Nordstom Case Study

Nordstrom Case Study

The Nordstrom case study seeks to examine the differing ways in which a particular organizational structure of a company motivates an employee in order to reach particular goals. Although there are a number of ways for in which to get motivated toward different goals, what becomes clear from this case study is that an organization can employ methods and concepts from a mixture of different theoretical frameworks to stimulate employee productivity. These methods, however, can have varying degrees of success.

The case study begins with the observation that when it comes to motivating employees to do their jobs well, Nordstrom appears to have a good model system. The company was cited as growing financially and was able to increase the size of its stores as well as its employee base and was thereby able to become one of the most successful department stores. Additionally, they seem to have a strong loyalty base that stems from their exceptional customer service that begins the moment the customer enters the store. The employees are willing to go to great lengths to make customers feel like they are part of a community and an important aspect of the brand itself. In short, Nordstrom is able to achieve a level of employee motivation that allows for high customer satisfaction as well increases in profit margins, both of which are important facets of determining a successful company (as we learned in the last case study, as well). We can see now, just how crucial motivation can be to a companies success.

Motivation theory can be broadly classified into two different types: content theories that deal with what motivates people by focusing on individual needs and goals and process theories that are concerned with how motivation occurs. Principles from both schools of thought can be employed when examining the Nordstrom model.

The first point of note from the study is that employees are willing to work hard for the company for the salaries, which are higher compared to the industry standards and national minimum wage standards. Salary is a consistent factor that can be applied to all theories, whether under content or process theories. Pay can allow an individual to meet the basic physical and safety needs required in order to attain the higher level needs, such as esteem and social needs. This is also good for the employer. Employees in other areas or companies that are performing similar tasks equally but for less would be enticed to seek better pay for their hard work. This would in principle retain and attract the best talent in the industry. In addition to pay, the company also provides structural logistics and extra incentives to work hard and achieve other aspects of motivation outlined by various content and process theories and these logistics and rewards are made known to the employees. Some of these practices include their policies of promoting within, having the managers themselves work on the floor along side their employees rather than being separated from them, and providing the employees with additional opportunities to obtain more money through a sales commission in addition to their already higher-than-average salaries. They also have the added benefit of obtaining other rewards when they meet certain quotas for the company. These give employees the means needed to allow them to establish a positive culture of working together to the benefit of themselves and the company and clear standards where employees can be evaluated (in this case it is called the sales per hour or SPH) and if they perform well or exceed these expectations, there are tangible rewards.

In this way, the system of rewards and the culture of teamwork that is stressed at Nordstrom provide powerful incentives to perform well on the job, which in turn benefits the company. There is a perceived connection between effort and outcomes that seem to be desirable for employee productivity. However, things are rarely as simple as they seem.

As with many things, there can unintended consequences or unseen factors at play. This is evidenced both by the fact that the company still experience a high-level of turn over and numerous lawsuits that have been filed against it. Any motivational theory requires that there are clear standards that need to be in place in order for employees to check against when determining the level of effort or responsibility to put into a task. Perhaps in an attempt to increase autonomy, the Nordstrom 20-page