Nordstom Case Study

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rule book was replaced with a single sheet of paper that contained mantras like “Use your best judgment in all situations”. This inherently meant that employees were then guided by subjective determinations of performance. After all, what is deemed as the best judgment of one individual might be different from what another individual determines is the best judgment. It implies that there are standards, but then these are not made in any way clear to employees, which leaves them vulnerable to judgment (what they thought was best may not leave the manager pleased with their performance). This means that the ability of employees to receive the rewards outlined in the previous section above will inevitably vary depending on the social context of the employee (Maybe Manager Bob just really doesn’t like John). Indeed, managers of different stores are given license to run their own stores however they see fit and when the managers have their company-wide meeting each year, information is not transparently disseminated when these managers go back to the store.

Additionally, their one uniform performance standard, the SPH, meant that when on the clock an employee is mostly likely going to be driven primarily, if not solely, by their sales. This in turn led to an implicit culture within the company where employees had to work off the clock in order to complete other required tasks. In fact, if an employee did not do this and did the other required tasks on the shift, there tended to be negative consequences in the form of fewer SPHs. And since this was the metric which was used to determine who can move up and who was recognized in the company, it was not favorable to morale. As those who did not focus on their SPH were often relegated to shifts where there were fewer customers and fewer opportunities to obtain rewards for doing the same amount of work. The goals that those individuals work toward have to be altered compared to their peers who stay off the clock.

In order for employees to perform well and meet goals, they need to know what the company-wide goals are and the steps that need to be taken in order to move up. There are no set standards company-wide that can guide an individual toward higher needs and goals. If employees do not meet these “best judgment” and other loose standards, then they could get fired or relegated to shifts where they have even fewer opportunities compared to their peers to obtain and would lose access to the potent motivators, which means that there is inequity among the workers. This also means that employees work under the pressure of negative reinforcement rather than positive and that if they don’t perform well, even against these unequal conditions, that they can lose a job and therefore their ability to provide even the basic needs for themselves, and for many, the long hours and stress are too much. By not having company-wide performance standards, the link between performance and reliable outcomes (as outlined by expectation theory) becomes a subjective issue of the managers. If standards at a particular branch make it significantly difficult to set performance goals that can be realized and rewarded, this is where lawsuits and turnover can occur.

In short, Nordstrom can make its customers happy, expand, and make profit but it seems to be able to do so only at a high-cost to the employee. Despite them having higher standards and rewards in place that are well known by the employee in hopes to attract and retain, the inconsistent performance standards and the managers having the ability to run their individual stores to individual standards means that employee experiences can vary widely across the chain store. This undermines what the store is trying to accomplish.

In the future, I would recommend proper employee performance standards of what constitutes excellent performance standards that employees know about. Their knowledge of the incentives provides employees something to work toward but it is often times unclear how to get there except by working extra hours or face the fear of a negative consequence that could destroy their ability to meet their basic needs. Also, the mangers of stores also need some degree of universal guidelines as far as operating. And finally, the discussions that occur between upper level management should include what is working to make employees motivated and these policies should be tweaked and made transparent to employees so they have consistent standards to know how to work toward