Situation description:
in August 2019, a retailer (a chain of shoe shops) asked us to review the motivation system of sales department employees, since the company sales have not increased over the past year. The company was stable in the market, but had the potential for growth. The company sales department consisted of 8 sales assistants, 4 cashiers, 3 consulting operators and 1 senior operator. Sales assistants and cashiers worked in the sales areas, operators carried out online sales in the office (mainly through Instagram). The work of the operators was supervised by a senior operator, the work of sales assistants and cashiers was supervised by the business owner himself. Our work began with a thorough diagnostics of the existing personnel management system.
The following facts were revealed:
- The shortage of control and personal motivation of sales assistants and cashiers in the sales areas on the part of the direct manager. The manager often travelled to another city, where another branch was located, and he travelled to exhibitions in Turkey once or twice a year. During that time, sales assistants and cashiers worked without a supervisor.
- There was a noticeable spread of revenue by day when we analyzed daily sales. This resulted in an uneven flow of funds to the cash register and, as a result, a periodic shortage of operational cash.
- Salaries of sales assistants and cashiers depended only on revenue and did not take into account the quality of the service provided and customer satisfaction.
- Operators got a fixed salary and were not interested in increasing sales and improving service.
Work performed:
- Together with the company management, the KPI for the sales department were determined.
- An urgent recruitment of personnel was carried out – two administrators in shops. Administrators controlled the work of the sales team on their sites, supported experienced employees and mentored new employees. The feedback of administrators partially affected the salaries of sales assistants and cashiers. Thus, effective vertical communications were established at the operational level.
- A motivational system based on KPI was developed for administrators, sales assistants and cashiers.
- A system of money incentives of sales assistants and cashiers was introduced, which took into account the execution of the daily and monthly sales plan, this led to stable daily sales at approximately the same level.
- A system of money incentives for sales assistants and cashiers was introduced, which took into account compliance with sales standards and customer satisfaction. Compliance with sales standards was assessed by regular “mystery shopper”, and the degree of customer satisfaction was assessed by a survey conducted by operators by the phone.
- Fixed salaries for the operators, including the senior operator, were cancelled and they were also offered a money incentive system based on KPI.
Achieved results:
Despite the coronavirus pandemic in 2020, as a result of the introduction of a new personnel motivation system, the company’s sales increased by 22% compared to the previous year. In addition, the problem of uneven daily receipt of funds to the cash register was eliminated. The motivation of sales assistants and cashiers has increased due to the positive influence, support, training and supervision from the administrators. The service (CSI index) has improved according to the customer survey. The results of “mystery shopper” checks has improved.
P.S. We would like to emphasize that in some cases it is better to outsource the development or adjustment of the existing personnel motivation system to a third party who are experts in the field. Here are some reasons for this:
- A third-party HR consulting company is not interested in obtaining personal benefits as a result of the work of new personnel motivation system and will always adhere to an objective approach, taking into account only the interests of the business. If the internal employees of the company will be engaged in the development of the personnel motivation system, different subjective factors may arise that can negatively affect the correct operation of the system.
- Internal employees of the company often do not have time to carry out such large-scale projects. They are busy solving operational
- Lack of experience in conducting such a review among existing employees is often the reasons for seeking help from an independent company.
- Also, the involvement of a third-party will help to avoid conflicts of interest and get an additional expert assessment of HR consultants from outside.