Carphone Warehouse will be a "commission-free zone" from this month as it implements a radical new reward strategy across its retail business.
The mobile phone giant will now pay employees for giving good customer service rather than for individual sales. The move is 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.
Carphone Warehouse HR director Lynne Weedall conceded the decision was "brave" as nearly 50% of staff's pay was previously made up of commission. But she said: "We are convinced that increasing basic pay, but still having a variable element that is more team and customer service-based, will serve us better in the long run."
Sales staff, now called customer consultants, will see wages increase from a typical £9,000 a year to £17,000 in London. They can earn more as a percentage of store profit will go into a bonus pool. Staff can double the amount in the pool by meeting customer service targets, or halve it if they do not deliver these scores.
"The previous structure had huge variables," explained Weedall. "Employees can still earn a significant amount of money but this will drive a real team effort. Staff have taken comfort from the fact they now know what they are earning in these difficult times."
The company believes better customer service will deliver more profitability. "It is a shift from being short termist - from just grabbing the sale - to being much more forward thinking. We are driving business profit through giving brilliant service," said Weedall.
The move is part of a programme to transform Carphone Warehouse from mobile phone retailer to provider of everything you need in today's wireless world. The company, which created a joint venture with US retailer Best Buy 12 months ago, is working on the demerger of its retail business from broadband and home phone operator Talk Talk.
