Based upon this information and your knowledge of various contingency pay system

Question

Based upon this information and your knowledge of various contingency pay systems, how would you recommend that Altenergy LLC structure a contingency pay plan for these new consultants?

the case is that jack , ed, and tom all former employees of Accenture and have just started their own energy consulting company caled Altenergy. for the past six months. jack , tom and ed have been the only consultants in the company. they have now picked up enough business that they want to add five new consultants in order to have three different consulting teams. because altenergy LLC has such a unique niche in the consulting market and is a recent start up . jack , tom and Ed fel that it is necessary that they hire consultant with experience with dealing with alternative energy sources, with connections to a variety of alternative energy companies, and sales experience since these new consultants will be responsible for finding and obtaining new clients. from their past experience, it is not enough to hire consultants,with this kind of experience. but also to retain them. they feel that they will be able to recruit and retain consultants if they implement a proper contingency pay plan

Please explain why you gave the recommendation that you did and why you didn’t recommend the other contingency pay systems possible. As a way to get started on this statements below, consider the statements bellow of the Plans Recommended for Various Strategic Business Objectives

the statements for the Strategic Business Objective CP Plan are:

1-Employee development Skill-based pay

2-Customer Service Competency-based pay, Gain Sharing

3-Productivity: Individual Piece rate, Sales commissions Teamwork Team sales commissions, Gain sharing,

4- Productivity: Group Gain sharing,Group incentives,

5- Tea,work team sales commissions , gain sharing, Competency-based pay , executive pay

6- Overall profit Executive pay, Profit or stock sharing

Explanation / Answer

I would recommend the 5th Strategic Business Objective Plan i.e. Team work team sales commission, Gain Sharing, Competency based pay and executive pay. The reason for this recommendation is that it covers all the elements. It is paying for team work team sales commision so it will push all the consultants to work and collaborate as a team as the team's success will mean fat pay checks for them. Also, this plan compensates the gain sharing which means everyone will push to seal new deals as the profit made from it will be shared. Moreover, employees will strive hard to learn or add new competencies as there is a component linked to competency based pay. In addition, the consultants will be getting executive pay based on their contribution to the organization which will keep them motivated to put there sincere efforts to help the organization grow and therefore, reap the benifits.

The reson for not recommending 1st plan is that it will just keep the consultants focussed on improving their individual skill sets as their pays are linked to it. It will not foster a team culture.

The reason for not selecting the 2nd plan is: It will not encourage the individuals to learn new competencies which is required to be in the consulting world. Their main focus would be customer ecstacy.

The reason for not selecting 3rd plan is: Although it covers most of the components encouraging individual productivity as well as working as a closed knit unit. It will not be easy to motivate individuals to keep a strong focus on enhancing competencies as this pay component is missing.

The reason for not selecting 4th plan is: There will be no differntiator between individual performances as there are only group based components. Hence, it will not encourage individuals to put great effort when everyone is getting the same paychecks.

The reason for not selecting 6th plan is: It will not encourage the individuals to learn new competencies which is required to be in the consulting world.

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