1. Changing Commission Structure to Hourly Rates (with potentially Pay- for-Performance)

2. Success, Teamwork, and Compensation are Interwoven! Spa and/or salons are struggling to control payroll costs – the major cost within our businesses! Competitive environment is accelerating even faster than before True “Teamwork” is often lacking. Many owners feel like “they are hostage” to Service Providers. Present Situation

3. Analyze and implement needed changes within your present compensation structure to: Free up cash for reinvestment Free up cash for reinvestment Reduce Payroll Costs Reduce Payroll Costs Align staff to execute SUPERIOR Client Service Align staff to execute SUPERIOR Client Service Motivate and Attract Staff Motivate and Attract Staff Implement Pay-for-Performance via three different performance levels: Implement Pay-for-Performance via three different performance levels: o Individual o Department o Business (enterprise) Present Needs

4. Compensation System Foundation A. Assumptions By nature, people are good and want: Structure, Consistency, and Predictability Motivation Feedback (Rewards, Evaluations) People want these things in their workplaces (by importance): #1 Security #2 Sense of making a difference (Both self-worth and contribution) #3 Equitable Compensation #4 Opportunity for Advancement

5. Compensation System Foundation B. Business Premises Reward and compensation systems must be: Factual Integrated Progressive Logical A desire is to have the system simple-as-possible, easy to execute, with minimal maintenance. Management results are only successful when using the practice “Managing what you are measuring”.

6. Compensation System Foundation C. Business Needs Alter/assure that Compensation System is optimizing costs and rewards for all stakeholders: Clients Providers Support Staff Management Owners Maximize data system(s) to quickly and objectively gather, analyze, and communicate critical-to-business results Spearhead advanced team management practices and perpetuate an open, honest business environment

7. Owner’s Advantages Decreased overall payroll costs Decreased overall payroll costs Ability to motivate employees with Ability to motivate employees with Individual, Departmental, & Enterprise Individual, Departmental, & Enterprise Success Success Ability to increase prices without sharing Ability to increase prices without sharing increase with service providers increase with service providers Better budgeting and business plan Better budgeting and business plan projections Better projections of cash flow projections Better projections of cash flow

8. Possible Financial Savings Sales $1,000,000 Direct Labor @ 49%$490,000 Indirect Labor @ 10%$100,000 Total Labor$590,000 If save 1%$5,900 Company’s Advantages

9. Providers’ Advantages Stability Stability “Guaranteed” hourly wages “Guaranteed” hourly wages Defined and achievable, progressive Defined and achievable, progressive wage increases wage increases Career path defined Career path defined Sense of appreciation and contribution Sense of appreciation and contribution Sense of building business on an Sense of building business on an individual, departmental, and enterprise individual, departmental, and enterprise perspective perspective

10. Pay for Performance Where do you start?

11. Trend Chart – 2006 (sample) Using straightforward, key business data as well as marketplace information, the system compiles benchmarks for performance* such as: Hourly Pay Structure Performance Factors in 7 Different areas that are correlated to business success

12. Pre-Control Chart – 2006 (sample) With the critical data compiled, analyzed, and validated, compensation and performance factors are transformed into easy-to-use charts and recommendations. * The theories and practices are based on world-class Six Sigma theory and proven management practices. For instance: Correlation Analysis Multiple Variable Analysis Regression Analysis Process Capability With the critical data compiled, analyzed, and validated, compensation and performance factors are transformed into easy-to-use charts and recommendations. * The theories and practices are based on world-class Six Sigma theory and proven management practices. For instance: Correlation Analysis Multiple Variable Analysis Regression Analysis Process Capability

13. Success, Teamwork, and Compensation are Interwoven! Run “present” compensation plan and the recommended plan at the same time for a designated time frame. Compare results. Communicate with staff. Hold 1-on- meetings. Compare results of each “system” Discuss superior benefits of “hourly system” versus “commission”. Implementation Plan (Sample) Implement per management discretion. Track results. Modify if necessary.

14. Changing Commission Structure to Hourly Tremblay Consulting Cincinnati, OH 45249 Office: (513) 530-0122 Cell: (513) 708-3977 info@Tremblay-Consulting.com Please start getting results today by contacting us. We will prompting get back to you in order to help you on this important, logical journey. www.Tremblay-Consulting.com Thank you for your time and consideration.