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Changing Commission Structure to Hourly Rates (with potentially Pay-for-Performance)

Changing Commission Structure to Hourly Rates (with potentially Pay-for-Performance). Success, Teamwork, and Compensation are Interwoven!. Present Situation. Spa and/or salons are struggling to control payroll costs – the major cost within our businesses!.

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Changing Commission Structure to Hourly Rates (with potentially Pay-for-Performance)

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  1. Changing CommissionStructure to Hourly Rates (with potentially Pay-for-Performance)

  2. Success, Teamwork, and Compensation are Interwoven! Present Situation • Spa and/or salons are struggling to control payroll costs – the major cost within our businesses! • Competitive environment is accelerating even faster than before • True “Teamwork” is often lacking. Many owners feel like “they are hostage” to Service Providers.

  3. Present Needs • Analyze and implement needed changes within your present compensation structure to: • Free up cash for reinvestment • Reduce Payroll Costs • Align staff to execute SUPERIOR Client Service • Motivate and Attract Staff • Implement Pay-for-Performance via three different performance levels: • Individual • Department • Business (enterprise)

  4. Compensation System Foundation • A. Assumptions • By nature, people are good and want: • Structure, Consistency, and Predictability • Motivation • Feedback (Rewards, Evaluations) • People want these things in their workplaces (by importance): • #1 Security • #2 Sense of making a difference • (Both self-worth and contribution) • #3 Equitable Compensation • #4 Opportunity for Advancement

  5. Compensation System Foundation • B. Business Premises • Reward and compensation systems must be: • Factual • Integrated • Progressive • Logical • A desire is to have the system simple-as-possible, easy • to execute, with minimal maintenance. • Management results are only successful when using the • practice “Managing what you are measuring”.

  6. Compensation System Foundation • C. Business Needs • Alter/assure that Compensation System is optimizing costs and rewards for all stakeholders: • Clients • Providers • Support Staff • Management • Owners • Maximize data system(s) to quickly and objectively gather, analyze, and communicate critical-to-business results • Spearhead advanced team management practices and perpetuate an open, honest business environment

  7. Owner’s Advantages • Decreased overall payroll costs • Ability to motivate employees with Individual, Departmental, & Enterprise Success • Ability to increase prices without sharing increase with service providers • Better budgeting and business plan projections Better projections of cash flow

  8. Company’s Advantages

  9. Providers’ Advantages • Stability • “Guaranteed” hourly wages • Defined and achievable, progressive wage increases • Career path defined • Sense of appreciation and contribution • Sense of building business on an individual, departmental, and enterprise perspective

  10. Pay for Performance Where do you start?

  11. Trend Chart – 2006 (sample) Using straightforward, key business data as well as marketplace information, the system compiles benchmarks for performance* such as:• Hourly Pay Structure• Performance Factors in 7 Different areas that are correlated to business success

  12. Pre-Control Chart – 2006 (sample) With the critical data compiled, analyzed, and validated, compensation and performance factors are transformed into easy-to-use charts and recommendations. * The theories and practices are based on world-class Six Sigma theory and proven management practices. For instance: • Correlation Analysis• Multiple Variable Analysis• Regression Analysis• Process Capability

  13. Success, Teamwork, and Compensation are Interwoven! Implementation Plan (Sample) • Run “present” compensation plan and the recommended plan at the same time for a designated time frame. Compare results. • Communicate with staff. Hold 1-on- meetings. Compare results of each “system” Discuss superior benefits of “hourly system” versus “commission”. • Implement per management discretion. Track results. Modify if necessary.

  14. Changing Commission Structure to Hourly Please start getting results today by contacting us. We will prompting get back to you in order to help you on this important, logical journey. Tremblay Consulting Cincinnati, OH 45249 Office: (513) 530-0122 Cell: (513) 708-3977 info@Tremblay-Consulting.com www.Tremblay-Consulting.com Thank you for your time and consideration.

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