NordstromDissension in the Ranks ?

Organizational Behaviorpresented by :

Akbar. Roliyanti. Yedida. Yoice 

Februari 2011

Nordstrom Characteristics• Family company : The Nordstroms• Retail company products

o Shoeso Apparel

• Managemento Philosophy: best in service, selection, quality, and

value Entrepreneurship spirit “Treat this like your own

business”o Prestigious award : the 1989 National Retail

Merchants Association’s Gold Medalo Company competitive advantage : superior customer service

• Financial o the most productive in industry (per square feet)o Strong Financial growth for the last 20 years

• Competitorso Competitors : RH Marcy, Bloomingdales, Neiman Marcus

• Employeeo higher employee annual income rate from National averageo expanding from 5000 in 1980 to 30,000 in 1989o intense competition between salespeople (more likely to be

unhealthy)o extremely strong customer service skills

Nordstrom Characteristics (cont…)

Nordstrom policy :the classification of task performed off the

sales floor into "SELLING" and "NON SELLING" activities

    consequences : employees would     continue to feel pressure not to report all

     their hours spent to the tasks.

Root Cause

Impact of the Reward System• The SPH implementation is not fair to all sales people, especially

for those who do not achieve target• Lack of a clear distinction between ‘selling time” and “non-sell”

work time• That condition will impact on employees motivation• Implicitly push employees to work off the clock to increase their

SPH and not report overtime• Unhealthy competition among sales people

SPH-based commission system hasimpacted negatively to employees’

motivation

Gap Analysis• SPH policy aroused a significant difference

between employees’ and top management’s perception

• Customer service value versus employee satisfaction

Recommendation

• Decentralization system --> centralization• Standardized shift rotation system• Group incentive reward beside individual

incentive reward• Commission based on weekly/ biweekly/

monthly sales target• Overtime must be paid on approved time

sheet• Better communication on company's policy