Employee Motivation: the of the Nordstrom Legend
Identified Problems of Nordstrom
Different perception and understanding of the employees on the tradition and policies of the company
Lack of training that will inculcate the values and beliefs of the company
Weak company culture that divides the workforce
Theories included in the Report
Good Customer Relations
Motivation-hygiene Theory
Training as a means of educating the workforce
Introduction
Nordstrom is one of the biggest department stores in the United States. The beginnings of Nordstrom can be traced more than 100 years ago to a small shoe store in downtown Seattle. The humble beginnings of the store soon caught the attention of the market and they were able to expand their business to other states. From selling shoes, the store expanded their business by offering clothing lines for the whole family.
It has always been a family for Nordstrom. The management of the business has been handed down from one generation of the Nordstrom family to the next. The family affair perception of the business led the company to believe that customers must also be treated like family if the company wants to ensure that they will return. This started the legendary customer service that Nordstrom provides to its shoppers.
According to Bain and Co. (qtd. in Bhaskaran), it is more expensive to gain new customers rather than retaining them. The cost is estimated to be 6 to 7 times higher. They also stated that if customer retention increased by 5 percent, profit can increased between 25 to 95 percent. This numbers are significant given that on the average an American business looses about 50 percent of their customers every 5 years (qtd. in Bhaskaran). However, on average American companies lose 50 percent of their customers every 5 years. This, to a certain degree, it proves that there is an indirect relation between customer satisfaction and increase in sales through increased customer retention.
This numbers also indicates that building lasting customer relations can be beneficial to the company. The importance of building a lasting customer relation runs in the tradition of Nordstrom. From the management level to the salespeople that they employee they instill the value of good customer relations. The legend of Nordstrom when it comes to customer relations is not just supported internal stories; customers also validate the claim that Nordies are willing to go beyond the call of duty to ensure customer satisfaction (Pohlman and Gardiner 140).
However, the very culture that catapulted the Nordstrom business brought about a wave of controversies that sprang from within their ranks. Some employees have claimed that due to the desire of the company to please each and every customer that enter their stores, employees are the ones who are forced to take the burden. Heeding to the call of the customers became obligatory, if an employee wishes to continue working for Nordstrom. Off-the-clock work became a normal routine in among Nordstrom employees in order to deliver the kind of service that customers expect. Former employees claim that this kind of working condition is oppressive.
On the other hand, majority of the Nordstrom employees feels the opposite. They believe that the company policies are called for and that nothing should be changed. This division among the Nordstrom employees sparked the need to write this report. The aim of the report is to present possible explanations for the occurrence of the different views regarding the Nordstrom culture among its employees. The report will be focusing on the subject of employee motivation and how it affects the perception of the employees regarding their jobs and how this perception affects their performance.
Employee Motivation in Nordstrom
It has often been said that prevention is always better than cure. Medical doctors have advised their patients repeatedly that the best way to stay healthy is to avoid getting sick. They also advised that maintaining good hygiene is one way to ensure that viruses and bacteria will not find their way into the human system and disrupts its normal operations. One such manifestation of good hygiene is constant hand washing. This is recommended to kill bacteria that pose potential life threatening outcomes.
In the business world, maintaining good hygiene is also important. However, the definition of hygiene factors within the business world is different from its medical counterpart. Nevertheless, the premise behind the usage of the term is relatively based on a common notion of prevention rather than cure.
In the same way that the medical profession recognizes the presence of bacteria and viruses, the business community recognizes the presence of factors that can result to poor work attitudes of employees (Mausner, Snyderman and Herzberg 114). These factors are known as hygiene factors and include supervision, working conditions, security, peer relationships, salary and company policies (Herzberg).
In the case of Nordstrom, employee salary is one of the key factors that allows the business to keep its employees. The business is performance –based. This means that employees will be compensated based on metrics. One of the decisive metrics that affect the compensation of the employees at Nordstrom is sales per hour (SPH). Commissions are large part of employees’ salaries.
The commission scheme of the company is designed to go with the performance-based rating of the Nordstrom. The commission system of Nordstrom is called draw. In this system the employees will be compensated based as follows, commission percentage times the total sales for the pay period or hourly rates times the total work hours, depending which is higher. This implies that an employee has greater chances of being paid higher if he or she has a high sales margin.
According to Mausner, Synderman and Herzberg (114), factors that result to positive attitudes are able to do so because they satisfy man’s need for self-actualization or self-realization. According to many personality theorists, man have the innate yearning to experience the feeling of fulfillment in various aspects of life. One of the most important aspects of life is job fulfillment. This fulfillment can prove that man is unique based on his/her own personality in relation to the boundaries of reality.
The statements abovementioned suggests that the factors help man realize his/her life goals. It gives them the drive to excel in various aspects of life. In the workplace setting, these factors function in the same way. Hygiene factors, for example, prevent the proliferation of dissatisfaction among employees. This means that the absence of low levels of hygiene factors will result to the dissatisfaction of the employees and thus affecting their job performance.
However, studies have shown that the increase of hygiene factors do not translate in the increase of job satisfaction. This means that another set of factors affect the increase of job satisfaction and that hygiene factors are present just to control the levels of dissatisfaction. Factors that help increase job motivation are known as motivators. Motivators include recognition, advancement and growth to name a few (Internet Centre for Management and Business Administration, Inc).
