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Incentive Compensation in Retail Industry

incentive_compensationThe retail landscape is increasingly dominated by stores. But the headlong rise of e-commerce has put extreme pressure on retailers to become more efficient, and to justify their bricks and mortar existence to customers. Retailers are recognizing that traditional retail needs to be retooled and their key differentiator could be that employee standing in the store.

Employee motivation is probably the most important single manageable factor for success and profitability of all the facets of store retailing. There are almost as many effective ways of motivating employees as there are ways of enticing customers into a store but money is generally the greatest motivator of all.

Retailers offer incentive compensation plans to promote employee motivation. These plans are tailored to the unique situation of each store.

Some of the factors used by retailers while building a compensation plan for a store are

  • Y-O-Y growth ($$$)
  • Y-O-Y growth percentage (%)
  • Achievement against target ($$$ – A grid of growth $ against various bonus %)
  • Achievement against target (% – A grid of growth % against various bonus %)
  • Inflation
  • Seasonality
  • Store factors (Age of the Store, Store Hierarchy, Geography)
  • Non comparability against last year performance (New Store, Store Expansion, Store Relocation, Cannibalization against new store)
  • Employee role, grade/band, salary etc.

While measuring achievement, Targets are usually the store turnover or the profitability or a combination of both. It is better if the plans are simple. However, simplicity itself cannot be given excessive consideration since it is necessary to cover every major measurable factor.

The master data required to build and roll up compensation plans is either defined at the Incentive compensation platform or flows to the platform from upstream systems along with achievement (turnover, profitability) details.

Master data is typically validated by financial controllers and relevant entities before getting fed for compensation consideration.

Incentive compensation platforms help in performing calculations using set of complex rules and the final rates and amounts are dispatched to payroll department for validation before they are broadcasted to the stores.

Store employees access these details through employee portals or other methods setup for them.

Compensation platform facilitates regular reviews of performance against compensation plans to stimulate store level efforts. Data is archived to facilitate audit.

The installation of an effective incentive plan is the foundation of a successful motivational compensation program. To optimize results retailers should regularly nourish and promote the program and a regular review would make sure it is still working to expectations.

About CRMIT Solutions:

CRMIT Solutions is a leader in transforming businesses with cloud based Customer Experience (CX) solutions on sales, service, marketing & social cloud.

oracle_specialized_sales_cloudCRMIT Solutions has achieved OPN Specialized status for Oracle Sales Cloud –Oracle Recognizes CRMIT Solutions for Expertise in Implementing Oracle Sales Cloud. CRMIT Solutions Offers A Host of Solutions on Oracle Sales Cloud, Including Consulting, Sales Planning, Social Sales, Customer Data Enrichment, Field Sales Automation, User Adoption, Training, Health Checks and Testing.

CRMIT Solutions deliver a Fixed Scope Implementation offering for Oracle Sales Cloud to fast track sales productivity. Fixed Scope Offering leverages Oracle best practices and agile approach for fast track implementation of Oracle Sales Cloud – Go Live in less than 4 weeks. It drives sales productivity through higher win rates, forecast accuracy, and lead conversion.

Inputs
C.A.Mohammed
Consulting – CX/CRM Industry Solutions
CRMIT Solutions

 


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Whats there for Today’s Citizen from The Internet of Things and Big Data?

Internet of things

Internet of Things, such as sensors and network technology, is changing company processes and consumer interactions – and even entire business models.

More objects are becoming embedded with sensors and gaining the ability to communicate. The resulting information networks promise to create new business models, improve business processes, and reduce costs and risks.

Internet of Things and Big Data are already considered to be one of the disruptive technologies/ concepts (See: Disruptive Technologies) which has business potential of more than trillion dollars directly or indirectly. (Ref: Wikipedia for Definition – Internet of Things and Big Data).

According to McKinsey Global Institute, the Internet of Things has the potential to create an economic impact of $2.7 trillion to $6.2 trillion annually by 2025 (McKinsey Global Institute, Disruptive technologies: Advances that will transform life, business, and the global economy, May 2013).

Internet of Things is already there in the devices, sensors, cloud infrastructure, and data and business intelligence tools you are already using.

When government starts embracing the technologies and concepts of Internet of Things and Big Data, the value addition and the experience that it can bring to common man’s life, will be of great significance.

Here, I thought of sharing my ideas on one of the major transformation that governments can do to benefit and improve citizen’s experience who commutes miles for their day to day activities.

Offer them a smart city with smartly regulated traffic controls. Utilize Internet of Things concept to install the sensors/ actuators in almost every vehicle (two wheeler, four wheeler, trucks, lorries etc) in the city and collect the varied, huge volume, rapidly changing big data for analysis.

With these raw data in place, government shall be able to identify and get the statistics on the no. of vehicles during peak hour, in every specified location, the free alternate roads during the same time, no. of outstation vehicles commuters and can gather limitless data which shall help in streamlining the traffic to the best minimum. Nevertheless, these data shall as well be utilized for the future infrastructure needs of the city.

What I have shared now is just one of the many advantages that IoT and big data can bring together to add and improve citizen’s experience which inturn potentially decrease the stress level of citizens, improving their life style and providing more time for their personal needs.

About CRMIT Solutions:

CRMIT Solutions is a leader in transforming businesses with cloud based Customer Experience (CX) solutions on sales, service, marketing & social cloud.

We are committed to provide customers with the best service in the industry. Everything we do – every order, every delivery, every service, every offering – centers on the satisfaction of our customers, and making them more efficient at what they do.

Testimony to Customer Excellence

 

Inputs
Suresh Ponniah
Principle Business Consultant –Industry CRM & CX Solutions.
CRMIT Solutions