Compensation Design And Human Resource Management Strategies Essay

Compensation Design And Human Resource Management Strategies Essay

Length: 787 words (2.2 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

Martocchio (2013) states that compensation design boils down to the organizational goals, the organization’s competitive strategy, and how the organization aligns its marketing and human resource management strategies (p. 190). In addition, managers tweak fixed and variable incentive pay to properly motivate employees to perform based on the employee’s influence on the sale, nonsales duties, and the industry’s competitive pay standards (Martocchio, 2013, p. 193). Martocchio (2013) states that employees who have greater influence on the sale would be more likely to have more incentive pay than those who have less influence on the final decision to buy, while employees who have more nonsales duties would likely have more of a fixed salary than those who had less (p. 193). Ryals and Rogers (2005) concur with the idea that compensation plans, referring to a compensation plan as a balance of control and motivation, where the salary represents the organization’s control of the employee and the variable incentive represents the motivation (p. 357). Finally, the pay standards within the industry would weigh heavily on the incentive pay plan that an organization would implement (Martocchio, 2013, p. 193).

According to Martocchio (2013), there are five commonly used sales compensation plans: salary only plans, salary with bonus plans, salary with commission plans, commission only plans, and commission with draw plans (p. 191). Under a salary only plan, an employee earns a fixed rate of compensation that does not vary with sales performance (Martocchio, 2013, p. 191). Martocchio (2013) suggests that salary only plans may be taxing on the organization since employees get paid whether they produce or not (p. 191). Thus, the salary onl...

... middle of paper ... (p. 192). Abratt and Klein (1999) posits that commission only plans work well for organizations that seek to increase its sales volume and profitability (p. 66). Martocchio (2013) states that if organizations fail to be realistic about its sales goals and employee performance standards, the consequences may include decreased employee motivation, loss of profits, and unprofessional behavior (p. 192).

Abratt, R., & Klein, M. (1999). Sales force compensation and incentive schemes: practices in the South African .. South African Journal Of Business Management, 30(3), 65.

Martocchio, J. J. (2013). Strategic compensation: A human resource management approach (7th ed.). Boston, MA: Pearson.

Ryals, L. J., & Rogers, B. (2005). Sales compensation plans -- One size does not fit all. Journal Of Targeting, Measurement & Analysis For Marketing, 13(4), 354-362.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essay on The Human Resource Management Process

- According to our textbook Human Resource Management (HRM) is the policies, practices, and systems that influence employees’ behavior, attitudes, and performance. “The human resources management process involves planning for, attracting, developing, and retaining employees as the HRM planning provides the rights kinds of people, in the right quantity, with the right skills, at the right time (Lussier, 2012, p. 240).” According to our textbook the typical responsibilities of the Human Resources department fall into three categories, and they are administrative services and transaction, which handle hiring employees....   [tags: Human resource management, Management]

Better Essays
777 words (2.2 pages)

Essay on Diversity Management : Human Resource Management

- Increasingly, women have moved toward greater gender equality at both the home and workplace (Chin, 2001). One source of staff diversification is the demographic development in the workforce, with particular interest on the participation of females (Lauring and Selmer, 2013). Women are underrepresented in the workplace, with this being exceptionally evident in senior leadership (Baker, 2014). Diversity, as defined by Fenwich, Costa, Sohal and C’Netto (2011), is supporting and tolerating differences with a degree of receptivity to perceived dissimilarities, or simply put by Krmar (2012), as a variety of differences and similarities between people....   [tags: Human resource management, Management, Gender]

Better Essays
1409 words (4 pages)

Design and Implementation of Sets of Strategic Human Resource Management Practices

- The design and implementation of sets of 'strategic' human resource practices continues to lack coherence and consistency, primarily because the concept of 'fit' is still so little understood. Strategic human resource management refers to managing people in organizations proactively, such that it helps a business gain competitive edge. It is directed by the organizational strategy, as opposed to human resource management which aims to on better management of people only. SHRM is gaining widespread popularity due to the inducement that it provides of supporting the organizational strategy....   [tags: Human Resource Management ]

