The case is about motivation theory. Thanks Case Study 5.1 VÊTEMENTS LTÉE Vêteme

Question

The case is about motivation theory. Thanks

Case Study 5.1 VÊTEMENTS LTÉE Vêtements Ltée is a chain tores located throughout the province of Quebec, merchandise was not stocked or reorder forms were of men's retail clothing occasions, stores have faced stock shortages because ada. Two years ago, the company introduced not completed in a timely manner. Potential sales new incentive systems for both store managers and have suffer sales employees. Store managers in each store re- merchandise was available in the back storeroom ceive a salary with annnal m sales above targeted goals, store inventory man several other performance measures. Some of this assist in other aspects of inventory management. information (e.g, store appeara ing visits by senior management, while other infor- problem by assigning employees to inventory duty, mation is based on company records (e.g, sales but this has created resentment among the employees volume). ed from empty shelves when plenty of erit increases based on appearance, store plaints, and or at the warehouse. The company's new automatic inventory system could reduce some of these prob- lems, but employees must still stock shelves and agement, customer com nce) is gathered dur- Store managexs have tried to correct the inventory selected. Other managers have threatened sales staff ales employees are paid a firxed salary plus a com- with dismissal if they do not do their share of inven- mission based on the percentage of sales credited to tory manage that employee over the pay period. The commission effective when the manager is in the store, but staff represents about 30 percent of a typical paycheck and members sneak back onto the floor when the man is intended to encourage em customers and to increase sales volume. Because re relations with the store turned merchandise is discounted from co ment. This strategy has been somewhat ployees to actively serve ager is away. It has also hurt staff morale, particularly inmissions, To reduce the tendency of sales staff to hoard ave assigned employees to specific areas of the sales employees are discouraged from seling prod- customers at the store entrance, some ucts that customers do not really want. Soon after the new incentive systems were intro- store some resentment among duced, senior management began to receive com- employees stationed in areas with less traffic or plaints from store managers regardin ig the performance of their sales staf They observed that sales employees tended to stand near the store entrance waiting to ,sales staff would argue over "ownership" of the customer. Man agers were concerned that this aggressive behavior intimidated some customers. It also tended to leave lower-priced merchandise. Some staff have openly complained of lower paychecks because they have been given more than their share of inventory duties n a slow area of the store or have been "tag" customers as their own. Discussion Question symptom(s) in th wrong? is case suggest that some- some parts of the store unattended by staff. thing has gone Many managers were also concerned about in ventory duties. Previously, sales staff would share 2. What are the main causes of these symptoms? responsibility for restocking inventory and com- 3. What actions should Vêtements executives take pleting inventory reorder forms. Under the new compensation system, however, few employees were willing to do these essential tasks. On several 1989 to correct these problems? Steven L McShane.

Explanation / Answer

Question 1

The new incentives resulted in

1. sales employee standing near the store entrance waiting to 'tag' customers as their own

2. Sales staff arguing over 'ownership' of the customer.

3. Employee not taking the responsibility of restocking the inventory.

4. Resentment among the employees.

These are the symptoms that something has gone wrong.

Question 2

In the above case study, the company has initiated new scheme to increase the sales of the company. The scheme was designed theoretically, but they didn't think practically and about the negative consequences.

Employees started concentrating on the commission and they proceeded with unfair means to get the job done. This has led to the failure of the new scheme.

Question 3

They should Implement strict rules about the way sales staff tag their customers.

Sales staff who chose unfair means and illegal means to make money should be replaced or given with inventory duties.

Commission to the sales staff should be given based on the review of the supervisor and customer feedback.

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