Parisian Department Store :: essays research papers

The Parisian Department store in Birmingham, Alabama clearly needs to rethink their sales strategies to maximize profits. The management specifically needs to take a look at whether the new pay program achieves its intended effect of cutting costs while driving sales and how this would affect the company as a whole. The company should look at whether this program would be enough fix the problem, or does Jones need to implement more drastic measures? The first major issue was taking a look at HR issues and other related business issues that Parisian faced before they implemented the pay adjustments. As the case studies mentions, Parisian sold high merchandise, highly personalized service, high commitment to caring for its employees and communities of businesses. Jones?f goal is to raise the performance of the store and restore it to its former reputation as an upscale retailer. ISSUES: 1. Parisians payroll expenses in 2003 were 8.6% which was higher than those at comparable sister business within SDSG. 2. Hourly pay at Parisians was 12.18 and Carson paid an average of 9.54 an hour. 3. Selling costs buildup did not work because it only temporarily fixed the issue at hand. A huge issue with Parisian is that their pay system is extremely complicated when it does not have to be. Currently there are three forms of pay: base pay only, base plus commission, and commission only. The cosmetics selling cost is also an issue because cosmetics only bring in 15% of sales, but they spend 22% on payroll sales because of the expertise needed as well as the need to have a body in the bay at all times when you sign the agreement with the vendor. Taking a look at Chart B should this very theory, Parisian shows a net sales of cosmetics of 100 M which is compared to Carson?fs 250M and there people at Parisian get paid more an hour (14 versus 12). It does not make sense for a store that brings in a lot less to pay their people more. The case further explains that the high volume salespeople are paid at high commission rates and sometimes that rate can exceed selling cost benchmark. The stores with the ?gsacred cows?h were costing them a fortune have- specifically 14% sell ing cost. Table C shows that there were certain stores that were not able to have as many employees cover the floor because they had large payroll expenses.