Nordstrom Case

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        Nordstrom:  Dissension  in  the  Ranks?   Strategic  Management   Hunter  Kerkes   1/30/2012                      

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  Executive  Summary     The  Nordstrom  case  is  a  discussion  of  the  way  sales  clerks  were  driven  to  the  highest   standards  among  the  retail  shopping  industry  during  the  1980’s  and  1990’s.  The  philosophy  of   Nordstroms  is  to  offer  the  customer  the  best  in  service,  selection,  quality,  and  value.  This  is  a   very  good  example  of  a  business  motto  that  not  only  will  succeed  but  have  returning   customers.  The  only  problem  with  this  philosophy  is  that  in  order  to  achieve  such  success  you   need  to  have  employees  who  share  the  same  passion  as  the  owners  and  operators  of   Nordstroms.  Many  of  Nordstroms  employees  did  share  this  vision  but  there  were  also  many   employees  that  were  pushed  to  standards  that  they  could  not  fulfill,  for  fear  of  lost  wages,  bad   shifts,  and  even  termination.  Pushing  employees  to  breaking  points  was  not  a  huge  concern  for   the  upper  management  of  Nordstroms  and  this  is  a  reason  why  I  feel  that  the  company  as  a   whole  suffered.    

Problems    

There  are  many  problems  associated  with  the  way  Nordstrom  management  treated   there  employees  many  of  which  I  feel  could  be  taken  care  of  with  a  little  better  management  of   time  resources  and  company  policies.  I  feel  these  are  key  problems  with  this  case  which  are   listed  below:   •

Poor  management  of  time  cards  and  time  allocation   Nordstrom  sales  clerks  were  required  to  clock  in  and  out  of  work  just  like  any  other   employees  but  the  problems  arose  when  “selling  time”  and  “non-­‐sell”  time  are  not   clearly  distinguished.  

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Hostile  work  environment   Peer  pressure  from  other  sales  clerks,  bad  shifts,  termination,  and  almost  unattainable   goals  makes  the  Nordstrom  working  environment  very  stressful.  The  Nordstrom  SPH   commission  system  is  very  difficult  for  all  employees  to  achieve.  

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Union  representation  of  only  a  few  employees   Only  1,500  of  Nordstroms  nearly  30,000  employees  are  represented  by  the  United  Food   &  Commercial  Workers  union  which  only  covers  Nordstroms  Washington  employees.  A   split  among  union  employees  and  non-­‐union  employees  creates  even  more  problems.  

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Bad  representation  by  United  Food  &  Commercial  union   The  union  officials  are  asking  Nordstroms  for  way  more  than  the  employees  are  entitled   and  refusing  to  take  some  of  Nordstroms  offers.    

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Recommendations   These  are  just  a  few  of  the  problem  associated  with  this  case  along  with  many  more  that   can  be  discussed  as  well.  There  are  a  many  number  of  recommendations  the  can  be  suggested   to  fix  the  problems  discussed  above.  Below  are  actions  that  will  benefit  the  employees  and   ownership  of  Nordstroms.     •

Incorporate  a  new  system  of  time  keeping   The  time  keeping  system  at  Nordstroms  could  use  many  improvements.  First  with   respect  to  clocking  in  and  out  for  normal  work  hours,  this  should  be  accomplished  by   using  a  computer  system  that  would  keep  track  of  when  you  clock  in  and  out.  This   system  could  also  be  used  as  a  means  for  sales  clerks  who  were  working  after  normal   hours  to  continue  to  stay  clocked  in  until  there  work  was  done.  As  for  doing  extra  things   outside  of  the  store  it  should  be  mandatory  for  those  employees  to  manually  write   down  their  hours  and  turn  them  in  at  the  end  of  the  each  week,  with  approval  for  their   managers,  this  system  would  ensure  that  employees  were  paid  for  all  of  the  hours  that   they  worked.    

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Improve  working  environment  for  success   Nordstroms  working  environment  is  full  of  stress  and  pressure  that  could  drive  sales   clerks  to  the  brink.  The  SPH  program  that  is  in  place  now  is  in  effect  a  driving  force  for   sales  clerks  that  are  unlikely  to  be  achieved.  The  program  was  intended  to  benefit  those   clerks  who  achieved  the  goals  that  were  set  forth  for  them  but  many  clerks  were  not   able  to  achieve  these  goals  and  as  a  result  were  penalized  with  fear  of  decreased  hours   or  termination.  This  system  could  be  used  to  motivate  employees  instead  of  leaving   them  in  fear.  

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Unionize  all  Nordstrom  employees   By  allowing  all  Nordstrom  employees  to  be  part  of  a  union  you  eliminate  those   arguments  between  union  and  non-­‐union  employees.  With  only  Washington  employees   being  represented  by  a  union  this  creates  a  division  in  the  labor  force  for  Nordstroms.   By  giving  all  employees  the  right  to  be  represented  by  a  union  you  are  giving  employee’s   options  that  will  make  them  happier  and  more  productive.    

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New  labor  union  president   The  Local  1001  union  is  poorly  represented  by  its  current  president  who  not  only  is   overestimating  the  back  pay  that  employees  deserve  but  also  arguing  against  steps  that   Nordstroms  is  taking  to  fix  the  problem  of  back  pay  and  time  keeping.  A  new  president   and  a  new  board  could  greatly  benefit  the  employees  represented  by  the  Local  1001.      

