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Lower Pay=Better Sales?
Posted: 07/30/2007, 9:37 AM PT
Macy’s North division seems to be taking a page from the Circuit City playbook
(see "More
Gibberish from Circuit City," "Age
Bias Suit at Circuit City" and "Running
With the ‘Knuckleheads’ "). Not only is the famous retailer struggling to
carve out a new identity for its famous State Street store in Chicago—the former
Marshall Field’s—but now the company has decided to cut wages and commissions
for some sales associates starting in August.
According to the Chicago Tribune, "Macy’s notified employees at its North
division, made up of former Field’s stores, that it will cut the range of wages
and commissions for some sales associates starting in August and offer voluntary
severance packages for those who choose to leave. Macy’s officials declined to
be more specific but said the pay model at the former Field’s stores is outdated
and out of line with the other Macy’s divisions."
Consumer behavior expert Britt Beemer told the Tribune that it’s a mistake to
lower pay, even for a portion of the sales force, going into the big holiday
selling season. The risk of hurting employee morale could overshadow the efforts
to attract shoppers into the stores, he said. "Those [marketing efforts] are all
nice things, but when I walk in the front door of the store and the employees
aren’t happy, am I going to come back?" said Beemer, founder of America’s
Research Group. "When you’re a retailer, you’ve got to sell the employees
first."
Cutting pay and commissions seems to be a curious way to motivate your
workforce, especially a sales-oriented workforce, as Circuit City has
discovered. Is Macy’s seriously thinking that this move will help fix what seems
to be a growing problem in the Windy City? Only the holiday shopping season will
tell, but I’m betting that this move will backfire in a big-shouldered town like
Chicago.
Got a comment about Google or any of my other posts? Until we get the comment posting function on this blog operational, send me comments at jhollon@workforce.com. I will publish as many of them as I can.
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John Hollon
Workforce Management editor John Hollon is an award-winning journalist with more than 20 years' experience as a newspaper, magazine, Internet and business journal editor. He holds a bachelor's degree in journalism from California State University, Long Beach, and an MBA from Pepperdine University's Graziadio School of Business and Management.
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Previous Posts
1. Another Airline, Another Meltdown
Whatever happened to the notion of shared sacrifice, of workers and management both sharing in the pain and hardship it takes to get a money-losing business back on track? Well, the concept is a good one, but at Northwest Airlines, it seems to be at the core of all that is wrong with the business right now.
2. Bad Behavior, CEO Style
I’ve been meaning to write about last week’s news concerning Whole Foods Market CEO John Mackey, who has put his company’s $565 million acquisition of rival Wild Oats at risk by anonymously attacking and belittling Wild Oats and its CEO on Internet financial forums.
3. Hiding Behind HIPAA
4. Lower Pay=Better Sales?
5. No One Forgets a Great Manager
6. There’s Some Kind of Message Here
7. Why the Rich Get Richer
I’ve been in the workforce long enough that I remember a time when companies sometimes hired a person even though they didn’t have a specific job for them. It didn’t happen often, and it sometimes turned into a problem, but when it worked, it was kismet.
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