This case study is about the chain retail clothing company throughout in Canada’s Quebec province, Vetements Ltee. This company had introduced a new incentive system two years ago for the managers of the store and the sales employees. On the basis of the management of the inventory, the appearance of the store, above the target sales and several other performances the store manager receives its annual sales with increased merits.
The information and the data on for example the appearance of the store is gathered by the senior management themselves whereas the rest of the information of say about the sales volume of the store is recorded by the company accounts records. The sales people are paid a fixed amount of salary on the amount of sales they have made and also with a commission during the whole pay period. This commission consists of a paycheck 30 per cent in order to motivate the employees to serve the customers more and push its sales up.
Some of the problems started occurring in the company, the merchandise that had been returned had been discounted to the customers from the commissions of the sales employees, that is they are then given less commission which discourages them to sell more products and sales go down. The problems had started just after this new incentive system took place. The employees in the company lost their interest in the work and were demotivated to give off their best, their performances levels declined and soon the management started receiving complaints from the managers of the stores about the irresponsibility’s and poor behavior of the employees.
Resentment took place between the staff and the inventories were not stock and restock by the employees which created a shortage of the goods. The irresponsible behavior of the employees resulted in the store managers taking the decision of assigning a particular part of the store to different employees which too caused great resentment between them as some complained of getting the slow areas of the store and are being paid less as they cannot raise up their sales in the part of the store they were assigned.
The problems that had resulted from the new incentive program were that because the salary had been fixed for the sales employees the commission that had been added to the salary was cut down by discounting the returned merchandise for the customers. This had caused a discouragement for the employees and they were demotivated to increase their sales of goods. The store managers observed the sales employees tagging the customers as their own standing on the entrance of the store.
They also began arguing with the management and they had become very aggressive toward other members of the company. From a responsible motivated staff they had become an irresponsible and demotivated staff who didn’t care about their work and the company as a whole. Many of the inventory parts were unattended by the staff and not even restocked when needed, which lead to a shortage of goods. When assigned different areas of the store to employees resentment rose as some complained to getting the slow area and where there was no special scope to increase sales volume.
Case study analysis This case study which is about a company who had introduced a new motivational program two years before about increasing the store managers pay on the basis of its performance in the store that means on merit and giving a commission to the sales staff in addition to their fixed pay. This strategy of the company though didn’t seem to work as the commission of the employees had been deducted by the management by discounting the returned merchandise to the consumers, for encouraging them to purchase it.
This step of the management had caused a great deal of discouragement among the employees in selling the product to the customers they don’t really want for themselves. Soon after this had happen the senior management started to receive the complaints from the managers of the store about the performance of their sales staff and how the sales volume had been going down, this was a very important issue that had to be complained about as it’s about the most important part of the company, that is the sales department.
The managers of the store started observing the sales employees closely and observed that they had been all day standing at the entrance of the store and had been labeling customers as their only which may had scared the customers and may result in loosing them frequently. The sales staff also went to the extreme of arguing about being the customer’s owners which frightened the customers.
This aggressive behavior of the employees had been really scared the management themselves as in extreme cases it may lead to their sales going to zero and they being left with a whole bunch of stock lying in the store unsold and a big inventory stock lying idle. The staff had started becoming really irresponsible too as many areas of the store had been left unattended, which may mean letting go the opportunity to achieve a high sales volume and thus higher pay and commissions.
The sales staff had always been very responsible with setting up the shelves with decent amount of stock, restocking them and ordering more if the needed. But after the new incentive or say commission system these tasks were ignored by the sales employees and not been given any attention to, this is why there had been problems in the management of the store and made the store managers worry more. This had been the reason why the store had been facing the shortages of stock because the staff had not stocked the shelves with the product or set it up on time.
Even though many of the stock had been lying in the back room store they were not stocked on the shelves, potential sales had been not taken advantage of just because the sales staff had been too ignorant to the entire task and irresponsible. The managers could only come up with one solution to this problem which is to assign different pats of the inventory to different employees, but even this didn’t seem to work as it again caused resentment and anger between the staff that had been selected.
The managers had also threatened the sales employees of dismissal if they don’t perform their tasks correctly but this too didn’t work as the employees just performed and completed their tasks efficiently when the manager had been around but as soon as he left or wasn’t around they went back to their irresponsible and discouraged behavior and performance. This shows that the staff wasn’t motivated at all. The relationship between the store manager and the sales staff had also been very bitter and something which resulted in a low morale of the employees.
Some of the managers had also thought of the solution to assign different employees different specific areas of the store so that they all accumulate or gather all the customers at the entrance of the store. Areas where there were low priced merchandise or areas with less customer passage the employees who were assigned there started complaining and made them angry asking for a better area of the store where the potential of a great sales volume is high.
These people had also complained about being paid less than other employees as they had been assigned a slow area of the store and a place where there was no scope of high sales. Recommendations Vetements Ltee Company had come up with a strategy which was driven just by the thought of motivating the employees or staff by money and even this had not been done efficiently as the employees commission which had been offered in the incentive program had been cut down by the discounts on the returned merchandise which didn’t help at all.
