|
Retail SMART |
High
Morale Means High Profits |
|
|
By:
Dennis A. Conforto
Chairman & CEO of A-Z Media Group, Inc. |
|
|
Among the ways you know you’re no longer in the retail grind is
reviewing your staff turnover. When you see that your staff turnover is low and morale is high, you’re out of the Grind.
High turnover is always the killer to an independent retailer’s long-term profits. It is difficult to replace a well-trained staff member, making turnover painful. The key to low staff turnover is keeping morale high. The question is: How can a retailer do that?
Some would argue that it is not possible to have high morale with retail staff members when the pay is low, the hours are long, and the benefits are small. However, studies have shown time and again that what employees value more than even high pay, is to be heard, listened to, and respected. They need to feel like their ideas count, are valued, and are even implemented.
This means that, as the owner of the business, your focus should be on catching the staff doing things right rather than catching them doing things wrong. I think most of us in life long to be caught doing things right.
Most people know what they have done wrong long before anyone says anything. Usually
the employee feels worse about it and anything said to the employee might seem like piling on.
How to Reward:
I am a big believer in reward systems for retail employees, based on performance. In past articles I have suggested that part of their pay comes as revenue increases. For example, if you know the break-even point for your store, then you can use that breakeven point as bonus pool.
So let’s say that the monthly breakeven point for your store, including your salary, is $50k. You might consider taking 10% of everything over that $50k and placing it into the staff bonus pool. The pool would be dispersed based upon the percent of time they worked in relation to the rest of the staff.
The Benefits:
This does several things for your business:
1. You learn your breakeven point
2. Your staff learns the breakeven point
3. It gives the whole company a goal to achieve. They know they can earn more by doing more, helping more, and being a part of the team.
4. You kill off bad work habits like, "that’s not my job." When you use the team bonus pool concept everything is everyone’s job. By looking for ways to reward your staff you create for them high morale for the business and personal loyalty to you.
5. You can quickly identify the poor performers.
Making It Work:
Many people have a hard time understanding that they get paid based on their own production, instead of the company’s production as a whole. But the free enterprise system works best when the rewards have no caps and are based on what they produce. Of all the things you do for your retail business, hiring the right person at the right time for the right job is the most important job you have. Your life as a retail executive is so much easier when you have a great staff working with you. Remember the people who work for you are like you in many ways. They, too, have dreams, hopes and aspirations that are based on their self-esteem and the ability to make a difference in your business. When they are a part of the process, they will step up to the plate. When they are not part of the process then they work at cross purposes with your goals.
The SMART retailer always wants to lower staff turnover. A dedicated staff is the result
of a system that motivates the staff to do more than they thought they could.
|
|