“How do you charge your consultants for personal or general sales?” Is one of the most popular questions causing a lot of controversy and gossip on the online forums of retail business owners. Indeed, how to properly form the earnings of sellers? But what about bonuses, where to get a sales plan from, do employees allow them to buy goods at discounted stores? In search of truth, the Shoes Report turned to a dozen shoe retailers, but no company wanted to disclose its motivation system - the process of its development was too complicated and individual. Then we asked four business consultants, and finally became convinced that the topic of seller motivation is very complex, because even our experts could not come to a common opinion.
How to calculate the salary of the seller
Julia Veshnyakova: First of all, the store owner needs to calculate how much of the total turnover of the company goes to salary. The recommended payroll fund for sales personnel should not exceed 7% of the turnover of the outlet.
Anna Boldyreva: Suppose we conclude that the average monthly salary of our seller is 30 000 rubles per 40-hour work week. Next, you need to break the salary into the main and bonus part. Thus, 30 000 rubles is divided into the base part, for example, 25 000 rubles, and the premium fund - 5000 rubles monthly. The premium may be accrued as a percentage of sales subject to the achievement of a certain turnover. These payments may not be regular. The main thing is that the total bonus fund for the year should be no more than 60 000 rubles (5000x12 months) per employee if the year ends with a minimum turnover. Disciplinary action may be taken from the premium portion.
Julia Veshnyakova: I am of the opinion that the salary should be distributed on the 3 part. The first is a permanent salary, it should be approximately 40% of all earnings. The second part, the percentage of personal sales, will make the same percentage. The remaining 20% is a percentage of total store sales. Therefore, it is necessary to use both personal and collective motivation.
Anya Pabst: There is also a transitional option between personal and general sales - the creation of fixed “corridors” when accrual occurs, for example, like this: 500 rubles for fulfilling the plan for 70 - 79.9%, 1000 rubles - for 80 - 89.9% and so on. In any case, the interest accrual system should be 100% transparent so that the staff does not have any reasons for discontent. Employees must clearly understand how their work efficiency affects income.
Nina Tarasova: The ratio between salary and percent depends on the psychological characteristics of employees. If you have single-handed employees working for the highest possible income and focused only on personal results, then the salary should vary between 30-60% of total earnings. If your sellers are a real team, ardent supporters who believe in a common cause, then it is worth distributing the salary in this way: 60-70% - “fix”, 20-30% - percentage of store sales or shift. For personal sales, you should leave 10-20%. The general market situation is as follows: in most retail stores, payroll is based on personal sales. Such a motivation system appeared when Western companies with their ideology entered the Russian market. It seems to me that in Russia this scheme does not work. In our country, the collective is much more important for people than in Europe or America. Therefore, the main incentive for Russians to work is to achieve a common result. And I am inclined to consider that the reward for personal sales should not exceed 20%. A system based on collective sales must be properly organized. It is necessary to create such an environment and relations in the team, in which the lagging ones will be tightened without external pressure, and the loafers will leave of their own free will. For this it is necessary that the teams (shifts) compete among themselves, and those who achieve the best results receive small non-material incentives.
How to calculate an individual employee plan
Anya Pabst: Individual plans are more effective than shift or store sales plans. As a basis for a personal plan, you can take the result of an employee in the same month last year. Tasks should be known to the employee before the deadline for which they are set. It is highly undesirable for the plan to change during the month or season, even if it is exceeded. This leads to a loss of trust on the part of employees and a decrease in loyalty. Significant underperformance of the plan is due to planning errors made by managers, and not through the fault of sellers.
