Nordstrom, a major player in the retail industry, applies the sales per hour (SPH) motivation system so as to encourage is sales staff to work harder, generate more sales as well as climb towards the top level of their career ladders. In this case, the number of hours and the sales made by the staff are the factors considered in the SPH ratio. Each staff must meet a certain sales quota so as to receive the incentive; otherwise less work hours and even termination may be the end result. While this helps the company in terms of ensuring strong sales level, the work environment it creates is not as pleasant. Specifically, this system makes the staff employees against each other. The competition tends to be unfriendly as employees steal the credit of other colleagues; the pressure such system can also get too intense, making it even more difficult for other employees to perform well and get the much-coveted incentive. These effects make this motivation system ineffective; hence, it should be removed or changed.
From the description of the company’s case, the main fault of this system is that is solely focused on sales generation. In other words, SPH only works for the company’s benefit. This type of ineffective motivation is similar to the description of Herzberg (2002) where the employees are not working hard for SPH because they are willing to but because they have to. In order to improve the motivation system of the company, several factors considered as employee performance drivers should also be considered. As a motivation theory stated, employees have different sources of motivation (Herzberg, Mausner & Snyderman, 1959); thus, the company must discover what these sources are.
One suggestion is to develop a multi-faceted motivation system. This is similar to an employee assessment or appraisal wherein different aspects of the sales staff’s performance are considered. In particular, this system considers the staff’s level of customer orientation; this feature refers to the ability of the staff to attract customers as well as generate repeat customers. Another factor to consider is sales generation capability; this pertains to the level of sales the staff can make within a period of time. Finally, the company will also consider the staff’s work principles; this includes the employee’s ability to comply with company expectation, attitude, creativity, responsibility and other relevant features. Employees who pass the criteria set by the company using these features will then receive standard salary increments, promotions or incentives.
One of the benefits of this multi-faceted approach is that the company will be able to determine the strengths of its staff. By drawing their strengths and potentials, the company can then plan on how to enhance them (Nicholson, 2002). In this way, the employees are more motivated as they have more room for growth and achievement (Herzberg, 2002). This also enables the company to recognize well-rounded employees or the real “all-star” employees and not only those who can generate sales. Recognizing the distinct contributions of all staff can help lessen negative competition; the development of a friendlier work environment can also be a good means of motivation. With these gains, it can be said that the use of this system is more helpful considering that it is beneficial for the company as well as for the employees.
Credit:ivythesis.typepad.com
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