Japanese department store switching to performance-based pay for top sales staff

Japanese department store switching to performance-based pay for top sales staff

Major department store operator Isetan Mitsukoshi Ltd. has decided to adopt a performance-based compensation system for its sales staff at domestic department stores from this spring, according to sources.

Some salespersons for the company have annual sales exceeding 100 million yen (S$1.1 million), but despite such strong performance their annual income is less than 10 million yen.

The company intends to raise the salaries of staff with particularly outstanding sales to levels that rival board members in the future, the sources said.

The company aims to motivate staff and improve the quality of their service.

Retail sales staff tend to see relatively low salaries because of efforts to cut costs, and their sales performance is rarely reflected in their wages.

Targeting dozens of staff with top sales performances, the company plans to roll out the system from fiscal 2015 and to make more sales staff eligible from 2016.

Based on careful analysis of different sales floors and product lines, the company will pay wages according to performance, the sources said.

"We hope some sales staff will receive executive-level salaries," a senior executive at the company said.

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