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CHAPTER 13 COMPENSATION FOR HIGH PERFORMANCE I. COMPENSATION AT INGERSOLL-RAND II. COMPENSATION IS MORE THAN MONEY A. Any type of organization can reward sales performance in three fundamental and interrelated ways: 1. Direct financial rewards 2. Career advancement 3. Nonfinancial compensation B. Sales Reward System – a system of measuring and rewarding salespeople's performance. C. Purposes Of Compensation 1. Connect individual with organization 2. Influence work behavior 3. Organizational choice 4. Influence satisfaction 5. Feedback 6. Reinforcement III. DESIGNING A COMPENSATION PROGRAM A. Determine Sales Force And Compensation Objectives 1. Formal Compensation Process – the process of establishing a formal written plan for the compensation and rewarding of salespeople. B. Determine Major Compensation Factors
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1. Wage level is the amount of compensation established for salespeople in comparison with the industry average. 2. Wage structure is the pay differential among different sales levels within an organization. 3. Individual wage 4. Administration procedure C. Implement Long- And Short-Range Compensation Programs 1. Communicate compensation policy a. Compensation Message – the communication to salespeople about pay and management's expectations. D. Relate Rewards To Performance E. Measurement Of Performance F. Appraisal And Recycling IV. PERFORMANCE-BASED PAY: PREREQUISITES AND OBSTACLES V. TYPES PF COMPENSATION PLANS A. Straight Salary 1. Straight Salary Plan – a way of compensating employees for their work in which they are paid a specific dollar amount at regular intervals. 2.
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This note was uploaded on 02/01/2012 for the course MGMT 405 taught by Professor Drucker during the Fall '97 term at Radford.

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