Analysis and Development of Compensation Plans and Training Programs

This report analyzes compensation plans and training programs for International Herb Express, a US-based spice and herb supplier. It begins with an introduction to the company and its market strategy, followed by an exploration of sales training programs designed to develop leadership, sales, and business skills. The core of the report focuses on two distinct compensation plans: the first, based on salary and commission, is critiqued for its individualistic approach. The second plan emphasizes team-based incentives, skill-based task allocation, and employee benefits. The report concludes with a comparison of the two plans, recommending the second plan for its fairness, motivational incentives, and alignment with the company's goals. The report also highlights the importance of training and its associated costs.

Running Head: Development of Compensation Program
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INTERNATIONAL HERB EXPRESS
Management Strategies for B2B Sales force
Student name
6/20/2019

Training Manual 1
Contents
Introduction:...............................................................................................................................2
Training Program:......................................................................................................................2
Compensation Plan 1:................................................................................................................3
Compensation Plan 2:................................................................................................................4
Conclusion & Recommendations:..............................................................................................4
Bibliography...............................................................................................................................5

Training Manual 2
Introduction:
International Herb Express is known as a supplier of spices and herbs in the US. Its
customers are mainly bakery and restaurant, as it uses in the form of raw material and then
converting it into finished goods for making them desirable to sale to final users. It launches a
new type of spice in the market and made its marketing strategy in such a way so to earn
more profit rather than putting more focus on society (Hinson & Adeola, 2018).
In this report, making of compensation plan in such a way, so to achieve the overall
goals of the company and to launch training programs for the sales personnel.
Training Program:
For the purpose of developing leadership skills in the individual various things such as:
a. Focus on sales coaching: It is done for increasing their effectiveness in their job and
for avoiding the repetitive mistakes which occur due to work (M. & Indradevi, 2015).
b. Hire Sales stars: It is a consideration which needs to be kept while recruiting in this;
those are selected who have the ability to make sales easily.
c. Business Acumen: In this learning is on various things such as decision making,
planning, and fulfilment of needs of the consumer (Kathleen, Hope, & Fidler, 2018).
d. Proactive Performance Management: It is a procedure for evaluating the actions and
the reactions of the employees.
e. 180-degree feedback: It is a process for identifying the strengths of the individual for
evaluating which type of coaching to be offered (Galipeau & Moher, 2013).
The person must have to develop these skills for leading in a team:
a. Initiative: It is a process taken for removing fear and to develop a learning attitude in
the person (Barta & Barwise, 2016).
b. Communication: It is very much essential thing in order to delegate the work to
members.
c. Team Work: Teaching them how to work towards a common goal by removing
individual goals (M. & Murphy, 2012).
d. Goal setting: How to set a challenging but achievable goal.
e. Feedback: It is necessary for improving the performance of employees.

Training Manual 3
Skills for business-to-business sales:
A. Negotiation skills: It is for the purpose of bargaining to the suppliers as well as to the
customers.
B. Time Management Skills: It is for utilizing time effectively so that targets meet on the
time (Hutt & Speh, 2012).
C. Presentation and Demonstration skills: It helps in boosting the sales of the
organization.
D. Developing trust: It is for enhancing the experience of the customer.
E. Active Listener: It is required for understanding the feeling of the customers well.
Compensation Plan 1:
In order to this exercise, review of the recent plan is done for making a new plan on
the basis of the previous one. In the current year, the company pays $ 42000 as a salary and
gives 6.1% commission to each working sales staff and this resulted in a gross total amount
of $ 625750 for all members. Profit for this year is $ 1757500.
This program is not satisfactory, as it does not understands the importance of groups
and only gives priority on individual efforts and also does not gives recognition to promotion
practices, this serves as a hurdle in the growth process (How to Set Up a Sales Compensation
Plan, 2019).
For removing the drawback, a new plan is developed with the added new features so
to satisfy the VP as well as CFO of the organization. A new strategy of payment method: In
this method, salary + commission paid to the personnel (Example of an Employee
Compensation Plan). It should make pay-scale differ according to products as, Fresh type of
products requires more efforts because people are not familiar so, more commission to be
given whereas on the selling of old is very much easy as the brand becomes popular in the
eyes of customers so the commission will be given actual one. Increases the basic pay scale
of employees, who deals with a customer in a good way by which they repeat sales and
becomes loyal.
Cost of training is also included in the salary part as it, enhances the skills and
experience of employees for the work. It is done with the perception, for gaining education
knowledge, fees need to be paid.

