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Continuing to make sales calls despite little supervisionoGrowing trend toward linking sales compensation to customer satisfaction measuresoStandard compensation might not workMore reliance on incentive payments tied to individual performanceFor top-level sales representatives, the incentive-based pay can be over 40% of total compensationoNature of people who enter sales professionMotivated by moneyoOrganizational strategyCustomer service vs. volume sales
oMarket maturityMaturing market – focus on customer service and retentionoCompetitor practicesCompetitors may chat about payoSize of companyLarger companies pay moreoEconomic environmentIn a recession, focus on top-level performers and those who achieve high levels despite the downturnoProduct to be soldTechnical products have high barriers to entry and need training – high base-pay componentLow barriers to entry – higher incentive componentProducts that sell themselves – base payProducts that require harder work – incentivesoSales jobs don’t fit with either straight salary or straight commission packagesoCombination plans are often usedGuaranteed straight salary can be linked to performance of nonsales functionsSales commissions for volume yields incentive to sell•Guaranteed base salary•Guaranteed base salary + commission•Guaranteed base salary + bonus•Guarantedd base salary + commission + bonus•Commission only•Contingent workersoInclude a person who works:Through a temporary help agencyOn an on-call basisAs independent contractoroTypical salary arrangementsWorkers in first two categories often earn less than workers in traditional arrangementsIndependent contractors often earn moreoIdentify was to deal with equity issuesView workers as pool of candidates for more permanent hiring statusChampion the idea of boundary-less careersChapter 15Impact on general wage and benefit levels—do unions get higher wages and by how much, are wage cuts more prevalent in unionized organizations
-Unions make a difference in wagesoUnion workers earn between 8.9% and 12.4% more than nonunion workers-Size of gap varies from year to yearoDuring periods of higher unemployment, impact of unions is largeroDuring strong economies, union-nonunion gap is smaller-Union-nonunion wage differentials in public sectoroUnion employees earn about 22% more than their nonunion counterpartsImpact on the structure of wages—benefits, two-tier wage structures, worker vs. management wages-Impact on general wage and benefit levelsoPresence of a union adds 30% to 40% to employee benefitsoGreater percentage of total wage bill allocated to employee benefitsBenefits are 37.9% of total compensation package for union workersBenefits are 27.8% for nonunion workersHigher costs due to•Higher pension expenditures•Higher insurance benefits-Impact on structure of wagesoTwo-tier pay structures are a phenomenon of union sectorContract differentiates pay based upon hire date•Employees hired after a target date receive lower wages