Introduction
In the internal equity analysis of rewards, the company considers basic job sizes available and employee performance while considering the market’s current demand and sales patterns. This analysis assists the company in making decisions on the best rewards to be compensated to its staff. The job size refers to the available maximum number of staff in one duty area. The job sizes differ depending on the company’s requirements and the organizational culture. In addition, performance refers to the output and productivity of each staff from the area of duties delegated.
In the case of Kull café, the job size contains various managers from different levels of duty and sales agents. The managers from each job unit have a sales target that differs depending on each manager’s rank, seniority, and age. In addition, the café employs various sales agents who are ranked from levels 14 to 17 depending on their targets and the budget allocation to each sales staff. The expectation from each employee enables the management to design the best remuneration in terms of the basic salaries and the bands which depend on the sales attained.
The survey conducted from the company data depicts an even increase in sales targets from each staff and the salary scales. The managers have an increment target of 4% to 5% at the end of 2022, depending on each manager’s job scale and the sales revenue attained at the end of the year (Vojnic, 2022). In addition, the sales agents have a targeted scale of 3% to 8% increase at the year-end when they attain the sales revenue allocated to each group of sales agents.
Therefore, the internal equity index from this company enables the employees to enjoy the rise in terms of their salaries and the bonuses scale. It is approximated that by the end of 2022, their pay scales would experience an increase in various percentage levels. Therefore, the sales agents and the managers are exposed to enjoying a certain pay increase even though they are at different percentage levels (Paul, 2022). Therefore, the Kull café company encourages and motivates its employees to improve their sales and increase the targets allocated to each staff once they attain the level of sales desired.
External Fairness
In considering the external competitiveness of the market, the company compensates its employees based on the external factors in the market. The key considerations include the current employee wage rate across the industry averages and comparing work delegated from other companies (Nolan, 2022). The key input in the external competitiveness of remuneration is understanding the market demand and supply trends.
Therefore, the Kull café industry has its objectives to ensure consistent sales with the minimum number of employees. To achieve a competitive edge in retention and maintain sales growth patterns, the company needs to set a constant pay rise. It enables the company to minimize worker turnover as it aims to consistently improve sales growth in the market (Nolan, 2022). In addition, the trends in the sales market impact the nature in which various jobs are performed and renumerated by the company.
The total cash available to each employee in various levels and job groups includes each employee’s basic salary and bonuses. Kull café has a competitive policy and culture of motivating and encouraging its employees at the end of the year based on their achievement of sales targets. The current survey shows that the company renumerates its managers based on their achievement from 4% to 5% uniformly by the end year, including the basic salary increments and other bonuses due to the managers. In addition, the company has a policy of rewarding sales agents who perform beyond their targets between 3% to 8% at the year-end when they perform beyond their targeted sales (Nolan, 2022). Therefore, the Kull café industry renumerates the employees competitively to ensure that they are retained throughout their performance levels.
Proposal about Compensation Mix
Kull café company considers a remuneration mix that combines the basic pay, the bonus, commission, and other interest of each job group of its employees. This strategy would encourage its staff to remain loyal and improve their performance based on the sales targets. The compensation to managers includes allocating each budget to individual managers as their basic pay is reviewed constantly (Lagone, 2022). While reviewing the pay for the managers, the company considers a standard method that applies to all managers regardless of their job groups and levels.
The most performing managers have bonuses and other benefits on top of their salaries which add value to their performance and output. In conclusion, the company intends to regularly increase the salaries on an annual basis from a range of 4% to 5% for all its managers, which would encourage them to produce more and improve their performances (Horstmann, 2022). Besides, the sales agents would enjoy bonuses on a uniform basis to their salaries and would be rewarded with a pay rise of 3% to 8% based on their output at the year-end.
Salary Bands of 2022
The salary bands in 2022 would likely increase once the basic pay and bonus payments are increased by the relevant percentages. Managers and salespersons from different job levels would be entitled to rewards depending on their performance from each task (Ciccarelli, 2022). The salary scale of 2022, including the basic salary and the bonuses, would increase by 3-8% for the sales agents and 4-5% for the managers. This strategy would enable most employees to earn high amounts of payments compared to the current pay levels.
The strategy of increasing and reviewing the salary bands of the employees at the end of 2022 would enable the company to sell and improve its competitive edge in the market consistently. The decision, therefore to improve the earnings of the employees depends on their performance level (Chung et al., 2018). It would assist the company in reaching the objectives of attainment of full sales growth in the next coming years of its operations.
Proposal for Salary Increase in 2022
The proposal of a salary increase matrix involves reviewing the regular pay level and rewarding them with an increment of 4-5% salary growth based on their output from their job levels. In addition, the matrix involves compensating the sales agents with increases of 3-8% on their salaries and bonuses, which depend on their performance outputs from the sales units they have been allocated (Black, 2022). Therefore, this matrix is essential since it encourages employees’ performance levels to rise and encourages productivity in the company.
The salary increase matrix is also a boost for the employees from their various duties as it enables their growth and improvements in their sales from individual levels. Therefore, Kull café should consistently review the increase in the salary scales regularly to its employees to encourage them to sell more and market the company brands to wide markets. The matrix assists the company in expanding its services as it can produce more and sell most of its products to the entire market effectively with the current number of employees.
Conclusion
The proposal of varying employees’ pay enables the company to design the specific staff who desire the pay rise based on their output and job levels. For instance, the variable pay ensures that the managers are paid an increase of 4-5% on their salaries from their sales in the periods. In addition, the sales agents are paid at a constant variable rate of 3-8% on top of their bonuses and the salaries they earn regularly. By varying the pay of each employee, the company would ensure that the individual staff is motivated by their performance in the areas delegated to them.
References
Black, K. (2022). The season to renew with the personal power to achieve fierce sales. Journal of Marketing and sales.
Chung, D., Steenburgh, T., & Sudhir, K. (2018). Do bonuses enhance sales productivity? A dynamic structural analysis of bonus-based compensation plans. Marketing Science, 33(2), 165-87.
Ciccarelli, D. (2022). How to jumpstart your audio-driven brand strategy. Marketing Research Journal.
Horstmann, R. (2022). Sales excellence – a comprehensive view. Journal of Marketing.
Lagone, G. (2022). To capture M&A revenue synergies, successfully integrating sales organizations is a must. Journal of Marketing Research.
Nolan, P. (2022). How to create a connection between your brand and your B2B customer. Market Philosophy Article.
Nolan, P. (2022). Sales enablement and digital marketing lead sales budget increases in 2022. American Marketing Research.
Nolan, P. (2022). To beat the ‘great resignation,’ begin with a new hiring paradigm. Marketing Reserach Journal.
Paul, H. (2022). How to align your email messaging with sales conversations. International Market Resrarch.
Paul, N. (2022). The behaviors and skills sales leaders care most about. International Marketing Research.
Vojnic, M. (2022). How B2B organizations can embrace sustainability in their marketing strategies. Marketing Research.