compensation plan include in your thinking: 1. Core Elements could include: [base pay, commissions, bonuses,] 2. Non-Core Elements could include: [Choice of plans; Incentive pay horizon] 3. How much should be Fixed earning Versus incentive pay (for each level). This should be based on the amount of influence each role has on outcomes. 4. Outline (1,2,3 above) By role \& Layers 5. If Using commissions in the sales compensation plan- Identify if [Absolute, relative, straightline, gross margin] and why you selected the one you did. 6. Prepare a budget based on the title, number of peoples at each level and split out by Fixed, Variable and total expense based on Sales plan/quota (ie. OTE at 100% of plan) 1. What would happen to the budget if the company exceed plan by 20% [in total dollars/ in \% of Sales] 2. What would happen to the budget if the Background: Your Selling Career at S-BSD Continues to progress. As a successtul initial role as an Inside Sales representative and your more recent role as Key Account Manager where you acquitted yourself extremely well and delivered beyond expectation. This has led to your current promotion as Regional Sales manager Power Tools and member of the compensation committee In this new role beyond leading a team of Territory Managers [TM's] you have been assigned the task of studying and bring forward and negotiating a recommendation to the SLT [Senior Leadership Team) and an external consultant (TCG-Toronto Consulting Groupl on a new sales compensation structure. Simply put S-BGD is experiences high levels of staff turnover (leaving the company or going to different departments) plus the lack of performance [over-achieving quotal by the best Sales Representatives. The SLT has high hopes for this committee and the recommendations, this is high profile and can only help your career, if done well. Your Assignment: 1. IOutline a Sales compensation Plan, reduce turnover, increase effiencyl 2. Present the final compensation plan [Create a presentation] Outline the elements of the sales compensation plan (by role f level) including: Level 1: Inside Sales (IS) [4] Level 2: Territory Managers (TM's) [10] Level 3. Regional Sales Managers RSM's [3]: National Account. Managers NAM's [4] NOTE 1: Numbers in brackets above {4] - are number of salespeople in each role NOTE 2: Total Compensation assumptions include: Level1$50,000Level2=$100,000Level3=$150,000(OTE)"OnTargetEarnings(OTE)(OTE) NOTE 3: For Budget Calculations, assume that on target earnings [OTE] sales plan is $100,000,000. NOTE 4: This will be specific to the Power Tools division of S-BD NOTE 5: Directors/ VP/ CRO's will be excluded for this phase of NOTE 2: Total Compensation assumptions include; Level 1=$50,000 (OTE) * On Target Earnings Level 2=$100,000 (OTE) Level 3=$150,000 (OTE) NOTE 3: For Budget Calculations, assume that on target earnings [OTE] sales plan is $100,000,000. NOTE 4: This will be specific to the Power Tools division of S-BD NOTE 5: Directors/ VP/CRO's will be excluded for this phase of the compensation project but could be part of a follow up committee. CAPSTONE PRESENTATION TIPS: PRESENTATION GRADING: Based on completeness, impact, additional elements - to what is already in other questions Create a "recommendation" presentation for your Management Team. Also, remember that this like everything is a negotiation. The management team you are presenting to favours 100% commission plans, variable pay and limited investments in people and technology. So, be prepared with not only your recommendations, but also your BATNA and ZOPA's. TIPS: This assignment is based on L13&14, Powerpoint #9 \& 10 . Read ahead, plan your presentation format, which areas to include. Review all class presentations for any elements you wish to include