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&nbspBarbara Sheeran has been reading about a quiet revolution

     Barbara Sheeran has been reading about a quiet revolution sweepingdepartment store retailing and has decided to give it a try. At storessuch as Macy’s and Nordstrom’s, managers are using commission pay tomotivate salespeople. At Nordstrom’s, for example, a top-tiersalesperson in women’s apparel can earn nearly $200,000 per year. Sheeran wants to implement commission pay at Caprio’s, a regionalchain of upscale department stores based in Tuscon. Caprio’s has longused commissions in departments such as electronics and appliances whereextra sales skill pays off, but Sheeran believes that extending thesystem storewide will attract better salespeople, increase motivation,and enable employees to earn more money. For example, under the oldplan, a new salesclerk in women’s wear would earn about $18,000 per yearbased on hourly wages and an 0.5% commission on $500,000 insales. Under the new plan, the annual pay would be $35,000 based on 7%commission on sales of $500,000. Sheeran implemented the new system intwo area stores first and plans to roll it out across the chain withinthe next six months. Eli Johnson, who works in the men’s shoe salon, is enthusiasticabout the change. His pay has increased an average of $150 per week. Butin other departments, such as women’ s lingerie, employees are lessenthusiastic. Making enough sales per week to earn their previous salaryis nearly impossible, particularly when the economy slows down. Evenduring the holiday season, many employees saw their pay decrease anaverage of 8%. Sheeran is keeping a close eye on fluctuations in pay. She’sbecoming concerned that the commission system may not work as well forsmall-item purchases as it does for big-ticket items. In addition, shequestions whether Caprio’s can meet its goal of creating morecustomer-oriented salespeople when they work on commission. Clerks maybe less willing to handle complaints, make returns and clean shelves,preferring instead to chase customers. Moreover, it will cost Caprio’snearly $1 million per store to install the commission system because oftraining programs, computer upgrades and increased pay in manydepartments. If the overall impact on service is negative, the increasedefficiency may not seem worthwhile.Question: What would you do? Be sure to discuss motivational theories, employee needs, and customer viewpoints in your answers.

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