Vetements Ltee free essay sample

Vetements Ltee is a chain of men’s retail clothing stores located throughout the province of Quebec, Canada. Two years ago, the company introduced new incentive systems for both store managers and sales employees. Store managers receive a salary with annual merit increasing based on sales above targeted goals, store appearance, store inventory management, customer complaints, and several other performance measures. Some of this information (e. g. , store appearance) is gathered during visits by senior management, while other information is based on company records (e. g. , sales volume). Sales employees are paid a fixed salary plus a commission based on the percentage of sales credited to that employee over the pay period. The commission represents about 30 per cent of a typical paycheck and is intended to encourage employees to actively serve customers and to increase sales volume. Because returned merchandise is discounted from commission, sales staff are discouraged from selling products that customers do not really want. We will write a custom essay sample on Vetements Ltee or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Soon after the new incentive systems were introduced, senior management began to receive complaints from store managers regarding the performance of their sales staff. They observed that sales employees tended to stand near the store entrance waiting for customers and would occasionally argue over â€Å"ownership† of the customer. Managers were concerned that this aggression behavior intimidated some customers. It also tented to leave some parts of the store unattended by staff. Many managers were also concerned about inventory duties. Previously, sales staff would share responsibility for restocking inventory and completing inventory reorders forms. Under the new compensation system, however, few employees were willing to do these essential tasks. On several occasions, stores experienced stock shortages because merchandise was not stocked or reorder forms were not completed in a timely manner. Potential sales suffered from empty shelves when plenty of merchandise was available in the back storeroom or at the warehouse. The company’s new automatic inventory system could reduce some of these problems, but employees must still stock shelves and assist in other aspects of inventory management. Store managers tried to correct the inventory problem by assigning employees to inventory uty, but this has created resentment among the employees selected. Other managers threatened sales staff with dismissals if they did not do their share of inventory management. This strategy has been somewhat effective when the manager is in the store, but staff members sneak back onto the floor when the manager is away. It has also hurt staff morale, particularly relations with the store manager. To reduce the tendency of sales staff to hoard cu stomers at the store entrance, some managers assigned employees to specific areas of the store. This also created some resentment among employees stationed in areas with less traffic or lower-priced merchandise. Some staff openly complained of lower paychecks because they were assigned to a slow area of the store or were given more than their share of inventory duties. Question 1. What symptom(s) exist in this case to suggest that something has gone wrong? 2. What are the root causes that have led to these symptoms? 3. What actions should the organization take to correct these problems?