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Unit 12: Store Management

they might have. You’ll gain valuable information, and your employees will feel like real Notes
participants in the process. In some cases, you might even learn something that could
change your evaluation.

Task Discuss about compensating and rewarding store Employees.

Self Assessment

State whether the following statements are true or false:
6. The evaluation process also nips a lot of employment problems in the bud.
7. Performance standards describe what you want workers in a particular job to accomplish
and how you want the job done.
8. Unlike performance standards, mission should be tailored to each employee.
9. The evaluation process will seem fairer to your workers if they have an opportunity to
express their concerns.

12.5 Compensating and Rewarding Store Employees

Many people are motivated by money—at least for a period of time. But the motivational power
of money often wears off as employees simply get used to their current level of compensation.
Many studies have confirmed that as long as employees are paid competitively, money is not
the main factor that leads to job selection or performance.

Ultimately, most people are motivated more by the work they do and the environment in which
they work than by the money they earn. Therefore, the compensation and rewards system you
offer to employees should include both monetary and non-monetary ideas.

Utilizing Monetary Compensation

Growing businesses that struggle with cash flow issues and “making payroll,” will want to
think creatively about how to provide monetary compensation and rewards to their management
and staff. When Ewing Kauffman managed Marion Laboratories, he paid his managers, directors,
and officers salaries slightly below what competitors were offering, but offered profit-sharing,
paid generous bonuses for high performance, and added benefits when the company did well.
Similar techniques are available to you in terms of end-of-year, team-performance, and individual
bonuses, profit-sharing, stock options, phantom stock, and stock warrants. All of these plans can
have their pitfalls, and all must be tailored to your particular situation. Seek expert assistance
from a compensation specialist and a lawyer and keep your plan aligned with your company’s
values.
Remember, when establishing your compensation and reward policies, employees should be
compensated for the work they do at or near competitive salary levels. Also, monetary
compensation above and beyond competitive levels may not be motivating if the recipients
really value other things, like time with their family.

Growing companies that cannot afford to pay the same salaries as an established corporation
may offer their key employees a form of ownership in the company. That way, if the company
is successful, the employees will share in the success.

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