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Publikacja: “Podejmowanie decyzji w działalności gospodarczej”

Miło mi poinformować, że nakładem Wydawnictwa AGH w publikacji pt. Podejmowanie decyzji w działalności gospodarczej ukazał się artykuł mojego autorstwa pt. Różnorodność organizacyjna a model kontroli zarządczej w średniej wielkości przedsiębiorstwach wytwórczych – tożsamość, kultura organizacyjna, dojrzałość procesowa. Aby przeczytać artykuł wystarczy kliknąć podany tytuł artykułu.

Dostęp do pełnej publikacji jest otwarty. Zapraszam do zapoznania się z innymi artykułami z publikacji Podejmowanie decyzji w działalności gospodarczej.

Implementing changes in the sales department. Part 12/12. Stage X – Implementation of the financial incentive system.

The last stage of changes should be the implementation of the employee motivation system in connection with the assumed sales goals. Sales goals should be set based on budget assumptions resulting from the extensive analysis contained in the sales strategy. In this context, a motivation system should be created in the sense of financial motivation.

The strategy defines the main goal which is the sale of a specific volume of goods. An additional task is to achieve a certain level of turnover with new customers within the main goal. Completing this second task should be linked to the expansion strategy of expanding the market and diversifying the customer portfolio. The diversification of the group of recipients is to allow for an increase in the level of margins achieved by making the negotiation process more flexible. It is primarily about moving away from the model of result conditioning by cooperating only with two or three large (turnover) clients who in this case use their hegemonic advantage when negotiating long-term contracts.

Considering the above, the following assumptions of the bonus system for sales department employees may be adopted (decision of the Management Board) as regards the implementation of the main strategic goal:

  1. The bonus system will be consistent for the entire organization, i.e. all employees will receive a bonus on the same terms if the goal is met.
  2. The settlement period for the payment of the bonus will be a calendar month – the implementation of the monthly goal means the payment of the bonus.
  3. The basis for calculating the bonus amount is the appropriate percentage of the basic salary.
  4. If the annual target is met, each employee will be paid an additional bonus in the amount of eg 100% of remuneration.

Commenting on the above assumptions, it should be emphasized that the main goal of the implemented bonus system is to develop team responsibility for the result, which is to improve cooperation between all departments in the company. The coherence of the bonus system for all employees means that the entire organization has focused on good-quality customer service, which should be understood in a generalized sales process, production process, quality control, accounting – that is, in fact, all manifestations of the company’s activity addressed to customers. The monthly settlement of bonuses gives the opportunity to implement tasks on the basis of “quick win” – the employee immediately received a reward for completed tasks. Rapid progress is immediately rewarded. On the other hand, an additional annual bonus, paid out if the budgetary target is met, gives the opportunity to “catch up” the unpaid premium for the month in which the target was not met.

Regardless of the financial incentive system, you can introduce additional incentives for sales employees to achieve an additional goal, i.e. expanding sales to a larger group of customers and diversifying the portfolio. The implementation of this system should be preceded by an analysis that should define the concept of “new customer” and determine the expected portfolio development in terms of “new busisness”. After presenting the status quo to employees and precisely defining the definition of a “new customer”, an annual target should be set for sales to this group of recipients. It can be established that all sales employees, regardless of their position and level of remuneration, as well as other bonuses, will receive an equal net amount as an additional annual remuneration for achieving the assumed goal. This amount should be set at an attractive level (decision of the Management Board). It is also worth determining the increase in this bonus when crossing the next higher result thresholds, and indicate its upper limit. To monitor your progress, it’s a good idea to enter a simple daily report showing the level of task completion and missing value to your annual goal. This report should be supplemented by employees so that any significant change in ratios bringing the bonus closer to you would be an additional motivation.

Implementing changes in the sales department. Part 11/12. Stage IX – Implementation of internal procedures.

Changing internal procedures for sales and customer service is a task that requires consideration, because new organizational solutions can affect customer relationships. When introducing procedural improvements, every manager should be careful not to achieve the opposite effect, i.e. disorganize work. Due to such risk, it is necessary to perform a number of preparatory actions that will reduce the risk of implementing a non-functional and thus demotivating work system. What’s worse, mistakes made can have a negative impact on sales results and the quality of customer service. It should also be remembered that the word “procedure” in most organizations is pejorative. Employees often assess internal rules as inconsistent with reality or limiting their field of activity or paralyzing work.

