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Retail pay: on transparency and motivation
26.11.2014 5646

Retail pay: on transparency and motivation

In retail, the success of a transaction at 80% depends on the ability of the seller. Therefore, his motivation, ability to work with people, experience and knowledge of the goods determine the success of the entire enterprise. What wage strategy will be correct and will help not only keep sales at the same level, but reduce staff turnover and increase seller motivation?

Anya Pabst Anya Pabst - Head of the Russian branch of BEITRAINING. Master of Sociology and Slavic Studies. Education "HR Manager", is a specialist in the field of crisis communication. He has experience working with people in study groups of various profiles both in Germany and abroad. Over the years, Anya Pabst has trained over 150 trainers. For more than 7 years her professional activity has been associated with work in the CIS countries - Russia, Kazakhstan and Ukraine. BEITRAINING is an international franchise company and a certified strategic partner of the German and Austrian Franchising Union on the topic of “Professional Development”. He specializes in training and professional development in the field of management, trade, customer service and personal growth.

The retailer, as the face of the company, directly affects the success of sales and the number of regular customers. Owners of domestic shoe retail seek to expand in order to increase the turnover of this largely unprofitable business. At the same time, when hiring new employees or drawing up a sales plan for existing outlets, such an important issue is often overlooked as the motivation of sellers - both by intangible means (read about this in the next issue) and by competent wages.

The ideal seller is a myth

High staff turnover and a shortage of qualified employees, who on average change jobs every six months to a year, are common retail problems. There are many retailers on the market at the same time, looking for candidates for the basic positions of a sales assistant and offering similar conditions. A busy schedule, low salaries and constant pressure from managers / business owners negatively affect employee motivation.

“Each person has a level of productivity that can fluctuate,” says Anya Pabst, head of BEITRAINING’s Russian subsidiary. - At the same time, the employee’s motivation often depends on how much he himself can influence working moments, starting from the average check and ending with the complexity of sales. In addition, it is worth considering that there is a big difference between a simply satisfied and motivated employee. ”

Often the buyer falls in love not with the product, but the seller’s attitude towards the client, whose professionalism allows to bring the transaction to its logical conclusion.

But ideal sellers, like ideal people in general, do not exist, and in professional life everyone has ups and downs. The main problem of the seller may be a drop in sales. But before you try to influence the situation, you need to understand the problem.

A satisfied and motivated employee - two different things!

Working in retail requires increased stress tolerance. Long shifts, constant communication, pressure from the manager and unexpected changes in the sales plan post-factum or along the way, an insufficiently transparent remuneration system or the issuance of envelope salaries are factors that adversely affect whether an employee is satisfied with his work. If low sales are largely a matter of motivation, before you worry about raising it, you should minimize the factors that make the seller unhappy with his place of work. A disgruntled employee can be forced to work harder, but he will not last long, and one can doubt the long-term growth of personal results.

But how does a satisfied employee differ from a motivated one? In the first case, the situation may completely suit him and he will not make every effort to increase personal or team sales. In the second, he will be ready to leave the comfort zone in order to change the situation for the better, and stimulating this willingness is not so easy.

To increase motivation, you can use not only financial leverage. Moreover, fines are the last thing to resort to. Penalties deprive the employee of autonomy, confidence that he can take some risks and make creative decisions. It is better to develop a bonus system, thanks to which the best sellers or those who have improved their previous results will receive bonuses monthly or quarterly. It is possible that the bonus part of the salary is saved when a certain level of sales is reached, it decreases slightly if the sales correspond to the average at the enterprise or decreases significantly if the sales plan is not fulfilled.

At the same time period, employees can show different results simply because someone is in the first (growing) and second (most productive) part of the productivity cycle, and someone is in the third phase, characterized by a recession. At the same time, when drawing up a sales plan, many owners neglect the analysis or are even inclined to change the already approved plan if it turns out that the sales have approached the planned level or overcame it.

It is easy to avoid an incorrect assessment simply by taking a sufficiently long period of time as a basis. The second rule is not to forget about the Pareto law (20: 80), which is one of the defining ones in the trade and states that 20% of employees make 80% of revenue. At the same time, each employee needs to be motivated so that both the successful and the average seller in their achievements are ready to improve their own results.

Achievement-oriented payment does not necessarily mean a waiver of a fixed salary. Its presence is slightly lower than the so-called The “bread line” provides a foundation and self-confidence. At the same time, the fixed salary should not exceed 50 percent of the total amount, otherwise instead of active “sales people” “accountants” will come to work. “The real seller is result-oriented and not afraid of interest payments,” says Anya Pabst. “And the payment system agreed upon when hiring determines the contingent that comes to work in your company.”

Incentive to action

Pareto law is also true for customers. Of the 100 people who visited the store, only 20 are really interested in the product. In a retail store where the sale is accompanied by a sales assistant, and not carried out by the visitor himself, as in a supermarket, approximately five of these twenty are ready to make a purchase right now. Consequently, a good level of conversion of visitors into buyers is 5 percent, and how many people are hiding behind these five percent is determined by the traffic of the outlet.

Cross-country sales or the quality of the goods offered are factors that a retailer cannot have a particular influence on, unlike the size of the average check or the complexity of sales. At the same time, the ability to change something is an important motivating factor. Recognition and involvement, the feeling that each employee affects the success of the company, is one of the most effective factors of motivation and development of the enterprise as a whole.

There are factors on which the employee can have an indirect effect, for example, the number of returns (it increases if sellers are forced to “push” the goods) or drawing up a sales plan. But the sphere that is within the competence of sellers - the average check, the success of team work in one shift - should succumb to the influence of the employee and create the feeling that the activity of the seller in the sales area affects the success of the company.

This feeling should be supported by factors that depend on the management of the enterprise. First of all, it is a transparent remuneration system, which has been known since the moment of negotiations on hiring, as well as an analysis of the activities of each employee over a long period of time. They lay the foundation for successful motivation. The first is responsible for the employee’s confidence in his position in the team and in tomorrow. The second allows you to notice even a little progress and create a motivating bonus system.

If during the quarter, the average seller’s average check increased by a few percent, this can be noted as a financial incentive, even if the employee was not among the best workers. It is such a system that positively affects motivation: if only the most successful are awarded with prizes, the rest lose the desire to change something. Although a small but marked personal progress of the employee is a contribution to the well-being of the entire company.

Thus, the transparency of doing business at the enterprise, the sales plan approved in advance, as well as a detailed analysis of the activities of each employee and the subsequent individual conversation with each create the necessary groundwork for increasing motivation. The next echelon is the confidence of employees that they have room for activity and personal initiative in individual and team work, and each success will be marked with a bonus. All together creates a motivated team, which pleases even a small success, which is especially true in an economically difficult period.

Net salary or only a percentage of sales are ineffective methods of material incentives. The lack of a bonus part does not contribute to the personal interest of workers in the results of labor.

In the retail business, the optimal (variable) part is the amount of 20 – 30% of the total income of the specialist. At the same time, the fixed part of wages should be the same as that of the main competitors

It is necessary to introduce individual allowances - this will correctly motivate employees to increase sales.

In retail, the success of a deal is 80% dependent on the ability of the seller. Therefore, his motivation, ability to work with people, experience and knowledge of the product determine the success of everything ...
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