Compensation Case 1
Determine whether base pay should be an important component of compensation for the sales staff. If so determine the most appropriate method of determining base pay for the sales staff. What factors did you consider in making these decisions?
Ben Hanlon
ORGS 3146
February 8, 2014
Base Pay as Compensation
Base pay is the amount of money an employee is making prior to any sort of compensation or other benefits. Compensation methods such as bonuses, indirect pay, and performance pay are some of those excluded from base pay (Long, 2013, Pg. 500). Base pay is often expressed in an hourly rate or a salary. In this Fit Spot case you have an employee roster of highly trained and educated staff, working long full-time hours and weekend work. Along with prior education, many Fit Spot employees will need extensive training on the equipment and machines being sold. The Physiotherapists and Linesiologists will be subject to training responsibilities. Lastly, the owner Susan says that in order for her to be successful, MOTIVATED and KNOWLEDGABLE employees are a must (Long, 2013, Pg. 500).
Creating motivation is a key factor in keeping Fit Stop in business. With more motivated employees comes more sales and better customer satisfaction. Unfortunately, base pay is not a good enough means of compensation. The store will consist of managers and sales people. Sales people should be paid on a small base pay basis along with some sort of compensation method for the sales they make. A compensation method such as a commission percentage on sales or a performance pay are two options. There are many factors to consider as to why base pay as the only means of compensation is not effective with sales staff. Base pay does not make an employee feel like they stand out, or have any value based on their performance. Non-commission sales do not motivate sales staff to actually go out of their way and sell because they are receiving the same amount of pay regardless of
Ben Hanlon
ORGS 3146
February 8, 2014
Base Pay as Compensation
Base pay is the amount of money an employee is making prior to any sort of compensation or other benefits. Compensation methods such as bonuses, indirect pay, and performance pay are some of those excluded from base pay (Long, 2013, Pg. 500). Base pay is often expressed in an hourly rate or a salary. In this Fit Spot case you have an employee roster of highly trained and educated staff, working long full-time hours and weekend work. Along with prior education, many Fit Spot employees will need extensive training on the equipment and machines being sold. The Physiotherapists and Linesiologists will be subject to training responsibilities. Lastly, the owner Susan says that in order for her to be successful, MOTIVATED and KNOWLEDGABLE employees are a must (Long, 2013, Pg. 500).
Creating motivation is a key factor in keeping Fit Stop in business. With more motivated employees comes more sales and better customer satisfaction. Unfortunately, base pay is not a good enough means of compensation. The store will consist of managers and sales people. Sales people should be paid on a small base pay basis along with some sort of compensation method for the sales they make. A compensation method such as a commission percentage on sales or a performance pay are two options. There are many factors to consider as to why base pay as the only means of compensation is not effective with sales staff. Base pay does not make an employee feel like they stand out, or have any value based on their performance. Non-commission sales do not motivate sales staff to actually go out of their way and sell because they are receiving the same amount of pay regardless of