Julia Veshnyakova: The personal plan of each functional unit of the retail store should directly depend on the general plan of the outlet. Suppose the store’s plan for the season is 5 million rubles, 5 sellers work in the store. We make simple calculations and understand that each employee must sell a million rubles worth of goods per season. But you can’t set the same tasks to a consultant with many years of experience and a novice seller who just came to the company. For old-timers, the sales plan will be higher, but at the same time there will be a larger percentage of personal sales and the base salary. An inexperienced seller will receive a smaller plan and, accordingly, a lower salary and percentage. As a result, his earnings will be lower, but this is completely normal. If the plan for the store is fulfilled, then sellers will also receive a set percentage of the total profit. If one shift fulfilled the plan, and the second did not, then only those who have done a good job should be encouraged. When developing individual plans for sellers, the concept of an employee category arises. If the seller works long and well, fulfills the plan, successfully passes certification, then his category rises. Accordingly, the salary increases, the percentage of sales increases, but the plan also. Employees with different experience and work results cannot be in the same financial conditions, this rule applies in all areas of the market.
Should I pay even very large bonuses?
Anna Boldyreva: If the company receives additional profit, then based on the results of the temporary period, employees may be rewarded. The premium payroll may contain an additional estimated percentage to increase the basic monthly sales figures.
Julia Veshnyakova: If the seller earned a lot from individual sales, 4-5 times the usual amount, paying him this money is not just necessary, but necessary! After all, this is the seller’s merit - he worked hard and brought significant profit to the store. In addition, this situation should signal to the business owner about an error in calculating the motivation system, which resulted in such fabulous amounts. If at the end of the reporting period, the outlet shows a very large overfulfillment of indicators, then this indicates planning errors. And this is a problem of a different nature, more serious. It is necessary to understand in detail where inaccuracies are made.
Nina Tarasova: When the seller achieves incredibly high results, the premium must be calculated individually, but at the same time it should not exceed 40% of the monthly earnings. In general, I am not a supporter of regular bonuses - it makes employees addictive and ceases to be an instrument of motivation. Bonuses should be paid no more than once a quarter. The premium amount is usually 10-25% of monthly income.
Are fines good?
Anya Pabst: The reward system should be achievement-oriented; this increases personal motivation and responsibility. Fines take us to the situation of “naughty children - strict parents” and remind us of the punishments for crimes. Both of these associations are not consistent with the idea of a successful venture.
Nina Tarasova: Fines are acceptable with a prescriptive management style that worked well with the previous generation but is not at all effective for Generation Y, which today has a large number of sellers. The penalty can be applied only as a last resort if the employee has committed a very gross violation. If you do not want to lose your employees, then try to use fines as little as possible as an instrument of influence.
Do sellers allow you to buy your product at a discount?
Anna Boldyreva: Undoubtedly, you need to allow employees to purchase goods from the assortment of the store. This is beneficial for the company, as it increases sales.
Julia Veshnyakova: Definitely worth giving sellers a discount on the product. The question is what should be its size in order to prevent abuse. I recommend giving employees the same privileges as regular customers. There is another option - to limit the amount of the purchase for a certain period depending on the position. For example, during the fall-winter season, the manager can purchase shoes from the assortment of the store for 10 thousand, taking into account the discount.
Anya Pabst: For many employees, the opportunity to purchase goods at a discount is an important motivation factor. This procedure should be the same for all personnel, for example, each employee receives an equal number of discount coupons. The size of the discount the entrepreneur must evaluate independently. At the same time, it is worth considering in sales analytics that if employees often purchase goods for themselves and their loved ones, the indicator “average check” of a month or a season will turn out to be less.
Other bonuses and compensation
Anna Boldyreva: It is worth compensating employees for transportation costs if the store is located in an uncomfortable place.
Anya Pabst: Compensation or partial compensation of transportation and other expenses is an interesting material way of motivation. If the system is the same for all employees, then this is a good idea. But you can’t transfer it to the category of symbolic ones, otherwise, over time, employees will no longer perceive such compensations as an additional bonus.
Any bonuses should appeal to the emotions of the employee and show how much the manager is interested in him and knows his preferences: for example, whether a particular seller will be more happy with tickets to the theater or a subscription to the pool.
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