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I have a question regarding salaries and increment system.

We run a multiproduct trading company in exports. In our company we employ several sales person – Monthly Salary Range Rs. 35000 to Rs. 75000. Besides this, they get an annual performance bonus ranging from 1 - 8 lacs per person which is a direct proportion to his sales in his area.

Their job profiles remain unchanged year on year. The company structure is usually quite flat so they all continue to report to the Head of sales. The products they are selling, payment terms, profit margins and areas of operations also remain more or less similar every year. They do have sufficient opportunity to increase their sales by adding new customers, areas and products if they are able to since we have a relatively small marketshare of the total space.

There is no restriction on capital employed or supply side. Ofcourse all sales have to be made for safe payment terms which is probably the only limiting factor in increasing sales.

The question I have is :

1. Should the sales person get an annual increment every year on his fixed salary besides whatever annual bonus he may get based on his sales ?
2. He should be expected to get the growth in his salary by using growth in his sales and thereby increasing his annual bonus ?

I would appreciate frank views on this and can post a synopsis back on the group.



From India, Ludhiana
Dear Friend,

Since, you have a sales team, ofcourse, the entire team is selected from the market and their sales performance, past career must have been scrutinised, hope, your organisation might have fixed salary for that particular person/employee attaching sales bonus and their area of operation. No sales person may cross another`s territory and sanctum safe guarded... as this will create greater problem in showing their performance by intruding another`s territory...clearly, as an organisation they are reporting to the head sales,and the head sales maintain genuiness. When the sales go to the best there will be no problem, what happen if the same dwindle? Further, it is not clear from your wording the sales person selected have a common fixed salary without increment, are they remain/serve continuously, is a question? how many sales person serving for long years/say the period is longer than sales head? have you ever checked the sales and progress? OK these are your issues..

For, the sales person to remain and attached with us we should implement enhancing salary every year that will remain an added career growth, there is no flat as you said, they have to meet new customers and they should have been motivated for better performance thus certainly their salary should be enhanced.. as regard sales bonus, certainly whenever they meet new customer their sales progress projected and their bonus increase, if they fail to meet new customer their bonus is not going to increase, the hidden fact is you are paying for the old sales and the old customer is being treated as new customer thus, bonus is being regularly paid to the old customer treating as new customer or every sales is being regularly added for are basically have the team concentrate to old customer.

In the absence of clearly policy certainly the projection lead to some anomalies, so, for better career opportunities and motivating the sales team considering for enhancement of salary is good to proceed, the sales bonus is a separate case, and depends upon old added with new customer...

best of luck ..

From India, Arcot
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