Another common mistake is the lack of internal training refreshing employees’ knowledge of procedures. As a result, a common condition in the organization is that commercial activities are implemented based on one criterion – sales result, and according to the principle: the end justifies the means. Commercial procedures should be understood as the overall regulation of the sales department’s scope of work. Depending on the type of business or market segment, this type of procedure may contain different regulations. They should also protect the company against broadly understood poor quality sales. The scope of risk incurred by sales activities is significant and includes many factors that go far beyond standard thinking about the task of offering and providing products to customers. In this context, it should be noted how the correct programming of the work system by creating functional procedures has a positive effect on employee motivation. To illustrate the scale of possible regulations, and as an overview, the following is a list of areas that can be considered in commercial procedures:

  1. Principles to verify the credibility of contractors (verification of the solvency of contractors and the legality of their business scope).
  2. Principles of preventing fraud attempts and fraud to the detriment of the enterprise.
  3. Rules for organizing transport to customers and selecting transport companies (eliminating the risk of losses during transport and phishing).
  4. Sales rules within the insurance limit and sales monitoring within the limit (control of the turnover balance with individual clients under external or internal transaction limits).
  5. Principles for hedging financial risk (cooperation with the risk department in securing transactions on the stock exchange and eliminating currency risk).
  6. Principles of cooperation with production departments in the scope of ordering production.

Therefore, the implementation of the sales procedure has the following objectives:

  • Maximum reduction of transaction risk with clients.
  • Meeting the formal and legal requirements necessary from a tax point of view.
  • Reduction of the risk of goods being lost due to phishing scams.
  • Providing employees with comfort of work by providing precise instructions in specific cases and documenting work.

It should be emphasized that the last point of the above list is of particular importance from the point of view of the employer / supervisor – employee relationship. A clearly defined sales procedure, approved by superiors, clearly delimits the scope of responsibility between these parties. The employee may be assessed for compliance with the procedure, while the supervisor’s responsibility is to correctly construct this regulation.

To prepare a reliable commercial procedure, you can take the following actions:

  1. Review of existing procedures in the area of sales and customer service.
  2. Mapping of all main and secondary processes in sales and customer service.
  3. Transaction risk analysis (from the financial security side) at individual stages of the sales process.
  4. Interview with sales department employees about knowledge of procedures and their actual application.

After the analysis, which can be described as an internal audit, proceed to the development of individual elements of the sales procedure. Considering the long process of its preparation and implementation, resulting from the need for internal consultations and the approval of managers, its individual components can be implemented based on a business order with validity until a comprehensive regulation is announced. The caveat to any official order should be the rule that if the order does not provide for any situation or raises any doubts, the employee should refrain from action until the supervisor decides. The consequence of this solution will be the rapid implementation of the necessary regulations and ensuring the safety and quality of commercial operations.

On the other hand, it will be possible to verify specific procedural regulations in practice. Therefore, in this case one can speak of pilot implementation of the procedure.

Depending on the level of complication, the final implementation of the procedure may take place over several weeks or months. It is recommended to test individual solutions and collect comments from all persons acting on its basis. This approach provides the following benefits:

  • All interested parties, and later persons using the procedure, are involved in its development and thus become familiar with the purposefulness of the regulation and the genesis of its creation.
  • Employees naturally already know procedural regulations at the pilot stage.
  • The implementation of the final document is quick and does not require significant commentary or, for example, long training and explanations.
  • Employees gain comfort by clearly indicating the paths of action in specific situations.

From the supervisor’s point of view, the main benefit is, of course, the fulfillment of their duties in this area, but also the regulation of a significant area of work, which eliminates making ad hoc decisions and introduces uniform and transparent action towards contractors.

Speaking of sales procedures, you cannot ask questions about regulations directly related to the standards of working with the client – speaking the so-called commercial language service. The literature on the subject extensively describes this aspect of working with clients.

Implementing changes in the sales department. Part 10/12. Stage VIII – Establishing a hierarchy and structure of responsibility.

Managerial activities in determining the hierarchy of positions in the sales department should be implemented based on three main premises.

  1. Distribution model.
  2. Employee competences.
  3. Customer relations.

An important element of organizational changes is the division of the sales department into employees responsible for sales and customer contact (the so-called Front Office) and employees performing administrative tasks in the field of customer service (the so-called Back Office).

When making organizational changes in the sales department, the following premises can be taken into account:

  • The Sales Department manager should be relieved of direct supervision of operational activities in the field of administrative customer service and delegate some control functions in this area reporting directly to specialist / sales managers (more time for preparation and implementation of strategic tasks),
  • Specialized functions should be taken over by experienced and effective employees who will be promoted (motivation),
  • Customers should be informed about the new organizational structure,
  • New employees should be introduced to work and develop their skills under the guidance of experienced colleagues,
  • Managers / sales specialists should be given greater opportunity for business trips by securing administrative work in the office by their subordinates,
  • As a result of changes, there should be the possibility of exchanging functions and replacing employees (eg greater freedom when planning holidays).

