Plano,TX—As JCPenney’s CEO Ron Johnson continues to roll out “transformative Fair and Square” changes in the department store, the latest casualty is apparently commissioned sales associates.
Earlier this week the Dallas Morning News reported that sales associates in shoes, jewelry, salon, furniture and men’s suits were told they would no longer receive minimum wage plus a percentage of each sale. Instead, starting May 20 some of them will receive hourly pay that will be increased significantly. However, the company told them at employee hours were being reduced across the store, so they no longer will be full time, nor be eligible for health insurance.
Some of the employees told the paper that “new pay scale is based on last year’s averages. But with hours and commissions being cut, many of them are calculating that they will make significantly less under the new structure.”
Others reported that some commissioned sales associated were laid off.
‘Stunned, Funeral Atmosphere’ in Stores?
Kate Coultas, a spokesperson for JCPenney, responded to the employee’s reports: ”Our new business model requires that we move away from a commission-based environment so that every team member is motivated by meeting the needs of our customers. Therefore, our commission pay plans will move from a commission-based structure to a competitive hourly rate structure. By bringing their compensation levels back to what they earned last year with commissions, team members can have a better sense of their incomes.
“This new, collaborative approach to taking care of our customers will not only enable our teams to be even more effective in winning the hearts and minds of our customers but, over time, will provide greater opportunities for personal growth and development.”
Another JCPenney spokesperson said no one will lose benefits eligibility in 2012, even if they start to average less than 35 hours a week.
Speaking anonymously to Business Insider, some of the affected employees called the elimination of commissions just another in a series of morale-busting measures.
“There was a stunned, funereal atmosphere throughout the store,” an employee told Business Insider. “One was fearful of being observed discussing the details and comparing war wounds, as we were all cautioned in the individual meetings that this information was extremely confidential.”
Earlier this month, JCPenney began eliminating an undisclosed number of jobs on the store level following its announcement in April that it would be eliminating 600 out of 4,400 employees at its corporate headquarters. Another 300 employees will lose their jobs when the company closes a Pittsburgh call center in June.
JCPenney’s “new approach to pricing, promotion, merchandising and the customer experience has simplified our business and removed a lot of the process-oriented work that was previously required under the old business model,” a spokeswoman said.
By eliminating layers of management, “leaders have broader spans of control, greater accountability and higher flexibility to focus on work that provides the greatest value to our customers.”