Analyzing the functioning of the firm, it is vital to draw attention to several very important points. First of all, the commission-based approach to compensating should be discussed. It is obvious, that the main advantage of the given approach is the stimulation of the competitive element. People, working at the company, know that their payment depends on the level of sales and it is up for them to increase it.
That is why, they are highly motivated and try to do their best in order to sell a certain good to a potential customer. Moreover, there is another advantage of the given model. The fact is that the approach is widely used nowadays by all firms that work in the sphere of sales. Trying to stimulate their workers and achieve better results, companies organize their functioning in accordance with the given pattern. That is why, employees know the main peculiarities of the functioning of the majority of companies and could try to work in many firms. Besides, one should also keep in mind the great importance of the professional development of a worker.
It is obvious that trying to sell a certain good, a specialist should present various information connected with it, outlining advantages and disadvantages of a product and use different techniques to make a customer buy it. Under these conditions, it becomes obvious that a worker should work hard to master his/her skills of a salesman and obtain new information about the goods provided by a company. That is why, it is possible to say that the given approach also stimulates the professional development of workers, outlining the necessity of the constant growth (“Piece rates & commission payments” para. 3).
However, it is also possible to underline several disadvantages of this pay approach. First of all, the greatest disadvantage of the given model is its controversial influence on the organizational culture and the working environment. According to the given pattern of distribution of rewards, not all workers get the same sums of money. On the one hand, employees who work more obtain bigger sums, however, on the other not always this pattern turns out to be fair.
This fact leads to the appearance of disagreements within the collective or even unfair competition, when workers could use any remedy to get the client and sell something. In consequence of these actions, the working environment and organizational culture might suffer as people will not feel comfortable and protected. The idea that only workers who perform and have a great number of sales are appreciated by the officials could also appear.
The combination of all these facts could introduce some tension to the relations within the collective and have the negative impact on the final result. Additionally, trying to sell a certain good by all means, a salesman could be too aggressive which could scare a customer and make him/her use the services of some other company. Finally, taking into account the dual market segments of customers peculiar to the firm, it is possible to say that the company depends on both these segments and it will be difficult to reorganize its functioning in case of the disappearance of one of the elements of this pattern. That is why, the firm should prepare some strategic plan to be ready to act under the new circumstances.
Works Cited
Filling Top Professional and Senior Management Positions for the Energy Industry. n.d. Web.
How to Take Your Company Global. n.d. Web.
Job Security Law & Legal Definition. n.d. Web.
Piece rates & commission payments. n.d. Web.
The Best Ways to Reward Employees. n.d. Web.
Theen, Ong and Teh Heng. “The Reward Strategy and Performance Measurement.” International Journal of Business, Humanities and Technology. 2.1 (2012): 211-223. Web.