This paper will discuss how an optimal sales system should be implemented by Arck Systems through analyzing the changes incorporated by Bryan Mynor for the recently acquired Lux Software’s sales force’s compensation plan. We will begin with an overview of the major issues Arck Systems faced when assessing how the company should modify the plan. An examination of Arck Systems and Lux Software Inc.’s current compensation plans as well as the benefits and disadvantages of making changes to those compensation plans will then be introduced. Next, our recommendation for Arck Systems to create one unified compensation plan for both sales forces will be discussed, stressing the …show more content…
In the Case: Performance Management at Vitality Health Enterprises, Inc., Vitality Health’s solicitation of employee feedback allowed them to make an informed decisions regarding the company’s performance management system. Had Mynor taken this approach, employees would have felt that their opinions are valued and it would have allowed Mynor to gauge which sales plan was better suited for the organization and its employees. This input from employees may have resulted in fewer top performers leaving the company.
Potential Future Courses of Action
Mynor was correct to be concerned with Lux’s sales incentive plan. Prior to the acquisition, the manner in which Lux’s sales plan was enacted to allow the salespeople to take advantage of the company. Based on Figure 1 from Arck Systems (B), it is evident that the Lux sales employees were using large discounts to close deals at the last minute in an effort to receive the accelerator incentive bonuses (Larkin, 2011, p. 2). The largely discounted deals resulted in an unnecessary loss of revenue for Arck Systems. It is obvious that Arck Systems needs to alter Lux’s compensation plan, however Mynor’s kneejerk reaction to Snow’s insubordination to severely lower the top performers’ incentive payouts, was his initial mistake. By eliminating all but one accelerator, he ultimately eradicated most of the company’s top salespeople. Arck Systems is a high margin