but they suspect that many of the salespeople tend to slack off once they have attained an acceptable level of sales for any given month. The seven support employees appear to be steady workers, but management believes their performance could be enhanced with the right incentive program. The owner/managers are satisfied with their current salaries but would like to look for some tax shelter for any additional profits. Your job is to design an incentive plan with elements that will be attractive to each of the three categories of employees. Be prepared to present your plan to the class.

Answer 1

The following are the incentive plans that can attract the three categories of employees:

Profit Sharing Incentive Plan	Bonus Incentive Plan	Retention Incentive Plan	Stock Based Incentive Plan	Career Development and Training Incentive Plan	Rewards and Recognition Incentive Plan
The profit sharing incentive plan will be implemented as when the company exceed their planned profit and growth it would share it with their employees.	The bonus plan will be implemented when the employees work over time and increase their work performance.	The retention incentive plan is implemented to retain the top talents of the employees in the organization.	The employees will invest on the company share and the company provide option to the same so that motivate them towards saving.	The company would focus towards employee career development and training, so they get motivated to increase the work performance.	The non-monetary incentive plans will motivate the employees as where the employees will be rewarded and recognized by the company and motivate them to increase the work performance.