Compensation Plan

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  • Topic: Sales, Retailing, Customer service
  • Pages : 14 (4019 words )
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  • Published : January 11, 2013
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Total Compensation Plan Design
Macy's (fictional)

Table of Contents
Executive Summary…………………………………………………………….3 Macy’s Overview………………………………………………………....4 Macy’s business strategy and organizational culture………………………..5 Macy’s Organizational Chart………………………………………………….6 Macy’s Broad Compensation Strategy…………………………………………7 Macy’s Compensation Plan……………………………………………………….8 The Cost of the Compensation Plan………………………………………………..9 Compensation Plan Communication……………………………………………..10

Executive Summary

Macy’s Overview
Macy’s Inc. is one of the nation’s premier retailers operating more than 850 department stores and employing approximately 182,000 employees in the United States. Macy’s takes pride in selling numerous private label brands and pulling away from other department stores like JC Penny and Sears. Today’s organization is a combination of a number of department stores which came together beginning in 1929. Federated Department Stores, Inc. (renamed Macy’s Inc. in June 2007) was born through the combination of Abraham and Straus of Brooklyn, Filene’s of Boston, F&R Lazarus & Co. of Columbus, OH, and Bloomingdale’s of New York. At that time these separate retailers were established and rich in history on their own. In joining together, they agreed to maintain their separate identities while linking their financial interests. Macy’s mission statement is written to reflect how the company will run their business in the present and the future. Below is Macy’s mission statement explaining their core values: “Our goal is to be a retailer with the ability to see opportunity on the horizon and have a clear path for capitalizing on it. To do so, we are moving faster than ever before, employing more technology and concentrating our resources on those elements most important to our core customers” ( http://www.Macys.com) Macy’s specializes as a chain of mid-range American department stores. Products sold at Macy’s range from clothing, shoes, accessories, cosmetics, fragrances, to house wares, furniture, and bedding. Macy’s operates over 850 stores in 45 states, including the District of Columbia, Guam, and Puerto Rico.

Macy’s Business Strategy and Organizational Culture
There are four objectives Macy’s publishes every year; grow sales, continue to increase the company’s profitability levels as a percent of sales, improve return on investment capital, and to maximize total shareholder return. To do this, Macy’s believes their greatest strength lies in the skill, judgment and talent of their people. Their priority of attracting, retaining and growing the most talented people in the retail industry has been and will continue to be their greatest advantage (Macy’s company website, 2012).

To achieve these goals Macy’s has had to change its business strategy. In 2009 Macy’s adopted a new strategy called “My Macy’s”. The strategy boosted sales by tailoring the merchandise in each store to its customers. Much emphasis was placed on gradually adapting the transition to “My Macy's” as a new managerial business strategy, thus ensuring that both social and technical changes will not blur the organizational boundaries and culture. This change in philosophy resulted in the chain doubling earnings over the past three years. This at a time when Macy’s competitors such as JC Penny had earning plunge by 32% (Schonberger, 2012).

The organizational culture at Macy’s is one of inclusion. They actively address diversity issues and believe diversity in business and multicultural diversity are key to their success and the success of the communities they serve. Their goal is for every associate to achieve his or her potential. Because of this commitment, women represent more than 75% of Macy’s workforce and 65% of their managers. Racial minorities are nearly 50% of their workforce and nearly 28% of their management (Macy’s company website, 2012). From a compensation standpoint, Macy’s rewards employees for good work. To...
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