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Author: 
 
 Bloomfield & Bloomfield 
 
 Title: 
 
 Methods of compensation 
 for department store... 
 
 Place: 
 
 Boston 
 
 Date: 
 
 [1921] 
 
. ■ . I J ' m r—^rfmm 
 
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 Business 
 D254.53 
 
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 ■ 
 
 Bloomfield & Bloomfleld. 
 
 Methods of compensation for department 
 store employees; a survey by Industrial re- 
 lations, Bloomfield 's labor digest. Boston, 
 
 C1921. 
 
 cover -title, 16 1. 
 
 At head of title: Special economic siipple- 
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 THE LIBRARIES 
 
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 SPECIAL ECONOMIC SUPPLEMENT 
 
 Methods of Compensation 
 Department Store Employees 
 
 t 
 
 A Survey by Industrial Relations 
 Bloomfield's Labor Digest 
 
 \ 
 
 Copyright 1921 
 
 BLOOMFIELD & BLOOMFIELD 
 
 Publishers of Industrial Relations — Bloomfield*8 Labor Digest 
 
 Consultants in Personnel and Industrial Relations Problems 
 
 6 BEACON STREET, BOSTON 
 
 '4' 
 

£ 
 
 in 
 in 
 
 03 
 
 INDEX 
 
 What This Survey Shows 
 
 Contact with Customer 
 
 The Wage as an Incentive 
 Temporary Payments 
 
 Commission and Bonus 
 
 Commission Systems 
 Examples 
 
 Seasonal Commissions 
 
 Measured Individual Bonus 
 
 The Bonus System--Pro and Con 
 Measured Group Bonus 
 
 Profit Sharing 
 Stock Participation 
 Bonus Payments 
 
(2) 
 
 FINANCIAL INCENTIVES iFOR DEPARTMENT STORES EMPLOYEES 
 A Survey by Industrial Relations: Bloomf ield' s Labor Digest 
 
 Redoubled efforts by retail stores to find a system of compensation which 
 provides incentive to the individual employee and greater sense of responsibility 
 for the growth and success of the business among employees as a group of co-workers, 
 are indicated by the increasing number of department stores which have established 
 bonus and commission systems, or are changing and perfecting methods of long stand- 
 ing. 
 
 WHAT THIS SURVEY SHOWS 
 
 A survey by Industrial Relations conducted during the past year among several 
 hundred retail stores, large and small, in all sections of the country, shows that 
 nine-tenths of these stores have established a bonus or commission system that 
 seems to be more or less satisfactory, are experimenting with a system of com- 
 pensation which they hope will have better results than previous flat-wage methods, 
 or desire to adopt some other system if a better plan can be found. 
 
 
 CONTACT WITH THE CUSTOMER 
 
 The retail store is probably more dependent upon the spirit of the individual 
 employee than any other branch of business or industry. This is particularly true 
 in all selling operations, which involve a contact between customer and employee 
 in which the intelligence and interest of the employee is an important, and fre- 
 quently the important, factor. The principal object of a large majority of the 
 stores in establishing commission and bonus systems has been to make this contact 
 between employee and customer more effective by making such positions attractive 
 for workers of ability, and by providing incentive for greater effort in each 
 transaction. Prom one-third to one-half of the employees of a store have contact 
 with the buying public with a direct effect upon sales, and the efficiency of many 
 of the employees who do not meet the customer has an influence upon sales that is 
 by no means remote. 
 
 Additional compensation for all employees, as a reward for better team-play 
 and organization spirit, has been provided by many stores. This type of extra 
 payment is sometimes a substitute for a commission or bonus system, more often 
 used in addition to such a system. 
 
 Profit sharing, through stock distribution among employees, has been adopted 
 by several stores, but they comprise a small proportion only. 
 
 THE WAGE AS AN INCENTIVE 
 
 It is also noteworthy that some stores find an established wage, subject to 
 frequent adjustment to conform to the record of the individual employee, meets 
 
(3) 
 
 successfully the prolDlera of providing incentive. Some stores, having abandoned 
 commission and "bonus systems, revert to such plans again after providing better 
 supervision and records. 
 
 WHY SOME PAYMENTS ARE TEMPORARY 
 
 Study of methods of compensation in addition to an established wage during 
 the past year has probably occurred at the peak of interest in such methods. Many 
 stores have distributed funds among their employees during the past few years for 
 the purpose of sharing prosperity, or of meeting the competition of other lines of 
 business for employees, and such distribution has not become permanently a part of 
 the regular system of compensation. 
 
