Is it true that a store can only give a certain number of "O" a year?
And
Is there such a thing as a cap at spot? And I so is there any way around it?
In theory, there is not a limited number of "O" scores. However, since there is an overall budget at all the levels, it does limit the number of scores you can give. For example, if give 10 "O" scores out, you are basically guaranteed to go over budget. I would estimate that for an avg store (150-200 tms) you can give 3-5 "Os". This takes care of the best of the best, and leaves room for some Ex and E scores. When you get close to the budget, you have to decide if you want to move one person from O to Ex, which migh allow you to move 4-5 people from IE to E. It sounds a bit confusing, but there is a balancing act with budgets. Hope this helps.
As far as a cap, yes there are caps at every level and paygrade. However, these are pretty big ranges and very few tms every actually hit the cap. You generally have to have been with Target for a long time, or have a series of significant promotions/raises to hit the cap. The people that I see hit the cap are often tms who demoted at some point and did not lose much (if any) money in the process. You can get around the cap, but you have to get a great review score. Tms who are at their cap must get at least an Ex to qualify for a raise. I have a few tms that are capped that got these better scores this year, so they are still seeing a raise.
So in other words, the reviews aren't even based on genuine merit but how much money the store has to work with? Not that I already didn't know this, but it's nice to hear it stated. I'm sure the genuinely bad employees get genuinelyy bad scores, but that explains why so many good workers still end up with IEs.
I don't think this is breaking new, but maybe it is to some. Each store, district, etc. has a budget for their raises. Let's just talk on a district and store level.....though it's far more complicated than this. Some of the factors for pay raises are AE score, golden contribution (basically, how did your store do with sales vs. payroll), and total store operational score. Corporate has a pool of money for the entire company sitting there waiting to be distributed down. AE score is the first trickle down. Corp views AE as the baseline to how regions and groups operate. After groups know what they have to work with, DTL's come out swinging. Your DTL fights tooth and nail for every penny they can get their district. Groups can have 5-10 different districts so DTL's use the best numbers they can to fight for their district. This is where golden contribution, total store ops, AAR, basket size, conversion, and all those metrics come into play. Districts then receive their merit budget. From there it is pretty straight forward. Your store numbers are what they are. STL's can fight for small bumps up in what they are allocated, but it's pretty cut and dry. Smart STL's will use their bench talent as a way to get a little more merit budget. STL's and DTL's get bonused on the number of promotions that come out of their store/district, so it can be adventitious to make sure the talent doesn't leave.
Let's number crunch shall we....
I know my ULV's so I will use that as an example (THIS IS ONLY AN EXAMPLE!!!)
1 – STL 5,000 year 5,000
4 - ETL's 3,500 year 14,000
3- SR. TL's .55 @ 2,000 hrs 3,300
7 - TL's .35 @ 2,000 hrs 4,900
80 - TM's .12 @1,500 hrs 14,400
Total: 41,600
I’d say the average ULV has about 40k – 60k to work with depending on all the factors that I have already mentioned. You notice the 2 largest groups of merit increases are ETL’s and TM’s. Honestly, I think my ETL increase is a little inflated so the largest group is easily TM’s. You can play with the numbers and see that small changes in the average merit increase for TM’s, will get the budget in a bind fast.
When you start expanding out to a company level, the numbers get silly. Corp will end up spending 125 -150 million a year in merit increases. This is Target’s business model. Could they triple the size of the merit budget? Probably. Could they take the money they use on sponsoring racecars and use it for the merit budget? Probably. The impacts of NOT sponsoring racecars and baseball stadiums is waaaaaaay out of my league. What does not make sense to us, must work on paper because ALL corporations do it. It may be the cheapest form of advertising, I don’t know.
I hope this draws a better picture of how merit increases work....good or bad.
.....Let the insiteful1 reaming begin.......
