Align Goals

Align Individual Goals with Organizational Goals

The items made metric is counter-productive because it encourages pricers to put items on the floor indiscriminately. Managers tell pricers to put items on the floor that have a good chance of being sold, but they measure pricer performance based on the total number of items made. This creates a conflict. The pricer’s goal is not aligned with the organization’s goal.

This may cause bad behavior like printing 100 miscellaneous tags and putting them on items that will absolutely not sell in order to make their quantity quota. To combat this behavior, Goodwill should measure pricers based on the dollar amount of the items that actually gets sold. Then, there’s no reason for a pricer to make items that won’t sell.

If their metric is based on the items that sell, they might spend a few seconds deciding which items are more likely to sell. They may also be more careful where they put the price tag so customers can see it clearly. They may put the item on the shelf in front so customers can get to it easier. This is the type of behavior that we want to encourage.

With AMI, all of this information is available. AMI knows which pricers items are selling and which pricers item are not. Here is a sample report:

Items Selling

AMI captures very granular data about pricers. It records every aspect of the production-to-sale path including: the amount of hours worked, the retail value of items made, the sales value of items sold, the sell-through rate, the average tag price, the average sell price, and the average sell time. AMI tracks each pricer’s contribution to the bottom line.

Thus, weak pricers are easy to spot. They’re the ones with the low Sold Value and low Sell Through rate. Using this data, a new rating system can be created. Let’s use Sold Value, Sell Through, Average Sell Price, and Average Sell Time. We can weight each dimension based on importance. Here’s a sample rating system:

Sample Rating

This is similar to a class where 40% of the grade is the final exam, 30% is the midterm, 20% is for class participation, and 10% is for homework. This rating system tells pricers that the agency is most concerned with the Sold Value and the Sell Through. There are no points for the Produced Value.

With this system in place, pricers must focus on which items can be sold and at what price, rather than blindly creating items at a fast pace. This will increase the level of difficulty of the job and better utilize their skills and talents. It will align their individual goals with those of the organization. Then, pricers can be accountable to the same goals as other store employees and receive similar incentives.