Insentive Paper

Perfume Express is a small company with only a handful of employees. Therefore it is necessary to keep all incentive plans simple and attractive. Incentive plans play a strong role in any kind of business, according to Businesstown.com "Some kind of incentive pay is an important part of any compensation plan. Incentive pay shows appreciation and creates a sense of participation in the company's well-being that straight salary dollars, no matter how large, don't convey. A well-designed incentive-pay plan can also help pull people together, help point them in the direction you want them to go, and give that extra push that every company needs in today's competitive environment".(Businesstown.com)

Perfume Express Inc. has realized that employees need to know what they can do to earn an incentive and what exactly that incentive will be. If the plan involves tracking a lot of detailed performance indicators it will waste management's time and confuse the employees. The company therefore looks at the bigger picture of performance results which include, the ups and downs of sales, and performance.

The company's incentive plan for its sales personals includes a three-tier approach of immediate recognition for a job well done, short-term rewards for performance over a month or quarter, and long-term rewards for being a loyal employee over the years. By layering incentives, the company is able reach employees from different perspectives. Those who like immediate satisfaction will get it and those that look long-term will also be satisfied as well. The overall goal and objective of every sales personal is to increase sales, gain customer royalty and create brand loyalty.

To ensure retails sales are high and employees are motivated to sell fragrances, Perfume Express offers 5% commission on the total sales a employee makes for the day plus base salary. The company also provides breakfast and lunch for its employees. Individual effort by each employee is also noted and rewarded. If a sales personal does a great job handling a difficult customer situation then he / she is rewarded with immediate praise, recognition and a bonus. There is no analytical performance tracking for this incentive plan. This way the staff knows that management appreciates the extra effort they put in. This is one aspect of the first layer of employees' incentives. This incentive plan has greatly improved the performance of employees, instead of hanging out or killing time by talking on the phone, they are now concentrating on sales because the more they sell, the higher their commission.

In today's competitive job market, employees are not motivated just by money, but also by recognition. Today's employees look beyond money for other rewards. They are looking for challenges, recognition and empowerment. Perfume Express's incentive plan also includes Non-cash recognition awards which are a very effective way to reinforce the company's values. For example,