Raleigh – Rosse Case Summary

Raleigh and Rosse is a luxury goods retailer which sells goods such as clothing, jewelry, handbags etc. R&R is reputable company with 38 stores nationwide and is known for its exceptional customer service and strong customer loyalty. The company was very successful and was even named one of the “Top 100 Employers to Work For” by Fortune magazine.

The company started an “Ownership Culture” program which began in 1992 which uses a Sale per Hours system which measures the sales performance of employees in weekly sales, weekly revenues, and a customer satisfaction metric. The program was intended to create a more entrepreneurial and accountable working culture. In this program, R&R hired sales associates from college and focused on training them.

Despite its success, the recession had a negative impact on R&R and resulted in declined revenues. Furthermore, in 2010, sales associates from R&R filed a lawsuit against R&R under the Federal Fair Labor Standards Act.

R&R is faced with bad reputation due to the lawsuits and accusations of forcing employees to work overtime which resulted in a negative brand image and hurt revenues. The Sales per Hour program placed a lot of pressure on the sales associates leading to a more competitive work environment and forced the employees to work longer hours off the clock. R&R forced its employees to take customer satisfaction to extremes by running personal errands and doing personal favors for their customers. Customers’ needs were being placed above those of the employees

Managers started to manipulate the system in order to improve their sales per hour and the performance management system was abused. Furthermore, the rewards program of the Ownership Culture that was created to motivate employees created animosity amongst colleagues and resulted in sharking- associates who stole credit for the sales that were made by their co-workers.

With the declining revenue, poor brand image and lawsuits faced by the company due to mistreating their sales associates, Raleigh and Rosse needs to revamp their “Ownership Culture” program to benefit their employees as much as the loyal customers.