The case discussed the problems of the Nordstrom “off the clock” working and also the rewarding mechanism as well as strict treatment of managements towards the employees. All of them relate to the implementation of their performance evaluation and rewarding mechanism of sales per hours ratio (SPH). Initially not only they didn’t have any complain about their rewarding system from the union but also all retailers in America thought that “Nordstrom is the future of retailing” and Nordstrom’s sales clerks were “the envy of the industry”. Since their system was working fine initially, the problems Nordstrom faced at the end of 1980s could be the result of lack of maintenance of motivation mechanism by the upper management system between middle
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They had some mandatory non-sales tasks which took times from them and resulted in lower SPH. They had a poor differentiation between “selling time” and “non-sell” work time aggravated pressures from management on employees. Due to not having a clear distinction between selling and non-selling hours, all the hours employee worked for were considered as working hours and used for calculation of sales per hour ratio. In order to maintain Nordstrom’s superior customer services, the sales team should write “thank you” letters, deliver purchases to their customers’ home, as well as participation in mandatory meetings. They had to do the above-mentioned tasks on “off the clock” time because they were forced to maintain a high sale per hour ratio. If they count those hours, there sales per hour ratio would go down and most likely would be penalized to the end, but there wasn’t any clear definition between selling time and non-sell time. Nordstrom proposed the SPH as an incentive way to reward their top sellers, but mostly it was used to force their employee to their SPH high, which means working off the clock. The problem arises here since they should do some non-sales jobs, they two options, either recording their hours which resulted on lower SPH and eventually led to punishment or not recording their time …show more content…
They were not controlled on the way they were treating their sales staff. In their decentralized system, managers had full authority to reward high performers, however they also have the authority to punish low performers. Thus, motivation was a function of the manager’s fairness, the efforts of each individual and how the other sales team perform.
Since the line between sale hours and non-sell hours were not clearly defined and managers had full authority in assigning tasks, even if payroll exactly followed the designed pay mechanism, sales clerks with high sales rate during “sales hours” still will not get the reward they were supposed to get. This misalignment was first due to the number of hours they had to do for non-sales tasks which leads to lower SPH, and second to the full authority of managers to assign tasks, which could lead to assign more non-sell tasks to one salesperson than another
They had some mandatory non-sales tasks which took times from them and resulted in lower SPH. They had a poor differentiation between “selling time” and “non-sell” work time aggravated pressures from management on employees. Due to not having a clear distinction between selling and non-selling hours, all the hours employee worked for were considered as working hours and used for calculation of sales per hour ratio. In order to maintain Nordstrom’s superior customer services, the sales team should write “thank you” letters, deliver purchases to their customers’ home, as well as participation in mandatory meetings. They had to do the above-mentioned tasks on “off the clock” time because they were forced to maintain a high sale per hour ratio. If they count those hours, there sales per hour ratio would go down and most likely would be penalized to the end, but there wasn’t any clear definition between selling time and non-sell time. Nordstrom proposed the SPH as an incentive way to reward their top sellers, but mostly it was used to force their employee to their SPH high, which means working off the clock. The problem arises here since they should do some non-sales jobs, they two options, either recording their hours which resulted on lower SPH and eventually led to punishment or not recording their time …show more content…
They were not controlled on the way they were treating their sales staff. In their decentralized system, managers had full authority to reward high performers, however they also have the authority to punish low performers. Thus, motivation was a function of the manager’s fairness, the efforts of each individual and how the other sales team perform.
Since the line between sale hours and non-sell hours were not clearly defined and managers had full authority in assigning tasks, even if payroll exactly followed the designed pay mechanism, sales clerks with high sales rate during “sales hours” still will not get the reward they were supposed to get. This misalignment was first due to the number of hours they had to do for non-sales tasks which leads to lower SPH, and second to the full authority of managers to assign tasks, which could lead to assign more non-sell tasks to one salesperson than another