Let us take some of the presented hygiene factors and analyze their absence result to dissatisfaction. First, there is salary. People work to gain financial independence or stability. This means that they expect companies to compensate the work that they do with financial incentives. If employees feel that the financial gain does not compensate the work output that they give the company, chances are they will feel that the company does not recognize their efforts to help the business succeed. This attitude towards work and the company itself can result to a decrease in job performance.
The case of some Nordstrom employees supports this point. Majority of the employees who stated that they are dissatisfied with the policies of the company claimed that the long hours of work are not fully compensated. The case of Patty Bemis, as presented in the case study, stated that she worked overtime to deliver cosmetics to customer and unpacking boxes of make-up. However, those hours that she worked were unpaid overtimes. The grueling hours became one of the factors that pushed Patty Bemis to leave Nordstrom for another job.
Another hygiene factor mentioned is peer relationships. Humans are social beings; they need to constantly see themselves on others to assure them that their experiences are not isolated and that others feel the same way they do. They need constant affirmation of the actions that they do. This means that people develop interpersonal relationships. In turn, these relationships help them get by obstacles. In the workplace, employees need to develop harmonious relationships with their co-workers if they want to perform well in their jobs.
Another employee story presented in the case study was that of Lois Lucas. Her case stated that their manager had accused her and other employees of not being team players. This is a tough call especially in the Nordstrom working environment where affirmations are expected. The tension between employees and mangers often result to the decrease of job satisfaction since employees fail to realize their capabilities especially when their co-workers or superior gives them the feeling that they are not exerting efforts to excel even if they really are doing so.
In conclusion, the presence of motivators and hygiene factors means that management must ensure that both factors are present in order to ensure the quality of performance that their employees provide. This means that it is not enough that the level of employee dissatisfaction is low; employee satisfaction rating must also be high in order to maximize the potential of each employee.
Possible Cause of Perception Differences among Nordies
In the case study that was the basis of this report, it was stated that employees received modest formal training upon being hired or promoted. Seasoned employees, through on-the-job communication, hand down the knowledge and skills of new hire and newly promoted employees. However, it is the case that people have different understanding or interpretation of the knowledge that they were able to acquire through the years. This means that the information that seasoned employees pass onto new hires may not be the perception that the company wished to inculcate to its personnel.
There are various reasons why employee training must take place. These reasons are closely linked to the company’s sustainability and profitability. According to Noe and Colquitt, training is being used to facilitate education (53). In addition, training is also seen as a tool to retain employees, improve corporate culture and design incentive programs for employees (Tannenbaum 29).
The formation of the appropriate corporate culture is important. The beliefs and values dictates the business ethics of the organization as well as code of conduct of the members of the organization. Therefore, corporate culture also determines the human relationships formed within the organization including business and personal activities. The perception of truth and reality by the members of the organization and the organization itself is also created through the corporate culture.
If the perception being handed down to new hires are different from the values and beliefs of the organization, then problems may arise. Every employee will be using their own interpretation to decode the policies of the company. Therefore, their understanding of the system will not be unified and thus the division of perception. This might very well be the case of Nordstrom. Due to the lack of formal training, employees were not properly educated about the culture of the company. The feeling of dissatisfaction may have been due to the different understanding of some employees regarding the policies of the company.
A company must be unified by the desire of its employees to attain a certain goal that is also being shared by the whole organization. Through the collective understanding of the employees, they will be able to work together towards the realization of their goals. It is also the case that training allows the organization to reiterate the importance of their mission or objectives. Through training employees will be able to familiarize themselves with the expectations of the company. They can also be motivated through training.
The results of training and development start a chain reaction. When the company is able to produce effective employees then their profitability will increase. When this happens, they will also be able to compensate their employees based on their contribution to the company’s growth. In turn, it will create a feeling of satisfaction that will motivate them to improve further their efficiency and then the cycle will once again begin (Parker).
Recommendations
In order to resolve the issue being faced by Nordstrom, it is being recommended that formal training be implemented especially for the new hires. New hires must be given importance when it comes to training programs since they basically know nothing about the company. If a business organization wants it employees to be accountable for their actions while working within the business organization, companies must make them feel that they are indeed part of the organization. Trainings are great opportunities to tell employees about the tradition of the company and how things are done within the organization.
The training program to be implemented must give emphasis on the tradition of building lasting customer relations. This will allow the employees to understand the logic behind the need to go out of one’s way in order to please the customer. The training can incorporate the existing training program with the new one.
For example, the existing training being given to new hires include practical issues such as scheduling, salary commissions and benefits. The new training program can be incorporated by relating the practical concerns with the benefits of creating lasting customer relations. It can be the case that the new training program state that an employee have the opportunity to receive higher commissions if more customers return to the store and purchase regularly.
This can motivate the employees to start doing their best to ensure that customers see and feel the good shopping experience offered by the store and return. By making the employees see that the benefits they will be getting is worth their efforts then they will continue on with the Nordstrom tradition.
In addition, trainings will allow the employees to master and put into practice the tradition of the company as the company intended it to be. A unified perception and understanding of the information will be achieved and thus the employees will be working with the same line of thinking which is to ensure the success of the business.
Credit:ivythesis.typepad.com
0 comments:
Post a Comment