The new organizational chart should also be the basis for developing a payroll throughout the entire commercial division. Based on the pay scale, pay adjustments should be made taking into account employee experience, development prospects and the labor market situation.

Implementing changes in the sales department. Part 9/12. Stage VII – Staff changes.

The consistent implementation of the process of implementing changes and the motivation system presented in previous stages was aimed at assessing the team’s potential and raising the competence of its individual members. The openness of individual employees to changes and the introduction of a work model was also examined. As a result of the implementation of these stages, the quality of staff will be verified in the context of meeting the criteria of the competency model adopted as the expected ‘model’ of the employee. As a result of this analysis, it may be necessary to end cooperation with some team members. The reason for this decision will most often be the individual attitude of employees throughout the entire cooperation. From the point of view of further cooperation, disqualifying features and behaviors are:

  • Reluctance to change,
  • Open, unobjective and emotional critique of superiors and proposed new solutions,
  • Not taking action as a result of official orders or apparently carrying them out,
  • Inciting other team members to protest against implemented changes,
  • Reluctance to develop further,
  • Exorbitant and non-objective assessment of one’s own competences.

When assessing such decisions in retrospect, it should be emphasized that they are necessary and have a positive impact on changing the attitude of other employees. Thus, negative factors affecting relationships within the team are eliminated. From a managerial point of view, the decision to terminate cooperation should be transparent for the entire team. The manager should also show that he is not hostage of his own employees.

Implementing changes in the sales department. Part 8/12. Stage VI – Determining the employee’s competence profile.

Employees of customer service and sales should be people who understand customers from the emotional side and be able to reach their shopping motivations. In addition, they should have a key feature which is the ability to be entrepreneurial when working with clients. This is due to the complexity of the tasks performed and many factors affecting the sales result. Optimal use of all commercial opportunities (e.g. speed of order processing, selection of appropriate transport, quick establishment of internal production plans, organization of meetings with clients) allows for better economic results. This means that the priority is to instill in employees an economical approach to sales and customer service – “work as if it was your company!”.

It is therefore crucial to create an appropriate organizational culture in the entire department, which would be transferred to employees of other departments during their daily relations. This culture is also to be a showcase for customers who quickly understand its features:

  • Flexibility for customer needs,
  • Quick response to customer inquiries,
  • Precise answers,
  • Openness to new projects and challenges.

The above list is a manifestation of the implemented organizational culture noticed by customers. From an internal point of view, sought candidates and current employees should have the following competences:

  • Self-discipline – the ability to perform tasks on time and in good quality without the need for continuous managerial supervision,
  • Readiness to achieve goals within the team – the ability to cooperate with team members regardless of their role,
  • Openness to new ideas,
  • Honesty,
  • Regularity and good organization of own work.

The above-mentioned features are the foundation of the employee’s competency model from the interpersonal side.

Implementing changes in the sales department. Part 7/12. Stage V – Identification of motivators and demotivators in teamwork.

The team’s work efficiency is influenced by many factors that can strengthen or weaken employees’ attitudes. At the same time, one should not be limited to motivation theories and the tools created on their basis. The managerial task is to eliminate negative factors that reduce employee motivation. From a strategic point of view, i.e. the goal of strengthening the positive attitudes of employees, it is necessary to quickly implement changes.

Common factors that have a negative impact on employee attitudes can be:

  1. Disordered pay grid (too wide pay gap in similar positions).
  2. Unclear organizational structure (no division of tasks and responsibilities) and thus chaos and frequent conflicts.
  3. Unaesthetic appearance of the rooms constituting the workplace.
  4. Lack of appropriate work tools (too few devices, frequent failures).
  5. Wrong location of the workplace.
  6. Task overload due to staff shortages and / or poor work organization.
  7. Lack of bonus system for achieved goals and above average results.

The fastest possible action to implement is to improve social working conditions. Symptoms of poor social conditions can be (examples):

  • Damaged walls,
  • Old furniture,
  • Frequent failure of printers,
  • Dirty armchairs at desks,
  • Poor distribution of the work space, which does not emphasize the managerial functions of some people and introduces confusion for clients,
  • Difficult working conditions during the summer – no air conditioning of the rooms,
  • Lack of a coffee maker and fridge in the kitchen for storing meals.

Few managers pay no attention to this area of work, but from the point of view of the quality of work and team motivation it is crucial.