Your resources representative has contacted you, in a role as being a controller, to assist in the development of compensation strategies that would be based upon incentives. In preparation just for this meeting you need to discuss a number of the financial problems that have surfaced in some simple discussions. The techniques of compensation and their impact on the financial model are not completely understood.
The kinds of incentives and how they might correspond with revenue generation also not really clearly comprehended.
The human assets director features enthusiastic accepted total top quality management and wants to develop incentive metrics based only on customer satisfaction that create cash additional bonuses. In a crafted communication to the human resources director, describe the financial problems that should be resolved when employing incentive settlement programs. Type your interaction in the response area listed below using the phrase processor provided. Reminder: Your response will probably be graded to get both technological content and written expertise.
Technical content material will be evaluated for information that is certainly helpful to the intended reader and clearly relevant to the issue. Writing abilities will be evaluated for advancement, organization, and the appropriate manifestation of tips in specialist correspondence. Use a standard business memo or letter format with a crystal clear beginning, middle section, and end. Memorandum To: Human Resources Movie director From: Michael jordan Schell Particular date: [ 10/7/2012 ] Re: Development of reimbursement methods depending on incentives There are plenty of financial problems that need to be addressed when applying incentive settlement programs.
Prior to our conference I wanted to deal with some of the monetary issues that have got surfaced in a few informal discussions regarding this matter. It is not necessarily fully understood what the techniques of compensation will be and what their impact will be on the financial unit. It also is definitely not clear what types of incentives will be used and how they are going to relate to income generation. Discovering the right incentive reimbursement program for our personnel is very important to keep and to attract the best employees but we must make sure we now have a solid want to pay for it.
Basing the incentive in customer satisfaction is very important but it also needs to be linked into increased revenues. Settlement expenses might go up while using incentive system so we have to have the earnings to pay for it or locate other areas to cover it. Using cash bonus deals is one option for incentives but investment or inventory bonuses are another alternative. It is important to get the employees’ centering on long term goals for the organization and not just in short term profits.
Stock options might help encourage this kind of behavior although cash additional bonuses can lead to temporary incentives. One of the drawbacks to stock options would be that the stockholders from the company might not approve of that because of the dilutive effect it may have within the stock price. It is important to weigh the choices and decide what would be best for the organization. I look ahead to discussing these kinds of and other issues with you at our meeting. Please please contact me with any questions or concerns that you may have.