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Kuzmina Nadia

Kuzmina Nadia

Faculty: Management

Educational and Scientific Institute "Higher School of Economics and Management"

Speciality: Management of human resources

Subject Qualification of Masters: "Payment of sales personnel"

Scientific Supervisor: Ph.D. (in Economics), Associate Professor of the PMLE department Natalia Podluzhnaya


About author

Summary of research and developments

Payment of sales personnel


TABLE OF CONTENTS
INTRODUCTION
HOT TOPICS
RELATIONSHIP WITH THE SCIENCE programs, plans, themes
PURPOSE AND OBJECTIVES OF RESEARCH
SCIENTIFIC NOVELTY
PRACTICAL IMPLICATIONS OF THE RESULTS
  1. THEORETICAL BASIS OF PAYMENT
  2. ANALYSIS OF THE ORGANIZATION FOR PAYMENT micro and macro levels.
  3. IMPROVEMENT OF PAYMENT SALES REPRESENTATIVES
CONCLUSION
REFERENCES
INTRODUCTION

20 century was the century of production,. XI century as it is safe to be called the century of sales. Around the world, including in Ukraine, there is overproduction of goods and services, so the master plan goes salesmanship. In connection with these every year an increasing demand for qualified sales personnel, it is several times greater than the supply. Now companies are willing to pay top dollar for competent professionals. Consequently, there is a tendency to divert their employees of one company to another, which explains the high turnover among these professionals. This need for a market economy, and it is typical not only for Ukraine but also for Western countries and the U.S. Companies wishing to increase sales, have become increasingly pay attention to the functioning in the enterprise system of remuneration and motivation of sales staff. Competently built the system of motivation of sales personnel gives a significant effect in increasing the profits of the enterprise.

After the success of any company in the market determined by the implementation of its products and depends, not least, on the effectiveness of the sales department.The professionalism and the level of interest in the outcome results of its sales force, will depend on whether the company will be able to put into practice its competitive advantage in the marketplace. Therefore, the question of his motivation is always the highest priority for any CEO. In order to motivate employees to effectively work of considerable importance is the system of organization of their salaries.

HOT TOPICS

Wages are a major factor in ensuring an effective system of material incentives for sales staff and forming a motivational mechanism of labor activity. From the right of its organization depends largely on the success and prosperity of the company. The urgency of this work is that the question of the organization wages of sales personnel is essential in the enterprise. Remuneration is a key tool for improving the efficiency of workers.

RELATIONSHIP WITH THE SCIENCE programs, plans, themes

Masters qualifying work carried out during 2010-2011. in accordance with the scientific direction of the department "Human Resource Management and Labour Economics, Donetsk National Technical University. 

PURPOSE AND OBJECTIVES OF RESEARCH

The aim of this work is to develop a new model of payment of sales personnel, effectively motivating staff at the plant, which will greatly contribute to the achievement of sales targets and key objectives of the enterprise.

    Achieving this goal through the following tasks:
  1. analysis of the wages of sales personnel;
  2. analysis of the existing system of payment of sales personnel;
  3. analysis of payroll;
  4. satisfaction survey system pay sales force;
  5. analysis of the suggestions of the staff to change the wage system;
  6. development of a new wage system sales staff.

The object of research is "AB-BA."

The subject of research is the organization pay for sales staff.

Research methods: analysis, synthesis, system approach, abstraction.

SCIENTIFIC NOVELTY

Scientific novelty of the work is to develop a new model of payment, which will be forwarded to a fair remuneration and a more effective motivation of sales personnel.There will be a number of new indicators based on the connection average salary by profession and a minimum cash required for a decent life. It is also planned to develop a number of indicators of bonuses and de - bonuses that will be tested in the effectiveness in real conditions, on the basis of commercial enterprise "AB-BA". Thanks to the implementation of the proposed model is expected to substantial results in an increase in sales volume and customer satisfaction, and thus increase profits and prosperity of the enterprise.

PRACTICAL IMPLICATIONS OF THE RESULTS

The practical significance of the work lies in the fact that it contained conclusions and recommendations concerning the choice of the wage system, can be used for commercial enterprises.Practical implementation of scientific and methodical recommendations on a specific company ("AB-BA") would improve the payment system and labor incentives, motivation, efficiency of production and employment of staff.

1. THEORETICAL BASIS OF PAYMENT

The nature of "wages" is complex and multifaceted, potoemu consider it should be from different positions [1].

First, wages - is an economic category, which shows the relationship between employer and employee over the allocation of newly created value.

Secondly, the salary - or pay a fee, calculated in monetary terms, which is under an employment contract the employer pays the employee for work that is performed or to be performed [2].

Third, in a market economy wage - it is an element of the labor market, which develops from the interaction of labor demand and supply, and expresses the market value of the use of hired labor [1].

Fourth, for employee salaries - is a major part of his income.

Fifth, for the entrepreneur salary - it is an element of production costs, while at the same time, the main factor in ensuring the material incentives, to achieve high end results of work [1].

