Commission-free reward strategy has improved staff engagement levels, Carphone Warehouse claims
David Woods, 25 February 2010
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3 comment's on this article.The Carphone Warehouse has decreased its rewards costs and improved staff engagement levels by 20% by axing its commission scheme.
In July, HR magazine reported the mobile phone retailer was to become a ‘commission-free zone' with a radical new reward strategy across its retail business. The scheme has been so successful the company plans to roll it out across Europe in the next year.
The company moved to pay employees for giving good customer service rather than for individual sales. The move marked a step change for a sector in which commission has been the reward mainstay and is often regarded as encouraging aggressive sales tactics at the expense of good customer service.
Six months on and Caroline Edwards, head of HR for support functions, reports engagement scores have reached 88% - up 20% since the launch of the new scheme - and on average managers' salaries are 30% higher and customer consultants' salaries have risen by 50%.
Speaking at the CIPD Reward Conference in London this week, Edwards said: "We removed commission because our reward strategy had to be aligned with the vision of the company. Now bonuses are paid out based on team targets and feedback from customers. We wanted people to work in teams, putting customers at the heart of what they do."
The company launched a campaign to customers to go with the initiative ‘0% commission, 100% impartial advice' and Edwards claims this has attracted customers
She added: "We haven't had any grievances or employee issues with the new scheme - and like-for-like sales have soared."
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Scott Edy - 25 February 2010
This new pay system put the frigheners on most employees at CPW. It sounded all good and well in theory. In practice, its not all smelling of roses for those on the front line.
For those of us that have always done all we can to give the customer the best service possible it has been devastating.
I can not speak for every one but I do not agree with the 50% pay increase. Not by a long shot. My wage packet is down 20% pcm as an average.
With so much working against us to make the bonus/bonus excelleraters and having to rely on other team members to do just as good of a job as yourself, hard work can barely be met with a smile.
It only takes one part timer \(or anyone for that matter) to not put in the effort for the customer and your world class service will have \(for you) been a waste of time.
i give the customer everything. the handset, the price, the servivce and afterservice but because the customers son \(for whom the handset was for) "just doesnt like phone shops" i didnt get paid for that sale. i have many more examples of this. i must say i felt it best relay an example of my own and not that of the working of another memeber of staff.
big jok - 25 February 2010
another nonsense article about new deal which many in the company have nicknamed " raw deal ", i for one would like to see exact figures because 50% increase in salary definitely does happen in my region, and my region consistently hits target
lets be honest here for a second for many in the company they have seen a pay cut, dont be romantised by all these inflated numbers because the front line of carphone is feeling the pinch
our salary is dictated by a fundamentally flawed customer feedback system where the benchmarks are nigh on impossible to hit. too often nonsense feedback which we have appealed remains
im a store manager so my salary has increased but i feel for all my guys on the front line who are taking pay cuts so the powers at be can get rich on our hard work
we are asking our workforce to more for far less surely that doesnt make sense
im a cpw veteran of 8 years loyal service and i feel disillusioned at the new pay structure
we are losing top talent to rival firms
david blaylock - 03 March 2010
What strikes me about the comments made is that the reduction in personal pay is always down to others.
I assume that the bonus scheme has been designed to get everyone working together [TEAM] and to improve the overall customer experience with the explicit desire of increasing sales.
Team work is not a solo sport and takes everyone getting involved to work. If your pay is down, it is because you and your colleagues are failing in your comittment to support other staff members. If you or they do not prescribe to the new culture, maybe you or they should find a company who's culture you and they prescribe to.
It is not only a change in staff payment structure that has changed here, but the culture......that always takes a little longer to bed in
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