 During the holiday season just passed some of these stores failed to distrib- 
 ute those additional funds as in the previous two years, and in other cases the 
 amount distributed was substantially smaller than that of the previous year. Such 
 funds were used to bridge temporarily the gap between retail store wages and factory 
 and business office wages, during the period of keenest competition for workers. 
 
 Retail store wages cannot normally rise and fall with the rapidity of indus- 
 trial wages, since the nature of the business does not permit of increases and de- 
 creases in the number of workers in as exact ratio to sales as can be applied in 
 the factory in ratio to production. 
 
 In a time of readjustment the store cannot shut down or run on part time. A 
 relatively large proportion of employees must be retained in the periods of poorest 
 business, in order that all departments may be operated, merchandise protected, and 
 a trained force ready for increased business. During the period of rising cost of 
 living and keen competition for labor the wage level in retail stores has been 
 substantially raised, but bonus payments and gifts, less permanent than wage in- 
 creases, have often been depended upon to meet the need for maximum wages. 
 
 DEFINITION OF COMMISSION AND BONUS 
 
 The terms commission, bonus, and profit sharing have been used by various 
 stores to designate almost identical systems. Their use for classification or de- 
 scription of the various methods of compensation is misleading without careful 
 definition. 
 
 The Committee for the Study of Wage Problems of the National Retail Dry Goods 
 Association has established, for the purposes of its reports, the following defini- 
 tions : 
 
 Commission: A percentage paid to individual salespeople on their total sales. 
 
 Bonus: A payment in addition to regular wage, for services exceeding a set 
 quota or standard in quantity or quality. (May be determined as a 
 percentage of sales above quota or by any method of measurement. 
 Applicable to either selling or non-selling forces.) 
 
(4) 
 
 * 
 
 These definitions allow a clear division of various types of commission and 
 bonus systems, "but do not conform wholly- to common usage in that they do not recog- 
 nize as "bonus any distribution for service not measured by individual performance, 
 and are not comprehensive in failing to recognize as bonus payment that plan of a 
 number of stores of distributing funds measured by group performances. 
 
 The definition of the term bonus as given above is therefore used in this 
 statement as measured individual bonus, and the terms me^asured group bonus and 
 bonus without qualification are used in the following senses: 
 
 « 
 
 Measured group bonus: Payment in addition to regular wage, through distribu- 
 tion in accordance with wage or responsibility, for services by em- 
 ployees as a group exceeding a set quota or standard in quantity or 
 quality. 
 
 Bonus: Payment in addition to regular wage, through distribution in accord- 
 ance with wage, responsibility or length of service, to all employees 
 or to groups of employees, in recognition of improved service or team- 
 play, but not measured by quota or standard applied to the work of 
 individuals or groups. 
 
 Other terms used, and the sense of their usage, are: 
 
 Profit sharing: "An agreement freely entered into, by which the employees 
 receive a share, fixed in advance, of the profits." 
 
 Adjusted wage : Wages adjusted at frequent intervals in accordance with the 
 quality and quantity of service by the individual employee. 
 
 COMMISSION SYSTEMS 
 The essential features of commission systems are: 
 
 (1) Commission is paid only to salespeople or executives of selling depart- 
 ments. 
 
 (2) Commission is paid in addition to regular wage or drawing account, 
 usually, wage is paid weekly and commission monthly. 
 
 (3) Commission is paid on all sales, i.e., there is no sales quota. Com- 
 mission, however, is paid upon net sales, not gross sales. 
 
 (4) Rates of commission range from 1/2^^ to 1 l/S^^. In some cases -yie same 
 rate is paid in all departments; in other cases, higher rates are paid in depart- 
 ments where volume of sales is relatively smaller because of the nature of the 
 merchandise--thus, the lowest rate of commission in furs, the highest rate in 
 notions and smallwares. 
 
(5) 
 
 COMMISSIONS--PRO AND CON 
 
 The principal advantage of the commission system is that all salespeople earn 
 in addition to the regular wage--the incentive applies to all. The principal dis- 
 advantage is that the compensation of the poorer salespeople may "be larger in 
 percentage to sales than that of the "better salespeople, unless the regular wage is 
 constantly adjusted. 
 
 Some stores have comhined the commission and individual bonus systems, paying 
 commission on all sales, and additional commission on sales ahove the given quota, 
 in order to secure the advantage of having all salespeople earn commission, and at 
 the same time overcome largely the possihility of salespeople "below the average 
 earning in greater proportion to sales than those ahove the average. 
 
