Write a Comprehensive INTRODUCTION of the case study ( Management subject) Case

Question

Write a Comprehensive INTRODUCTION of the case study ( Management subject)

Case for Critical Analysis Kimbel's Department Store terson has been reading about a quiet revolution based on hourly wages and a 05 percent commission on saceping department store retailing and has decided to give it a $500,000 in sales Under the new plan, the annual pay would ?At stores such as Bloomingdale's and Bergdorf Goodman. be $35,000 based on 7 percent commision on ales o! nunagers are using commission pay to motivate salespeople. Au $500,000. Patterson implemented the new system in two area Bergdorfs. for example, a top-tier salesperson in women's stores first and plans to roll it out across the chain within the apparel can earn nearly $200,000 a year next six months Patterson wants to implement commission pay at Kimbels, Juan Santore, who works in the men's shoe salon, is enthusi s regional chain of upscale department stores based in St. Louis astic about the changeover. His pay has increased an average o Kimbels has long used commissions in departments such as $150 per week. But in other depari dectronics and appliances, where extra sales skill pays off, but gerie, employees are less enthusiastic. Making enough sales pe Panterson believes extending the system storewide will attract week to earn their previous salary is nearly impossible, particu eter salespeople, increase motivatio earn more money. For example, under the old plan, a new slesclerk in women's wear would earn about $18,000 a year percent ments, such as women's lin- larly when the economy slows down. Even during the holiday season, many employees saw their pay decrease an average of 8 n, and enable employees

Explanation / Answer

Case study introduction

Kimbel’s is a regional chain of upscale department stores in St Louis. It has several departments like electronics, garments etc. A recent trend in the retail industry is the introduction of commission pay to motivate employees. Even Kimble has been using them at certain departments like electronics

Patterson at Kimbley is contemplating about extending the system to entire stores

The new pay system can lead up to (even more than) 100% increase in salesmen pay. Patterson wants to introduce it in stores located in two areas first and then expand it.

While employees in certain departments are enthusiastic those in deport6ments like women’s lingerie are wary because it is difficult to make sufficient sales especially during economic downturns

Even Patterson is worried that this may not work for small items. Also, she is worried that those may affect other areas of customer service as employees will be focused on sales. Also, she is apprehensive about the increased costs (about $1milion per store) and this may not justify the system.

Questions

1.

Theories about motivation applicable

Maslow’s Hierarchy of needs

People work for recognition and esteem. The achievement and recognition from others through extrinsic rewards motivates them.

Learned Needs Theory

McClelland's Theory (Learned Needs Theory) states that people are motivated by a need for affiliation, achievement, and power. Commission pay increases achievement motivation by helping them set goals and stretch their skills

Herzberg’s two-factor theory

This talks about two kinds of factors- hygiene and motivations.Herzberg talks about motivating factors like achievement, recognition, advancement, a possibility of personal growth, responsibility and the work itself.Sales commission acts as a recognition of the employee’s sales achievement. It also offers possibilities of personal growth and responsibility to achieve sales

Expectancy Theory

States that people are motivated to the extent to which they believe

Money is an attractive reward for salespeople and it motivates them to put extra effort

Equity Theory

States that people are motivated when they believe they are being treated fairly compared with others. If employees are compensated better for their extra effort compared with others, they will be motivated.

Reinforcement Theory

If behavior is followed by positive consequences like rewards then such behavior is repeated more frequently

2.

Higher level need – self-esteem needs are satisfied.

Self-esteem need are those:

He sale men acquire confidence and self-esteem by achieving something. The organization supports satisfaction of needs by recognizing him through rewards

3.

I would not prefer to go to shops where employees are motivated to make commissions, based on my experience. Such employees are very pushy and they are biased to products that can help them get better commissions. Also apart from sales any inquiry or other service is frowned upon by them as it does not get the additional money. They consider such services as a waste of their time

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