Strategic Compensation Plan - Free Essay in Human Resources Management

Published: 2019-10-28
7 min read

Employees play an integral part in an organization's success. Having a great team equipped with the right skills and abilities is merely enough to facilitate and sustain growth in an increasingly competitive business environment. Motivated employees are key to achieving this feat. Unfortunately, maintaining motivation among employees has been a hurdle that a majority of companies are yet to manage. This instance is reflected in StopNShopToday Inc. motivation levels among the stores cashiers have been on a downward spiral. If this situation is not effectively addressed, the company will end up losing great employees who may seek for greener pastures elsewhere. In this regard, this report will discuss strategic compensation recommendations of the companys cashiers in a bid to increase their sales performance without infringing on the companys financial position in their implementation.

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According to Petri and Govern (2012), motivation is a construct that seeks to explain the underlying reasons for peoples behavior, actions, needs, and desires. In order to understand how the stores cashiers can be motivated to improve their sales performance, it is imperative to first comprehend factors of motivation. Miner (2007) categorizes these influences into two classes, intrinsic motivation and extrinsic motivation. The former focuses on an individuals interest and overall enjoyment in carrying out a task, while the latter focuses on the outcome or consequence of an activity. As such, the individual incentive program focuses mainly on intrinsic motivation. In reference to this concept, the three components that should be taken into consideration in the program are bonus payments, employee discounts, and incentive awards.

Since the company is not in a position to roll-out massive payment schemes for individual employees, the need to embrace the three components of the individual incentive program identified above in line with the projected budget of $200 per year, will yield productive results on an individual and company capacity. In this case, the recommendation for a bonus payment will be in respect to an identified target sales number set for each store cashier. For instance, if an employee manages to meet his/her monthly sales targets, he/she can be compensated with a fixed and one-off payment as a reward for their hard work. As a result, employees will be motivated to meet their set targets in a bid to earn the bonus. At the same time, the stores financial position will improve as a result of increased sales from the motivated employees.

Secondly, the recommendation for employee discounts in the individual program is an effective compensation strategy especially in a less-than favorable financial position. Since the store has a wide product portfolio, employees can be granted company discounts to purchase items of choice at a discounted price and in a manageable payment plan as agreed with the company.

Lastly, the company can introduce incentive awards such as gift or travel vouchers that can be won by employees upon scoring the highest sales in the year. This long-term plan ensures employees remain committed and motivated in a bid to win the prize at the end of the year. This initial investment the company makes can be recouped following increased sales and consequently profit margins.

On the other hand, corporate-wide or group incentives are those that relate pay to group effort in the company (Zoltners, Sinha, and Lorimer, 2006). In relation to StopNShopToday Inc, the company can implement these incentives on two levels, same-store incentives and corporation-wide incentives. In regards to the former, the company can implement two strategies to improve cashiers motivation levels. Firstly, the company can implement a recognition award program. In this regard, different departments may be recognized for the role they have played in achieving set targets. In this regard, the company can organize a fan-fare event where teams are recognized for their efforts and rewarded accordingly. This action shows the company recognizes the hard work put in through team effort, thereby prompting and encouraging other groups or departments to do the same. Secondly, the company can organize a team outing out in the city. This measure may be simple but very effective as it shows the company appreciates teamwork. Therefore, the budgeted $500 can be put to good use.

Possible avenues for implementing corporate-wide incentives include profit sharing and a stock ownership plan. In the first case, upon compilation of end-of-year profits, the company can share a certain percentage of the net profits with employees as a motivation boost. In regards to a stock ownership plan, the company can provide an opportunity for employees to purchase stock at a future date on an agreed price. As such, employees can have a sense of ownership, hence prompting them to work harder.


Miner, J. (2007). Organization behavior 4: From theory to practice. New York: M. E Sharpe.

Petri, H. & Govern, J. (2012). Motivation: Theory, research, and application. New York: CengageBrain.

Zoltners, A. A., Sinha, P., & Lorimer, S. E. (2006). The complete guide to sales force incentive compensation: How to design and implement plans that work. New York: AMACOM.

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