 EXAMPLES 
 
 Among the stores using the commission system are the following: 
 William Pilene's Sons Co., Boston. Commission on all sales, at rates ranging 
 from 1/2 to 1 1/2^^, according to the nature of the departments. 
 
 J. L. Hudson Co., Detroit. Commission of 1/2$^ on net sales throughout the 
 year with the exception of December, when commission of 1^^ on net sales is paid. 
 
 B. P. Dewees, Philadelphia. Salesperson working full time receives 1^; 
 salesperson working on contingent time--i.e., 11 a.m. to 5 p.m. --receives 3/4$^. 
 
 Hager & Bro., Lancaster, Pa . Commission of 1/2^^ and 1^^, according to the 
 nature of the departments. In addition this concern has a department bonus for 
 sales workers and a bonus for non-selling workers which are described in other 
 sections of this report. 
 
 Patton-Anderson, Inc., Minneapolis. Commission of 1^^ on net sales. 
 
 Christman Dry Goods Co., Joplin, Mo. Commission usually 1^^; in such depart- 
 ments as furniture, rugs, men's clothing, women's suits, cloaks and dresses, 3/45^. 
 
 Wm. Hengerer Co., Buffalo. Commission of 1/2^, with the exception of two 
 store-wide sales, when commission is 1^^ on sales and 3^ above a certain quota based 
 upon salaries. 
 
 H. C. Capwell Co., Oakland, Cal. Commission of Ifo, (In hairdressing de- 
 partment there is a commission of 5$^ on hair sales and 2% on labor. ) 
 
 SEASONAL COMMISSIONS 
 
 Some stores in which the commission system is not used throughout the year 
 find it advantageous for certain periods, generally during the Christmas selling 
 
(6) 
 
 season or for special sales events. Such commissions, paid upon all sales, usually 
 are in addition to payments made under an individual "bonus system. For example: 
 
 The Dayton Company, Minneapolis. Prom NovemlDer 17 to Decemher 24, 1919, com- 
 mission of li on net sales was paid all salespeople. The rate of commission was 
 increased or decreased in certain departments to equalize the earning opportunity. 
 
 Jordan Marsh Co., Boston. Commission of 1/2^ is paid on all sales from 
 November 1 to Christmas. 
 
 Joske Bros. Co., San Antonio. For three weeks prior to Christmas, 1919, com- 
 mission of 2< was paid on all sales, except in lace, emhroidery and notions depart- 
 ments, where the commission was 3^^. 
 
 MEASURED INDIVIDUAL BONUS --SALESPEOPLE 
 
 The individual honus for salespeople, frequently referred to as the quota 
 system, is the most complex of the compensation systems in common use, yet has been 
 adopted in some form by more stores than any other system. It has as many varia- 
 tions as there are stores using it, but in a large majority of cases the essential 
 features are as follows: 
 
 (1) Selling expense percentage is established for the department, from ex- 
 perience of the preceding year or the same period of the preceding year, as the 
 proportion of total salaries to total sales of the department. 
 
 (2) Selling quota for each salesperson is established .on the basis of regular 
 wage and selling expense percentage. 
 
 (3) Bonus at an established rate (usually about one-half of the selling ex- 
 pense per cent, and often more than one-half of that per cent) is paid on all sales 
 in excess of the quota. 
 
 (4) The bonus period ranges from one to six months, and deductions are made 
 from sales above the quota for sales below the quota during that period in figuring 
 bonus . 
 
 THE BONUS SYSTEM- -PRO AND CON 
 
 The principal advantage of such a bonus system is .that it establishes a stand- 
 ard task for each employee which must be performed before the regular wage is fully 
 earned, with a reward for those who exceed the standard task. The principal dis- 
 advantage is that salespeople who cannot earn a bonus with any degree of regularity 
 lose the incentive to do their best. This disadvantage is frequently due to the 
 difficulty in figuring quotas accurately and fairly. 
 
 There are many systems of establishing quotas, and widely varying rates of 
 bonus on sales above the quota. There is no standard system. A typical system, 
 

 (7) 
 
 however, is descri"bed in the following quotation from the statement to their em- 
 ployees "by 
 
 Ah 
 
 raham & Straus, Inc. , Brooklyn. "This is the Abraham & Straus method of 
 
 arriving at your quota: 
 
 "Pirst: The total net sales for your department for each month of the year 
 for the past five years is noted hy our Accountants. 
 
