Executive Compensation and Total Reward Management
Introduction
Contemporary businesses are increasingly concerned with the human resource management (HRM) practices as they realize the value, which is hidden in accurate and appropriate approach to managing human assets of the organization. It is evident that HRM function went a long way in the evolution process from supporting the element of the company to one of the critical constructs of strategic organizational development. Many modern corporations invest heavily in human capital in order to develop and grow talent inside the company (Armstrong, 2000). This trend is explained by the realization that motivation, retention and development of individuals within the organizations allows these enterprises succeed in closing the capability gap, when they grow and develop organically. Additionally, the history and numerous examples in various industries prove that employment market has become much more commercial, placing such elements as motivation, satisfaction with working environment and bonds with the company on top of candidates´ agenda, when considering their employment options. With that in mind, such concepts as total reward management are becoming more and more popular, receiving significant attention in academic and business circles (Armstrong, 2002).
This document aims to explore the effective tools and mechanisms of total reward management (TRM) programs, look at the behaviors of sales force, targeted with the compensation plan and explore the value proposition of the suggested TRM for sales force staff.
Question I : In order to motivate the sales force to produce the highest number of clients, describe six (6) features of an effective total rewards program
Question ITotal Reward management, as it is defined by the industry, is the complex set of tools, available to the employer, which can be used to attract, retain, motivate and manage employees within the company. With that in mind, it is evident that contemporary businesses, which adopt TRM system go way beyond the monetary compensation and look at multifaceted approach to reward management, which utilizes both, extrinsic and intrinsic motivational methods. The reality shows that contemporary corporations, which understand the value of human asset continue to increase the investment in Leadership Development Programs (LDP) and other HRM practices to boost organizational performance, especially when it comes to the motivation of sales force employees, whose performance directly affect the bottom line of the company (Mello, 2011). There are many elements to the TRM system, but some of them are especially effective to direct sales force efforts to bring the highest number of customers. First of all, the company should look at compensation, which is comprised from fixed and performance-based pay, where employee is motivated with the higher compensation, based on specific and measurable targets. Secondly, such TRM should include benefits, such as health insurance, retirement and other elements, which build on the bond with the company and increase long-term motivation to perform. Thirdly, performance management system should incorporate effective tools to build on employee empowerment and recognition, such as performance appraisal system and the Balanced Scorecard. Fourth element of such TRM is the development and training opportunities, which should be personalized to benefit both, the company as well as the employee. Once manager and his direct subordinate build on the personal development plan, this approach opens up new motivational channel and creates loyalty, which drives performance and the achievement of the client relationship targets (Boxhall and Purcell, 2011; Cannon and Mcgee, 2010). Fifth component of effective sales force TRM is the environment and working conditions themselves. It is evident that employees are motivated not only by external factors, but by the feelings and emotions that they experience while being part of the company and social environment in which they work. It is critical that the organizations build on comprehension and feeling of belonging with employees to create a high-performance culture among the sales department staff.
Question II: Describe the behaviors of the sales force that are targeted with the compensation plan
Sales department is one of the most dynamic and difficult to measure within the company. Employees within this department should be able to bring the results, which are, at times, extremely difficult to measure and assign effective targets. With that in mind, organizations, which aim at building on high-performance culture in their sales structure, have to target specific qualities and cognitive behaviors among their staff. To better understand the possible behaviors, which companies’ target, one should recognize the possible objectives of the company and its “translation” into sales goals. One of the classic sales objectives is to reach a certain revenue level or profitability. The department and individuals can be measured on the basis on the profit margin per client or revenue per client. Additionally, sales force efforts are difficult to measure if not with the amount of sales calls and new client relationships developed within a particular period of time. With that in mind, sales department Balanced Scorecard often includes profit, sales visit, revenue and other specific numeric targets.
Taking into account the possible goals of the sales department, the companies can develop a profile and job description for their sales force. One of the most common behaviors, which the company can target in this situation, is independence and self-motivation, which enables effective work and self-driven targets. Another element, which is important for sales force is the ability to work independently, where decision-making and empowerment are key for high performance. Additionally, sales department staff should possess some specific qualities, such as good interpersonal and communication skills, conflict and negotiation management and other critical capabilities to manage and develop daily routine relationships with the clients, as well as crisis management techniques. Similarly to other departments, the company should expect compliance with internal regulations and behavioral contribution to the company´s culture and standards of internal communication and interaction process. TRM is one of the effective ways to build and monitor this behavior (Cardy and Leonard, 2011).
Question III: Assess how a value proposition is achieved for current and future employees in the plan you have outlined
TRM system is a multifaceted approach to employee management and the company is able not only to build on the future value, but deliver results and benefits for current employees. The possibility to personalize and customize the performance management system and motivate each employee through individual plan and personal development targets is one of the advantages of the TRM system. Total reward management recognizes the intrinsic merits of employment relationships, which help an organization, create and sustain in a long-term productive and efficient working environment. Nohria Groysberg and Linda-Eling (2008) argue that employees´ value is built upon four major drives, drive to bond, drive to comprehend, drive to defend and drive to acquire. These elements are covered and addresses by the TRM system and, thus, allow the organization develops current and future value for the employees.
Question IV: Based upon the type of plan you have created, indicate how attracted you think future salespeople may be to this plan.
Conclusion
Employment relationships are a set of complex interpersonal and organizational connections and relationships. Contemporary business environment demands business become more creative and long-haul oriented, when it comes to strategy and development plans for the company. With that in mind, managers and organizations as a whole realize the value which human capital can bring to them and, thus, place more emphasis on employee motivation and retention policies and practices. One of the most recent and complex developments, which received a lot of attention in business and academic environments, is a total reward, which involves a multifaceted approach to employment relationships. It is evidenced that with accurate planning and goal setting, TRM is able to direct the efforts of sales force and other departments, as well as build on high-performance culture in general.
TRM brings current and future value to the employees as well as employers. This value can be seen through the way, TRM addresses and builds on the four drives of employment relationships and employee satisfaction, such as drive to bond, acquire, comprehend and defend. Moreover, the complexity and scope of the issues, addressed by TRM allow the organization strengthen its culture and ensure cooperative and effective working environment.
References
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