Better Essays
1690 words (4.8 pages)

Essay on Human Resources And Human Resource Management

- The Human Resources Function Human Resources is responsible for managing all aspects of personnel practices, processes, and policies. This area of the business focuses on all activities relating to employees as well as how they impact the business. Historically, the role of Human Resources in the work place consisted mainly of clerical work, hiring and firing. This has changed significantly over the years as businesses continue to evolve and further recognize how important this function is to the success of the company....   [tags: Human resource management, Human resources]

Better Essays
1242 words (3.5 pages)

Essay on Human Resources And Human Resource Management

- Human Resources may aid organizations in many ways. It is seen as being an advocate of employees, to help ensure fair and equal treatment is given to all employees regardless of personal backgrounds or circumstances. Human Resource Management is the design of management systems that allows organizations to effectively use its human talent to reach the company’s goals and missions. Managing people in organizations is more than administering a pay program, designing trainings or avoiding law suits....   [tags: Human resource management, Human resources]

Better Essays
711 words (2 pages)

Human Resource Management And Organizational Development Essay

- After reading, The making of twenty-first century HR: An analysis of the convergence of HRM, HRD, and OD, I found myself learning a lot more in-depth about the principles of HR. Just starting out as a Human Resource minor I was only familiar with the term Human Resource Management. Ruona and Gibson help me open my eyes to the ever growing history of the principles of Human Resource Development, Human Resource Management, and Organizational Development. The evolution of these three principles is fascinating especially when looking at what they have evolved into today....   [tags: Human resource management, Human resources]

Better Essays
702 words (2 pages)

Essay on Effective Management Strategies And Responsible Human Resource

- Effective management strategies and responsible human resource are solutions to control work stress related problems. Today, most of us have to wake up and rush early in the morning, to go to work, attend to our families, do house works, accomplish unending chores etc.. And often than not, after all the work we did all day, ironically, we will call it a day by planning for the next day and rewarding our self with late night sleeps. Our shoulders are just heavily loaded with responsibilities. However, we find satisfaction and life purpose in accomplishing something, especially when doing it makes us feel happy or we love and enjoy what we do....   [tags: Employment, Job interview, Management]

Better Essays
916 words (2.6 pages)

Human Resource Management And The Organizations Essay

- Human resource management and the organizations in which it takes place are facing challenges from a changing environment. Hiring the proper people with the appropriate skills is an essential part of maintaining the workplace. Economic issues which include downsizing, organizational culture, productivity, ethics, demographics, and diversity plays a significant role when redesigning a company 's Human Resource Department. Success in the field of Human Resource requires an update of knowledge continually....   [tags: Human resources, Management]

Better Essays
855 words (2.4 pages)

Essay on Management Strategies for Retail Market Management

- Management Strategies for Retail Market Management The newspaper headlines often bring about a clue regarding the status of the economy on a daily basis. We hear from newscasts on the radio and on the television of distressing news of the market rising and dropping daily and just about every website have news regarding the impending gloom of the economy both locally and globally. Corporations cannot hide from budget cutbacks and organizational restructuring and it is inevitable that any improvement will be for the good of preserving the company....   [tags: Business Management]

Better Essays
2631 words (7.5 pages)

Human Resource Roles and Responsibilities Essay

- Human Resource Roles and Responsibilities Human Resource is a key to the success of a company by keeping in connection with the organization's objectives and business strategies. Human Resource maintains a healthy work environment between company policies and individuals. Human resource management focuses on securing, maintaining, and utilizing an effective work force, which organizations cannot survive without. Human resource management can also be described as the relationship between the employer and the employee....   [tags: Human Resource Management Essays]

Better Essays
735 words (2.1 pages)