- The paper should be single-spaced and submitted by college email by the due date. Approximate length: 4 pages, plus or minus.
- There is no need to do outside research for this assignment or to use the internet.
- Review the following case discussion. Develop a discussion regarding the case, using the questions at the end of the case as a guide. In analyzing this situation, consider material related to the topics of motivation, applied performance practices and any other course concepts that you consider useful. Apply these concepts to better understand the problems in the case, alternatives to resolve the situation and suggestions for improvement.
Submissions will be evaluated on the quality of the written presentation (clear, spelling, grammar), the insight, analysis and application of knowledge.
Sports Heaven is a retail chain of stores located throughout BC. The company offers an extensive line of sporting goods equipment for most types of sports, all age groups and all skill levels. Eighteen months ago, the company introduced new incentive systems for both store managers and sales employees. Store managers in each store receive a salary with annual merit increases based on sales above targeted goals, store appearance, inventory management, customer complaints, and several other performance measures. Some of this information, such as store appearance, is gathered during visits by senior management, while other information is based on company records (eg. Sales volume).
Sales employees are paid on a fixed salary plus a commission based on the percentage of sales credited to that employee over the pay period. The commission represents about 30 percent of a typical paycheque and is intended to encourage employees to actively serve customers and to increase sales volume. Because returned merchandise is discounted from commissions, sale employees are discouraged from selling products that customers do not really want.
Soon after the new incentive systems were introduced, senior management began to receive complaints from store managers regarding the performance of their sales staff. They observed that sales employees tended to stand near the store entrance waiting to “tag” customers on their own. Occasionally, sales staff would argue over “ownership” of a customer. Managers were concerned that this aggressive behaviour intimidated some customers. It also tended to leave some parts of the store unattended by staff.
Many managers were also concerned about inventory duties. Previously, sales staff would share responsibility for restocking inventory and completing inventory re-order forms. Under the new compensation system, however, few employees were willing to do these essential tasks. On several occasions, stores faced stock shortages because merchandise was not stocked or re-order forms were not completed in a timely manner. Potential sales have suffered from empty shelves when plenty of merchandise was available in the back storeroom or the warehouse. The company’s new automatic inventory system could reduce some of these problems, but employees must still stock shelves and assist in other aspects of inventory management.
Store managers have tried to correct the inventory problem by assigning employees to inventory duty, but this has created resentment among the employees selected. Other managers have threatened sales staff with dismissals if they do not do their share of inventory management. This strategy has been somewhat effective when the manager is in the store, but staff members sneak back onto the sales floor when the manager is away. It has also hurt staff morale, particularly relations with the store manager.
To reduce the tendency of sales staff to hoard customers at the store entrance, some managers have assigned employees to specific areas of the store. This has also created some resentment among employees stationed in areas with less traffic, or lower-priced merchandise. Some staff have openly complained of lower paycheques because they have been placed in a slow area of the store or have been given more than their share of inventory duties.
Review the case and then develop a discussion based on the following:
- What symptoms in this case suggest that something has gone wrong?
- What are the main causes of these problems?
- What are some alternatives worth considering and what actions should SPORTS HEAVEN take to correct these problems?
In your discussion make good use of class concepts on motivation, applied performance practices and any other course concepts you consider useful.