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Real Deal

Real Deal: The Case of the Unhappy Anniversary

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In a store where everyone is paid well, the extra-large bonuses paid to the sales team are causing tensions. What should owner Graham Sullivan do to restore the peace?

BY KATE PETERSON

This article originally appeared in the June 2015 edition of INSTORE.

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Jeweler's staff has bonus envy of jewelry salespeople

ILLUSTRATION BY KARLA DURANGPARANG

The Sullivan family has had a long history of taking good care of employees. For as long as Graham Sullivan could remember, celebrations in the family store were the highlight of every month … and sometimes every week!

Graham’s father and his grandfather before had always believed that the way to get the best from people was to be the best for them.

Edward Sullivan opened Sullivan Fine Jewelers as a young bench man back in 1962. Integrity, a friendly, neighborhood environment and innovative craftsmanship drew attention to the store, and business grew quickly.

Two years after opening, with Edward and Connie’s first child — George, Graham’s dad — on the way, they hired Sullivan’s first two salespeople. Ed insisted that both continue their professional education, and agreed to pay for whatever business-related classes they wanted to take, forming the foundation for an education benefit that continued to be part of the company program today.

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EDITOR’S NOTE

Real Deal scenarios are inspired by true stories, but are changed to sharpen the dilemmas involved. The names of the characters and stores have been changed and should not be confused with real people or places.


Graham reflected on this tradition of providing employee benefits as he wrestled with the unease he was feeling following a conversation he’d just had with his sales manager.

It was Monday morning, and Graham had just returned from a weeklong vacation to find his sales manager, Jeff, waiting in his office. Jeff wanted to discuss an incident that had happened the previous Friday — the day that Sullivan’s office manager, Barbara Sanchez, celebrated her 25th anniversary with the company. In line with the store’s long-standing tradition, Graham’s mom had left the company’s regular anniversary gift — a “lunch on us” certificate from a nice local restaurant along with a card signed by Graham and herself — on Barbara’s desk that morning.

Later in the day, two of the store’s salespeople came to Jeff to ask if he knew what was going on with Barbara. She had been acting strangely all day, snapping at them, being short on the phone and grumbling about everything.

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When Jeff approached Barbara, she said she was tired of being undervalued and under-appreciated at Sullivan’s. She launched into a tirade about how insulting it was that after 25 years with the company, all she got was a free lunch. She mentioned a friend in another business who had just received an expensive watch for her 20th anniversary and brought up a topic that Jeff had heard from her before — the fact that the sales team at Sullivan’s was treated far better than the support team. She pointed to a box she had just opened from a designer that contained the incentive prizes won by the salespeople in the store. She asked Jeff why he and his group were allowed to take “vendor handouts” on top of their commissions, while she and the rest of the support team got nothing other than their paycheck and an occasional bonus that was minuscule compared to the commission checks handed out to salespeople.
Barbara hadn’t been rostered to work the weekend and was due in the store in about an hour.

Graham had always liked Barbara and had never witnessed this side of her. She was a friend of his mother’s, and had been with the company since he was a small child. It was difficult for him on a good day to act like her boss. But he was finding it impossible to not take her ingratitude and lack of appreciation personally. He was also angry that she wasted a day creating unnecessary stress and negative energy when the family had nothing but good intentions. On the other hand, he couldn’t help but wonder if she had a point. Everyone at Sullivan’s was paid very well, but it was clear that with the commission structure the company had in place, the salespeople were far ahead of the rest. Last year, two of them had incomes in six figures. The vendor incentives — cash, jewelry and trips — offered by the big designers the store carried made the disparity even more obvious.


The BIG questions

How should Graham handle Barbara? Should there be consequences for her disruptive behavior ? In an incentive-based pay structure is there a better way to handle support staff when salespeople are bringing in big commissions on top of their substantial base pay? Is there a better way to include support staff in the world of vendor spiffs and gifts?


R E T A I L E R   R E S P O N S E S

Jim A.

Meridian, ID

I’ve worked in commission-based jewelry stores most of my career and as a manager for many years I have dealt with the same issues. In most cases, a very direct discussion of each team member’s role within the store is vital. If you know your position prior to taking the job, it should reduce conflicts over “fairness.” In this case, Graham will have to talk with Barbara and acknowledge her feeling of not being appreciated. But he must also remind her of her position within the company. We live in a selling world; most every human interaction is selling, some people do it well and some don’t. Most companies pay commission, and if it’s structured properly, business can be very profitable.
 


Maria A.

Austin, TX

I believe salespeople are due those incentives because of their ability to handle a wide range of issues. There is a definite personality required on the sales floor, which is not the same as the set of skills required for the support team. And while it may seem the sales team gets huge payouts it is not always the case. I have seen slow months where the sales team does not make any money. If this were our store, I would ask the employee what would make her happy. Perhaps she would like to try selling? And mention the lower hourly rate.


Kim H.

Sumter, SC

 
Barbara needs to be reminded that she is an example for other employees, whether she chooses to be or not, simply by her longevity, and that bad attitudes are never tolerated. At the same time, a free lunch as a gift for a 25-year employee is awful. If you are lucky enough to have a good employee with you that long, she deserves to feel truly appreciated and valued.
 


Marc M.

Midland, TX

A free lunch at 25 years is extremely weak sauce. She’s obviously jaded and feels undervalued so Graham needs to come up with a remedy not for just Barbara but any other employee who doesn’t get the incentives the sales team gets. It’s vital to keep a well-oiled machine and that doesn’t happen if all of the moving parts aren’t taken care of.
 


Dan P.

Dulles, VA

Our store has strict guidelines about salary and hourly pay rates. These are not to be discussed with anyone else in the store! By enforcing this policy, no one knows what anyone’s commission is or was and there is less jealousy and animosity involved. We also realize that we cannot do it without our office support staff. Therefore, we stress to our vendors that when we have contests with spiff rewards for sales staff, they should have office support staff included as well.
      


Stacey H.

Chicago, IL

Twenty-five years of service certainly ought to merit more than just a card and gift certificate for lunch, right? She probably should get an engraved plaque and a gold wristwatch for her years of service. Also, the little extras from the vendors, maybe management could tell the vendors that the sales staff couldn’t manage without the admin staff, and that the incentives need to reflect that. The whole point of incentives is to increase sales, so why not try to set up a “win-win” for everyone to get a little recognition?

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