All tagged Organizational Structure
I’ve been working with freight brokers for over 15 years now, helping them revise their organization structure and align their compensation plans to support the goals of their business. While the number of different possible organization structures is almost limitless, there are really only two approaches, with some variations on each: Cradle to Grave and Split Structure. This article deals with the first; we will address the Split Structure in the next article.
There is ONE universal compensation plan that does not depend on or affect your organization structure and allows you to change your structure, roles, responsibilities, and workflow pretty much at will, and that is a “salary only” plan where there is no incentive tied to individual performance. You could also have pretty much complete org design freedom if you did salary plus company year-end bonus. Neither of these approaches is affected at all by the structure or flow of work. An individual would earn the same amount if they were working cradle to grave or only as carrier sales (the salary levels might need to be adjusted but that is all). Consider the opposite extreme – the version that I consider to be THE WORST change to make…
I was recently asked by a medium-sized freight broker to provide a list of the things we look for when assessing the health of an incentive plan. That prompted the following list of key items that we consider when determining if a compensation plan may need to be revised. While this list has items specific to freight brokers, you can easily substitute your roles and economics in place of the broker specifics mentioned.
