This business memorandum presents a comprehensive compensation plan for a sales team following a corporate merger. The plan is structured around three core components: base salary combined with commission-based incentives, a core benefits package including healthcare and retirement options, and supplementary perks such as company cars and gym memberships. The paper argues that balancing individual financial incentives with community-oriented benefits fosters both competitive drive and organizational loyalty. It explains why each element of the package is strategically advantageous for attracting top talent, improving retention, and enabling flexible sales campaign management.
TO: Janet Durham, Vice President of Human Resources
FROM: [Student]
DATE: October 10, 2010
SUBJECT: Compensation Plan
Dear Janet, since our merger with EnviroTech, the combined company has made excellent progress. We have performed a job analysis, a workforce plan, and selected employees for our new team. We have also implemented a training and development program and a performance and career management program. The final stage of the career development plan is to implement a new compensation plan for our sales team. I am writing to request your approval of the following plan that I have developed.
Please do not hesitate to call or email me if you have any questions regarding the proposed compensation plan. I would like to implement the plan within the next 30 days.
The sales team compensation plan is designed to improve company sales and enhance employee motivation. It offers salary-based incentives, a core benefits package, and additional perks such as the use of company cars. Employees receive a base salary, can earn additional income through commission-based sales, and also receive a healthcare and wellness package. This structure will motivate sales staff to be more proactive and foster loyalty to the company.
Motivating sales staff requires a balance of individualistic and community-based initiatives. Sales is by nature a highly competitive field, and employees who are drawn to the profession tend to be strongly motivated by external factors, such as the opportunity to earn unlimited income through commissions. However, a degree of organizational loyalty is also desirable among a sales team. High levels of attrition are disadvantageous for a company, given that employees who are well-versed in the organizational culture are likely to be more effective advocates for the company's products.
The proposed package encourages sales staff to remain with the company through its generous benefits, while still providing salespersons with enough individual incentives to satisfy their competitive drive. A keenly competitive but not cut-throat attitude is what we wish to cultivate among our employees. Research on employee motivation consistently supports the value of combining financial rewards with non-monetary benefits to sustain long-term engagement.
The compensation plan encompasses three basic elements: base salary and commission, core benefits, and supplementary benefits. As this plan is designed for sales staff, commission-based earnings will be emphasized. Employees will receive a commission for each product sold to a consumer, with additional incentives for selling particular products and services. For example, selling a new line of environmentally friendly cleansers, securing customer agreement to an extended warranty, or signing customers up for a prepaid extended service contract will each result in added compensation for the employee. Employees will also receive additional base pay for training junior staff and/or assuming managerial responsibilities. Bonuses will be awarded based on exceeding specific sales goals.
In addition to salary compensation, employees will receive core benefits scaled to their tenure with the company. All employees will receive healthcare coverage — including dental and optical care — along with the ability to contribute to the company 401(k) plan and access to stock options. Benefit packages will become more generous the longer an employee remains with the company.
Additional benefits include access to company cars, which are necessary for sales-related travel. Employees will also be offered free membership to the company health club or a local health club of their choosing.
"Strategic advantages of each plan element"
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