Question

During the yearly performance and sales review at an organization, an HR manager realizes that the sales goal and bonus structure could potentially incentivize individuals to move closings from one quarter to the next as needed to meet quarterly sales goals. Leadership, mid-level management, and the salespeople have different bonus structures-annually for leadership, quarterly for mid-level managers, and monthly for salespeople. This has created a disconnect between the different groups and created different motivations.

The HR manager presents an analysis of the data to the CEO. The CEO determines that, while this bonus structure may have worked in the past, it needs to be changed and the bonus structure of the different groups needs to be aligned. She tasks the HR manager with crafting a new bonus structure and implementing it after she has approved it.
What should the HR manager do first to create a bonus structure that is compatible with organizational goals and drives employee performance?

A. Determine if salaries lead, lag, or match the market in order to determine if a bonus plan is still needed.
B. Conduct interviews with employees to determine what changes they would like to see.
C. Determine the average time required to close a sale, and use that to create a new plan.
D. Hire an outside organization to conduct a remuneration survey of competitors and their bonus structure.

Answer 1

The HR manager should determine if salaries lead, lag, or match the market to assess the need for a bonus plan.

Step-by-step explanation:

To create a bonus structure that is compatible with organizational goals and drives employee performance, the HR manager should first determine if salaries lead, lag, or match the market to assess the need for a bonus plan. This will help in understanding the overall compensation structure and whether a bonus plan is still necessary. Understanding the market competitiveness of salaries will also help in designing a bonus structure that aligns with industry standards and attracts and retains the best talent.