R.

Uy

Nordstrom

I. Synthesis

Nordstrom a large and successful department store companies in the U.S. that has more than 25 store

branches in the entire country. It started its humble beginning in Seattle and has diversified throughout the

years. Since then, the company has remained a family corporation wherein most of the chairman and

members of the top management are family members of John W. Nordstrom, the founder of Nordstrom

Department Store. “The Nordstrom Way” is the company’s pride of running its sales by having an

extraordinary customer service which was quoted as “above and beyond the call of duty”. Aside from

hosting fashion shows, gala dinners, concierges, valet parking, the store also provides personal assistance

for customers.

Employees in Nordstrom are highly motivated by the high salary that they receive. Loyalty to the

company entails an increase in the salary. Base fare is also said to be higher than the normal base fare

receive by an entry-level employeeTrainings are informally handed through on-the-job communication. It

also changed its 20-page rule book to a one-page sheet that only indicated the company’s wisdom,

suggesting a decentralized approach to management. Managers are given the freedom to run their

department, being responsible for hiring, scheduling, evaluating, and by far receive a little guidance from

written company policy. The key point is to do whatever it takes to make a customer happy.
The regular employees are on a commission system called a draw, in which their hourly rates are based

on a salesperson’s abilities and the length of employment period in the company. Nordstrom’s

expectations to employees are said to be explicit in such a way that salesperson’s employment is defined

by goals periodically and storewide, qualitative and quantitative. Also, managers are free to implement

their own approach as long as it promotes productivity that leads to achieving set targets and is consistent

with the Nordstrom ways. Low performance can be grounds for dismissal, and therefore monitored

through charts that are displayed bulletin boards. Employees can also monitor their performance through

computer printouts that have their personal identification number. Nordstrom also periodically hire

“secret shoppers” to monitor salespersons’ performance. They are required to be enthusiastic, friendly and

warm. Although some employees are religiously acting on their job, there are some that feel like the

“Nordstrom way” actually meant harassing, oppressing and adding up pressure to employees by means of

competition. Sometimes, to meet a deadline, employees make use of their free-time, such as lunch breaks,

past the end of their shifts, and weekend rest days just so they can be able to deliver on time. On these

accounts, no overtime pay was rendered. Complaints were raised and many employees decided to transfer

to competitors’ companies, realizing that they receive as much salary and there is less stress encountered.

Despite the complaints and resignation of some employees, others still feel happy about their job. Happy

customers are also what make the company successful.

II. Point of View

The group have decided to go with a centralize method of approach. Taking into consideration

the lack of experience that the employee have considering their tenure. Having said that, managers who

are practicing decentralize approach might make decisions that are premature by not understanding the
actual rationale from the top heads. Top managers tend to see the entirety of the organization while

managers and lower managers who are more focus on the operation.

Lack of cooperation and coordination may be a factor in a decentralized setup because of

unhealthy competition among the two management because work allocation and performance

evaluation are not harmoniously coinciding in a decentralized establishment

III. Statement of the Problem

How can Nordstrom organized the company in such a way that its employees will be motivated

and coordinated to ensure that that customer service and profit will thrive?

IV. Objectives

Short Term:

 To be able to come up with a solution that can stop workers to work over long hours

 Reasonable pay for employees

 To improve communication among the managers and the members of the

organization.

Long Term:
  Encourage unity and coordination through employer and employee relationship

 To monitor performance by developing email blast that helps both the employees

and the company

 To minimize the use of sales per hour ratio as the basis for an employee’s

performance

 To provide formal trainings for newly hired staff and for promoted staff

 To establish of standard performance evaluation medium on how staff should be

evaluated
 As much as Managers are given the freedom to operate their departments, there

should be a HR who would see that the entitlements of the employees are given

V. Analysis

SWOT Analysis

Strengths

 Nordstrom’s stellar personal customer touch (i.e., personal thank-you letters for

customers, special deliveries, etc)

 Nordstrom can be considered as one of the promising and most successful big tree’s in

mall industry at USA

 High wage especially for those who have rendered long continued service to the company
Weaknesses

 Employees bantering over their residual effort to make the quota which in an ordinary set

up should have been exchange with a reasonable amount of work hours but instead all

went in vain. In short, no incentive for overtime

 Employees little formal trainings when hired, most are informally provided through on-

the-job communication.

Opportunities

 Managers are given their own free will to make decisions and handle the salespersons as

long as they stick to the “Nordstrom way”

 Promotions are based from the performance of the salespeople.

 Nordstrom’s exemplar salary rate offer, applicants would definitely consider an

employment with Nordstrom

 Nordstrom is one of the big mall chain specializing in apparels and leather goods.

Replacement is undoubtedly not an issue.

Threats

 No uniformity when it comes to protocols regarding forms that are used for salespeople

and managers.

 Decentralized management approach

 Trainees are not oriented how the three criteria (customer service, productivity and

teamwork) in which promotions are based are specifically evaluated.

  Unmotivated and stressed employees because of no overtime pay for salespeople

 Ridiculous one-page rule book

VI. Alternative Courses of Action

ACA PROs CONs

1. An Email blast for all 1. The system will inform 1. Costly to buy: Must
prospective customers the buyers of what’s hire IT expert to
new and avail of maintain the system
special discounts as
well
2. The system will
generate thank you
cards that will be sent
to customers after they
have bought stuffs
from Nordstrom
3. To be able to get loyal
customers entice them
to buy more from your
store through
accumulation of points
that can be redeem for
a reward items at the
store
4. For a personal touch
add a birthday message
to the customers
5. Nordstrom can build e-
commerce for them to
increase sales without
pressuring their
employees.
2. As is 1. Since most employees 1. This will start the deter
are okay with of the company by
theNordstrom culture imbibe “Nordstrom
way” attitude.
Employees’s would
eventually move out to
a less stressful
 neighboring job.
3. Immediate  The actual hours worked to  Additional cost for
implementation of will be tracked accurately Nordstrom since they
time sheets and  Commissions and overtime would need to hire people
prohibiting sales pays will be computed also who will deliver goods and
employees from accurately do the stocktaking
delivery goods and
stock taking
activities. These two
extra work should be
done by non-sales
person
4. Middle managers  Quotas will be feasible
must be involved on  Employees without pressure
how quotas must be or fear of being dismissed is
designated for their will initiate innovative ways
department in this to keep his sales to the
way quotas will be quota or above the quota
likely to be feasible
and will not create
unnecessary pressure
to the employees to
meet the quota

VII. Recommendation

VIII. Implementation