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Justification     With  the  recommendation  above  I  feel  that  Nordstroms  could  move  past  employee  and   management  differences  and  continue  the  Nordstrom  model  of  success.  Below  are  the  reasons   why  the  recommendations  will  be  beneficial  to  Nordstroms  and  its  employees.   •

Offering  a  new  time  system   Nordstroms  would  have  more  success  keeping  track  of  employee’s  hours  with  this  new   system  which  would  result  in  a  better  sales  and  happier  employees.  This  would  ensure   that  employees  are  getting  paid  for  every  hour  they  worked  and  don’t  feel  like  they  are   getting  robbed  of  hours  that  they  spent  providing  added  customer  support  which  is  one   of  Nordstrom’s  company  mottos.  

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To  improve  employee  morale   Happy  employees  are  more  willing  to  do  the  extra  things  that  Nordstoms  are  asking  for   as  long  as  they  are  getting  compensated  for  their  efforts.  The  SPH  program  can  be  very   motivational  for  employees  who  succeed  but  it  should  not  be  used  a  punishment  if  goals   are  not  met.  Employees  should  not  fear  getting  bad  shifts  of  losing  their  jobs  but  instead   strive  to  make  improvement’s  every  week  to  eventually  attain  the  goals  that  have  been   set  for  them  as  part  of  the  SPH  program.  Employees  should  not  be  penalized  for  working   overtime  and  there  for  not  meeting  their  sales  per  hour  goals.    

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Unionization   If  most  or  all  employees  are  represented  by  a  union  then  this  would  eliminate  a  rift   between  employees  who  are  very  loyal  to  the  company  and  of  those  who  are  loyal  to   unions.  With  all  employees  being  part  of  a  union  they  are  fairly  represented  if  they  need   it  but  also  loyal  to  the  company  as  well.  Employees  wouldn’t  feel  scrutinized  for  not   being  part  of  a  union.    

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New  union  leaders   With  the  election  of  a  new  union  president  for  the  Local  1001  the  relationship  between   the  employees  represented  by  the  union  and  the  management  of  Nordstroms  could  be   put  back  to  the  way  it  was.  The  president  of  the  union  is  being  unfair  in  arguing  with  and   overestimating  the  amount  of  back  pay  owed  to  employees.  There  is  no  accurate  way  of   knowing  just  how  many  hours  employees  worked  off  the  clock  without  those  employees   physically  writing  down  their  hours.  Nordstroms  management  took  steps  to  improve   their  systems  which  seemed  fair  but  the  president  still  argued  against  their  steps.      

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Argument     These  justifications  are  just  a  few  ways  that  things  between  Nordstroms  employees  and   management  can  be  beneficial  for  both  sides.  However,  with  every  recommendation  there  can   become  problems.  Below  are  some  of  the  problems  that  might  arise  when  acting  upon  the   above  recommendations.   •

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Employees  recording  false  times     A  problem  that  arises  with  the  implementation  of  a  new  time  system  is  that  employees   could  record  false  time  while  working  off  the  clock.  This  could  include  dropping  off  an   item  which  may  only  take  a  half  hour  but  the  employee  writes  down  that  the  task  took  a   full  hour  instead.  Stealing  time  is  one  of  the  biggest  concerns  for  any  company,  one   which  cannot  be  solved  very  easily.     Employees  getting  complacent     Nordstroms  may  improve  the  morale  of  its  employees  but  in  doing  so  it  may  cause   employees  to  become  lazy  and  have  no  drive  to  achieve  their  individual  SPH  goals  for  no   fear  of  punishment.  Employees  will  just  sort  of  become  used  to  just  only  doing  enough   and  not  going  over  and  above  to  please  customers.     Opposition  to  unionization     Although  many  people  enjoy  the  benefits  of  having  a  union  represent  them  there  are   many  people  who  do  not  feel  the  same  way.  People  shouldn’t  have  to  be  forced  to  join   a  union.  This  could  cause  create  problems  that  can  be  avoided.  Employees  could  choose   to  just  quit  or  never  even  begin  working  for  Nordstroms.       Even  worse  representation     The  union  president  now  in  place  may  be  doing  the  best  job  he  can  for  the  time  being   but  there  are  always  worse  ways  of  being  represented.  The  election  process  could  take   unwanted  time,  the  elected  president  could  only  be  their  because  of  some  sort  of   connection  and  not  looking  out  for  the  goodwill  of  the  entire  union.  Either  way  there  is   never  a  way  of  knowing  who  will  do  the  best  job.  

     

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  Conclusion   This  case  is  fairly  complicated  with  many  problems  that  can  be  identified  and  plans  can   be  put  in  action  to  resolve  these  problems.  I  believe  that  the  Nordstroms  motto  of  offering  the   customer  the  best  in  service,  selection,  quality,  and  value  is  a  strong  goal  that  would  achieve  a   superior  business  strategy.  The  only  problem  is  that  somewhere  along  the  way  the   management  of  Nordstroms  forgot  about  their  employees  being  the  key  part  of  this  strategy.   Pushing  sales  clerks  until  they  were  no  longer  willing  or  able  to  achieve  such  goals  without   sacrificing  their  own  time  and  money  was  not  the  greatest  play  for  the  management  of   Nordstroms.