If Blinds To Go staffing stores still lack of staff for the expansion plan, it is difficult for the company to fill current store requirements for the additional 50 stores per year.
The BTG have problems of a variation of the commission-based compensation plan, so they are difficult to keep high-level associates, assistants and managers, they face to high staff turnover each year and lack of the attraction to recruit new members. In order to analyze BTG’s problems, they must look at their compensation structure, recruiting methods, and the condition of staff turnover.
In 1996, the Shillers decided to change the compensation system from full commission to salary, and her intention was to attract more recruits, make sales associates less entrepreneurial and more customer-service focused, but the best commission-based people did not like it and left. However, sales declined between 10% to 30% in both new and existing stores from 1996 to 1997. A variation of the commission-based compensation plan was back in 1998, and store sales improved. Next, a plan for store employees was implemented along with a sales award and recognition program, and all full-time sales associates were made partners and given shares in the company. In addition, there was another concern that a commission-based compensation structure would not work in the U.S., because the workers prefer a straight wage or salary. Finally, senior management believed that sales managers had to be properly motivated and provided them with a combination of store sales commission and opportunities for rapid advancement in the growing organization.
In order to attract quality retail sales candidates, BTG had tried several recruiting methods to varying degrees of success, such as employee referral, Internet sourcing, DSM compensation readjustment, BTG retail recruiters, newspaper advertising, and store generated leads. As a result, the most effective method of attracting quality candidates is employee referral, followed by Internet sourcing, and next is DSM recruitment. The total number of employee referral in two months in 2000 is 59, the highest percentage of all recruiting method. Referrals generally pursued employment with BTG, excited by the opportunity that a friend or family member who was a BTG employee had recounted. Moreover, recruiters were focused on non-store sources and store sources were handled by the DSM.
By June 2000, Blinds To Go operated 120 corporated-owned stores across North America, and it was senior management’s belief that quality of staff is more important than store location. There are four staff roles in the store: the sales associate, the selling supervisor, the assistant store manager, and the store manager. Overall staff turnover increased to more than 40 percent from a pre-1995 figure of 15 percent. This problem was further exacerbated by the fact that rapid store expansion into several large cities had required the deployment of skilled store staff, thinning the ranks of existing stores. The 1998 shift back to commission-based compensation structure caused a huge turnover in BTG stores, it had still not fully recovered from the previous compensation change.
Plan of Action
In order for Blinds To Go to recruit and develop enough people for the expansion plan, the following steps need to be taken so the company will success to meet the growth objectives.
The sales managers had to be properly motivated so BTG need to change the commission-based compensation structure to have a combination compensation structure with base salary and other compensation decisions.
According to the base salary of $8/hour were attracting a lower caliber of people, and the best commission-based people did not prefer it, and the U.S. folks like a straight wage or salary. In addition to the small base salary and sales commission plan, the company could use group incentives and organizational incentives to encourage teamwork and cooperation. BTG may add up a profit sharing plan for employees to receive a portion of the organization’s profits over and above their regular compensation. The employee stock ownership plans are also available to compensate employees by awarding them shares of the company stock.
The company could continue the existing recruiting methods and add more details to the recruiting process more integrated.
To provide a job analysis and job description are easy for employees to comprehend the important work-related aspects, the basic tasks, duties, and responsibilities required of a particular job. BTG may attach importance to external recruiting rather than internal recruiting, but internal recruiting is still functional for the company to figure out qualified employees inside the company. During external recruiting, keep the method of cold call, walk-ins, internet, employee referral, DSM hires and develop some other methods. For example, advertising on newspapers, magazines, direct mail, radio, and television are effective to recruit broadly. Moreover, develop employment services is also important, to establish state or private employment agencies, temporary help agencies, and professional search firms will attract more quality candidates. Furthermore, the special events such as career conferences or job fairs will also work.
BTG may develop performance appraisal and use functional one-to-one communication to keep low and functional staff turnover.
The performance appraisal is the process of assessing how well employees are doing their jobs. Objective performance measures are also measures of performance that are easily and directly counted and quantified. These measures are benefit for BTG to figure out the quality of the employees, and may use the hierarchical pay structures top decide the pay level of people with different abilities. However, training programs are also accessible to improve the quality of employees. In addition, use one-to-one communication could help the managers to figure out the problems of people’s performance on the job. Especially for counseling, communicate with the person about non-job-related issues that may be interfering with the person’s performance could help employees to address their personal issues and improve their performance on the job.
By following these steps, BTG can develop enough people for the expansion plan, and the company can meet the growth objectives successfully.
After developing the compensation structure, the employees have to be appropriately motivated, and the BTG selling process involved a very high level of interaction with the customer, which set a very high level of service expectation. The emphasis on customer satisfaction at the retail stores lead to a higher volume of orders relative to the retail competition. Store sales will improve across the board.
To try several recruiting methods such as formal or informal programs that worked to entice qualified personnel to apply to BTG which increase the degree of success. To keep the turnover low and functional, the quality of the store’s staff will be high in a healthy competitive environment among sales associates.
According to the percentage of staff voluntary turnover occurred in their first four months become low and the employees are stable in BTG, the company will have stable source of staff to proceed with its expansion plan and develop complements efficiently. The sales of the company will be high for each consecutive store opened, and no competitors could replicate the model of BTG.
Courtney from Study Moose
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