Carphone Warehouse is to scrap its commission-based pay structure in a radical move that will transform the way mobile phones are sold.
The retailer will introduce much higher basic salaries and store performance-related bonuses in a phased move to begin in October.
Retail director Steve Blan told Retail Week that the initiative aims to deliver outstanding customer service. “It is the right thing to do,” said Blan. “We want to put customer service at the forefront. I want colleagues to focus on delivering the best customer service in stores and work together better as a team.”
Traditionally, the mobile phone sector has been at the forefront of commission-based pay structures and the move mirrors strategies employed by other retail sectors to focus on customer service.
Electricals retailer Comet axed commissions in 2003 and DSGi will focus on rewarding store teams as part of its turnaround plan. The move mirrors Carphone partner Best Buy’s structure in the US.
Blan said the pay scheme will encourage its 7,000 retail staff to put knowledge and expertise ahead of personal financial gain and that it will attract employees who are motivated to deliver the best customer service.
Basic salaries will rise 50 per cent, with managers’ pay related to store size. Colleagues will share a team bonus when their store hits targets.
700 out of 800 store managers who work on commission will move to the initiative in October and a trial for all staff in its London stores will start at the same time. “I want managers to spend time managing and developing their teams – not be torn between selling and managing,” said Blan.
From January, the changes will be phased in to the rest of the retailer’s UK stores, beginning with a 50 per cent reduction in the commission rate, before it is phased out altogether in the following months.
Carphone Warehouse will decide on the final structure of the pay scheme in April.
Blan said staff backed the changes fully, which will also guarantee them a higher basic income as they face rising mortgage rates, food and energy bills.
“We are leading the way with this,” said Blan. “The mobile industry needs this. It is better for our customers and our colleagues.”
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