Raleigh & RosseMeasures to Motivate Exceptional Service GROUP 5 Pawan Badgujar FT14447 Piyush Talreja FT14448 Purnima Kochar FT14452 Raghavendran J FT14453 Rahul Chadda FT14454 Ratika Gupta FT14455 Ravikant Sharma FT14456 Reecha Lal FT14457 R&R repeatedly and continuously violated state and federal wage and hour laws by coercing employees to work “off-theclock” • The risk of a potential $50million judgment against R&R. high profile lawsuit • Inefficient Performance Management System. combined with the reputational risk from a prolonged.What is the problem here? • NY State Department of Labor reported. Introduction of Sales-per-Hour program led to – – – – Intense work environment Sharking Off the clock work hours Darwinian culture • Ineffective HR feedback system . plus additional punitive damages – The lawsuit will damage reputation of the company irretrievably – The lawsuit can result in monetary losses up to the tune $50 million – Employee dissatisfaction and internal conflicts with absence of healthy competition – Focus will move away from customer satisfaction and be directed towards achieving higher SPH .How serious is the problem? • The problem is serious because – The plaintiffs sought damages equal to twice the amount of unpaid wages. This caused distortion in the SPH figures. But the hours outside weren’t included in the selling hours and were written off as non-selling hours. where per customer sales time can beyond sales floor premises. sometimes involved associates efforts outside the sales floor. Mechanics : • SPH measured the sales performance by the following formula: • SPH = (Sales. • Unfortunately . Suitability : • SPH isn’t suitable in retail business of luxurious goods . • Instead we must provide incentives on absolute dollar sales values. What were the mechanics and suitability of the SPH system? . a sale of a good .merchandise returned)/Selling Hours. Are R&R employees pressurized by the SPH system & by Management? • YES • Failure to meet the SPH target resulted in decreased hours and eventually in termination • Customer service off the floor was recognized as non selling and if this was added the SPH would decrease eventually reducing the incentives • “ Doing whatever it takes “ policy was followed. • They created an intense work environment. . • Newly hired employees had hard time adjusting. • The selling and non selling time was not clearly differentiated by management and they would force the employees to reduce the non selling hours and eventually increase the SPH. How would you redesign compensation and performance appraisal system at R&R? • Target based Performance Management System – Exclude # of hours from evaluation • Optimal Shift/Job Rotation – to provide equal opportunity to every sales associate • Individual customer feedback appreciations or complaints need to be accounted . Is SPH system a good measure of customer satisfaction? • No. • SPH is only a sales related metric for employee performance appraisal • It will impact customer satisfaction because – Employees concentrate less on non-sales activities – Negative impact of employee competition on customer . SPH in fact decreased camaraderie amongst employees – The pressure to become an “All Star” could sometimes result into “Sharking” – Resulted into Darwinian culture of survival of the fittest – Increase in internal competition led to decrease in customer satisfaction – A newly hired employees had a hard time adjusting to the work culture .Does SPH system increase camaraderie amongst employees ? • No. • Thank You ! .