R&R is a specialty luxury retailer known for exceptional customer service and deep loyalty. They implemented a Sales per Hour program to measure sales associates, but it led to a more intense work environment with issues like mandatory unpaid Saturday meetings. The program did not align with the company's strategy of promoting accountability and entrepreneurship as it did not pay employees for non-sales hours and encouraged underreporting work hours. While incentives can be motivating, the SPH program was flawed and not scientifically analyzed to increase performance. The recommendation is to modify the SPH program to clearly define work and non-work hours and ensure fair compensation, incorporate qualitative metrics, and hold store managers more accountable for associate performance and hard work.

1. Raleigh & Rosse: Measures to
motivate Exceptional Service
By Group 9:

2. R&R DASHBOARD

 Specialty retailer of luxury goods
 38 retail locations with average revenue per square
foot of 1200$ significantly higher than industry
average of 675$
 Extraordinary customer service, deep customer
loyalty
 Strategy: “Own your business, own your customer
relationship”

3. R&R ownership culture &
SPH Program

 The following are the policy changes
 Shifting focus from experienced sales professionals to
college graduates and training them
 Maintaining internal promotions system thereby improving
the experience level of mid mgmt. team
 Revamped sales associates commission system
 Investment in IT
 Greater autonomy to sales managers
 Sales per Hour Program
 Measurement of sales associates – by weekly sales
 Sales managers were measured by standard metrics like
revenues, gross margin etc.

4. PROBLEM STATEMENT

 Introduction of SPH led to
 More intense work environment
 Sharking
 Off the clock work hours

5. Problem Analysis

 Managers tend to manipulate the system to improve
SPH
 Mandatory Saturday morning meetings were not
allowed to be included in the work hours
 Vague distinctions between “Selling time" and “Non-
Selling hours”
 Flaws in Performance Management program

6. Five Building Blocks of Effective Incentive Plans

Using an incentive plan does not make sense as : 1. Motivation is not a problem as the
employees are already known for their extraordinary customer service. The job is not
standardized and work flow is not regular.
2. A sales person performs a number of miscellaneous tasks for customers and takes part in
non-sales activities. Floor sales are not continuous or consistent.
The incentive program (SPH) does not align with their strategy:
1. The strategy for the company is to promote accountability and entrepreneurship.
2. SPH does not pay employees for non-sale hours spent on client relationships and hence
employees and also encourages the employees to report lesser number of hours to get higher
incentives
The program is not completely motivational :No clear relationship between effort and reward
Complete standards are not set : The incentives are based only on value of sales made. No
qualitative aspects of performance are measured and rewarded
It has not been scientifically analyzed whether SPH increases performance

7. Recommendation

 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.

8. Thanks