This week discussion is based on an analysis of a case study examining the Vetements Ltee men’s clothing stores located throughout Quebec. It appears that an executive decision was made to incorporate a pay incentive within the management level and the sales level of the company’s organizational chart (McShane, 1995).
The starting level was directed to each store manager, as a proposal to increased sales above the target goal, improve internal appearance of the store, and improve inventory control. In return of a successful plan, managers would gain an annual merit increase and the company would have a new incentive method to motivating employees. The second focus was directed to the sales positions. The challenge for sales personnel’s was to increase sales volume and in return they would gain a much bigger commission check (McShane, 1995 pg 34-35).
As the challenge began, the primary focus of gaining the most sales was evident in the sales people. Everyone wanted the position to greet customers at the front of the store to gain the first chance of selling something, as the quality of manners, sales pitch and professionalism went out the door as customers entered. The concern of aggression was quite apparent and the reasonability of team work or effort was not visible at all among managers nor sales personnel. The stocking or restocking of inventory was ignored and potential sales began to suffer, while the morale among employees and managers faded. What went wrong?
A poorly executed incentive plan that focused on money and not the true stakeholders…. the employees (Chung Hee, K., & Scullion, H. 2013). The incentive plan started from the top of the chain instead of where the production truly took place. The plan had no merit of fixed assets or calculations of estimated value. For example, the managers were promised an annual increase in salary….who waits around for a company to give an annual return for something that happened a year prior? Vetements Ltee had no set percentage of how much salaries would increase, no prior engagement with employees on their thoughts of the idea, no defined roles, no connection to the mission of the organization and a very unclear way of measuring the commission for the sales people with no cutoff date on return merchandise (McShane, 1995).
The company simply executed off of the “expectancy theory” while employees are expected to work, it is expected that they would work harder for an illisional amount of money. According to Maslow’s theory, when we focus on the lower part of an organization or group’s task, which is the base and foundation of the organization, we work to strengthen the most importance part, we then should move up the ladder to increase stability at the next level of management as the lower ones are satisfied. (McShane & Gilnow, 2013).
Chung Hee, K., & Scullion, H. (2013). The effort of Corporate Social Responsibility (CSR) on employee motivation: A cross-national study. Poznan University of Economics Review, 13 (2), 5-30.
McShane, S. & Von Gilnow, M.A. (2013). Organizational Behavior. 7th ed. McGraw-Hill Irwin. New York, NY.
McShane Steven, L., (1995). Vetements Ltee, Case 12, University of Western Australia.
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