People do matter

With the holiday shopping season coming to a close, retailers are counting the fruits of their sales.

Not Circuit City though. The U.S. consumer electronics retailer is learning a hard lesson in human resources.

In a move that would make Donald Trump jealous, the company fired its 3,400 top sellers, who are at the higher end of their payscale.

Sales took a sharp drop and Circuit City posted a $207 million 3Q loss in late December. A moderate loss is expected next quarter for what should usually be the most profitable period in retail. Meanwhile sales at rival Best Buy surged 52%.

The problem here is obvious.

The lower-payscale staff at Circuit City aren't as competent in closing sales. Neither are they finding much success in upselling products or attaching warranties to purchases.

2008 news flash: The quality of the people in your organization does matter.