Sample Sales Incentive Scheme

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SAMPLE SALES INCENTIVE SCHEME FOR Q2, Q3 & Q4 2000-2001

INTRODUCTION :

> 1. This is a short term incentive scheme valid for all orders booked between Oct. 2000 and June 2001.

2. The scheme is based on quarterly order booking targets and is transparent to cumulative performance / targets.

3. Incentives are payable quarterly on order booking (linked to targets) and collection (not linked to targets).

4. Order booking and collection incentives are independent of each other.

5. For all subsequent formulas:

N = 1 for Account Managers

N = No. Of Account Managers reporting to him for RM's (RM stands for Regional Manager)..

If no. of Account Managers reporting to a RM is 1, then RM will be paid incentive as 50% of incentive earned by the Account Manager.

6. This new incentive scheme makes all previous incentive schemes void.

7. For all disputes GM (Sales) decision is final.

ORDER BOOKING INCENTIVE

1. All sales staff on quota can choose quarterly order booking target of either 90 x N lacs or 120 x N lacs. He can choose different targets for different quarters but targets for all quarters must be decided now. In case RM's do not send their targets, default target would be 90 x N.

2. All orders dated for the quarter and received at H.O. latest by 3rd of the first month of the next quarter will be treated as order booking for the quarter subject to order acceptance by H.O. Normally order will be accepted by H.O. if :

(i) Order is received with minimum of 25% of equipment price as advance.

Formal P.0 is received from Govt. Organisations / departments or PSU'S.

AND

(ii) Other commercial terms and conditions are as per our standard norms.

AND

(iii) No technical over commitments are made.

3. Order value will include: (i) Equipment price (ii) One time charges (iii) First year fixed recurring charges payable annually in advance.

4. Quarterly order booking incentive will be as follows as percentages of order booking value in staircase manner. (Percentages indicated are applicable on the amount in that slab).

	TARGET
ACHIEVEMENT SLAB	120 LACS x N	90 LACS x N
upto 50%	0%	0%
Between 50% and 100%	1.0% / N	0.4 % / N
More than 100%	1.2% / N	0.6% / N

Achievements vs. Incentive payable for few specific quarterly (achievement) value are given below :

	TARGETS
ACHIEVEMENTS	120 LACS	90 LACS
45 LACS	0 K	0 K
60 LACS	0 K	6 K
70 LACS	10 K	10 K
90 LACS	30 K	18 K
120 LACS	60 K	36 K
150 LACS	96 K	54 K
200 LACS	156 K	84 K

6. Incentive amount will be paid alongwith salary of the first month of next quarter after adjustment of amount for order cancellation (if any) for which incentive was paid earlier.

7. Incentive earned by all sales staff (Account Managers / RM's) will be split as follows : (i) 75% of Incentive Paid to the sales staff (ii) 15% of Incentive Accumulated in Regional Fund (iii) 1 0% of Incentive Accumulated in National Fund.

8. Amounts accumulated in Regional and National Funds will be apportioned to Pre-sales support staff as follows : (i) Regional Fund Amongst the regional Pre-sales support staff (ii) National Fund Amongst all Pre-sales support staff.

9. All Pre-sales support staff will be categorised in three categories (depending on knowledge, experience and past contribution) namely A, B and C. Incentive amount will be apportioned in the following ratios:

A 50%

B 35%

C 15%

10. A Pre-sales support staff will be entitled for incentives (if any) for a quarter only if he has worked in that position for at least 45 days in that quarter.

COLLECTION INCENTIVE

1. Collection incentive is payable on collection irrespective of target or achievement.

2. Collection incentive will be paid as follows:

(i) Advance : 0.6% / N of amount collected

(ii) Within 11 days of date of invoice : 0.6% / N of amount collected

(iii) Within 21 days of date of invoice : 0.4% / N of amount collected.

(iv) Beyond 21 days of date of invoice : - 0.2% / N of amount outstanding to be deducted from collection incentive for the quarter, if positive. Negative collection incentive will not be adjusted with order booking incentive.

(v) Beyond 45 days of date of invoice : -0.4% / N of amount outstanding to be deducted from collection incentive for the quarter, if positive. Negative collection incentive will not be adjusted with order booking incentive.

3. There will be no collection incentive (neither positive nor negative) for orders through other group companies.

4. Incentive amount will be paid alongwith salary of the first month of next quarter after adjustment of amount for order cancellation (if any) for which incentive was paid earlier.

5. Incentive earned by all sales staff (Account Managers / RM's) will be split as follows:

(i) 75% of Incentive Paid to the sales staff

(ii) 25% of Incentive Accumulated in a Fund/Funds

TOTAL INCENTIVE EARNING PER QUARTER (ACCOUNT MANAGERS)

	ORDER BOOKING		COLLECTION			TOTAL
ACHIEVEMENTS	120 LACS TARGET	90 LACS TARGET	40% ADVANCE @0.6%	60% WITHIN 11 DAYS @0.6%	TOTAL	120 LACS TARGET	90 LACS TARGET
45 LACS	0 K	0 K	10.8 K	16.2 K	27 K	27 K	27 K
60 LACS	0 K	6 K	14.4 K	21.6 K	36 K	36 K	42 K
70 LACS	10 K	10 K	16.8 K	25.2 K	42 K	52 K	52 K
90 LACS	30 K	18 K	21.6 K	32.4 K	54 K	84 K	72 K
120 LACS	60 K	36 K	28.8 K	43.2 K	72 K	132 K	108 K
150 LACS	96 K	54 K	36 K	54 K	90 K	186 K	144 K
200 LACS	156 K	84 K	48 K	72 K	120 K	276 K	204 K

MAXIMUM INCENTIVE PAYABLE PER QUARTER FOR ORDER BOOKING AND COLLECTION INCENTIVE (applicable to Account Managers as well as RMs) :

1. Order booking incentive: 160 K

2. Collection Incentive: 140 K

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