Compensation Plan Design
Challenge
A firm that has partnered with McLagan previously on a multitude of projects approached us once again to advise on, design, and implement a sales commission scheme for retail brokerage staff.
The firm felt that staff were unmotivated by the lack of a transparent link between the rewards they received off the back of business they generated for their employer.
McLagan identified the need to take a blank page approach and provide a tool that allows future flexibility to cater for different market conditions and furnish the client with an understanding and education of how to tailor the scheme parameters to accommodate in the future.
Solution
After a series of fact finding exercises, McLagan critically appraised the existing scheme and simultaneously developed a new commission-based reward scheme using proprietary expertise and studies of local market practice.
Buy-in from key stakeholders (from HR to the Management Board) was achieved through a close working relationship.
The scheme that McLagan advised to implement made a direct link between individuals’ performance and monetary reward, balanced with management’s concerns of cost and controlling payout ratios.
Results
The client is now engaged with McLagan on implementing and communicating the new sales incentive commission scheme to all eligible staff.
McLagan has delivered a model compatible with the firm’s MIS system that offers a turnkey payment and reporting solution.
The scheme requires very little administration since the utility is automated and wholly meets the defined objectives set by the client and McLagan.
