One of the worst plans I ever instituted was havingmanagers act as owners by rewarding them purely on
a profit basis. This plan ultimately backfired because
some store managers became excessively concerned
with overhead rather than sales. One manager suffering
about cutting the light bill; others focused on inventory,
keeping it vastly low because of charges for carrying
costs. receive as the only yardstick gave managers incen-
tive to concentrate on some of the wrong things and
misfocused their efforts!This changed in 1970 when Martin Ross attached thecompany as supervisory vice president. He teamed with
Ron Atcheson, our vice president for operations. That
wise and extraordinarily talented team decided the cor-
porate office should supervise payroll and expenses and
let the store managers concentrate only on sales, sales,
and sales. That did it! The stores focused only on sales,
which drove average volume ever higher, helping the
company grow in a major way.Understanding the change of profit andsales volume inindustry was one of the hardest concepts for me to fullycomprehend. Thankfully, I was fortunate enough to work withpeople who knew the change of balancing each.What about supervisory management? Should profit be thebe-all and end-all for them? Absolutely not! After 39 years of
learning in industry, I see my associates’ tremendous long-headedness inShould Incentives Be Basedon receive or Volume?
