a system of rewards for your employees
retailers have told us that they use a "traditional" method
of establishing starting pay and pay increases for their employees
- the traditional method being to have a starting pay that competes
with other retailers. Some stores give annual reviews, some have
at year's end, but few have a program that ties payroll to sales
and profitability. Take a look at this profitable business that
has developed a very talented staff.
are required to attend a bi-weekly staff meeting. They are shown
sales techniques, merchandising and displaying as well as learning
more about the products they sell. The staff meeting is also an
excellent opportunity to review goals and enjoy the rewards of their
efforts. Each of the employees has an assigned area of the business
for which he or she responsible. Newer employees have a more experienced
team member available to give them direction and assistance.
owner explains that previously they made a point to review payroll
every six months. They looked at longevity, how the employees were
performing on the sales floor, and how they managed their assigned
area. A pay raise was merited if there was an increase in productivity
or if they had been assigned additional duties.
the owner continued reviewing payroll every six months, he began
to do so using some new tools. Each employee was asked to review
him or herself in 10 categories. The owner reviewed the employee
using the same form. During the review, the employee and employer
created a list of goals that they wanted to have accomplish. Together
they agreed on expected completion dates for each goal. The goal
sheet was kept in the team member's file for easy referral in the
coming weeks and months.
month, there were also a number of opportunities for each employee
to receive bonuses. Because the owner was into sports, each of the
opportunities was called a "game." The first game dealt
with overall sales goals. The goal for each month was a 4.5% sales
increase over the same month the previous year. When the business
surpassed this goal, the owner took 4% of the gross increase over
goal and divided it among the employees according to the number
of hours they worked during the month. Sales were tracked and posted
to a bulletin board on a daily basis so employees could keep track
of their efforts.
second game of financial reward was one of bonus items for add-on
sales. Certain products that were not usually selected by customers
had a bonus paid to the team member who suggested and sold the item.
The first item was usually what the customer came to our store to
buy. The second item was the "add-on" sale. When an employee
sold the pair, he or she was entitled to the bonus - usually $1
the first two games, bonuses were given during the bi-weekly staff
meetings. With a bit of flash and show, the owner rewarded those
who had accomplished the goals, with all employees seeing how much
each other received. Those team members who did not achieve in any
of the games had to settle for their base pay.
The third game of reward, like the first, was one in which everyone
participated equally. The goal was to increase the average sales
ticket by $1. Like the first game, progress was tracked on the office
bulletin board. The owner commented about how often his employees
checked the bulletin board to see how they were doing. When they
increased the average sales ticket by $1. for the month, the owner
would then employ the services of one of his customers. The instructor
of culinary arts at the nearby vocational school prepared a steak
dinner at the owner's home for all of the employees, their spouses
owner also used games to resolve problems. One situation they experienced
dealt with their office manager and the amount of time necessary
to perform the daily audit of each of their cash registers. Creating
a score sheet, the office manager kept track of which cashiers were
most efficient. Those cashiers with an acceptable score were rewarded
with a 35-cent-per-hour bonus. Not surprisingly, this worked well
to resolve the problem, and that freed the office manager to perform
greatest benefit this owner saw from their "fun and games"
was having employees understand that customers and their purchases
are what drive the business. They knew how pay raises were created,
and how to earn them.