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Carphone to scrap commissions

August 6, 2008

All store managers to receive hike in basic pay, while London stores to trial profit share scheme

The Carphone Warehouse has announced it is overhauling its staff payment structure, with all store managers advised yesterday that from October they will no longer receive commission in lieu of a "significant" pay rise.

The retailer will trial the scheme for all store staff in the London area, who are also from October to receive a rise in the basic salary they earn with individual commissions to be shelved. Instead, if a store hits its profit target as a whole, all staff will share in a percentage of the store’s profits. Depending on success in the London area, the new scheme will be rolled out to all store staff country-wide early next year.

Carphone retail director Stephen Blan said that the company had recognised that "variable" pay such as commission comprised too large of a proportion of a store staffer's overall pay package.

Blan said the changes would assist managers to run stores more efficiently without the extra pressure of making sales. "I’m expecting managers to be extremely delighted," he said. "Their motivation needs to change from selling to managing and leading the store. Some salaries will become quite substantial.

"We wanted to do this to make Carphone a better place to shop and work. With higher basics we can also attract better staff and managers. We’d be flattered if our competitors followed our move."