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Penney To End Commissions For Some In Favor Of Hourly Wages

05/11/2012 | 08:45am US/Eastern

(This article was originally published Thursday.)

   By Karen Talley 

J.C. Penney Co. (>> J.C. Penney Company, Inc.) is ending the practice of paying commissions to employees in certain departments, a move seen saving the retailer money and furthering its transformation under Chief Executive Ron Johnson.

Company spokeswoman Kate Coultas said the affected workers will be put on hourly wages and that the moves "enable our teams to be even more effective in winning the hearts and minds of our customers."

Coultas didn't elaborate.

The moves affect sales staff in fine jewelry, shoes, window coverings, men's suits and some in salon. The changes take effect this month.

"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," Coultas said. "Therefore, our commission pay plans will move from a commission-based structure to a competitive hourly rate structure."

The move is the latest store-level change at J.C. Penney, which last week let go an undisclosed number of store staff at its 1,100 locations, many of whom were in supervisory positions. J.C. Penney has also laid off 600 employees at its Plano, Texas, headquarters and an additional 300 will lose their jobs at the end of June when a Pittsburgh call center is closed.

The goal is for a more streamlined operation, CEO Johnson has said, as he tries to remodel Penney from a stodgy department store into an array of shops-within-shops that eschews promotions. Johnson joined Penney in November after heading Apple Inc.'s retail stores.

Signs of how the business plan is doing will be offered next week, when Penney reports first-quarter results.

-By Karen Talley, Dow Jones Newswires; 212-416-2196;

Stocks mentioned in the article : J.C. Penney Company, Inc.
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