RMG 200 Chapter Notes -Job Analysis, Customer Satisfaction, Training And Development

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Published on 18 Sep 2012
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COMPENSATING AND MOTIVATING RETAIL EMPLOYEES
Two types of rewards from their work:
Extrinsic rewards
Intrinsic rewards
Money
Promotion
Recognition
Nonmonetary, nontangible
Sales people finding job challenging and fun
Retailers generally use three methods to motivate their employee’s activities
Policies and
supervision
Most fundamental method of coordination is to:
o Prepare written policies that indicate what tasks employees are responsible for
o Have supervisors/managers enforce these policies
Strict reliance on written policies can reduce employee motivation
Incentives
Some of the criteria that managers and employees could be measured on include:
o Customer satisfaction
o Average order dollar amount
o Market share
o Sales growth
o Top-of-mind awareness in a market
o Promotion from within
o Employee development
o Ideas and suggestions from staff that are implemented
o Revenue per square metre
Types of incentive compensation
o Commission: compensation based on fixed formula, such as percentage of sales
o Bonus: additional compensation awarded periodically, based on a subjective
evaluation of employee’s performance
o Profit sharing arrangements offered as cash bonus or as grant of stock options
o Stock incentives
o Incentive compensations plans: a compensations plan that rewards employees on
the basis of their productivity
o Straight commission: a form of sales person’s compensation in which the amount
paid is based on a percentage of sales made minus merchandise returned
o Drawing account: a method of sales compensation in which salespeople receive a
weekly cheque based on their estimated annual income
o Quotas: target level used to motivate and evaluate performance
o Quota-bonus plan: compensation plan that has a performance goal or objective
established to evaluate employee performance, such as sales per hour for
salespeople and maintained margin and turnover for buyers
Disadvantages of incentive compensation plans
o Hard to get salespeople who are compensated totally by commission to perform
nonselling activities
o Discourage people from providing services to customers
o Salespeople compensated primarily by incentives don’t develop loyalty to their
employer
Group Incentives
Encourages people to work together
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Document Summary

Sales people finding job challenging and fun. Retailers generally use three methods to motivate their employee"s activities. Most fundamental method of coordination is to: prepare written policies that indicate what tasks employees are responsible for, have supervisors/managers enforce these policies. Strict reliance on written policies can reduce employee motivation. Some of the criteria that managers and employees could be measured on include: customer satisfaction, average order dollar amount, market share, sales growth, top-of-mind awareness in a market, promotion from within, employee development, revenue per square metre. Ideas and suggestions from staff that are implemented. Disadvantages of incentive compensation plans: hard to get salespeople who are compensated totally by commission to perform nonselling activities, discourage people from providing services to customers, salespeople compensated primarily by incentives don"t develop loyalty to their employer. Organizational culture: a firm"s set of values, traditions, and customs that guide employee behaviour. Not written in policies, actually passed down by employees.

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