 "Second: The total salaries in your department for the same length of time 
 is noted hy our Accountants. 
 
 "Third: The total salaries for each month for the five years is divided hy 
 the total sales for each month for the five years. The resulting number is the 
 average selling expense in your department for each month. 
 
 "Take an example to make it clear: 
 
 "Suppose that your department has done |10,000.00 business for each June for 
 the last preceding five years. Adding, the total amount of business for the five 
 Junes is $50,000.00. 
 
 "Suppose that the salaries in your department have been, each June for the 
 last five years, $550.00. Adding, the total amount of salaries is $2,750.00.. 
 
 "Divide the $2,750.00 (total salaries for five Junes) by $50,000.00 (total 
 sales for five Junes). The answer is .05 1/2^^, which means that the selling ex- 
 pense in your department is five and a half per cent. 
 
 "Now suppose that your salary is $11.00 per week. Eleven dollars is 5 1/2^ 
 of $200.00. Therefore, $200.00 is your quota and you will have to sell it each 
 week before you have actually earned your salary of $11.00. Whatever you sell over 
 and above $200.00 would be over and above what the $11.00 pays you for. On any 
 amount you sell above $200.00 a week, therefore, you are entitled to a bonus com- 
 mission of 25^--and with the Abraham & Straus bonus commission system, you get it. 
 
 "Your quota, you see, has nothing to do with the commission that you or any 
 other clerk in your department has earned the month before. 
 
 "In justice, your quota must be changed almost every month — raised in the busy 
 season, lowered in the dull season. At the beginning of each month you will be 
 notified--in writing--of the amount of your quota for that month; that is, the 
 amount you must sell before you have earned your salary and before you are entitled 
 to any bonus. " 
 
(8) 
 
 Among the various individual "bonus plans for salespeople in operation are the 
 following: 
 
 LaSalle & Koch Co., Toledo. Quotas and honus are figured according to the 
 following plan: 
 
 
 "The rates of commission necessarily varied in the several departments, for it 
 is ohvious that the same rate would not hold for two departments so radically dif- 
 ferent, as, for instance, notions and furniture. These rates were hased on an ac- 
 cumulation of information: the cost of selling in this store for the three pre- 
 vious years and the cost of selling in several other organizations, modified to fit 
 the particular conditions existing in the departments, such as location, size and 
 light. These are the rates arrived at; they are not as yet perfected, for the rate 
 should be such that some person in each department is capahle of earning commission 
 on that hasis. And, as a matter of fact, there are two or three departments in 
 which no one earns. But, inasmuch as these rates would have to "be modified for any 
 other organization in any case, it is a matter which need not "be discussed at 
 length. The first column indicates the rate on which the daily quotas are hased, 
 the rate on which drawing accounts are reckoned. The second column shows the per 
 cent of commission paid on sales in excess of the stipulated quota. 
 
 Art H and • 5^ 
 
 Boys • I^urnishings ^i and 5^ 
 
 Buttons "^i and 6i 
 
 Carpets , Rugs , Linoleums 3-|-^ and 3^^ 
 
 China, House Furnishings 5^^ and 5^ 
 
 Coats and Suits Hi and 3^^ 
 
 Colored Dress Goods 65^ and 5^ 
 
 Corsets H and 4^ 
 
 Curtains 4^^ and 4^^ 
 
 Dresses 3^^ and 3i^ 
 
 Furniture H and 2^ 
 
 Furs H and 2% 
 
 Gloves H and 4^ 
 
 Handkerchiefs H and 5^ 
 
 Hosiery H and 3^ 
 
 Infants • Wear H and 5^ 
 
 Jewelry ^i and bi 
 
 Knit Underwear H and 4^ 
 
 Leather Goods , Umhrellas 65^ and 5^ 
 
 Linens H and 4^ 
 
 Men's Clothing.; 5< and bi 
 
 Men's Furnishings bi and 5^ 
 
 Muslin Underwear H and 5< 
 
 Millinery H and bi 
 
 Neckwear H and bi 
 
 Notions "li and 6^ 
 
(9) 
 
