Reward Store Employees Case Study

9.12. How to reward store employees?

The final step in the employee management process is rewarding and compensating employees. There are two types of rewards that store employees can receive from their work, which are intrinsic and extrinsic rewards.

Intrinsic rewards are rewards not only to get employees to do their job well and at the sametimes to make the work with fun. For example, salespersons often like to sell because they think it is challenging and fun because they can influence and help the customers to decide what to buy and make sales successfully. When store employees find their jobs intrinsically rewarding, they are more motivated to learn how to do them better. One approach to making work fun is to hold contests with relatively

What are the objectives of compensation programs?

The main objectives of a compensation program are to attract and motivate employees to achieve retailer’s objectives and reward them for their effort that they have contributed to the company. In the developing process of a compensation program, the store manager must strike a balance between providing attractive compensation to retain the high quality good employees and the labor costs control. Compensation plans are most effective for motivating and retaining employees if the plan is fair and compensation is base on the employees work productivity that they have contributed to the company.

There are several types of compensation plans. Retailers typically use the incentive compensation plans, and straight salary compensation plans to motivate their employees to achieve the company

For example, a salesperson might be paid $5 per hour, a supervisor $ 600 per week, or a manager $3000 a month. With this straight salary compensation, the retailer has the flexibility in assigning the employees to different activities and sales departments. The salaried salespersons will undertake not related sales activities such as displaying of merchandise and providing better customer service and are more willingly to accept if they are transfer from a high sales-volume department to a low-sales-volume department since their compensation is not based on incentive.

However, one of the disadvantages of the straight salary plan is that the employees are not motivated in their work and productivity of employees will be low, as the employees do not receive any incentives for their work contributed to the department or store. Another disadvantage for the retailer is that straight salary becomes a fixed cost to the company even if the sales decline or decrease and this will affect the store