Blinds to Go

2390 Words10 Pages
Executive Summary:
The case, based on the company Blinds to Go, emphasizes the importance of staffing in stores as they expand to meet their growth objectives.
Being a manufacturer and retailer, with a unique sales model - 100% commission based and focus on customer service gave the company an advantage over its competitors. According to the senior management Quality of staff was paramount and hence their original compensation system motivated best performance and fostered a high energy, sales hungry culture at BTG.
To attract more recruits for its expansion phase, the management changed the compensation system from full commission to salary on the recommendation of a newly hired vice president. Sales declined and the overall
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The commission based structure fosters the high energy, sales hungry culture at BTG. This structure was believed to be a motivating factor to boost performance. High performers at BTG actually made more money than comparable retail outlet salesman.
For Sales Associate the salary structure was a mix of fixed pay and variable pay with $3 - $5 comprising of fixed and 3% of sales as variable component.
For Managers/Assistants the salary structure was $10,000 - $15,000/yr as fixed pay with 1.5% to 3% of overall sales as variable pay.
Changes in Compensation Structure – 1996:
As per the recommendations from a newly hired Vice President of store operations the compensation structure for the store staff was changed from being fully commission based to salaried.
Under the new structure, the sales associated were paid Cdn $8 per hour as a fixed component. For the store managers a higher base salary component as compared to the commissions was set. The main focus of the move was to make the compensation more attractive to the prospective hires. Another change being brought was to limit the involvement of store managers in the sale process.
All these changes had an adverse effect on the sales figures which showed a decrease of 10 to 30% from 1996 to 1997. The staff turnover increased to 40% from the earlier 15%. Even thought the new pay structure helped in recruiting more hires, it led to the hiring of lower calibre people. The existing good performers

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