Payroll Makes a Performance Difference

Motivating employees to work hard is a challenge managers will always face because some associates are naturally driven to do their best every day while others lack initiative.

Employee appreciation lunches, discounts on products and other recognition methods all boost employee morale, but pay and benefits are the biggest motivators for high job performance.

Below is data collated from hardware store financials for the North American Retail Hardware Association’s 2014 Cost of Doing Business Study. As the graph shows, gross margin per employee is linked to employee payroll, which includes employee benefits. In 2009, 2012 and 2013, the average number of full-time employees was 10, but in 2010 it was nine and in 2011 it was eight. The decrease in employee counts explains the spike in gross margin in 2011.

Applied to Retail: Your full-time employees want to know they are valued and recognized, but they also want to be able to support their families long term. If you do not offer full-time workers insurance options or a retirement plan, speak with a professional to analyze the extent that offering those benefits would impact your expenses.

NRHA offers a health insurance plan specifically for independent home improvement stores. To find out more about the program, visit http://cbigi.com/nrha-program/.