 
 Petticoats 5^ and 5^ 
 
 RilD"bons 6^ and 5^ 
 
 Shoes 6^ and 6^ 
 
 Silks 4^ and 3^ 
 
 Silverware b<^ and 5^ 
 
 Toilets b^ and A^ 
 
 Trimmings 55^ and 4^^ 
 
 Waists b^ and A^ 
 
 Wash Goods , Domestics 65^ and A^ 
 
 The percentage in the first column was made larger in order to make it easier to 
 reach the daily quota and thus earn extra money on commissions. In this way people 
 are encouraged. It will he noticed that in this store AO^ of the departments have 
 the same rate on both quota and excess sales, and that these departments are largely 
 departments carrying staple merchandise, or merchandise without great style varia- 
 tions; while the other 60<^ which have a lesser per cent on excess sales are largely 
 departments which deal in style merchandise or perishable merchandise. The closer 
 the two per cents are, the better and more fairly the system works out." 
 
 R. H. Macy Co., New York. Combined commission and individual bonus plan. 
 Commission of 1/2^ on all sales up to quota; 2<^ on all sales above quota. 
 
 Henderson-Hoyt Co., Oshkosh, Wis. Quota based on percentages ranging from 
 4^ in ready-to-wear to 12^^ in notions and books, with 3^ bonus for all sales above 
 quota. 
 
 Shepard Stores, Boston. Average cost of selling for each month in each de- 
 partment is figured for past two or three years. The quota each salesperson should 
 sell per day is figured by using this per cent and the individual salary. A slip is 
 given to each salesperson at the first of each month telling what their sales must 
 average each day in order to earn a bonus at the end of each month. On all sales 
 above such amount for the month, they are paid 2^, 
 
 Other stores using such individual bonus systems for salespeople, with similar 
 systems except for variations in quotas and rates of bonus for sales above quotas, 
 are: 
 
 Jordan Marsh Co., .Boston. 
 
 The Wanamaker Stores, Philadelphia and New York. 
 
 The Emporium, San Prancisco. 
 
 Broadway Department Store, Los Angeles. 
 
 Killian Co., Cedar Rapids, Iowa. 
 
 Stix, Baer & Puller Dry Goods Co., St. Louis. 
 
 Hale Bros., Sacramento, California. 
 
 Halle Bros. Co., Cleveland. 
 
 MEASURED INDIVIDUAL BONUS- -BUYERS 
 
 A number of stores have applied individual bonus plans in the compensation of 
 executives of selling departments, generally buyers and assistant buyers. 
 
• 
 
 (10) 
 
 In such systems, however, the honus is usually a percentage of the sales of 
 the department over sales of the same period of the preceding year, or of sales 
 over the quota assigned to the department. 
 
 Some instances of such individual honus payments are: 
 
 Ahraham & Straus, Brooklyn. Assistant huyers receive 1/3^ on the increase of 
 the year's sales in their department over the preceding year. Buyers usually re- 
 ceive a special commission on increased sales. 
 
 William Eilene ' s Sons Company, Boston, have a plan hased on the net sales of 
 the department and the per cent of gross profit on the sales. Payments to an in- 
 dividual working in more than one department are made only if the minimum sales and 
 gross profit percentages for the group of their departments have heen exceeded. 
 
 If an individual working under the above management is transferred during 
 the year he is paid the proportionate part of the year's accomplishment based on 
 the time employed in each department or group of departments. Payment is made to 
 individuals only if they have been employed for the full fiscal year. 
 
 Any payments which may be due under this plan are to be subject to the con- 
 dition that after the payment of such sums as are called for under this plan or 
 any other offering of extra remuneration incentive which may be approved by the 
 management, and after the deduction from Total Store Profit all expenses, taxes, 
 merchandise depreciation, dividends, bonus and any distribution in the form of 
 Profit Sharing, there shall be left to the business a minimum per cent of net profit 
 to sales to be set by the management. 
 
 Joske Bros. Co., San Antonio. Buyers are paid a bonus of 2i on all increases 
 in sales over sales of the preceding year. 
 
 MEASURED INDIVIDUAL BONUS --NON- SELLING EMPLOYEES 
 
 Commission and individual bonus systems have been applied to selling em- 
 ployees in many stores, but few stores have devised a satisfactory system of ad- 
 ditional payment for non-selling employees on either a piece-work basis or that of 
 performance of more than a standard task. 
 
 The problem of rewarding efficient work by non-selling employees has usually 
 been met by the distribution of a fund among such employees, either in proportion 
 to salary or on the basis of length of service. Usually the amount of the fund so 
 distributed is arbitrarily fixed, but several stores make it a practice to dis- 
 tribute among non-selling employees a fund equal to the total commissions or bonus 
 paid to selling employees. 
 
