The labor journal. [volume] (Everett, Wash.) 1909-1976, 1913-12-19
PROFIT SHARING.
Outline of a Tentative Plan For
Department Stores.
BASED ON ENGLISH IDEA.
Scheme Contemplates a Commss
on Sales Sufficient to Provide Fair
Wages For Empoyees-Part of b.
muses. to Be Retained.

| Wages For Employees-Part OF Bo-
muses. to Be Retained.
A tentative profit sharing plan for
use in department stores has been for
mulated by f. Colburn Pinkham, sec
rotary of the National Retail Dry
Goods association, says the New York
Times This plan has been submitted
| for suggestions and criticisms to sew
eral persons prominent in the CONNER
cial world, including Secretary of Com
merce Redfield and George w. Perkins.
| Mr.. Perkins has expressed his approval
of the main features of the plan, and
Secretary Redfeld, while too busy to
give it thorough consideration, has ex-
pressed himself as being in sympathy
with the idea of it.
| Mr.. Pinkham also submitted the plan
to the management of Selfridge's, the
American department store in London.
and recently received from there a let
ter regarding it. Part of the plan, as
outlined below, is, strangely enough,
somewhat similar to the plan now in
use in the Selfridge store Over there
a commission of IL per cent is paid
weekly on sales. in addition to the reg
ular wage. In this way saleswoman
who might regularly earn So week
there is enabled frequently to make as
! high as S12 or SIS Naturally the Self
ridge executives expressed themselves
| in favor of the commission idea of Mr..
| Pinkham's plan. but they objected to
| the idea of Withholding bonuses from
employees under the conditions out
lined below in part Q
Part of the Pinkham plan deals
with the weekly wages of salesper-
sons and says:
First-Ascertain the wage which the av-
| erage employee is getting at the time II Is
proposed to install this profit sharing sys-
tenn and then figure out what percentage
this wage is of the amount of goods sold
by the average saesperson in a depart
ment
Second.-Assume that the average wage
of employees is So a week based upon sales
of $500 week. This equals per cent.
Third.-Reduce the fixed wages of IS to
81 Now, on the basis of per cent $40
worth of goods should be sold to earn this
81. On all sales in excess of $40 allow
percentage of from l to 3 per cent for
commission. The exact percentage of the
bonus should be in inverse ratio to the
sales price of the merchandise and the
readiness with which it may be sold
Fourth.-In following out the wage ana
percentage system care should be taken
that the commission percentage is sutf-
cient to guarantee that the salesperson
shall earn at least as much as before the
system was installed.
Fifth-When this system is properly in
stalled an increase in wage is produced
mechanically as a result of the additional
effort put forth by the salesperson under
the stimulation of this profit sharing sys-
TEN.
Part 2, which deals with retaining
part of an employees commission, fol
lows:
First.--It should be determined what per-
centage should be withheld from the en-
ployee's weekly or monthly commissions.
This percentage should not be SO large as
to decrease her weekly salary to point
where it is not in reasonable excess of the
fiat wage previously given.
Second.-The percentage withheld from
the commissions or bonuses paid the en-
ployees shall be turned over to them at
fixed rate of interest upon the completion
of five years continuous service in good
standing except in the case of women en-
ployees who marry before the five year
period of service is completed. They shall
receive full commissions to the date of
their resignation from the company's serv-
ice.
Third.-Where the employee leaves the
service of the concern before the five
years expire, except in the case OF women
employees who marry as above noted the
percentage of the employees earnings so
withheld shall be turned over to a fund to
| be divided equally among those employees
who have remained in the service of the
organization for five years continuously.
Part deals with plans for en-
ployees sharing in ownership OF the
working capital of the business. 1t
says:
First.-Where the concern is a corpora
ton it shall be arranged that the reserve
fund bonus shall be invested as working
capital in the business and that this shall
earn in precisely the same manner as ev-
cry other dollar of the capital of the bust
ness.
Second-This makes employees, in point
OF fact, sharers in the actual earnings or
the business to this extent
The plan concludes with an outline
for the organization Of a benevolent
association, which provides:
| Flrst.-That the owners of the concern
shall also agree to contribute to a benev-
client association a certain stipulated
amount. provided rs per cent of the en-
ployees join the association.
| Second-The idea of this mutual benefit
scheme, which provides for revenue In
cases of sickness, accident and death is to
knit the employees more closely to the
concern and to establish an organization
| in the concern which shall be governed by
the employees and which shall promote
the esprit de corps of the entire organiza-
| ton.
The plan was outlined by Mr.. Pink
nam to get suggestions and criticisms
from various merchants, and as soon
as enough have been received to make
1t possible permanent plan will be
formulated. Already several interest
ing points in connection with the plan
have been brought up and discussed.
When submitted at recent meeting
Of the board of directors of the asso-
citation the plan attracted considerable
attention.