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Commission-free reward strategy has improved staff engagement levels, Carphone Warehouse claims

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The Carphone Warehouse has decreased its rewards costs and improved staff engagement levels by 20% by axing its commission scheme.

In July, HR magazine reported the mobile phone retailer was to become a ‘commission-free zone' with a radical new reward strategy across its retail business. The scheme has been so successful the company plans to roll it out across Europe in the next year.

The company moved to pay employees for giving good customer service rather than for individual sales. The move marked a step change for a sector in which commission has been the reward mainstay and is often regarded as encouraging aggressive sales tactics at the expense of good customer service.

Six months on and Caroline Edwards, head of HR for support functions, reports engagement scores have reached 88% - up 20% since the launch of the new scheme - and on average managers' salaries are 30% higher and customer consultants' salaries have risen by 50%.

Speaking at the CIPD Reward Conference in London this week, Edwards said: "We removed commission because our reward strategy had to be aligned with the vision of the company. Now bonuses are paid out based on team targets and feedback from customers. We wanted people to work in teams, putting customers at the heart of what they do."

The company launched a campaign to customers to go with the initiative ‘0% commission, 100% impartial advice' and Edwards claims this has attracted customers

She added: "We haven't had any grievances or employee issues with the new scheme - and like-for-like sales have soared."