Money is not the only motivator for an employee, there are a lot of other factors that drive a person to work efficiently and give their best performances, and this is what the behavioral scientists believe in. They say that other strategies and techniques such as offering challenging jobs, giving them the right to participate in the decision making process, the goals and other incentives which are non-monetary motivate employees to a greater degree.
This is supported by the reasons that people who have been high achievers since the start and who are passionate about their work are less motivated by money as they are motivated intrinsically. Also some people cannot quite link performance with money (Aswathappa, 2005, pg 393). If we take the examples of the company’s and people that had been using non monetary terms of motivation for years and has been successful in their strategies then we can talk about the man David Gachuru who believes that there a lot of factors that are much more important than money in motivating employees and this man works and lives by this motto.
Appreciating his employees is what he does all the time when the work they do is perfect. He does this daily in his work routine. His managers follow the same strategy. He runs a Hotel Savor Panafric in Nairobi, Kenya. Thanking staff through emails and personally is what he does and besides this he also holds meetings where he in front of other staff appreciates the work of efficient employees and congratulates them with providing gifts to them such as paid holidays for them and their families, which motivates the employees to a greater degree.
The company has it own newsletter where the company’s best performer’s achievements are mentioned and distributed among everyone including the customers. This Hotel runs completely on the basis of the recognition and the importance that the employees are being given which leads to them being highly motivated and giving their best performance. This practice is quite helpful as recent surveys have said that in several of the countries due to lack of recognition and appreciation a great number of employees have left their jobs as they were demotivated.
Moreover, the Ireland’s Small firms Association has mentioned that more than 1000 of the people who have quit their jobs when interviewed had said that lack of recognition and them being given no importance was the reason for them to leave their jobs as they weren’t satisfied and had no motivation to continue with the job. So people who are not given any importance or appreciated for their work they hardly continue with their jobs no matter how much they are being paid and prefer jobs that give them personal satisfaction and some place where their work is cherished.
Another company that is the Ritz Carlton Hotel in Kuala Lumpur, Malaysia uses non-monetary motivation techniques. The co workers among themselves appreciate each other’s work by using the First class cards. This proves to be a great motivation for employees as they want to work harder and better to get more of those cards from their fellow employees and get recognized. Amgen is a biotechnological company situated in California. This company has a different way of recognizing their employees work. They had started a program which is the peer recognition program named Bravo!
Tier I recognition is a form of e-mail based recognition of the employees work or a Thank-you sent by the colleagues to their co workers through the web site of Bravo. The Tier II consists of good performance appreciated by presenting an electronic gift certificate. Tier III is that the co workers employee people who have been working hard or giving the best performances and then the best candidate is then selected and granted with an award and the amount of the reward is then decided by the “award wizard”.
The tier IV award is for those who had improved the performance of the company drastically and awarded with a higher financial reward. And lastly the Tier V is for those people who have created a great material impact on the performance of the company and rewarded greatly. If you notice, this great company has used both the monetary and non-monetary terms alone which clearly suggests that money only is not enough to motivate the employees. Besides the strategies that these company’s have used to motivate its employees there are many other non-monetary techniques too which can be used.
A good work environment too is very important for motivating employees; a good working environment creates or destroys the mood to work in a particular setting (Worman, 2006). In order to motivate the employees greatly the concept of leadership roles would work best. This consists of giving your employees leadership roles on the basis of their performance and also to create recognition for you to see whom to promote in the future. Team spirit too is an essential element. You can just take a picture of your entire workforce or staff enlarge it frame it and hang up on the whole in the office.
People like to be known as part of a group. Outside seminars or workshops for the employees is a break for them and they get a change of environment, because working every day on the same chair and desk all the time may be boring and too dull a work. Stress management helps a lot in performing your tasks efficiently. An in-house seminar on stress management may prove to be quite helpful for the employees and they may feel less of a pressure of work on them and relax them a bit. The employees must be given flexible hours of work (Heathfield, 2003).
Today’s employees have a great demand for social activities like festivals, spending their time with their families, giving time to themselves and they can do this if their job offers them a flexible schedule. By giving a flexible job routine to employees their motivational levels can be raised. The most important motivating factor is that of the need for them to grow and develop their skills. They being able to rise up to new challenges is what they want really and this helps them to grow in the work they do. Conclusion In order to motivate your employees a blend of monetary and non-monetary factors can be used.
Only money cannot motivate a worker like it was seen in the case study. An employee is a human being whose good performance is driven by the love it has for its work and the recognition that it gets from its seniors and coworkers. Money too motivates an employee in order to meet its financial needs. References Aswathappa, K. (2005). Human Resource and Personnel management. Edition: 4th Worman, D. (2006). 20 ways to motivate your employees without raising their pay. Heathfield, S. M. (2003). Top 10 ways to be happy at work.