 Methods of estimating and paying additional compensation for non-selling 
 employees, based upon service above a given standard of quality or quantity, have 
 been developed for some departments by several stores. Among them are the follow- 
 ing: 
 
 Hale Bros., Sacramento. Delivery drivers receive a bonus of $5.00 a month, 
 
9 
 
 (11) 
 
 provided they score 100^ on inspection of their automohiles. There is a 50c de- 
 duction for each criticism, such as a dirty engine, insufficient oil, etc. 
 
 NON- SELLING BONUS 
 
 A large Cleveland store is applying the following individual honus methods 
 for non-selling employees: 
 
 Wagon Boys* Bonus: Wagon hoys may earn a honus of |2.00 per week hy regular 
 and prompt attendance every day. If the hoy is ahsent during the week without a 
 reasonahle excuse, he loses his entire honus. If he has heen at work every day, he 
 loses 25c for each time he is late. 
 
 This plan has "been successful in securing hetter and prompt attendance. 
 
 Bookkeepers' System of Production Payment: Billers are credited with Ic for 
 each check hilled. This includes forwarding on trial halance and halancing each 
 day's work, hut does not include making the monthly halance on the hiller's work. 
 
 Deductions. A deduction of 25c is made for each error in hilling and a de- 
 duct iorToFToThecks is made for each mistake in heading they pass. The hills are 
 headed hy girls who are not hillers. 
 
 The period figured in computing the amount due each hiller is from the fourth 
 husiness day of one month to the third husiness day of the next, inclusive. At the 
 end of this period she receives the difference hetween the amount paid her on her 
 weekly drawing account and the amount due her at Ic per check, minus deductions. 
 
 The hookkeeping is done on Elliott-I'isher machines. 
 
 Elevator Operators' Bonus System: The elevator director, assisted hy a corn- 
 mi ttee^oFfTvTpeoplTTeTecterihr^^ store, together with the recommendation 
 from her assistants, grades each operator on the following points: 
 
 Punctuality ^^ 
 
 Courtesy and Conduct ^^ 
 
 Personal Appearance ^^ 
 
 Calling Floors ^^ 
 
 Making Stops • ^ 
 
 100 
 
 Each operator making a monthly average of 95 or higher receives a honus of 
 $5.00. By the use of a honus we have ohtained gratifying results in the qualities 
 listed ahove. 
 
 Production Payment for Sorting Sales Checks in the Auditing Department: Sort- 
 ing sales checks consists of the following elements. 
 
 1. Collecting charge sales checks throughout the store. 
 

 (12) 
 
 2. Sorting checks into iDins according to ledger, sorting out all employees' 
 checks and others not handled in the regular ledger. 
 
 3. Auditing checks which includes verifying extensions and additions, making 
 douhtful checks and writing clear. 
 
 4. Sorting checks into strict alphabetical order. 
 
 5. Running off an adding machine tape for each ledger. 
 
 Sorters are credited 3/4c for each check they complete, and 10 checks are de- 
 ducted for every error made. At the end of the week the sorter receives her total 
 earnings. No drawing account is given to sorters. The work is done "by school girls 
 "between 4.00 p.m. and 8.00 p.m. 
 
 Delivery Credit Authorization Production Payments: Authorizations are made 
 from a Rand Visible Index. 
 
 Delivery authorizers are paid l/2c for each authorization. A deduction of 25^ 
 is made for passing C. 0. D.'s, had accounts or no accounts. A deduction of 12 l/2c 
 is made for passing checks with any other kind of a mistake on it, as wrong address, 
 wrong initials, or incorrect spelling of name. 
 
 At the end of the month the authorizers are paid the difference between the 
 amount paid them on their drawing accounts and the amount due them at l/2c per au- 
 thorization loss deductions. 
 
 Audit Department Tabulating Card Punchers Production Payments: A tabulating 
 card is punched for each sale made. 
 
 Punchers are paid 15c per 100 checks punched, a deduction of 10 checks being 
 made for each error. They are given a drawing account, and all they make in excess 
 of this is paid them weekly. 
 
 Audit Department Sales Checkers' Bonus: Each tabulating card is checked 
 against a tally to see that all details are correct. 
 
 Checkers receive a bonus of |10.00 if no errors have been made for a period 
 of one month. A deduction of 2< of this bonus is made for each error. If no errors 
 are made for three months, an additional bonus of $5.00 is paid. 
 
