Upon reviewing the Vetements Ltee case, it became apparent that the company’s
narrow focus on increasing sales solely by adding commission backfired and provided
the opposite intended result. Several factors came into play to lead to the downfall in
sales, employee resentment towards each other, and low employee morale. The Four
Drive Theory, the Balanced Score Card concept, and the Equity Theory can all be used
in combination to correct the errors made in this case which will lead to increased sales,
improved employee relations, and increased employee morale (McGrath, 2013).
One factor was not adhering to the basics of the Four Drive Theory of Motivation.
Using the theory as a guide, one can see that the company only emphasized two drives
which are to acquire and to defend (McGrath, 138). The employees were only thinking
about satisfying their drive to acquire more money through sales and to defend their
territories in the store in order to obtain more customers. This would offset the balance
between their other drives including the drive to bond. The theory advocates to balance
all of your employees drives in order to maintain motivation which can lead to better
productivity. The employees were not concerned about bonding with one another which
would not promote a team atmosphere. They more concerned about defending their
territories in order to aggressively pounce on customers. This made for a hostile
working environment and caused the employees complaints about feeling resentment
towards one another because they were put in the better location in the store (McGrath,
500). A method to change this would be to gather employee groups into teams and base
incentives on how well the team is doing collectively. This will help to nurture not only
the drives to acquire and defend, but also to increase the drive to bond with their team
mates and even can benefit their drive to comprehend. By working as a team, the
employees can interact with one another to find creative ways of increasing sales
amongst their teammates and even inspire friendly competition between teams
(McGrath, 2013).
When the company decided to add annual merit increases for managers they were
adhering to the Balanced Score Card concept (McGrath, 148). By incorporating
multiple measures of success such as store appearance and low customer complaints the
goals were more evenly set across the board to reflect a more whole picture of how well
the store is performing. However, when the company only put in place an incentive
program for the sales staff which was solely based on the amount of sales obtained it
lead to employees neglecting the other duties that can be just as important to getting the
sale such as inventory. To correct this error, the company must match the areas of
measurement that were put in place for management so that the employees will focus on
more than just the sale. For example, if store appearance is measured by random visits
by upper management looking for well stocked shelves then the employees would be
motivated to make sure that the shelves were being stocked regularly. Adding a goal of
lowering customer complaints to the scorecard would also help to minimize the
aggressiveness of the sales staff as not to aggravate the customer (McGrath, 2013).
Management tried to correct some of the negative behaviors by assigning areas for an
employee to be stationed. This then backfired because the employees felt that their
commissions were negatively affected by where they were stationed for that shift. The
Equity Theory comes in to play here (McGrath, 152). If the employees feel that they are
given a particular disadvantage, in this case it would be where they were located in the
store for their shift, compared to their fellow employees then they can perceive this as
being unfair. Several negative behaviors can come from this perception, but in this
particular case it made the employees resent one another and helped to lower employee
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REACTION TO AH
morale. Again, the team solution would help to change this perception. A member of
each team could be stationed together in different sections of the store in order to be
fair, thus eliminating any inequities between teams.
Putting in play these changes would allow for the men’s retail chain to increase its’
productivity through effectively motivating its employees. Keeping in constant step with
the guidelines set out by these concepts would enable the chain to ultimately increase
sales, improve employee relations, and increase employee morale.
References
Mcshane. (2013). Organizational behavior (6th ed.). Singapore: McGraw-Hill
Education.
Reaction to AH
A company should not be narrow focused on increasing sales primarily by adding
commission; this could backfire and reduce sales rather than increasing sales like in the
company in Vetements Ltee case. It is noteworthy that adding commission so as to increase
sales could result in employee resentment toward one another, as well as low employee
morale, which together lead to drop in sales. According to Mcshane (2013), the Equity
Theory, the Four Drive Theory and the Balance Score Card are all essential in regards to
correcting such a predicament; the correction would in turn result in improved morale of
workers, improved relations of workers, as well as increased sales.
The Four Drive theory of motivation: This theory is basically a holistic manner of
looking at staff motivation beyond the characteristic pay model common in today’s corporate
world. The 4 underlying drives are: the drive to acquire and achieve; to define and defend; to
be challenged and comprehend; and to bond and belong (Mcshane, 2013). The workers in the
case only focused on 2 drives: to acquire and achieve; and to define and defend thereby
resulting in poor employee relations and low morale. In order to sustain motivation that could
result in better productivity, the theory promotes the balance of the drives of the workers.
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The Balance Scorecard: This concept measures and offers feedback to firms so as to
help in executing objectives and strategies. In essence, it translates the strategy and vision of
an organization into a logical set of performance measures (Mcshane, 2013). By adding
yearly merit increases for managers, the company adhered to the concept of balance
scorecard. The 4 perspectives of the scorecard are learning and growth; customer knowledge,
internal business; and processes and fiscal measures. It is imperative that the firm in the case
matches the areas of measurement that were implemented for management so that the
workers would concentrate not just on sales.
The Equity Theory: This theory requires a fair balance to be struck between the inputs
of a worker including skill level, hard work, and tolerance, and the outputs of a worker
including benefits and salary. Finding this fair balance ensures that a productive and strong
relationship is attained with the workers. The overall outcome would be motivated and
satisfied workforce (Mcshane, 2013). This theory is apparent in this case, in which some
workers feel that they are being placed at a disadvantage relative to their workmates. By
observing the principles of the 3 aforementioned theories, the firm would eventually be able
to have improved employee morale, improved employee relations as well as increased sales.
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Reference
Mcshane. (2013). Organizational Behavior (6th ed.). Singapore: McGraw-Hill Education.