Training Manual 4
Compensation Plan 2:
It is made with the intention of equality to all managing workforce so that to remove
the discrimination roots. Here work is allotted according to capability and knowledge of the
person such as for fresher fewer targets set and for experienced person target is at high as
compared to the normal one. Payment is given according to targets set, by this wastage of
payment not happens, as it is paid in accordance with the job profile.
The team is built in such a way which removes their egos at the side and fosters a
spirit of cooperation so to achieve the objectives of the organization. A leader is a person in
the team, who are selected, not on the basis of performance but on leading skills in which;
most important is communication (Dwyer, 2012). It is established with the goal to develop a
feeling of common spirit in the salespeople.
The commission is paid to teams based on territory in order, to cover the region’s
population living there. Sales staff in this process enjoys the various kinds of benefits related
to retirement and health insurance. They are paid also traveling allowance in which a trip of
two members is free on the consideration of performance appraisal of the team member who
does the highest sales in the month.
In this plan, training charges are not included in their income due to a belief that it is a
cost which is bear by the company for protecting their assets as well as for its optimum
utilization (Rawlins, 2014).
Conclusion & Recommendations:
In conclusion, it can be concluded that the first compensation plan is able to maintain
a difference in high and low products. It makes payment of salary and commission, as well as
instruction cost, includes in this as an expense.
While the second one is best fits in this scenario, as tasks are given based on
competency in the individual. It meets the expectation of VS thereby, removes the obstacle of
current plan running. It also includes incentives for motivation.
Training cost not to be considered as it increases the productivity of the organization
and for making employees feel good.

Training Manual 5
Bibliography
How to Set Up a Sales Compensation Plan. (2019). Retrieved from Inc.:
https://www.inc.com/guides/sales-compensation-plan.html
Barta, T., & Barwise, P. (2016). The 12 Powers of a Marketing Leader: How to Succeed by
Building Customer and Company Value. McGraw Hill Professional.
Dwyer, J. (2012). Communication for Business and the Professions: Strategie s and Skills.
Pearson Higher Education AU.
Example of an Employee Compensation Plan. (n.d.). Retrieved from Chron:
https://smallbusiness.chron.com/example-employee-compensation-plan-10068.html
Galipeau, J., & Moher, D. (2013). Systematic Reviews. Systematic review of the effectiveness
of training programs in writing for scholarly publication, journal editing, and
manuscript peer review (protocol).
Hinson, R. E., & Adeola, O. (2018). Sales Management: A Primer for Frontier Markets.
Information Age Publishing.
Hutt, M. D., & Speh, T. W. (2012). Business Marketing Management: B2B. Cengage
Learning.
Kathleen, M., Hope, K., & Fidler, A. (2018). Building Professionalism Through Management
Training. Journal of Public Health Management and Practice, 24(5), 479-486.
M., G., & Indradevi, R. (2015). Importance and Effectiveness of Training and Development.
Mediterranean Journal of Social Sciences, 6(1), 334-338.
M., N., & Murphy, S. . (2012). Leading Effective Virtual Teams: Overcoming Time and
Distance to Achieve Exceptional Results. CRC Press.
Rawlins, M. L. (2014). From Commission Plan to Compensation Strategy: Success for
Today's MLM Enterprise. BookBaby.