Implementing Incentives
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.
The first category is the sales force composed of 20 salespeople all working on a straight commission.
The second category is composed of seven support employees (two secretaries and five packer/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 that will include parts that will be attractive to each of the three categories of employees. Be prepared to present your plan to the class.