| dc.description.abstract | Company S is a small printed circuit board manufacturer. It is a niche player, specialized in small batch, diversified and quick turnaround production, enjoying higher margin than mass producers. Its target customers are Taiwan’s electronic industry’s fast turnaround R&D demands for new product development and prototyping. In the past, Taiwan has established a massive and complete eco-system of printed circuit boards, with advanced production technology and capabilities, abundant quality human resource with good skill and experience. There are may PCB companies, big and small, geographically concentrated in the Taoyuan area. Since there is little differentiation in capabilities and quality among the companies, they are facing extreme competition.
There are several key success factors for PCB producers, namely, fast delivery, price, quality, process capability, and product range coverage. Basically, a small batch diversified PCB producer like Company S receives orders with small quantities, and low invoice amount. In order to generate good profit, product mix and geographically dispersion of customers are important factors. In addition, it has to commit to, and be able to fulfill order requirements in delivery speed, price and quality. Since there is little difference in product and service between Company S and its competitors, its sales force becomes one of the most important and indispensable part of the company, and is also the engine of business growth in order to achieve its performance targets. As the sales force is central to its success, there is an urgent need for Company S to device an effective incentive scheme, such that the sales personnel can be motivated to improve the company’s revenue and turnover and gross margin.
A good compensation system not only can attract high performance sales personnel, but also can retain them. The high turnover of sales personnel are related to some important factors: compensation system, incentive scheme, opportunities for advancement, job stress, and professional training. Therefore, many companies attempts to establish competitive compensation scheme. An effective compensation system must be fair, rational, motivating.
This study aims at establishing an effective incentive scheme, so that compensation to the sales personnel can be linked to their performance. The incentive scheme proposed by this study has also been implemented in 2011 and 2012 in parallel to this study.
In addition to considering the effectiveness of the proposed compensation system, we included the performance goals of the company as part of the to the performance indicator for the sales force. This study also assesses the effects of the first stage of the implementation by analyzing the company’s sales revenue and increment of new customers. Results revealed that: (1) sales revenue increased in the first quarter of 2012; (2) increase of new customers improved over the same time last year; (3) the sales personnel made more contacts with customers; (4) the sales personnel showed more concerns with there performance and company revenue.
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