In 2010, Raleigh and Rosse, a luxury retail store was faced with massive problems that had to do with their employees that could eventually damage their reputation and put them out of business. Their main problem in this case was the fact that potentially a $200 million law suit was being threatened by their unhappy sales employees. Many of their sales employees found themselves to be overworked and working extra hours and not receiving any pay for them. Being overworked by the company led many of the managers feel as if it was an intense work environment with a lot of competition amongst their co-workers.
Other than being overworked, another problem that arose that hindered many sales employees was that their performance was based on a sale per hour measurement system. This system measured their sales employee’s productivity and performance based on revenue return/hours worked. The way that this system is set up has allowed the employees to decline in job performance and not be satisfied with the company. Due to how competitive the company teaches every employee to be affects the environment and the success of all of them.
Another problem that R&R is facing is the fact that they are losing revenues due to the lack of them losing their brand image. This all ties back to the dissatisfied employees because the way employees feel and how they do their job effects how people see them.
Current Information
After reading this case and digging deeper into how to motivate sales people with compensation plans I found some articles that help justify my recommendations. After reading “Boosting Motivations Through the Compensations Plan,” the author pointed out a very good point to me that R&R could apply to their own company. The article said, “A reward is only motivational when it is achievable and valued.” (WorldatWork, 2013) This line stuck out to me because it’s something that R&R should realize when putting their employees in such a competitive environment. Another article I read on compensation and motivation focuses more on the “star” performers and I found that to help justify my recommendations because R&R try to train their employees to be star performers from the start. The article, “Sales Motivation: It’s Not Just About the Pay” says, “Another telecommunications company told us that it motivates and inspires its star sales performers not by paying them more — they already make plenty — but rather by inviting them to share their lessons from the road with the entire sales organization.” (Monster Worldwide Inc., 2011)
The R&R employees were clearly overworked and worked extra hours and were not getting anything for it. Due to the competitive nature of the company employees felt they needed to work extra due to managers saying that they’re expected to be a team player and continue
to work off hours. Another article I found, “5 Easy Ways to Relieve Your Over Worked Employees,” makes a really good point in it. It says, “Managers who set clear goals for
employees, however, give their team "mile markers" to work toward each day. Have a discussion with your employees about what’s expected and how progress will be tracked. That way, they'll know if the quality of their work is where it needs to be, or if a few extra hours of work is actually necessary.” (Entrepreneur, 2017) R&R pushes their employees to do more than they should have to and does it in a not so nice way. They aren’t setting appropriate goals and are expecting too much from them.
In my recommendations, I further go on to expand how these articles apply and how they can implement better rewards in order to motivate their sales people.
Recommendations
The employees of R&R are obviously the most important people here to focus on because they are what drives the company to success. When they lack in satisfaction, this affects the companies brand and in the end the customers feelings on the company.
Another thing I would recommend R&R does while trying to improve their employee satisfaction is something that I learned from the “Motivating Sales People: What Really Works” article. R&R tends to reward and favor those strong sales employees who have a higher SPH than others. Not every employee can hit the SPH target, so by implementing a new reward system will actually allow people like the laggards of the company to have more incentives, grow, and improve. R&R should give those type of employees a reason to try to improve and develop into good sales employees. For the middle types of people in the company they should still give incentives and encourage them to continue to do better. Then for the high performers they don’t need to cap them off and allow them to still reach their full potential and goals. By splitting these employees up like this will allow the motivation and satisfaction of the sales employees to increase and will alieve the competitive environment amongst them all and lead to more teamwork throughout the company.
Something else I think R&R should do when it comes to compensation motivation is to start giving rewards to employees that isn’t money related. What I mean by this is give them a reason to want to overachieve and to want to be a part of the elite group of the sales team. “Non-monetary rewards such as titles are especially effective because they allow high performers to show off their status to their peers, who in turn want to join that elite group.” (Monster Worldwide Inc., 2011) These types of rewards will truly motivate the lower people in the company to have a reason to achieve and actually motivate them. These types of rewards are shown to be much more powerful than cash rewards.
A way to improve revenues is to first conduct surveys amongst customers. By conducting customer surveys the company can figure out where they are going wrong and what the customers perspective from the other side is. This can help people like Linda Watkins decide where the employees need more training and where they need to team build and restructure things in order to give the customers the service they need. One thing they could do when they are team building is something mentioned in the “Sales Motivation: It’s Not Just About the Pay” article. By having the star performers tell their lessons and stories will help motivate others not as high performing to take the lessons they hear and apply them to their own work style. When doing this they’re not only learning and bettering their sales approach, their also forming better relationships with their co-workers instead of having a competitive environment amongst them all. Creating an open environment can allow any employee have a say and be able to express themselves when needed.
Lastly, to improve satisfaction of the employees, R&R needs to stop overworking their employees, because this is a way to lose top performers and other employees. R&R needs to set goals that are achievable and need to make it clear upfront what they want and need to see from their employees. Managers need to check in on the appropriate goals that they set and not push them to do more than they can handle. Employees will work much better if they are given a work load that they can deal with and it will lead them to be happier and to do the job correctly and still produce revenue for the company and to affect customers positively.
In conclusion, R&R needs to take full action into turning their focus to their sales employees. Without doing this will lead to an unsuccessful business and for them to not get out of a lawsuit. If they want to keep a good reputation and keep their company going, then they need to shift their focus and get back on track with their employees.