Olympia Machine

Company Inc.
BY-
MANAN H16086
RAJESH H16096
PRANAV H16093
BHAVUK H16073
Situational Analysis
No link to sale and thus no incentive for increase sale
Base Salary and increment subjective
Product mix not considered in the compensation design
Expense accountability ( not cyclical though sales is )
Interdepartmental effort recognition
Product customization
Soft sales skills is an important criteria
Critical Success Factor
Skills of sales person
Product quality and customization
Service provided
Product delivery
Problem Statement
The lack of pay for performance plan for the sales force
New plan
Point Plan
Behavioural control - No ingenuity on part of sales person
High degree of formality
Report interpretation is subjective
No incentive for increased sales
Penalty points will increase control
Salary and commission
Product mix are handle
Territorial issue are handled by cyclical nature of industry
Territorial issue vs selective emphasis on item by commission revision
Name Carmody Peter Bowman
As per Salary and
New Salary 96762.30 101452.2 76330.95 Commission
Old Salary 110000 95000 70000
New plan
Bonus Plan
No incentive to achieve more than limit set by theoretical quota
If threshold missed (even by small margin) then no bonus
Procedure to decide theoretical quota is complex
Evaluation Criteria
Motivation of sales person
Attrition - low attrition
Complexity of plan- ( ease in communication, calculation etc)
Cost effectiveness
Criteria Point system Salary Commission Bonus Plan
Motivation X
Attrition X
Complexity X
Cost X
Action Plan
Commission Rate to be decided territory wise
Implement the proposed plan in certain location as pilot program
Proper communication of the new plan for better acceptance
Cap can be proposed as per production capacity
Reward and recognition policy for other departments
Increase expense accountability
THANK YOU