Footwear Insight

24 • Footwear Insight ~ May/June 2023 footwearinsight.com sense out the current employee culture … William Nettleton, Store Manager, Modern Shoe Provo Utah, stated, "Only true salespeople like commission, the ability to grind and earn more. e 'Quiet Quitting' culture of those coming now into the workforce believe they can do what they want when they want to but still be considered valuable to a company. The phrase 'the grass is always greener…' is something many people I have interviewed believe, so unless the culture is correct to engage with an employee long term and be more than just a paycheck, it doesn't matter what you pay them – they will leave searching for greener pastures." Jim Newman, Yellow Box wholesale sales representative and former retailer, previous NST Chairman, and previous NSRA Board Member, called me and said this, "Dealing with employees out there today, everyone is different. People in the age group of 25 to 40, at the height of their working careers, aren't motivated in the same way my generation was. Longevity is limited, many current employees will keep a job a short time until something better comes along. Maybe you need 2 to 3 different pay systems. A good manager has to recognize what motivates one employee different than another." Commentary ose who are against paying commission as part of their compensation plan insist that the hassles and conflicts with maintaining the appropriate business culture outweigh the benefits. I felt those that made comments expressed their position well and I must admit that their fears and concerns are largely real. Yes, employees will be competing against each other. Yes, some unintended results will be problematic. erefore, yes, it is certainly a hassle to manage the various issues! However, those of us who favor com- pensation systems based on commission insist they produce increased sales and profits for the business. You are in business to make as large of a profit as possible, are you not? Isn't your quest for additional profit worth dealing with employees and the commission issues? e following goals might be best achieved through commission-based pay systems: • Maximum Average Transaction: If your goal is to sell the highest volume in purchases to each and every customer, commissions provide for consistent encouragement for employees to maximize selling presentations, according to the proponents. • Longevity: If a compensation-based system is enacted and managed with care and attention, owners can benefit because it helps employees reach their personal income goals and that leads to longevity. What better way to retain employees than to pay them based on the value they generate within the business? e longer employees are with any company, the more they understand the offerings and the larger personal consumer relationships they create. erefore, longevity leads to more consistent and rewarding customer service environments. • Employees receive feedback: Commission-based pay systems require accurate and timely statistical reporting and that will require the employer to manage a system to calculate, analyze and issue reports. Employees crave feedback. What better way to give feedback than to issue periodic reports of an employee's average performance with each customer? • Good Behavior: If good behavior is measured by good customer service and good customer service is measured by the customer going home with the maximum bag of merchandise that they will be happy with, then commissions encourage good behavior. While those who favor commission-based pay systems advocate for them, even the strongest of advocates advise that managing a commission-based pay system requires a lot of careful thought, intense supervision of the selling floor, and other considerations. Commission helps identify the core business value each employee brings to the table — who is able to influence customers to buy or who isn't able to or can't. Any shoe store owner would benefit his business by recognizing quickly which employees are simply not a fit. Most employees prefer that their lazy or incompetent fellow employees leave the company. What employees hate is performing better than another employee but being paid the same. However, commissions must also work in harmony with your company culture, which tells your staff how to treat customers and how to work well with each other. Hopefully, your staff are all can-do, will-do, enthusiastic, ambitious, positive, collaborative and dedicated toward your company's success. If they are, you will also find an appropriate and manageable way to compensate your staff accordingly. n Alan Miklofsky is a semi-retired shoe industry veteran and contributor to Footwear Insight. is is his sixth article. Aer a 40-year award winning career as a retailer, long-term board member of the NSRA (which included a stint as its Chairperson), Alan is currently a business consultant. Should You Pay Your Shoe Sales Staff Commissions? If your goal is to sell the highest volume in purchases to each and every customer, commissions provide for consistent encouragement for employees to maximize selling presentations, according to the proponents. Business Insight

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