The essence of wages is detected in the functions it performs in the process of social reproduction.

    Therefore, we consider those functions that we believe are essential:

  1. Reproductive function is to provide employees and their families the necessities of life benefits for the reproduction of labor power. [3].
  2. Catalytic function of wages is to establish the dependence of its size on the quantity and quality of work a particular employee, his labor contribution to business outcomes. [3].
  3. Regulatory function of wages is to optimize the allocation of labor across regions, industries, farms, businesses, subject to market conditions.
  4. The social function of wages reflects the measure of human labor in the allocation of the fund of consumption between employees and owners of the means of production.
  5. Function of forming effective demand.Her appointment - coordination of effective demand, which refers to a form identifying the needs of collateralized by cash buyers, on the one hand, and the consumer [3].

Under modern conditions in the enterprises use different forms and systems of remuneration, but the most widely used two forms of payment: hourly, and piecework.

Piecework pay - it's pay for the amount made goods (works, services), it is based on pay in direct proportion to its results.

Hourly wage - it is wages for time worked.

Figure 1.1. shows a sample calculation of an employee's salary for piecework and hourly wage system.

Wages employee per month in the form of piece rate and hourly wage.

Figure 1.1 - Wages employee per month in the form of piece rate and hourly wage.

2. ANALYSIS OF THE ORGANIZATION FOR PAYMENT micro and macro levels.

In Ukraine, operates a free labor market.The State guarantees the right of citizens to work, that is to get a job with wages not lower than the state minimum amount, including the right to free choice of profession, occupation, and [2].

Inability to manage people - one of the main causes of instability of many domestic companies. And the leader here, as a rule, the absence of an effective system of financial incentives.A survey in Ukraine in 2003, consulting and training center SEVEN study in a developing market economy, the most powerful incentive for highly productive labor is wages (80-90%) [4].

Therefore, the organization of the company effective pay system is relevant in our time. The right to choose the system of remuneration granted to the enterprise.In each case, should apply exactly the wage system that best meets the organizational and technical conditions of production, and thereby contribute to the improvement of work [5].

According to statistics, one of the most visited sites in Ukraine workhouse, Rabota.com.ua, in the ranking of the 24 most popular professions among the candidates sales representatives take 11th place [6].Therefore, an important aspect in today's market conditions have wages just sales staff.

The section also deals with the system of remuneration applying at the plant "AB-BA, in particular, consider a system of compensation of sales representatives.


3. IMPROVEMENT OF PAYMENT SALES REPRESENTATIVES

To create an effective system of remuneration, which will allow the company to develop commercial should change the concept of business on customer orientation.

The new system of remuneration must first establish a motivation that would have directed the staff to meet the clients (Figure 3.1)

Control system for client-oriented approach.

Figure 3.1 - Control system for client-oriented approach.

In customer-oriented company, all activities of the enterprise is subject to the main goal - to achieve maximum customer satisfaction [7].And this idea understood and shared by all: artists and management, entrepreneurs and investors [7].

Financial motivations of the participants of the enterprise as defined and interrelated, that the satisfaction of the buyer inevitably beneficial impact on their personal income [7].

To begin with the introduction of a new wage system should clearly indicate that customer satisfaction - the main indicator of the work of all employees.

The proposed pay system sales representatives represented in Figure 3.2.

The payment system for sales representatives.

Figure 3.2 - The payment system for sales representatives.

Employee during the internship, vacation or sick pay is calculated according to the scheme shown in Figure 3.3.

Wages trade representative during the internship (vacation, sick).

Figure 3.3 - Wages trade representative during the internship (vacation, sick).

The method of interest calculation (Eq. 3.1)

% = Q – R,

где
% -
percentage of staff bonuses, %.
Q – Sales for the month, th . UAH.
R – Receivables for the month, th . UAH.

On the basis of the percentage, we see that any open trade or in part shipment or in part payment, the calculation of interest is not accepted.Consequently, no special bonuses for staff reduction in the size of the receivable is not envisaged, since it is directly linked to its catalytic and ceases to be merely a duty.

Rate of interest is defined by the scheme described below.

To do this, we divide the customers into groups according to the level of loyalty. Loyalty is defined as a% of the volume of the product supplier company in the amount of consumption of food analogues client company.Maximum 100% loyalty is considered to be utopian, and therefore the level of the beginning of complete loyalty to assume 70%.

  1. Client with a high level of loyalty - 70% and above;
  2. Client with an average level of loyalty - 40-70%;
  3. Client with low loyalty - 10-40%;
  4. Disloyal customer - 0-10%.
    The same customers can be divided into groups according to their purchasing power:
  1. A. Small Client (retail, small wholesale);
  2. B. Corporate client (wholesale);
  3. С. VIP & TOP clients (large wholesale).

Methodology for calculating per cent, depending on the level of loyalty to depict on the graph.

Methods of interest, depending on the level of customer loyalty

Figure 3.4. - Methods of interest, depending on the level of customer loyalty.

