CentralVA

"My employees are giving me h*ll falsifying their PCA/PSA numbers so I cannot track their performance as well" and so from that statement the following 'Sales Success' calculation system was born. Read it, try to understand it, and share with me if you will your thoughts on it. Share your results if you use it to calculate your team members' sales successes.

Premise:

• When given the opportunity, employees will/have use/d another employee's EMPLOYEE ID NUMBER to create the illusion of a higher than normal PCA/PSA
• Employee will often use another EMPLOYEE ID NUMBER when a person wants to tan to keep their PCA/PSA high, but will use their own EMPLOYEE ID NUMBER when a client makes a purchase
• When PCA/PSA are used to reward "a job well done" (cash or other prizes), and false PCA/PSA are present, it amounts to on the job theft

My proposed Solution:

• Create a report that takes total number of hours worked during any given period multiplied by the hourly wage for that employee divided by the total revenue that employee generated during that period to arrive at a number that shows more correctly how much that employee costs that salon, and how well they are selling/producing revenue.

Draft Instructions to Reach that Goal:

• From Helios (or whatever program you use - cause that's what I use) run your EMPLOYEE AVERAGES REPORT (shows PCA/PSA/TOTAL REVENUE BY EACH TEAM MEMBER) for the current completed payperiod. For example: July 3 through July 16.

• From Helios (or whatever program you use - cause that's what I use) run your TIME CLOCK REPORT (to get payroll hours worked during the biweekly pay period).

• From the EMPLOYEE AVERAGES REPORT for the above period, gleen the following information for each employee:

1. Take the total number of hours worked by EACH employee
2. Multiply that number by the employee's hourly wage, or if salaried by then simply record that salaried employees total biweekly pay on the next step
3. Multiply that number by 1.15 (15% is an estimated expense for employee taxes paid out by company, plus PAYROLL PROCESSING COMPANY expense) to yield "TOTAL ESTIMATED WAGES FOR THIS EMPLOYEE"
4. Take "TOTAL ESTIMATED WAGES FOR THIS EMPLOYEE" and divide by the TOTAL GROSS REVENUE produced by this employee during the pay period
5. The result should be a decimal number (.10, point one, point one two)
6. Subtract that decimal number from 1.0 t yield "PRODUCTIVITY INDEX"

Notes:

• In #4 above, that number is PAYROLL PERCENTAGE if you weren't aware of what was going on - but most of you are brilliant so I won't digress

Questions:

• Would this not be a more accurate method of calculating payroll expense for each employee as it relates to their sales productivity?
• Is not sales productivity as important and the acts of customer service?
• When sales productivity is placed against customer service, does not sales productivity rank as the more important?
• Looking back as far as you care to perform these calculations, what is the highest PI, lowest PI, and average store (all employees grouped together) PI for your salon. I do NOT want to see your gross revenue numbers, I just would like to see your PI's, if you care to share them
• Is this any more reliable than PCA/PSA in your opionion (for those of you who use helios)?
• Would you use this number if Helios added the report functionality in Helios automatically?

Thought I'd share one of my more mental moments.

movieking

Sounds like what you're trying to do is set a "sales per man hour" goal that all should meet or exceed. In the video business we want to have about a $50 sales per man hour. This is a number that gives great customer service yet keeps the payroll in check.

Neon Beach

I wish I could get $50 per man hour??

CentralVA

Does the "Sales per Man Hour" work in the video industry?
It seems, that when I go to BLOCKBUSTER, OR HOLLYWOOD VIDEO the staff behind the counter doesn't give a flying anything whether or not they rent a movie. So, by your statement, and experiences you've had, does having this "Sales per Man Hour" goal/quota/objective work? How? Percentage of that "Sales Per Man Hour" paid out as hourly pay?

Thanks for letting me pick your mind.

movieking

The examples you use are correct IMO. Chain stores more often than not cannot offer the same level of service that an independent can. We do use a sales per man hour goal inthe stores and generally beat it by a few dollars. We use the sales per man hour as a starting point when making the schedule and it generally is just what we need. Payroll is about 15% of gross income. I can't really offer any advice on how it would work for tanning because during much of the day we do not have a dedicated salon employee due to sharing of employees between the two busineses.

CentralVA

Positive, useful feedback. Thank you.

Anyone else have any comments, ideas, thoughts, numbers to share?

Neon Beach

Everyone wants facts and figures and absolutes. Had I listened to some advice from here 3 yrs. ago, I wouldn't be here now. Take in the info, but you gotta consider where you are. Cause those facts and figures will mostly like not match your market unless you are next door to the guy that gave them to you.

BP

In the movie place example it encourages quick transactions to decrease customer line time.

I track using helios pca/psa. I would see if someone sold something if they were not on the clock by the nightly transaction report. Even though there are pages of transactions the initials are a quick scan.

CentralVA

in an environment where your staff is on commission, and their personnel evaluations and reviews are based on pca, you should be able to see why they will use someone elses employee id number to keep their own pca up.

CentralVA

bump