Leading organization

Reward System at Business Run

Author: James G. Clawson

At BusinessRun, inc. it was time to reflect on the rewarding system. Since Henry

Brubaker had joined the organization 4 months ago, it was clear to him that the sales force

wasn’t engaged and the budget was a risky business for that year. Furthermore, salesmen weren’t

happy with the current company's decisions affecting their product portfolio.

BusinessRun was a subsidiary of a strong bank. It was operating in the B2B market with

web based integration services. After its fast and exceptional growth following its incorporation

5 years ago, BusinessRun had been trying for almost 1 year to diversify its products line and to

introduce more products to create a stronger legacy with its customers. Unfortunately, because

the market was new and there was not yet a well-defined business model, it was not clear what

the market would prefer the most and what would be paid to buy those services. Hence,

BusinessRun decided to launch several products, following the indications coming from its

marketing department. To push the sales force to promote and sell these new tools, the human

resource (HR) management department introduced additional incentives, based on one time

monetary reward bonuses.

The sales force, almost composed by the same people since BusinessRun’s incorporation,

was paid with a high fixed base (almost 80% of the total annual salary) and a low bonus, based

on the model currently held by the holding company. There also was a cap that limited the

maximum amount of money a sales person could gain in any given year. After the first 2 years

that BusinessRun had been in business, it was challenging for the salesmen to get the bonus

because each person’s targets were raised very fast every year due to the exceptional company

growth.

The majority of the sales people, particularly the oldest and most experienced ones,

expressed their disappointment with the fact that most of the new tools were proposed to the

market without asking their opinion in the product design phase. In addition, they pointed out

that the one-time monetary bonus were too low, related to their total salary and to the money

BusinessRun would have gained from the sale, to justify the effort and the risks incurred in the

sale of these new products.

Henry Brubaker joined the company after being sales director of a start-up also involved

in the B2B market. As Sales Executive of BusinessRun, he now perceived the strong influence of

the holding company in BusinessRun’s decision making process. After 4 months the picture was

almost clear in his mind: there was no more time to wait, he had to move quickly and clearly to

engage the sales force and to allow BusinessRun to achieve the budget and continue the

company’s growing process.

Is BusinessRun facing a crisis? Put yourself in Henry’s shoes and make recommendations to the top management at BusinessRun. Your answer should identify the issues at BusinessRun from the perspective of the top management and that of the sales people. Your recommendations should be detailed, actionable, and guided by the class material (i.e., theories of motivation discussed in the textbook and other readings from Week 3 & 4). You should clearly relate this situation to concepts from the class and discuss 2-3 personal takeaways. Note: Be sure to define a term before using it (e.g., if you need to mention “motivation”, define it before using it in your discussion.). Do not forget to mention any assumptions you need to make while preparing your recommendations. Required format: 1” margin all around, double spacing, and size 12 times new roman font. Word document file name: Persuasive Paper 1_Your first & last name (example: Persuasive Paper 1_Smriti Anand); Paper length: 3-4 pages (excluding references) Due Date: Before 6 p.m. on 2/6/2014 via email.