It is All Fun and Games

Developing a system of rewards for your employees

Many retailers have told us that they use a "traditional" method of establishing the starting pay and pay increases for their employees.  The traditional method being to have a starting pay at a level that competes with fast food restaurants and other retailers.   Some stores give annual reviews, some have bonuses at year's end, but few of us have a program that ties payroll to sales and profitability. 

As a retailer, our starting pay did not allow us to hire anyone away from a competitor, but it was slightly ahead of many comparable stores.  We preferred this method because we had a high level of success in developing skilled team members as compared to hiring them away from others.  We believe what separated us from other retailers was our method of developing and rewarding our team members. 

As our team members attended our bi-weekly classes, we taught sales techniques, merchandising and displaying.  Our classroom time was also an excellent opportunity to review our goals and enjoy the rewards of our efforts.  Each of our team members had an assigned department for which they were responsible.  Our newer team members had a more experienced team member available to give them direction and assistance. 

Previously, we made a point to review our payroll records each six months.  We looked at longevity, how we felt that this team member was performing on the sales floor, and in their department. A pay raise was merited if there was an increase in productivity or newly assigned duties.  While we continued reviewing payroll every six months, we began to do so using some new tools. 

With each team member, we asked them to review themselves in ten categories.  We reviewed all team members using the same form.  During the review, we established a list of goals that we wanted to have accomplished.  Together we agreed on expected completion dates for each goal.  The goal sheet was kept in each team member's file so that we could refer to it in the coming weeks and months. 

During each month, we also had a number of opportunities for each team member to receive bonuses.  Our first game dealt with overall sales goals.  Our goal for each month was a 4.5% sales increase over the same month the previous year.  When we surpassed this goal, we took 8% of the gross increase over goal, and divided it among our team members according to the number of hours they worked during the month.  This method reminded all of our team members that when it comes to sales, even the newest part timer is as important as our supervisors.  Even our office manager and warehouse staff participated in the distribution.

Our 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 that suggested and sold the item to a customer.  The first item was usually what the customer came to our store to buy.  The second item was the add on sale.  When our team member sold the pair, he received the bonus – usually one to five dollars.

Our third game of reward involved individual team member effort and their assigned departmental duties.  Just as our job descriptions defined an overview of our team effort, we had a procedure letter that specified what duties each person had within their department and how to perform them.  It was the same letter for each department. 

We had three customers shop the store during each month, and determine the three best looking departments for that month.  With this game, as well as the bonus items, we gave the awards during our bi-weekly staff meetings.

With a bit of flash and show, we rewarded those that have accomplished, with everyone knowing how much each team member received.  Those team members that did not accomplish had to settle for their base pay.

The fourth game of reward, like the first, was one that everyone participated in equally.  The goal was to increase our average sales ticket by $1.00.  Like the first game, we tracked our progress on our classroom bulletin board.  Our experience was that everyone watched to see how we were doing.  When we increased our average sales ticket by $1.00 for the month, we would then employ the services of one of our customers.  The instructor of culinary arts at the nearby vocational school prepared for all of our team members, and their spouses, a steak dinner at our home.

We also used games to resolve problems.  One situation we experienced dealt with our office manager and the amount of time necessary to resolve problems from each of our registers.  Creating a score sheet, our office manager kept track of which cashiers were most efficient.  Those cashiers with an acceptable score were rewarded with a 15-cent per hour bonus.  Not so surprising, was how well this worked to resolve our problem, and free our office manager to perform other duties. 

The greatest benefit we saw from our "fun and games" was having our team members understand that customers and their purchases are what drove our store.  They knew how pay raises were created, and how to earn them.

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This article is copyrighted by Tom Shay and Profits Plus Solutions, who can be reached at: PO Box 128, Dardanelle, AR. 72834. Phone 727-823-7205. It may be printed for an individual to read, but not duplicated or distributed without expressed written consent of the copyright owner.