 H. C. Capwell Co., Oakland, Cal. Drivers are paid a bonus for tire mileage, 
 being paid one-half the guaranteed cost per mile for each mile run over the 
 guarantee. 
 
 MEASURED INDIVIDUAL BONUS- -LENGTH OE SERVICE 
 
 Payments for length of service may be classified as individual bonus. Such 
 payments are made by a number of stores as a reward for the ".sticking qualities" 
 

 1 
 
 (13) 
 
 of employees, and in some cases are accompanied hy additional vacation periods with 
 pay for employees of 25 yaars or more. 
 
 Among the stores making such payments are: 
 
 Davidson Bros. Co., Sioux City, Iowa. At Christmas, 1919, $25.00 was paid 
 each employee who had TDeen with the store five years; |50.00 for service of ten 
 years; and $100.00 for service of twenty years. 
 
 Best & Co., New York. Payments to non-selling employees were adopted in 1919 
 on the following hasis: 
 
 1. To the non-selling employees receiving less than $1,600 salary a year, and 
 who shall have completed one year of service on or before Dec. 31, 1919--55^ of 
 annual salary. 
 
 2. To those completing 2 years of service — 6<^ of annual salary. 
 
 3. To those completing 3 years of service--?^^ of annual salary. 
 
 4. To those completing 4, 5, 6, 7, or 8 years of service--95^ of annual salary. 
 
 5. To those completing 9, 10, 11, 12, 13 or 14 years of service--105^ of annual 
 salary. 
 
 Payments to he made annually on the seventh "business day "before Christmas. 
 
 Lord & Taylor, New York. In 1919, the following "bonus payments, hased upon 
 length of service, were distributed: 
 
 Those in store continuously for: 
 
 10 years or more, to Jan. 1, 1920 $30.00 
 
 5 years and less than 10 years, to Jan. 1, 1920 25.00 
 
 3 years ,and less than 5 years, to Jan. 1, 1920 • 20.00 
 
 2 years and less than 3 years, to Jan. 1, 1920 15.00 
 
 1 year and less than 2 years, to Jan. 1, 1920 12.50 
 
 6 months and less than 1 year, to Jan. 1, 1920 10.00 
 
 Less than 6 months, to Jan. 1, 1920 • 8.50 
 
 MEASURED GROUP BONUS 
 
 A number of stores have found it desirable to establish systems of bonus 
 payments for departments or groups of employees, both selling and non-selling, 
 where the department has performed a task above the given standard in quality or 
 quantity. 
 
 Instances of this type of bonus payment are: 
 
 Hager & Bro., Lancaster, Pa. Percentage of increase in sales by depart- 
 
1 
 
 • 
 
 (14) 
 
 merits, ranging from 1 1/2^ to 2 l/2< according to the nature of the department, 
 divided among the employees of the department in proportion to salary. This is in 
 addition to commissions paid individual salespeople upon all sales. 
 
 Hale Bros., Sacramento . A honus fund equal to $5.00 per month per person is 
 established for the credit office. Every error in hilling, posting, etc., made by 
 anyone in the department is charged against this fund, and whatever is left in the 
 fund at the end of the month is divided pro rata. 
 
 James McCreery & Co . , ITew York. An "employees' economy dividend" is paid to 
 the store workers representing one-half of the savings in operating expense for 
 the current month over the average of the costs of the same months for the five 
 preceding years. This distribution is on the theory that reduced cost of operations 
 resulting mostly from an increase of sales, is accomplished by diligence, courtesy, 
 carefulness in saving, accuracy and the avoidance of waste. The dividend is 
 figured by securing the percentage of total expense for the given month for five 
 preceding years to the total sales of the same month for the same period. If the 
 percentage of operating cost to sales is lower than the average, this saving is dis- 
 tributed. This company originally based its estimates on savings over the preceding 
 year, but has changed to the average of the five preceding years as a fairer es- 
 timate, 
 
 Jordan Ma rsh Co., Boston. A bonus distribution with features of both group 
 bonus and profit sharing plans is made. Each employee holds a given number of 
 shares in the distribution ranging from 3 to 16, according to the responsibility of 
 the position. Por example, a salesperson holds 9 shares, an assistant buyer 12 
 shares, a buyer 16 shares. When the total fund to be distributed is determined, it 
 is divided by the toal number of shares outstanding, and the amount for each em- 
 ployee thus figured. The fund divided among selling employees is a fixed per- 
 centage of the increase in sales over the preceding year. The fund for non-selling 
 employees is a fixed percentage of the increase in sales plus a fixed percentage of 
 the increase in net profits, since the work of non-selling employees, through cut- 
 ting down or holding down expense, has a direct effect upon net profits. 
 
