Nordstrom
In the assigned case, we are introduced to Nordstrom – a successful line of department stores who hold customer service as a priority, and encourage employees to develop their own client bases while working the field. Customer satisfaction is essentially the backbone of Nordstrom’s business model, which is also its key success indicator. The potential challenge in this model is the perception of unfair hours worked vs. pay of some of its employees.
One way that Nordstrom is presented to distinguish themselves as an organization is by encouraging an environment where employees are the face and brand of the company. Through training of “the Nordstrom Way” values, employees are given the freedom to handle situations as they see fit. They are encouraged to “use [their] best judgment in all situations” and “do whatever it takes to make the customer happy”. In that case, policies seem to instill a sense of trust and ownership amongst employees, which in turn may give each employee a sense of leadership and worth in the company. Such freedom however is limited to managerial positions and higher. Nordstrom pays its salespeople on a commission system that is personalized to each salesperson’s abilities, length of employment with the company, as well as their sales per hour (SPH). They are paid in a “draw” system where they will receive the higher of their commission percentage x total sales, or their hourly rate x total work hours. It would appear that Nordstrom is thereby working to address Maslow’s first need (physiological needs) in the hierarchy of needs theory. Regardless of how many sales you are able to make – which is the main goal of any department store – you will be receiving a paycheck.
One cannot however show up to work, punch in the clock, and add no value to the company. This is where the company’s goal-setting system comes into play. Edwin Locke developed the goal-setting theory, which suggests that, “challenging and specific goals increase human performance because they affect attention, effort, and persistence”. Nordstrom appears to have developed a system where the success of its salespeople is directly dependent on their ability to meet company goals. Although it may set up for a harsh environment should personalized goals not be met, its main purpose is to motivate salespeople to do just that, make sales and perform.

Another integral part of the problems and complaints towards the Nordstrom system was their skewed differentiation of “non-sell” and “selling” times. Employees were made to come in on weekends for mandatory meetings, contribute to stocking back rooms, and make personal connections with customers – and ensure those connections remained intact through personalized letters and at-home deliveries – all whilst being “off the clock”. Employees were essentially encouraged to go the extra mile to ensure that a customer’s “Nordstrom experience” was one that would not be forgotten.
This type of mentality is very similar to what I have experienced working in the healthcare industry. The most successful business models share the common goal of an undisputable emphasis on customer satisfaction. Employees are constantly encouraged to treat others the way they would want to be treated and follow company values all whilst remaining successful as a business. There are employees who live and breathe patient care – taking extra time to build relationships and maintain organization in the work place – and their efforts do not go unrecognized. Those employees who add extra value to the organization and those who are innovative as opposed to submissive, excel and are motivated to attain higher levels in the corporate hierarchy. It is that passion that any employer would want to encourage its employees to have, and although it is extremely hard work, if it is something that one genuinely enjoys doing, being “on” or “off” the clock does not make much of a difference.
What I took away from the Nordstrom case was that hours were only accounted for when the employee had potential to add value to the company through sales. Although there is a lot of back end work involved in retail, salespeople do have an opportunity to exceed the “day job” mentality and work to attain higher managerial positions. The work is tough, but you would hope that employees who choose to work in customer service have a slight passion for working with people.
Where I do see a downfall to Nordstrom’s method however is in its rewards system. By creating competition and setting specific goals, there is motivation for employees to exceed sales goals for prizes or recognition. There is however still dissatisfaction in the work place that can be related to Frederick Herzberg’s dual-factor theory. Although Nordstrom uses competition and potential positive outcomes as motivators or satisfiers, the pay, fear among employees, and security of the job remain prominent hygienes. Increasing the number of motivators in the company does not necessarily lead to satisfaction, but rather less dissatisfaction in the work place. Thus, perhaps it would be important for Nordstrom to address the hygienes more significantly in order to increase motivation in the work place.
In conclusion, as in any large organization, leading and motivating 35,000+ employees to work hard and exceed expectations is a challenge in and of itself. Ensuring fair practice whilst maintaining company integrity and budgets can prove to be a huge feat that many have been unable to attain. Nordstrom remains a huge name in the retail industry, which leads one to believe that although it may be perceived as a harsh environment, there are still many motivators that keep employees loyal to the company.
In order to reduce complaints about work time and hours, I would suggest that while in training, the time requirements and SPH specifications are extremely distinct to reduce any confusion as to what is expected of employees. I would also encourage managers to discuss with salespeople both company and personal goals, and have them keep an eye on progress to motivate the employees’ need for achievement. It is also important to advocate proper leadership in the company where employees feel safe asking for help or bringing up any concerns they may have.