MODULE 5: CASE STUDY 5.1 VETEMENTS LTEE 1) Symptoms that suggest that something has gone wrong are: • Constant arguing between employees. • Deteriorated relationships between employees and between management and employees. • Intimidated customers due to customer “tagging” • Poor inventory levels and consequently poor sales as employees are unwilling to complete reorder forms or stock shelves (decreased profit margins). • Management is concerned about employees’ lack of concern in regards to inventory management. • Resentment towards management for being forced to do inventory duty and for being assigned “slow spots” on the floor. • Negligence of some parts of the store because employees do not want to work the “slow spots”. • Vocalization of disgruntled staff on their low paycheques. • Managers’ efforts to correct the store issues and employee complaints have failed, resulting in more tension and decreased morale.
Case Study 5.1 – Vetements Ltee
Question 1 – Identify Performance Problems/Symptoms
* Aggressive and poor Customer Service; sales staff tend to stand near the entrance waiting to “tag” customers as their own
* Occasional conflict among sales regarding “ownership” of customers
* Some areas of the store are unattended
* Inventory duties are being neglected and sales staff are unwilling to perform essential tasks
* To correct the inventory issues managers tried assigning employees to inventory duty creating resentment towards them and fellow co-workers among the employee’s that have been selected
* Low morale is being created among sales staff who are being threated by managers due to inventory duty participation
* Mistrust is occurring between sales and management; when management is on the floor, the sales members participate in inventory duty due to management threatening them with dismissal, but once management leaves, the sales staff quickly sneak back to the sales floor in order to meet their sales goals
Question 2 – Analyze Information to Determine Problem and Identify Root Cause
* The problem is that the sales staff; are only motivated to “sell” now with the new incentive system resulting in aggressive and intimidating customer service. This is causing the sales staff to focus their drive towards hoarding customers by tending only to the front end of the store front waiting to “tag” in-coming customers as their own, in order to make their individual sales goals and make a healthy commission; as a result they are not attending to undesirable areas of the store where items are more reasonably priced and they are neglecting inventory duty.
Expectancy Theory tells us that work effort is directed towards behaviours that people believe will lead to desired outcomes. In this case, the newly implemented commission reward structure represents about 30 percent of a typical paycheque for our sales individuals; Vetements Ltee...