Workforce economy, social and economic policy

Trade and service personnel remuneration in the company’s incentive system

Economic Annals-XXI

Economic Annals-ХХI: Volume 191, Issue 7-8(1), Pages: 127-137

Citation information:
Blyznyuk, T., Maistrenko, O., Kinas, I., & Pererva, I.  (2021). Trade and service personnel remuneration in the company’s incentive system. Economic Annals-XXI, 191(7-8(1)), 127-137. doi: https://doi.org/10.21003/ea.V191-10

View Full-TextDownload PDF

Tetyana Blyznyuk
D.Sc. (Economics),
Professor,
Simon Kuznets Kharkiv National University of Economics
9-a Nauky Ave, Kharkiv, 61100, Ukraine
blyznyuk.tetyana@gmail.com
ORCID ID: https://orcid.org/0000-0002-8291-4150

Olga Maistrenko
PhD (Economics),
Associate Professor,
Simon Kuznets Kharkiv National University of Economics
9-a Nauky Ave, Kharkiv, 61100, Ukraine
mai.olga88@gmail.com
ORCID ID: https://orcid.org/0000-0002-8007-3191

Iryna Kinas
PhD (Economics),
Associate Professor,
Simon Kuznets Kharkiv National University of Economics
9-a Nauky Ave, Kharkiv, 61100, Ukraine
irynakinas@hneu.net
ORCID ID: https://orcid.org/0000-0002-1790-3746

Ivanna Pererva
PhD (Economics),
Associate Professor,
Simon Kuznets Kharkiv National University of Economics
9-a Nauky Ave, Kharkiv, 61100, Ukraine
imatsikanych@gmail.com
ORCID ID: https://orcid.org/0000-0002-8119-7022

Trade and service personnel remuneration in the company’s incentive system

Abstract. At present, most companies all over the world, including Ukraine, are experiencing negative consequences of the pandemic. Staff efficiency has decreased, so companies have experienced a decline in business productivity in general. The system of labor incentives should encourage staff to work more efficiently by introduction of an additional remuneration system based on performance-related payment system. According to the European knowledge, commerce is one of the sectors where the introduction of this additional remuneration system is common and effective. The purpose of this study is to develop and substantiate practical recommendations to improve the system of additional remuneration for sales and service personnel of the company from Ukrainian commerce sector, which would increase their efficiency in the company. The study identified the main components of the system of incentives and the main forms of stimulating work for the company’s staff. It is substantiated the main stages of the improvement sequence of the company’s staff remuneration system as a component of the personnel incentive system. The system of additional remuneration of trade and service personnel of the company from Ukrainian commerce sector was developed and substantiated. It was determined that the basis of an additional remuneration system of trade and service personnel was introduction of a percentage of total sales, which exceeded the established volume, as the main priority. The five-factor model for assessing the productivity level of sales and service personnel in the company from Ukrainian commerce sector built. By this model, effectiveness of introduction of an additional remuneration system for trade and service personnel of the company from Ukrainian commerce sector proved and evaluated. Further, authors will work out practical recommendations for the development the basic salary system for sales and service personnel of the company from Ukrainian commerce sector.

Keywords: Labor Incentives System; System of Additional Remuneration; Personnel Remuneration System; Pay System; Salary; Trade and Service Personnel; Performance-Based Incentive Payment System; Commerce Sector

JEL Classification: J53; М52

Acknowledgements and Funding: The authors received no direct funding for this research.

Contribution: The authors contributed equally to this work.

Data Availability Statement: The dataset is available from the authors upon request.

