Beaumont, Texas – Conn’s, the regional CE and appliance
chain, may move from a 100-percent commissioned pay structure to an hourly-rate
plan with lower commissions but increased incentives and added bonuses for sales
associates.
The new performance-based plan is designed to provide
greater compensation for top performers, improve the productivity of average
associates, and weed-out underperforming workers.
“Our best performers will earn significantly more,” said
Bob Lee, store operations senior VP for the 75-store chain, which has locations
in Texas, Louisiana and Oklahoma.
The new compensation plan was set to go into effect Oct.
4 but is undergoing further testing in one of Conn’s markets, Lee said.
Under the new structurre, associates would work on a
sliding hourly scale – ranging from minimum wage to $20 per hour – based on
their monthly sales volume. The pay rate would be adjusted higher each month to
reflect improved performance, and lowered only every other month to provide a
grace period for an “off” sales cycle.
Commissions would be static for products and for service
attachments, but volume incentives would be increased 80 percent, up to $2,000,
Lee said.
Sales staffers would also see a significant increase in
the company’s use of spiffs – a previously underutilized means of driving store
margin, he noted – and top performers could earn additional compensation by
participating in a new mentor program. The latter would reward sales “mentors”
based on the increased productivity of new associates they take under wing. This
would further incentivize senior staffers while providing enhanced training for
recent hires, Lee explained.
Associates could also earn extra income through a store
volume bonus pool, which would reward all staffers on a prorated basis when
their store meets its sales quota.
All told, the new pay structure will “enhance our ability
to serve our customers, retain quality sales associates and encourage
above-average performance,” Lee told TWICE.
Conn’s plans to make the changeover far enough in advance
of the peak holiday selling season to ensure a smooth transition, and both
associates and the company should begin to see tangible benefits, including
reduced payroll costs, by November.
The plan tested well in an Austin pilot last month, and
for the most part was well-received by sales associates company-wide. “We have
not seen any mass exit,” Lee observed. “The very top performers support it,
we’ve heard some negatives from the lower-performing category, and others want
to see how it works out.”
Lee added that any comparisons to Circuit City’s controversial switch to a
non-commissioned sales force are unfounded. “As our San
Antonio district manager, a former Circuit City associate, pointed out, their plan
punished top performers. We’re taking the opposite
approach.”
