Incentive Program for Sales Force of a Local Pharmaceutical Company
Date Issued
2007
Date
2007
Author(s)
Chang, Hsiu-Chi
DOI
zh-TW
Abstract
The annual growth of pharmaceutical expenditure of BNHI (Bureau of National Health Insurance) increased slightly in recent years. However, sales performance of a local pharmaceutical Company P didn’t grow in parallel, but decreased in some degree. The major reason was that BNHI cut the pharmaceutical reimbursement price many times during the past years and the Company P was tremendously damaged by the price cut. Management team in this unfavorable profit situation had to modify their business model quickly, especially in improving the incentive program that will improve sales performance and increase sales in high gross profit products.
Company P changed its previous incentive program in 2005, but sales performance was not improved accordingly. They found the major reason was the decreasing percentage of A-class products (the highest margin products) in the product portfolio. It was owing to BNHI dramatically cut the reimbusement price that made the profit of all pharmaceuticals shrunk terribly. A lot of A-class products become B-class (middle margin products) & C-class (low margin products). Conclusions from further analysis includes : (1) Average length of work month for resigned employees increased from 6.83 months (’04), to 18 months (’05) and 18.28 months (’06). (2) Average incentives amount of an employee raised up from NT$86,944/yr (’04) to NT$127,322/yr (’06). For the purpose of increasing revenue, Company P elevated the sales bonus as the factor stimulating PSR (personnel sales representative) to achieve their target, but the outcome was not as expected.
Facing the revolutional change of pharmaceutical industry environment, Company P revised its incentive program of 2005 and 2006, and then developed a new program for 2007. Not only trying to overcome the BNHI pharmaceutical reimbursement deduction, but also connecting with reasonable sales target. Company P has implemented the new incentive program with the expectation of increasing revenue. There are two modifications in this new program. (1) Interval of Quota increment was adjusted from NT$ 200,000 to NT$100,000. (2) Incentives decreased for Cycle Quota below $1,200,000 situation (Low Quata PSR). Company P plans to implement “Extra Bonus Program” for the coming New Year period with the following consideration. (1) They increase the PSR Quota to have 15% growth next year. (2) This “Extra Bonus Program” will be implemented from Dec ’07 to Feb ’08 for countering the low performance phenomenon during Chinese Lunar New Year Festival. (3) This program consists of group competition and personal competition. Super PSR and ordinary PSR will have the same opportunity to get the bonus. (4) Significant elevation of bonus will increase the income of super PSR that will relatively stabilize their turnover rate and increase the revenue/profit of Company P.
Subjects
獎勵制度
績效管理
藥價給付
薪資結構
獎金制度
Incentive program
Performance management
Pharmaceutical Reimbursement Price
Salary package
Type
other
File(s)![Thumbnail Image]()
Loading...
Name
ntu-96-P94743008-1.pdf
Size
23.31 KB
Format
Adobe PDF
Checksum
(MD5):e19c8ea91bdfdf318542e4d0667abb7d