Hi, I am Alka Kaushik, working in Gurgaon as a Senior Executive HR for a freight forwarding company. I am presently working on the recruitment of a Sales Manager for our Mumbai Branch, for which I require an effective incentive plan.
In general, it is structured as follows:
If Monthly Salary: Rs. X
Monthly Target: Monthly Salary x 5
If targets are achieved, Incentive is 10% of Monthly Target. For example:
Rs. 50,000/-
Rs. 50,000 x 5 = Rs. 2,50,000/-
Incentive will be 10% of Rs. 2,50,000/- = Rs. 25,000/-
If Total Sales in a month are Rs. X, and Monthly Target is exceeded, for example:
Rs. 4,00,000/-
(Rs. 2,50,000/-)
Incentive will be 10% of Rs. 1,50,000/-, i.e., Rs. 15,000/-
The total incentive for the month will be:
10% of Monthly Targets: Rs. 25,000/-
10% of Exceeded Targets: Rs. 15,000/-
Total Incentive for a month will be Rs. 40,000.
Please suggest a plan other than this.
Thanks,
Alka Kaushik :)
From India, Calcutta
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1In general, it is structured as follows:
If Monthly Salary: Rs. X
Monthly Target: Monthly Salary x 5
If targets are achieved, Incentive is 10% of Monthly Target. For example:
Rs. 50,000/-
Rs. 50,000 x 5 = Rs. 2,50,000/-
Incentive will be 10% of Rs. 2,50,000/- = Rs. 25,000/-
If Total Sales in a month are Rs. X, and Monthly Target is exceeded, for example:
Rs. 4,00,000/-
(Rs. 2,50,000/-)
Incentive will be 10% of Rs. 1,50,000/-, i.e., Rs. 15,000/-
The total incentive for the month will be:
10% of Monthly Targets: Rs. 25,000/-
10% of Exceeded Targets: Rs. 15,000/-
Total Incentive for a month will be Rs. 40,000.
Please suggest a plan other than this.
Thanks,
Alka Kaushik :)
From India, Calcutta
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Alka, I suggest you adopt a piece-rate system after benchmarking the bare minimum. For example, set the salary at 50k with a bare minimum target of 150k (offering 5% incentives on achieving the target), 150k to 250k range earning 10% incentives upon hitting the target, 250k to 300k receiving 15%, and anything above 300k granting a 20% incentive. Setting closer targets once the benchmark is achieved will encourage employees to work harder to surpass the established goals.
From India, Mumbai
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From India, Mumbai
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I think it's hard to answer this question without having proper information about the target of the other sales staff. However, as a manager, I think he/she should be entitled to a percentage of the total target amount achieved by his team members!
From United Arab Emirates, Abu Dhabi
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From United Arab Emirates, Abu Dhabi
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Performance appraisal for sales manager.doc