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Compensation Proposal

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Compensation Proposal
Lori Berens
Human Capital Management 531
November 14, 2010

Memorandum
TO: Executive Management Team
FROM: Lori Berens
SUBJECT: Compensation Proposal

Attached the management team will find the new compensation proposal that will be used for all current employees and new hires. After the merger between InterClean and Enviro Tech the management team requested that a new compensation proposal be created. The new compensation proposal will be effective January 1, 2011 upon approval from the executive management team.
The new compensation plan for employees will consist of the employee’s base salary that will be determined by experience and education of each employee, the sales team will also receive commissions on his or her sales per month. The employees on the sales team will also be part of a sales incentive bonus program; this program will be a quarterly and is determined by the sales for each member on the sales team. If the employee meets or exceeds his or her sales goals for the quarter he or she will be eligible for the sales incentive bonus.
The compensation plan also includes vacation time, company paid holidays, and personal time. The company gives two weeks vacation to all full-time employees, at five years the employee will have three weeks vacation and at 15 years the employee will have four weeks vacation. The company has seven paid holidays (New Years Day, Memorial Day, 4th of July, Labor Day, Thanksgiving Day and the Day after, and Christmas Day). The company also will give each employee eight personal/sick days. The vacation time will accrue per pay-period and no more than 80 hours can be carried into the next year. The eight personal/sick days cannot be carried from year to year.
The company will offer health, dental and life insurance, and a 401k plan. The company has researched many companies and found the best price and coverage for the employee. The company will pay for one and a half times the employee’s salary for life insurance. The company also offers short and long- term disability as well as a supplemental life insurance paid by the employee. The 401k amount the employee contributes will be matched up to 6% $0.50 per $1.00 that the employee contributes.
The company will also include some employee-services to help the employees. The programs are tuition assistance, professional association memberships, referral awards, family leave programs, flexible work arrangements, and social activities. These services will help the employees to obtain his or her education and keep up with their memberships and certifications. The flexible work arrangements will have to be addressed with the employees’ management team. The company will have a picnic in the spring and a Christmas party that all employees and their families are invited.
The pay system will work as this is one of the most used pay system for companies with a sales team. By giving the sales team a base salary plus commissions is the standard for most sales teams. The sales incentive is a way to entice the employee to go out and get more sales to ensure he or she will get his or her quarterly bonus. This is a motivator for most as they look forward to the extra money each quarter as a little bonus surprise in his or her paycheck. This will also promote productivity for those on the sales team that want to achieve the bonus.
Three components that will motivate the employees to reach peak performance would be the commissions, the incentive bonus and employee-services for tuition assistance and the membership and certificates paid for by the company. Of course the management team knows that money is a motivator for most everyone. By offering the commissions on the monthly sales and the incentive bonus on the quarterly sales will motivate the employees to do their best so they will get a good commission check and ensure they are eligible for the incentive bonus. As for the tuition and paid membership and certificates this also motivates employees to further his or her education to improve themselves in their jobs.
This compensation plan is in line with most all other companies within the United States. The company is looking to have a successful sales team and wanted to make sure the commission and incentive were enough to motivate the employees as individuals. By offering both this helps the company to get more sales as the sales team will be motivated to get the sales needed to ensure he or she gets the bonus. Some companies do not offer both incentives for the sales team. We believe this was necessary to keep the good sales staff employed at the company. The other benefits the company offers are also standard with other companies in the United States with vacation, holiday, personal, and insurance benefits. Some companies do not offer the employee-services; this was something we believed was a bonus as we want our employees to get their education to improve themselves for their jobs. The benefits are not costly for the company but are priceless to the employees, by offering a good compensation plan will help to entice people to want to work for the company and stay employed at the company for a long time.

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