Here's How The Big 'No More Commission' Announcement At JCPenney Went Down


Photo: Scott Olsen / Getty Images

On Monday morning, JCPenney relayed another message down to the workers in its stores. CEO Ron Johnson is eliminating commission at JCPenney. Previously, sales staff in six departments received commission — such as jewelry and the salon.

The new policy begins on May 20th, which was confirmed by the Dallas Morning News and JCPenney yesterday.

Also, some commission associates were told they were being laid off.

We spoke with some employees about what went down that day. We’ve withheld their names per their request.

All the big announcements happen on Monday, one employee says, when the “Store Leader” (that’s the new name JCPenney has given to Store Managers) is present.

The Store Leader reads them a scripted statement out loud in the morning, instead of the usual “state-of-the-union” announcements, which are taped segments from Johnson “garbed in his usual business casual attire,” she says.

Then, she explains, employees are brought to the “inner sanctum” for private meetings with the Store Leader, in which employees discuss their individual options.

Here, they get their ultimatum. For those being offered continuing employment, they can choose to stick with it and sign the new contract or leave voluntarily — with “Job Eliminated” as the listed reason.

The deadline for that is today. If they quit, their hours are cut so they don’t have to work until May 19th. They’re allowed to come in to get their stuff, but aren’t allowed to walk through the store or talk to anybody.

So, how’s employee morale holding up in that atmosphere?

“There was a stunned, funereal atmosphere throughout the store,” said the employee. “One was fearful of being observed discussing the details and comparing war wounds. as we were all cautioned in the individual meetings that this information was extremely confidential.”

JCPenney didn’t immediately respond to a request for comment.

Were you affected by this? Send an email to [email protected]

UPDATE: JCPenney spokesperson Kate Coultas gave us this statement about its new pay structure:

“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. Therefore, our commission pay plans will move from a commission-based structure to a competitive hourly rate structure. By bringing their compensation levels back to what they earned last year with commissions, team members can have a better sense of their incomes. 

“This new, collaborative approach to taking care of our customers will not only enable our teams to be even more effective in winning the hearts and minds of our customers but, over time, will provide greater opportunities for personal growth and development.”

NOW SEE: JCPenney Is Quietly Firing Middle Managers Across The Country >

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