Foundations of Employee Motivation

Introduction

The problem at Vêtements Ltée was created by the new incentive system’s skewed treatment of employees. Incentives should motivate employees to work hard and increase their performance. For incentives to work efficiently, the incentive system must consider all employees’ needs and satisfy them.

Question One

At Vêtements Ltée, the incentive system did not fully consider all employees. The system used by the store managers to allocate inventory management duties and work sections within the stores was perceived to be unfair by the sales staff. In addition, the managers used coercion to force employees to take up inventory management duties. Such actions created a hostile work environment that discouraged employees from maximizing their efforts. The use of threats to force employees to perform tasks cannot maximize their performance because threatened employees work out of the fear, but not because they wish to work.

The management discounted returned merchandise from commissions earned by sales staff, which reduced their earnings (McShane and Glinow, 2013). The customers’ action to return the goods did not originate from mistakes made by sales staff. Therefore, reducing their commission to discount for the returned commodities was unfair and unjustified. Consequently, the employees’ morale reduced because they did not receive a fair compensation for their effort.

The third cause of discomfort with the new incentive system came from the company’s failure to compensate employees for their role in inventory management. When some sales staff were managing inventory, their colleagues were earning extra money as a commission for the increased sales volume. However, the company failed to compensate employees for their time spent on managing inventory. As a result, employees were not motivated to engage in inventory management activities, since no benefits accrued from them. Employees’ effort in their duties is related to their level of motivation. Motivated employees have increased performance while those with limited motivation depict reduced performance.

Question two

The company should devise another mechanism upon which to base the discounts for the returned commodities. The annual salary increment for store managers depends on the sales volumes generated by sales team. Therefore, when the earnings of sales staff were affected by the discounts, they should have affected the managers, as well. In fact, the discounts should be based on the managers’ salary increment because they had other benefits from areas such as store. Reducing the store managers’ salary increment to cater for the discounts associated with returned commodities is, therefore, justified.

Another recommendation for the company is to create an incentive system that included benefits for inventory management. The employees managing the inventory lose valuable time from their sales. During inventory management, they forego a commission from the sales they would be making if they were not managing inventory. As such, they should be motivated for the lost time so that they can be motivated to improve their performance in inventory management.

Moreover, the allocation of employees to different stations within the stores should be done on a rotational basis. The current allocation is perceived to be unfair and disadvantages some employees. A rotational allocation can provide every employee with an equal chance to earn commissions.

Conclusion

The problems at Vêtements Ltée were caused by the unfair allocation of duties both for inventory work and the sales within the stores. In addition, the reduced commission from sales people to cater for the incentives for the returned goods reduced their morale. The final cause of reduced motivation was lack of compensation for the inventory work done by sales people. A new system that does not reduce commissions earned by sales people should be used for incentives of returned goods. The work done in the inventory section should be compensated and a rotational system for employee allocation should be used to create fairness within sales stations in the store.

Reference

McShane, S.L., & Glinow, M.A. (2013). Organizational behavior: emerging knowledge, global reality. New York, NY: McGraw-Hill Irwin.