 Chas. Korrick & Br o., Phoenix, Ariz. Each department showing an increase of 
 business for a month of 25^ or more over the corresponding month of the preceding 
 year receives a bonus of 2 1/2^, divided among the employees of the department on 
 the basis of their percentage cost— wage in proportion to sales for that month. 
 
 PROPIT SHARING 
 
 Profit sharing in its technical sense (see definition page four) is not 
 practised by any of the stores covered in this survey. 
 
 STOCK PARTICIPATION BY EMPLOYEES 
 
 Some of the stores allow employees to purchase company stock. Among these 
 stores the following are typical: 
 
 Montgomery Ward & Co., Chicago. Employees have been permitted to purchase 
 
(15) 
 
 % 
 
 * 
 
 stock at a price consideralDly under the market value, and a number have taken ad- 
 vantage of this opportunity. 
 
 Sanger Bros., Dallas. When the corporation was organized in 1919, they of- 
 fered $1,000,000.00 of common stock to employees at 50^ of its value, with the un- 
 derstanding that this $1,000,000.00 worth of stock must receive 45 dividends hefore 
 the remainder of $8,500,000.00 common stock received any dividend. This stock was 
 fully suhscrihed for hy employees. 
 
 The Marston Co., San Diego, invites the purchase of company stock "by all em- 
 ployees who have heen with the firm more than three years. The only restriction 
 on such holdings is an option which gives opportunity of repurchase to other em- 
 ployees if the holder leaves. Ahout one employee in eight holds stock. 
 
 Miller & Paine, Lincoln, Neh . Much of the stock is held by employees, ranging 
 from large amounts down to one share. 
 
 Rothschild Bros. , Ithaca, N. Y. Have sold some stock to their employees. 
 
 BONUS PAYMENTS 
 
 With the possible exception of commission and bonus payments to salepeople, 
 the majority of payments in addition to regular wages by retail stores have 
 been in the form of bonus funds among all employees in proportion to salary or to 
 length of service. 
 
 These are generally distributed during the holiday season. 
 
 Among the stores which have made such distribution are the following: 
 
 Eranklin Simon «Sc Co., New York. In 1919, selling employees, except in men's 
 shops, and non-selling employees, were given ^i of salary for six months preceding 
 August 1; a similar 5$^ payment was made for the five months period from Aug. 1 to 
 Jan. 1, and selling employees also shared in a fund of 5^ of the total salaries of 
 the employees of each department, distributed in the ratio of the sales of each in- 
 dividual to the total sales. ^ 
 
 Louis Traxler Co., Dayton, Ohio. All employees holding non-executive and 
 non-selling positions have received 5^^ of their December salary, and all employees 
 in the selling departments, regardless of regular commission, received 1/2^ of 
 their December sales as a bonus. 
 
 L. Bamberger & Co., Newark. The following distribution was made at Christmas, 
 
 1920: 
 
 Co-workers employed before Jan. 1, 1920 $20.00 
 
 It •» since Jan. 1 and before July 1 15.00 
 
 w »» on July 1 and before Nov. 1 10.00 
 
 « "on Nov. 1 and before Dec. 1 5.00 
 
(16) 
 
 These amounts were paid to the selling as well as the non-selling force. In 
 order to receive the remeralD ranee, it was necessary to have perfect attendance from 
 Nov. 29 to Dec. 24. It did not apply to a few departments where special arrange- 
 ments as to employment had "been made. 
 
 Hager & Bro., Lancaster, Pa. A "bonus is paid semi-annually to non-selling 
 workers, including workers in Office, Advertising Department, Delivery Department, 
 Shipping Room, Porters, Packers, Wrapping Department and Cash Boys and Girls. SuId- 
 ject to efficiency shown during term; to he determined hy recommendation of: 
 
 1. Superintendent and general assistants. 
 
 2. Heads of respective departments. 
 
 To those employed over one year, hut less than three years--45^ of salary for 
 
 term. 
 
 To those employed over three jrears , "but less than five years — 6^ of salary 
 for term. 
 
 term. 
 
 To those employed over five years, "but less than ten years — S^ of salary for 
 
 To those employed ten years and over--105^ of salary for term. 
 
 
/ 
 
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