M Company

In order to meet the needs of market competition and the whole business development, M company has launched the performance-related compensation system for sales managers since 2012. So it has been implemented for three years. This compensation system links the sales to the performance-related compensation, improving the sales managers’ enthusiasm for work. However, it is also a double-edged sword. If the excessive pursuit of short-term benefits makes one neglect the internal management of the enterprise, the company is bound to be threatened and challenged in terms of the continuous development. 2014 is the first year of 4G. Along with the official launching to use of 4G network, M Company has come to the transition from rapid growth to maturity period and a variety of unfit symptoms have appeared gradually in the current performance-related compensation system for sales managers. Thus, it has become the problem for M company calling for immediate solution, how to optimize the incentives for sales managers and to set up an updated performance-related compensation system conforming to the characteristics of business development in the new stage of the company, which shall also has moderate elasticity and can stimulate intrinsic motivation of employees.In this thesis the sales managers of the M company are the study subjects. Through literature research, interviews and case studies the current sales manager performance-related compensation system will be diagnosed. By means of carrying out one to one interviews with 12 sales managers who achieve excellent performance and high performance-related compensation from 6 country –level branches, combining with statistical analysis of performance compensation of the sales managers in the year of 2014, as well as the analyzing of 10 executives from human resources departments, enterprise customers departments and country-level branches, following existing problems and drawbacks of the current performance-related compensation system have been judged.1) The system gives no incentive to the staff with excellent performances2) Too many businesses are related with performance compensation;3) Obvious gaps among the monthly performance compensation;4) No basis for costs regulation;5) Regional management cannot synchronize with the assessment;6) Lack of long-term incentive guide.At the end this thesis has redesigned a new sales manager performance-related compensation system based on diagnosis of the current system. By increasing the custom-made assessment items for county-level branches, streamlining the catalogues of payment-related business, adjusting the performance-related compensation structure, redefining cost factors, optimizing the team-building factors and planning the sales manager career paths etc., the three major problems and two drawbacks of the original performance-related compensation system will be solved. At the same time, a performance-oriented, flexible, moderate new performance-based compensation system with reasonable profit sharing and long-term incentive-orientation will be built.