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


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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.


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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)


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  • 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


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  • 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”.


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  • 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


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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



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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


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Pay for Performance

Where do you start?


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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


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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


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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.


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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.