Supplement | HBS Case Collection | March 2011 (Revised June 2011)

Arck Systems (E)

by Ian Larkin

Abstract

The Arck Systems series of cases describes the dilemmas faced by a senior sales manager in determining a sales compensation plan at an enterprise software company. The existing compensation plan is aggressive and highly rewards "star" performers. The cases track a series of changes the manager makes to the sales compensation plan in response to negative and unintended consequences of the existing system. The cases illustrate the tradeoffs inherent in incentive plans (even outside of sales environments) and presents a framework for the design and management of incentive systems. It also is useful in addressing employee response to incentive system change.

Keywords: Transformation; Framework; Compensation and Benefits; Organizational Design; Performance Evaluation; Salesforce Management; Motivation and Incentives; Software;

Citation:

Larkin, Ian. "Arck Systems (E)." Harvard Business School Supplement 911-060, March 2011. (Revised June 2011.)