Assigment For Researcher_D

Career Development Plan Part IV - Compensation

This proposal is to evaluate our new compensation plan specifically for our Puerto Rico team. Our new team consist in one Sales Manager, Tom Gonzalez, and four sales representatives, Dennis White, Eric Borden, Terry Garcia and Ving Hsu. Our compensation strategy took in consideration Puerto Rico, industrial cleaning and sanitation industry competitors to propose a highly competitive compensation package that attract and retain the best professionals in the market. We also took in consideration federal and government regulations that apply in Puerto Rico for our business model. Last but not least we took in consideration the new organization mission and vision to achieve outstanding customer service aligned with the long-term interest of the company.

InterClean Compensation Package

Basic Salary:

The salary proposal is divided in two sections one for the Sales Manager and one for the Sales Representatives that apply to all four of them. For our new Sales Manager the base salary will be the majority portion of his compensation package, but for the Sales Representative is just a minor part because they will be receiving a commission payment that will be tied to monthly goals to be earned (Tebbe, 2014). Goals will be describe in another section of this proposal. For the Sales Manager the annual base salary will be sixty thousand dollars ($60,000 USD), and for the Sales Representatives an annual base salary of eighteen thousand dollars (18,000 USD). A job description for each position of their responsibilities is attached to this proposal for your reference.

Commission:

The commission proposal is also divided in two section regarding the title of responsibilities and hierarchies within the Puerto Rico branch. Our commission package is designed to attract and retain high potential sales people who are motivated by the principle of reward for performance. Our compensation commission program is based on rewarding as business results and individual level of contribution to the organization InterClean. For the new Sales Manager we offer a stepped annual commission bonus of 50%, of his annual base salary if the organization sales goals for the year are accomplish at 100%. The total Puerto Rico branch goal will take in consideration all the InterClean Sales Representatives goals and Sales Manager in house sales, for a total amount of 5 million dollars ($5,000,000, USD), to achieve the organization target. If the target is affected the annual bonus will decrease as describe below.

Sales Manager Annual Commission Program:

Target reach at 100% (5 Million) - Bonus 50% of annual base salary = $30,000 USD

Target reach at 90% (4.5 Million) - Bonus 40% of annual base salary = $24,000 USD

Target reach at 80% (4 Million) – Bonus 30% of annual base salary = $18,000 USD

Note: Below four million in sales the Sales Manager will not receive an annual bonus.

For the new Sales Representatives we offer a stepped monthly commission plan that will be measure by monthly goals as describe below. The total annual target will be one million dollars, and for the excess of that million InterClean will pay as an annual bonus of 2%.

Sales Representative Monthly Commission Program:

Monthly Target of eighty five thousand ($85,000 USD): 4.5% Payment of invoice amount

Monthly Target of eighty thousand ($80,000 USD): 3% Payment of Invoice amount

Monthly Target of seventy five thousand ($75,000 USD): 1.5% Payment of invoice amount

Note: Below seventy five thousand dollars InterClean will pay 1% of invoice amount

Car Allowance:

We will include a car allowance for our Sales Representatives. The car allowance will be $300.00 dollars. Also the company will provide a company gas credit card to be use only during the week. For our InterClean Sales Manager the organization will provide a company car with our company logo. The car maintenance and gas will be paid by InterClean. By InterClean internal regulation all cars will have a GPS system.

Medical Plan Coverage:

InterClean will include in the compensation package a family medical plan. The name of the plan will be Triple S and it will include, dental, vision, prescription medicines, etc. This medical plan is the number one plan in Puerto Rico and it’s accepted by the majority of hospitals private medical offices, and specialists.

Vacation Leave Flexibility Election:

InterClean employees will have the flexibility to choose the periods of their holidays, according to their needs. The employees will follow the government regulation for holidays, vacation and sick leave.

Pension plan 401K:

Employees will be eligible for a 401K after the first year of employment at InterClean Puerto Rico branch. After the first year InterClean will match contributions to a maximum of 6% of employee 401K contributions.

Explanation of why our system will work

Our flexible compensation program is design especially for Puerto Rico. We took in consideration the economic and social local environment situation. Customers in the industrial cleaning and sanitation industry have a lack of good turnkey solutions, products, service contracts, that include product trainings in the healthcare markets. For this and other reasons we are going to conquer the market share in a fast pace.

Description of three components of a total rewards package that would motivate employees to reach peak performance. Market top base salary offer. Incredible flexible commission and bonus incentive program and an incredible family medical plan.

Description of our compensation plan’s benefits to the individual as well for the company.

Individual and Company Benefits Plan
Sales Representatives
Yearly Base Salary	$18,000
Yearly Commission	$45,900
Yearly Car Allowance	$3,600
Yearly Medical Plan	$3,000
Celular Phone	$1,200	Local Plan
Per Diem		$2,080
		$73,780
Multiply by 4 Rep. =	$295,120
Sales Manager
Yearly Base Salary	$60,000
Annual P.Bonus	$30,000
Company Car	$8,500	Depreciation at 6 years.
Yearly Medical Plan	$3,000
Celular Phone	$2,000	International Plan
Representation Exp.	$4,200	Business Dinner, Lunch, Alcohol.
		$107,700
Total:		$402,820
Total Yearly Gross Income:	$5,000,000
That consist in:
Product Sales:	$3,000,000	Profit 35%	$1,050,000
Product Expenses		($1,950,000)
Services:		$2,000,000	Profit 60%	$1,200,000
Services Operation Expenses	($800,000)
			Total:	$2,250,000
		Less Salary		($402,820)
			Total:	1,847,180	Net Income

An explanation of how Puerto Rican compensation plan differs from InterClean parent company’s compensation plan.

Rationale for the differences
Benefits			Puerto Rico		Parent Company
Christmas Bonus		Yes		No
Holidays			Local and Federal	Federal
Medical Plan		Triple-S		Cigna
Car Allowance		Yes		No
Corporate Credit Card	Yes		No
401K			Yes		Yes
Stepped Commission Program	Yes		No

Conclusion

Our proposal took in consideration the local and federal regulations and laws in order to create a highly competitive compensation plan for the new members of our InterClean Puerto Rico branch. We also evaluate the level of experience, knowledge, skills and abilities needed to achieve our organization new vision to be the number one, product and service provider in Puerto Rico with high quality standards.

References

Tebbe, L. (2014). Job Search 101: How to Evaluate an Offer. Retrieved from http://www.salary.com

University of Phoenix. (2015). Chapter 9 Direct Financial Compensation. Retrieved from University of Phoenix, HRM/531 PR Human Capital Management website.

University of Phoenix. (2015). Chapter 10 Benefits, Nonfinancial Compensation, and Other Compensation Issues. Retrieved from University of Phoenix, HRM/531 PR Human Capital Management website.

University of Phoenix. (2015). Chapter 11 Pay and Incentive Systems. Retrieved from University of Phoenix, HRM/531 PR Human Capital Management website.

University of Phoenix. (2015). Chapter 12 Indirect Compensation. Retrieved from University of Phoenix, HRM/531 PR Human Capital Management website.