Let us analyze the above scheme:

First consider the level of labor costs of sales personnel to work with each of the above client groups, primarily tied to the level of loyalty:

Clients Group 1 - "Cash Cows" (A, B and C) - are the most loyal to the Company's customers, at the moment the sales representatives with customer data is minimal, and practically isthat he needs to just accept at the customer's request by telephone or during the visit and submit it to the office [8].

Despite the fact that this group of customers most valuable to the company, work the sales representative to work with these customers is minimal and is reduced to the work of a courier to transfer requests from the client's office.

Naturally, the trade representative at such labor input must receive a minimum payment for his work with this client group. Under our system of salary level for this category of clients in the 0.01 (or 1%).

But since this group is the most valuable category of customers for the supplier, the decline in customer loyalty in this category should be severely punished in the form depremirovaniya dealer and service the customer to the operator.Decline of loyalty in this case threatens the employee depremirovaniem of 4%, in some specific cases, even dismissal, of course a bonus for this client is not charged until he is transferred back to their category.Reduction of this figure is expected to consider in detail directly in each case, because Clients in this category, the most important and profitable for the company.

Clients Group 4 - "Problem Child" (A, B and C) - the exact opposite of clients in Group 1, it does not loyal to the product provider customers, and it is with these customers sales representative to work best [8].That they need to "chew" why the product supplier company better than competitive, to explain all the advantages of working with the company, bit by bit increasing the loyalty of the client [8].

Customer orders that group sales representative must collect their own, doing their best to their constant increase. Therefore, the work of a sales representative with this category of clients to be evaluated above all, in our case 0.04 (or 4%).

Working with clients in groups of 3, 2, facilitated by decreasing the atomic number of the group.Work is practically the same as that customer group 4, but requires less and less effort, time and effort by the sales representative and assessed accordingly: working with clients of the group 3 - 0.03 (3%), work with clients in Group 2 - 0,02 (2%).

To prevent a situation where a sales representative keeps customers in groups of lower order, so that would receive greater rewards in the pay system is designed so-called restrictive line (the figure is marked in blue).In each group, customer loyalty can be "listed" no more than three months, otherwise the situation is considered in detail the head and apply a severe penalty, or dismissal of an incompetent employee.

The Sales Representative must understand that the clients in Group 1, it is like a deposit account in a bank, at least% of earnings from them is not great, but the effort they must spend a minimum [8].And if a sales representative in the average quality can handle about 50 customers in groups of 4, 3, 2, and more customers in this category will not let him, because the lower the quality of his work with the client, the clients in group 1, it can have up to 200 [8 ].System also requires that the accumulation of a sales representative for more than 200 clients in group 1, he transferred to the position of key account manager or the manager to work with VIP-clients (to choose from a sales representative) and a corresponding increase in pay and status in the company,with preservation of secure him this customer base.

Managing customer loyalty are the tools of aerobatics in sales, but at the same time pays off, because it is difficult to find a more efficient system for obtaining increased profitability of sales, sales development and growth of the company as a whole [8].

The proposed pay system as provided for the implementation rate of planned tasks Trade Representative, which multiplied his salary. Rate of implementation of planned tasks are calculated by formula 3.2.:

Formula for calculating coefficient execution of planned tasks

where

Coefficient execution of planned tasks Coefficient execution of planned tasks, %.

Coefficient  effectiveness in achieving objectives n Coefficient  effectiveness in achieving objectives n, %.

The proposed system factors impact on the key challenges we multiply. As a result, the premium portion of wages grow faster if the manager exceeded all plans, and is greatly reduced, if it failed to work on several fronts.

The company identifies a number of problems (in our system each quarter), each assigned a weight and is determined by the targets. The final salary will be determined by the compliance / non-each "mini-plans" because of its "importance."

When the problem reached at least 70% of the premium we paid. In carrying out the plan by 200% or more of the premium part of the salary ceases to grow.


INTRODUCTION OF NEW PAYMENT SYSTEM

The process of implementing the proposed pay system is supposed to start with the introduction of the conditional in the first three months.During this period, wages calculated in accordance with the previously existing order, but at the same time, at the end of each billing period, employees receive a payroll, have already made the new rules.Employees can go to the new system earlier than three months, it will only depend on their wishes. At the end of three months of the new system is fully implemented in the enterprise.

The introduction of an improved system of payment will also be accompanied by the creation in Microsoft Excel or a method for calculating employees' salaries, which, by substituting their indicators of current activity,the employee will be able to independently calculate the size of their salary.


CONCLUSION

As a result of research work have been collected and studied the materials on issues related to the topic of master's work. The systems pay applicable sales representatives in Ukraine and in the world. Identified strengths and weaknesses of existing systems of remuneration.As a result of identified problems, unsolved in these areas, ways and methods to improve them.Based on the results, a sophisticated system of payment of sales representatives, which was implemented in a particular company and in practice has proved its effectiveness.


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Note

When writing this Autosummary Masters qualification work is completed. Date of final completion: 1-st of December, 2011. Full text of the work and materials on the subject of the work can be obtained from the author or supervisor after that date.