Application of the Right Motivational Practices at Nordstrom - Case Study Example

Motivation Case Study- MGT 585 Identification and application of the right motivational practices at Nordstrom. Abstract The well-known Nordstrom stores, head-quartered in Seattle, have experienced immense success and growth through their customer-oriented sales, employee motivation, and the Nordstrom Way, a culture that Nordstrom is proud of. Started by John W. Nordstrom, this company still remains a family-run business and has inculcated family orientation among its employees across all the outlets. Nordstrom’s core value is customer satisfaction, for which its employees are empowered to make their own decisions and are expected to do anything to please their customers. To motivate employees to such an extent, Nordstrom’s managers hire the right salespeople; employ various motivational programs and contests; and employees are highly paid compared to other competitors. In spite, Nordstrom did face employee rebels because of workload, leadership and other issues, which affected Nordstrom business to some extent. A few proposals and their implications have been suggested in the present context. Scrutinizing Nordstrom: Employee motivation has certainly been one of the crucial reasons for the success of most of the contemporary businesses that flourished during the last century (Walker, Churchill & Ford, 1977). However, businesses have trembled because of changing circumstances and increasing competition. A similar issue gripped the upscale business giant, Nordstrom Inc for some time despite its huge success and immense growth beyond one’s imagination. Business at Nordstrom, which was started as a shoe retailer, grew at an unimaginable pace and started making profits and revenues of multiple times. All growth and expansion is attributed to the ‘Nordstrom Way’ that sets apart their unmatchable customer service, productivity, and teamwork, the three performance drivers. Apart from these, Nordstrom boasts of its practices such as thank you cards for its customers post sales, employee motivation and customer entertainment programs, sales contests, and other customer-oriented activities that contributed towards its growth and sales (Freedman & Vohr, 1996). Overall, top management at Nordstrom set goals and objectives for employee performance and provide resources for employee motivation. Although the company does not follow too many formal policies and procedures, Nordstrom levies complete responsibility of achieving these goals on individual outlets and empowers its store managers to make decisions that can help in achieving their goals. In turn, their frontline employees are empowered to achieve their individual and team goals. These unique practices have successfully motivated its employees to go beyond the call of duty to satisfy Nordstrom customer, irrespective of amount of sales given by the customer and the challenges ahead of the employees. Unique incentive practices for higher sales, improved customer relations, employee contribution to Nordstrom and tenure also drive sales and service at Nordstrom. With increasing sales and numbers of customers, workload automatically increased at Nordstrom. This workload resulted in extended working hours, working without pay, ineffective leadership and other issues that sparked employee dissatisfaction and insurgency resulting in unionism. Work-life benefits and coping with absenteeism are critical to employee wellbeing (Gitman & McDaniel, 2009) Directions for Nordstrom: Sales motivation and performance are attributed to four factors namely, ability of salesperson, incentives and compensation, psychological incentives and organizational and managerial factors (Walker et al, 1977). The Nordstrom Way clearly applies the first three factors to work; however, the last factor seems somewhat wavy at Nordstrom, which could be the reason for conflict and employee dissatisfaction. Firstly, Nordstrom’s culture of family run business should be changed and senior management team comprising of members outside the family with proven track record can be formed. This will not only help in changing the perception of Nordstrom employees but also open pathways to innovative thinking and change. Secondly, leadership stands at the core of all issues faced at Nordstrom. Procedures for appointing middle management staff should focus on leadership qualities apart from tenure and sales performance of the individuals. Thirdly, payment for non-selling work will certainly improve employee motivation, morale and loyalty; this should be continued along with commissions, incentives and the usual salary packages. Implications of these proposals: Including an outsider in the senior most management team will help in building trust among middle management teams in addition to bringing innovation and alternative perspectives to the business. However, possibilities are that the ‘Nordstrom Way’ could suffer because the new entrants might try to change the culture. Choosing the right people for the job has always been the priority at Nordstrom; however, choosing the right leaders makes a huge difference in the way their business is run and also to their employee motivation (Baldoni, 2003). Effective leaders will be able to address most of the employee issues through their clear communication, empathetic dealing, role and goal clarity, empowerment, and connectedness. Effective leaders will also be able to highlight employee issues to the management for timely action. Thirdly, recognizing employees’ selfless efforts would enhance their motivation, which can be achieved at Nordstrom by paying extra hours work. In addition, Nordstrom can hire few more employees so that the workload can decrease. Making payment for extra hours worked would be a short-term fixation to the issue; however, it is important to care for employees’ health and wellbeing also, which can only be achieved by easing their workload. Conclusions: To conclude, changing trends of the business, employee and customer expectations need to be always examined so that appropriate practices can be introduced. Employee motivation is dynamic and employers have to cater to these changes in order to retain employees and remain competitive. Nordstrom can continue to sustain their position in the market by understanding their employees’ concerns and making changes in their procedures. Major part of employee motivation lies in appreciation, recognition, empowerment, work-life balance and benefits, health relationships, effective leadership and financial compensation. While Nordstrom already uses most of these practices, a few gaps need to be filled in order to sustain employees’ morale and motivation. References Baldoni, J. (2003). Leadership Communications Planning. In Great communication secrets of great leaders. USA: McGraw-Hill Professional. Freedman, R.D and Vohr, J. 1996. Nordstrom. In Schuler, R.S and Buller, P.F. (Eds.) Cases in management, organizational behavior and human resource management. OH: West Pub Co. Gitman, L.J and McDaniel, C. (2008). Motivating employees. In The future of business: The essentials. 4th ed. OH: Cengage Learning. Walker, O.C, Churchill, G.A and Ford, N.M. (1977). Motivation and Performance in Industrial Selling: Present Knowledge and Needed Research. Journal of Marketing Research. 14(2), 156-168 Read More