Nordstrom Dissension In The Ranks Case Study

Nordstrom: Dissension in RanksJessica NguyenNordstrom, originally carried a survival of the fittest persona compared to other major retailing competitors due to its customer service which was outstanding as sales clerks went aboveand beyond for their customers.1This led to Nordstrom doubling sales and reaching milestones that other competitors envied. Up until the 1980's, Nordstrom prospered and employees continued to work hard under the sales-per-hour managing structure without a hitch until the "off the clock" working conditions were brought to light. This analysis is to discuss Nordstrom’s framework from Bolman and Deal’s frames.As a retailer which expanding from shoes to include apparel, beauty, etc., Nordstrom believes that sales and raising profits is part of the basic business model. However, Nordstrom alsobelieved in bringing in excellent customer service to the consumer, which led to more sales and theincrease of doubling profits almost every year. The several problems that started to arise from the structural frame having to do with “trouble arising and performance suffering from structural deficits,”2as well as the “organizations increase efficiency and enhanced performance through specialization and appropriation division of labor.”2Nordstrom relying on sales clerks and paid them

Nordstrom: Dissension in the Ranks? Essay

833 WordsOct 28th, 20134 Pages

1. What problems does Nordstrom’s evaluation/compensation system have? Think about this question while considering the objectives of the Company’s evaluation/ compensation system, what measures it took and what happened as a result.

Nordstrom’s Evaluation System and its Problems

Based on my analysis, the Company’s compensation systems poses serious problems which are inadequate measurement of performance through sales per hour (SPH) ratio as the only Key Performance Indicator (KPI), opposing incentive system and Company’s key success factors and unbalanced system for rewards and punishment. These problems are brought about by the incentive system complemented by a couple of Company’s other distinctive policies.

The incentive…show more content…

But because the performance is being measured solely through SPH, salespeople drive of doing these things are low since they are more focused on increasing their sales or extending their work time off the clock. The SPH as a standard measure does not reflect other activities such as meeting customers’ needs through pick up and delivery of items, routine merchandise stocking, store display activities and staff meetings. These activities if formally recorded lower the SPH. This results to less willing employees to perform “heroics”.

The incentive system doesn’t serve its main purpose of creating motivation for employees but rather divert employees’ focus on how to avoid the punishment. There was an unbalanced system between rewards and punishments. I could relate this to the “carrot and stick” system where it utilizes the carrot (rewards) as opposed to the stick (punishments) to motivate employees. However, the punishment was quite too detrimental to salespeople’s career that their main drive on aiming for SPH is to avoid decreased work hours that could eventually lead to termination. It was a selfish driver that other salespeople became “sharks” stealing credit for sales made by other staff or to render extra work off the clock.

Results of Nordstrom’s Incentive System

Although the aims of Nordstrom’s compensation system and other policies are to give employees emphasis to service, profitability and middle-managerial autonomy, it

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