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Raleigh & Rosse: Measures to Motivate Exceptional Service Members :
Raleigh & Rosse:
Measures to Motivate
Exceptional Service
Members :

Ajay Lodha

Bipul Kumar Gaurav Dalvi Jeewant Singh Niyati Metha

Vinay Tiwari

Srinivas Iyengar Rohit Kalla

Problem statement

  • Law suit filed by R&R sales associates

  • The effect of the “Ownership Culture” and SPH in

R&R.

  • Retaining R&R’s reputation & credibility in the industry and among the employees.

About the company

  • Founded by Michael Raleigh and Conor Rosse in 1903, largely managed and run by the family.

  • Raleigh & Rosse (R&R) was a privately held specialty retailer of luxury goods, clothing, handbags, accessories, footwear, jewellery, fragrances and watches for both men and women.

  • Experienced substantial growth and rapid establishment of new outlets, thereby requiring new “non-family member” players in the management.

  • Customer service viewed as “a calling, a vocation to serve their clients at the highest level of devotion”.

  • Aggressive U.S expansion program brought total store count to 38 and revenues reached $524.2 million in 2007.

The R & R Ownership culture

  • R&R called for its employees to go all out for its customers, run errands, perform personal favours, most of them beyond work hours.

  • Store managers should “own the business” and sales associates should “own their relationships”.

  • Sales-Per-Hour program introduced Set revenue targets for

managers and associates based on wages and reward them based

on that.

  • The firm followed the policy of extraordinary customer service which resulted in deep customer loyalty.

  • The ownership culture was a set of initiatives and policies to create a more entrepreneurial and accountable environment.

The R & R Ownership culture

(Cont…)

  • Under this, R&R witnessed major changes like -

    • 1. Hiring sales associates from the colleges and focused on training them

    • 2. Promoted scope for growth and promotions within the organization

    • 3. Invested in IT systems and granted store managers autonomy on staffing, scheduling and other sales associate performance.

      • SPH (Sales-per-hour) program was also a part of this initiative. According to this, each store manager and associate was given a target SPH based on the individuals hourly wage and department. And they had to fulfill the SPH to receive their paycheck every two weeks. Failure to do so, resulted in the employee being paid his/her hourly wage only.

Issues faced by R & R

  • Dissatisfaction among employees leading to a wrongful

termination lawsuit.

  • An unflattering story about R&R in Forbes magazine about store practices that were unfair to employees. More negative publicity.

  • Three-month investigation by New York state Department of Labour.

  • Recession 2008-2009

  • Another lawsuit filed by sales associates for repeated and continuous violation of state and federal wage and hour laws by coercing employees to work off the clock.

Major short-comings of SPH

  • Due to good customer relations, customers expected the salesperson to be present anytime anywhere for them. This resulted in low “selling hours”.

  • If these “non-selling” hours were formally recorded, the SPH would decrease. Hence, the associates had to end up servicing customers in their personal time (after work).

  • Employees hence started malpractices like sharking, not logging in the total time spent on the job to increase SPH etc.

Recommendations

  • Watkins should settle the lawsuit outside the court by paying its associates and bringing about changes in the Ownership culture and SPH.

  • Make modifications to SPH and re-implement. Draw clear lines between work hours and non-work hours and ensure that only work hours are counted for SPH rates. Non-work hours to be documented and recompensed at a standard rate, thus giving employees the necessary motivation.

  • Incentives not just for numbers but also for relationships created and maintained.

  • Implement an annual bonus plan for store managers. This should incorporate not just ratings for achieving personal goals but should also depend on associates’ performances. This ensures that hard-work is not forgotten and will offer a bigger pay-out

with continued efforts.

  • Making store managers more accountable for sales associates through balanced scorecards.