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J.C. Penney Eliminates Sales Commissions

By JCK Staff
Posted on May 10, 2012
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In the latest phase of its ongoing evolution under former Apple stores chief Ron Johnson, J.C. Penney has eliminated commissions for sales associates.

The new policy may particularly impact salespeople in the jewelry department, many of whom work at least partly on commission. 

“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,” Penney spokeswoman Kate Coultas tells JCK. “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.”

Coultas adds: “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.”

The move is just the latest in a series from Penney. In the last month, Penney announced it was laying off 1,000 employees at its home office and Pittsburgh call center, and followed that up with an unspecified number of layoffs at the store level. The company has also transitioned to a new policy of “Fair and Square” pricing, though its recent SEC filings have warned that the policy might depress sales.

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