Target Corporation: Sales Compensation Plan

Target is a retail general merchandise giant, represented by its bullseye mascot, with locations in the radius of ten miles in seventy-five percent of the United States’ population. This retail giant employs approximately 350,000 people. Target’s headquarters is in Minneapolis, Minneapolis, Minnesota, where the first store was birthed in 1962. The tagline is “Expect More, Pay Less”, is grounded upon their efforts to provide reasonably priced goods and services to consumers. Five percent of their profits are given back to the communities they serve yearly.

Target has the following six essential components inclusive in its compensation plan to promote an effective outcome accredited to their:

1. Establishment of company objectives
2. Identification of employee roles
3. Defining sales team objectives
4. Determination of pay structures
5. Development of growth potential for the company and employees
6. Monitoring and evaluating techniques

Target objectives are built upon community and consumers’ satisfaction; therefore, creating a necessity for total team participation in making profits, customer fulfillment, talent retention, attracting upright talent that is convertible to growth and improves in weak areas. Their strategy is to create a compensation plan that shares the responsibility of progress by aligning the employees’ potential and engagement to grow, as well as empathize the importance of a work-life balance. The plan aligns company success with employee success, so the employees achieve personal goals and accomplishments, and to make employees feel their families are mutual of importance to the Target Corporation. Each employee is trained on their roles and provided the expectations of their performances in these roles. Target also offers a competitive pay schedule, bonuses and an attractive compensation package with prodigious benefits. Lastly, the company leaves the floor open to feedback and suggestions from employees and customers, electronically and in-person on how to make improvements to job performance, services, and products. Internships and development courses are provided to potential and regular employees to promote growth and development. (Target Corporation).

The health benefits provided by Target cover pharmacy needs, medical care, dental and vision treatment, educational resources on wellness, life event support programs, an employee assistance program and wellness discounts. Another advantage of being a team member is the empowerment programs and resources offered to develop skill sets and obtain promotions through mentorship, leadership programs, college courses and coaching from colleagues. The financial benefits include a 401 plan, education assistance, flexible healthcare spending accounts, life insurance, vacation, well-being time, paid holidays, family leave, identity theft protection, adoption assistance reimbursement, short-term bonus incentives and discounts on personal and family outings. The company states its quest is to “bring joy to the center of every business decision we make and get the teams excited to come to work each day” (well-being program: Target Corporation), therefore their major focal point is to ensure that an effective compensation plan is in order.

One of the competitive advantages of their compensation plan is the recognition of domestic partners being counted in a family. Access to enrollment. information and benefits are available to domestic partners, equally as it is to spouses, regarding compensation and benefits. The second advantage is assistance to employees to obtain a general educational development diploma. Most companies require you receive this before hiring candidates as full-time employees. Thirdly, Target helps its employees refinance student loans through their credit union, with lower interest rates and loan terms by consolidating their loans. In addition to these three advantages, employees and their family members are privileged to discounts at gyms, Weight Watchers, fitness centers, transportation/commuter programs, child care centers and many partnerships in their community.

The average hourly pay is 12.68, The sales support team’s range of hourly pay is $10.11 to $20.23. The average hourly pay for a senior member of the sales support team is $24.36; however, customer service associates average an hourly rate of $10.56. Salaries ranges are based on the roles and the job performed by each individual employee. A Lead Software Engineer is a the high-paid employee at Target Corporation, with a salary of $120,749 annually. Sales Associates are the lowest-paid employees at an average annual salary of $33,877. The highest-paid bonus is awarded to the Store Team Leader and the lowest-paid is the retail store workers.

Commissions are used a variable pay, in addition to the employees ‘regular pay and as a motivational incentive to attain higher sales targets. Commission levels are role-based, which are limited to sales associates and members of the sales management team. Therefore, regular employee pay schedules must be offered above the minimum wage base to attract and retain all levels of employees. (WorldatWork, 2003).

Target must attract, retain and develop employees to mold a culture of workmanship that is transparent and encourages motivation, and produces superior performance in customer services, sales and overall corporate operations. By communicating, rewarding, developing their skills, and contributing to the employees’ personal fulfilments, a sense of trust, and commitment is formed. Additionally, the behaviors, and employees affect the sales for the company, its reputation and longevity as a giant if the employees are positioned right for their roles. Rewards and recognition assist in retention, attraction and keeping employees in the mindset of positive contributors who show accountability and ownership for their performance and behaviors.

Behaviors must be aligned with the values and objectives of the company. Leadership behaviors are the first models’ employees use as an example to set their cultural standards. Any deviation of poor behaviors must be terminated from the company immediately to avoid spreading throughout all levels of company. Target management teams build relationships through the development of employees, serving consumers, and encouraging helping the community through volunteer services. This methodology creates a positive culture that makes both the employees and the consumers happy. (Kotter & Heskett, 1992).

Target provides value preposition to its employees through great compensation, continuous education opportunities, benefits and improving their employees’ career path for upward mobility. The employees housed at Target currently and the future additions to Target will be the foundation of the brands as internal retentions increase and the right fit for the sales roles are recruited externally. The company must remain focused on investing in employees, not primarily on profits. (Caudron, 1996) If the company keeps the current employees’ morale high, others will mimic, even if they are the new kids on the block.

Sales personnel will be the most attracted to Target’s plan. Although the support roles such as cashiers and sales associates get higher than minimum wage pay, there are other competitors that offer better pay and work schedules. The sales teams and their manager receive higher pay, a shot at earning commissions and greater shares than the support teams. The benefits and compensation are attractive for the sales teams; therefore, Target will not have a problem drawing formulating a productive sales team to sustain themselves as giants in the industry.

Conclusion

Performances are not pay-based for the most part. Today’s workforce wants more, a supportive option of work performance. Employers must define and communicate their goals, align the goals with the employees’ needs to heighten the success of their talent. Building and maintaining a system that determines the factors necessary to sustain performance attracts and retains talent is a pivotable role in sales force compensation. (The job rests on training, transparency, communication, funding, utilizing checks and balances, producing high-performers and continuous evaluation.

References

1. Caudron, Shari. (1996). “How pay launched performance”. Personnel Journal, 75 (9). 70-75.
2. Kotter, John P., and Heskett, James L. (1992). “Corporate Culture and performance”. The Free Press, New York, NY.
3. Target Corporate: Social Responsibility. Careers, Press, Investors (February 6, 2020). Retrieved from https://corporate.target.com.
4. WorldatWork, (2007). The WorldatWork Handbook of Compensation, Benefits & Total Rewards.
5. WorldatWork. (2003). Salary survey Retrieved on February 6, 2020, from website www/world atwork.org