2 Page Business Problem Paper

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MEMORANDIUM

Date: September 1, 2016

To: Manager, Compensation

From: Smart Student

Subject: Business Problem Memo

This memo is in response to your inquiry regarding Morris’ Field Sales Representatives receiving inaccurate pay data. The volume of issues has increased recently and this memo will address the symptoms of the problem, discuss the effects of these symptoms, and provide the primary cause of the problem.

Symptoms of the Problem

We have received a growing number of requests from our Field Sales Representatives to review their monthly commission calculation for accuracy. These associates feel as though their monthly performance versus objective is being incorrectly measured. The concerns generally take one of two forms: either the associate believes they’re receiving credit for someone else’s sales, or they believe they aren’t receiving credit for all the sales within their territory.

Effects of the Problem

Regardless of which concern the associate has, the effects are the same. Time spent explaining the issue to our team is time away from selling. This results in decreased productivity levels for the associate, which translates into reduced annual revenues for the company. Additionally, when associates feel they are being cheated, they tend to leave, thus increasing our company’s turnover rate and the training costs for their replacement. Lastly, any error in our calculation results in re-work by our team and leads to diminished confidence from Senior Management of the process.

Cause of the Problem

After collaborating with members from the various departments responsible for the data used in our monthly commissions calculation, we have concluded that the primary cause of the problem is an inconsistent methodology of processing exceptions due to the use of antiquated technology.

The analysts responsible for tracking and reporting this data are utilizing MS Excel and they aren’t consistently applying the rules for a given exception. In other words, few audits exist, and what is being done for one product or territory may not be done in another.

Conclusion

A specific group of Field Sales Representatives at Morris’ is experiencing high turnover and low productivity as a result of discrepancies found in their monthly commission calculation. More of these issues are occurring recently and have created several negative byproducts for the company including re-work by the Compensation Department and management mistrust of the pay calculation process. Our inconsistent methodology of processing exceptions and use of antiquated technology may be the main cause. I will continue to conduct research in an attempt to identify a viable solution for this ongoing issue within our company, after your review and request.