DOI: https://doi.org/10.21003/ea.V191-10

References

  1. Alderfer, С. Р. (1972). Existance, Relatedness and Growth: Human Needs in Organizational Settings. New York: The Free Press.
  2. Auriol, E., & Renault, R. (2008). Status and Incentives. The RAND Journal of Economics, 39(1), 305-326.
    https://www.jstor.org/stable/25046375
  3. Besley, T., & Ghatak, M. (2005). Competition and Incentives with Motivated Agents. The American Economic Review, 95(3), 616-636.
    https://doi.org/10.1257/0002828054201413
  4. Bowers, M. R., Hall, J. R., & Srinivasan, M. M. (2017). Organizational culture and leadership style: The missing combination for selecting the right leader for effective crisis management. Business Horizons, 60(4), 551-563.
    https://doi.org/10.1016/j.bushor.2017.04.001
  5. Brown, G., Gardner J., Oswald, A., & Qian, J. (2007). Does Wage Rank Affect Employees Well-being? Industrial Relations: A Journal of Economy and Society, 47(3), 355-389.
    https://doi.org/10.1111/j.1468-232X.2008.00525.x
  6. Charness, G., & Kuhn, P. (2007). Does pay inequality affect worker effort? Experimental evidence. Journal of Labor Economics, 25(4), 693-723.
    https://doi.org/10.1086/519540
  7. Clark, A., Masclet, D., & Villeval, M. (2010). Effort and Comparison Income: Experimental and Survey Evidence. Industrial and Labour Relations Review, 63(3), 407-470.
    https://doi.org/10.1177%2F001979391006300303
  8. Eurofound. (2016). Changes in remuneration and reward systems. Publications Office of the European Union, Luxembourg.
    http://www.metalonia.com/w/documents/Changes%20in%20remuneration%20and%20reward%20systems.pdf
  9. Eurofound and Cedefop. (2020). European Company Survey 2019. Work place practice sun locking employee potential. European Company Survey 2019 series. Publications Office of the European Union, Luxembourg.
    https://www.eurofound.europa.eu/sites/default/files/ef_publication/field_ef_document/ef20001en.pdf
  10. Ferrer-i-Carbonell, A. (2005). Income and Well-Being: An Empirical Analysis of the Comparison Income Effect. Journal of Public Economics, 89(5-6), 997-1019.
    https://doi.org/10.1016/j.jpubeco.2004.06.003
  11. Gaiets, V. M., & Semynozhenko, V. P. (2006). Innovative prospects of Ukraine. Kharkiv: Constanta (in Ukr.).
  12. Galli, E. B. (2011). Das strategische Programm personell besetzen. In M. Menz, T. Schmid, G. Müller-Stewens, & Ch. Lechner (Eds.), Strategische Initiativen und Programme. Uniscope. (pp. 143-167). Publikationen der SGO Stiftung. Gabler Verlag, Wiesbaden.
    https://doi.org/10.1007/978-3-8349-6965-1_6
  13. Herzberg, F., Mausner, B., & Snyderman, B. B. (2017). The motivation to work. New York: Routledge.
    https://doi.org/10.4324/9781315124827
  14. Klymchuk, A. O., & Mikhailov, A. N. (2018). The motivation and stimulation of personnel in effective enterprise management and innovation activity improving. Marketing and Management of Innovations, 1, 218-234.
    https://doi.org/10.21272/mmi.2018.1-16 (in Ukr.)
  15. Kohn, A. (1993). Why Incentive Plans Cannot Work. Harvard Business Review, (September-October), 54-63.
    https://hbr.org/1993/09/why-incentive-plans-cannot-work
  16. Lisciandra, M. (2007). Agency theory and work incentives. Studieconomici, 91, 117-146.
    https://www.researchgate.net/publication/254415109
  17. Lyubitskaya, V. (2019). Problems of Labor Incentives of High-Tech Enterprises in Conditions of Digitalization. In M. Kaz, T. Ilina, G. Medvedev (Eds.). Global Economics and Management: Transition to Economy 4.0, (pp. 15-23). Springer Proceedings in Business and Economics, Springer.
    https://doi.org/10.1007/978-3-030-26284-6_2
  18. MacClelland, D. C. (1987). Human motivation. New York: Cambridge University Press.
  19. Maslow, A. H. (1943). A theory of human motivation. Psychological Review, 150(4), 370-396.
    https://doi.org/10.1037/h0054346
  20. Mayo, E. (1946). The Human Problems of an Industrial Civization. Boston: Graduate School Administration, Harvard University.
  21. Mazaraki, A. A., Gaiets V. M., Korolchuk, O. P. et al. (2011). Ekonomichni doslidzhennia (metodologiia, instrumentarii, organizatsiia, aprobatsiia) (Economic research (methodology, tools, organization, testing)). Kyiv: Kyiv National University of Trade and Economics (in Ukr.).
  22. Ogbonnaya, Ch., Daniels, K., & Nielsen, K. (2017, 15 March). Research: How Incentive Pay Affects Employee Engagement, Satisfaction, and Trust. Harvard Business Review.
    https://hbr.org/2017/03/research-how-incentive-pay-affects-employee-engagement-satisfaction-and-trust
  23. Ouchi, W. G. (1984). Methods of organization of Production: Japanese and American approaches. St. Petersburg: Ekonomika (St. Petersburg: Economy) (in Russ.).
  24. Pendleton, A., & Robinson, A. (2017). The productivity effects of multiple pay incentives. Economic and Industrial Democracy, 38(4), 588-608.
    https://doi.org/10.1177%2F0143831X15583099
  25. Pruss, D. M. (2008). Comprehensive system of motivation of personnel of trade enterprises in the conditions of transformation of market relations. Menedzher. Visnyk Donetskogo derzhavnogo universytetu upravlinnya (Scientific Journal «Manager» of Donetsk State University of Management»), 46(4), 171-179 (inUkr.).
  26. Rajiani, I., Haslinda, M., & Hardjono, B. (2016). Ability, Motivation and Opportunity as Determinants of Green Human Resources Management Innovation. Research Journal of Business Management, 10(1-3), 51-57.
    https://doi.org/10.3923/rjbm.2016.51.57
  27. Rob, R., & Zemsky, P. (2002). Social Capital, Corporate Culture, and Incentive Intensity. RAND Journal of Economics, 33(2), 243-57.
    https://doi.org/10.2307/3087432
  28. Saaty, T. (2012). Decision Making for Leaders, The Analytic Hierarchy Process for Decisions in A Complex World. Pittburg: RWS Publications.
  29. Taylor, F. W. (1997). The Principles of Scientific Management. New York: Dover Publications.
  30. Williamson, O. E., Wachter, M. L, & Harris, J. E. (1975). Understanding the Employment Relation: The Analysis of Idiosyncratic Exchange. The Bell Journal of Economics, 6(1), 250-278.
    https://doi.org/10.2307/3003224
  31. Winter, E. (2004). Incentives and Discrimination. The American Economic Review, 94(3), 764-773.
    https://doi.org/10.1257/0002828041464434

Received 4.03.2021
Received in revised form 29.04.2021
Accepted 3.05.2021
Available online 10.08.2021

View Full-TextDownload PDF
In, , , , , , , , ,

More Papers

Expert assessment and consumer preferences for the implementation of educational tourism in the learning system of universities students: the experience of Kazakhstan

Tashenova, L., Mamrayeva, D., & Borbasova, Z. (2023). Expert assessment and consumer preferences for the implementation of educational tourism in the learning system of universities students: the experience of Kazakhstan. Economic Annals-XXI, 202(3-4), 108-126. doi: https://doi.org/10.21003/ea.V202-10

Economic Annals-XXI