Retailers are gearing up for a growing economy through a variety of tactics aimed at motivating associates. While JC Penney is organizing sales conferences for managers and paying sales-based bonuses to hourly employees, Home Depot is busy training cashiers to be more helpful.
Despite the newfound enthusiasm, a unifying theme about all labor initiatives is their propensity to cost a lot of money (e.g. in bonuses that don’t generate incremental sales) and occasionally, to backfire in spectacularly unforeseen ways. After all, Circuit City’s short-lived (due to bankruptcy) labor reshuffling is not far in our memories. To mitigate these challenges, management must test labor changes to quantify the attributable impact to employee retention, employee satisfaction, top line sales, and ultimately bottom line profits. Read on to learn more.