Case Title: Montego Bay, Unsustainable Motivation The role of the responder: Lisa Mahoney, Store Manager, Montego Bay Introduction Montego Bay, a retailer selling distinctive women’s apparel, reported a quarterly sales drop of 3. 5% from the last year. The company is going to close down 20 underperforming stores in coming 18 months. A new computerized scheduling system was introduced to the store under trial basis for 6 months in order to see whether it could improve productivity & reduce payroll costs.
The new system improved productivity and reduced the labour cost but had a major impact on employee morale and significantly changed the culture and behaviour of the store. This case study is an insight of the scenario and it will try to explore possible alternatives to solve the problem. Key Issues 1. Sales staff of Montego Bay is very critical over the computerized scheduling system, there morale was down and voicing their bitter complains against new system. This situation is not healthy for store performance especially in long term aspect. 2.
Drop of quarterly sales before the trial and the risk of being included in to 20 underperforming stores going to close in coming 18 months. This will have a major impact if the trend is not reversed as early as possible. 3. The “successful” trial run of computerized scheduling may endorse the viability of new system. There is a risk of implementing it throughout the company without considering or undermining negative impacts because of key benefits as productivity improvement and payroll cost reduction. Analysis It’s not an easy task to keep sales on a positive track and employees motivated in an economic turbulence.
Customers tend to choose less expensive retailers than an upscale store like Montego Bay, when they feel economic hardships. Therefore an extraordinary effort to improve performance would be natural. In the other hand the sales staffs also has significant grievances regarding new system. It changed the whole set up of working and disregarded all intangible values, reasons considered in the previous system. The computerized system used an extrinsic motivation which focuses to lower ends of needs as security (job), food, and basic comfort.
But the staff was familiar with more advanced culture which cater for higher ends of needs as recognition, accomplishment, fulfillment and self-determination. According to Maslow’s hierarchy of needs theory, the lower levels of needs must be satisfied before move in to next level. Lower levels of needs as food, shelter, safe and secure physical & emotional environment were threatened by the new system. Sales staff was motivated just to achieve base level needs of hierarchy and the dissatisfaction became as an obvious outcome. This motivation is an extrinsic motivation and it didn’t come out from hearts and minds of employees.
Extrinsic motivation is not sustainable and will decline sooner. According to Herzberg’s two factor theory, hygiene factors must first be in place to motivate. As per computerized schedule, working hours and pay became a variable factor relate to performance. The sales staff’s dissatisfaction created instantly when the pay, a hygiene factor becomes “not guaranteed” anymore. Now the staffs is trying to achieve hygiene factor needs, therefore according to the theory this is not a motivated situation, it’s in the area of dissatisfaction and performance was increased only because of the fight for survival.
But the computerized schedule is not a bad one either. It improved productivity and reduced payroll costs. It provided more hours to more efficient employees which is a good motivational factor. The system became a threat for less productive staff mainly. In some cases, it’s hard to find ways to motivate employees who has already achieved first, second level of needs of hierarchy. Therefore the new system may provide a temporary boost for them to achieve. Alternatives 1. Implement computerized schedule with revisions which will address employee concerns would be a good option.
This will keep benefits of the new system as well as keeping employee moral higher. Scheduling system needs more human touch than a purely productivity based system. But productivity should be considered in sales perspective which will ultimately save everyone’s jobs. Therefore computerized scheduler should be continued but it should be revised moderately by the store manager in order to absorb employee concerns. 2. Discontinuing computerized system and implementing a more advanced motivating/ influencing program would be another option. Team’s morale would be maintained high and more sustainable motivation could be achieved in this way.
Sales figures and store closure threat should be conveyed to the staff and they should be given a task of saving the store as well as their jobs through increased sales. Quarterly goals should be decided and agreed; weekly, monthly figures would be discussed and individual productivity performance should be rewarded. 3. Implement computerized scheduling system fully would be the third option. The system proves that it is effective. The staff which is productive will embrace it since they have more benefits from the system. The second layer will try to achieve more and may become first level performers later.
The third layer may leave the job or company could train them for jobs which is not directly involved with sales. Recommendation and Justification There are pros and cons for all three alternatives. The second option, introducing complete new system is more advance and more scientific. But it depends on the team’s ability to absorb the vision. It will not be successful if the majority of staff is happy fulfilling basic needs and have no drive to achieve higher levels. It’s difficult to introduce a rewarding system to go for higher needs in an economic downturn.
The third option is good for short term. But in long term, it will be harmful. Customers may be over served with the increased competition between sales staff members and it will lead to customer dissatisfaction finally. I would like to choose the first option, keeping new scheduling system with revisions . Store manager could overrule the computer generated schedule considering human matters but maintaining the essence of the report, productivity based scheduling. This will address key productivity concerns and provide immediate results while keeping healthy employee relationship.