Brief Problem Identification

1. Brief Problem Identification

The case is about Nordstrom, a family operation that has been one of the most successful retailers with a phenomenal costumer service. The case illustrates that while some employees thrive in 'the Nordstrom Way', others feel intimidated and unfairly treated.

The problem is whether Nordstrom should conclude that the company motivational culture is 'not for everyone' and to continue its current course? Or whether the company should strive to make changes as a way to meet criticism of unethical and unfair employee treatment?

1.1 The main challenges in Nordstrom

A range of challenges has divided the employees in two extremes: Supporters and Opponents.

First of all, the pay system focusing solemnly on SPH tends to promote internal competition and jealousy to the extend that the employees plot to get better performing sales people fired as a way of enhancing their own personal gain. Furthermore, in the absence of overall guidelines and formal training to direct behaviour combined with large personal freedom as well as strict top-down set sales and performance demands, there is a space for some managers to pressure their employees beyond what is ethically responsible (correction of accent, appearance, working for free, etc.) in order to meet sales figures. In this climate, the large degree of personal freedom has transformed into a massive demand for high performance - no matter the consequences. Finally, the absence of guidelines means that the evaluation of employees and conflict resolution rests on the supervision and judgement of a narrow number of people - often one store manager - something that has led to accusations of unequal, unfair, intimidating or even discriminating treatment of the employees.

As a result, the company has experienced lawsuits and even organized union threats initiated by dissatisfied employees, something that bears the power - if left untreated - to severely damage the company's employer brand, recruitment efforts and sales numbers in the future.

2. Theoretical analysis of challenges

Different theoretical frames present different optics to analyse the challenges faced by Nordstream. Below I have selected the theories that I feel offers the most in highlighting the challenges faced by Nordstrom:

2.1 Content Theories of Motivation

Maslows Needs Pyramide / ERG Theory: In the case, employees unable to cope with the constant demands of Nordstrom feel threatened on their most basic existence needs (safety and physical needs) as they fear loosing their job and income to provide for their basic needs. Furthermore, due to the internal competition between peers it is very difficult for employees to fulfil their relatedness needs (social and belongingness needs) through satisfying relationships with co-workers. Much of the company focus is on the monetary dimensions of employee growth needs (esteem needs) as the employees' benefit and value to the company is mainly measured in terms of their SPH performance and costumer rating .

AAP Theory: There is little room for employees to fulfil their need for affiliation and camaraderie with their co-workers. The focus in Nordstrom is on personal achievement, promoting employees to perform well against a standard of excellence. People with a high need for achievement have extensive freedom to plan their results and get regular feedback on their performance level. Furthermore, the large emphasis on personal goal achievement combined with the internal competition means that the company motivational structure tends to favour employees in need for personal power rather than employees driven by the need for institutional power for the greater good of all employees. As there are weak needs for affiliation and institutional power, the strong need for achievement has set the stage for coercive tendencies with at times unhealthy shortcuts and illicit actions, all in the name of achievement.

2.2 Process Theories of Motivation

Equity Theory: In Nordstrom, the employees' perception of unfair treatment (outcome) is highly influenced by the fact that they perceive the processes as unfair. More specifically, the employees do not feel that they have a voice in the decision process; that the procedures are consistent or free from bias (there are no guidelines, outcomes depends on one managers better judgment,