Posted by: Matthew Molinari | February 28, 2011

Nordstrom/SAS (Blog #6)

Talk about conflicting business models when it comes to employee relations. Nordstrom thought, let’s get our employees to work hard by treating them poorly while SAS tended to create policies that promoted employee motivation through positive means.

The leaders of Nordstrom seemed to be completely oblivious to how their workers viewed the company and why they put in as much effort as they did. Jim Nordstrom explained away the multiple law suits against the company by saying that the company was simply letting the employees work as much as they wanted to work; in other words, if the employee works unpaid overtime, it is because they are super loyal and wanted to do it and not because they are petrified of losing their job.

Of course, the SPH rating had nothing to do with it even if a low rating meant the employee would probably be fired. The SPH system not only made the employee resent the company but also made the employees feel like they were at war with each other. They weren’t using the SPH rating in a positive competitive way. The employees saw it as a justification to cheat other employees as a way to pump up their own score.

SAS went in the opposite direction. Rather than making their employees work hard out of fear they tried to motivate them out of respect. Goodnight believed that a happy employee would like their job and therefore be willing to work hard for the company. They had much less focus on monetary rewards and more about making the employees feel appreciated on daily basis.

While Nordstrom was the definition of high stress and ridiculous  pressure on their sales people, SAS saw that this was detrimental to their employees. The system at SAS was set up to reward the success of the company and not the individual. This idea led to teamwork whereas the culture at Nordstrom led to employees basically sabotaging each other to make their own numbers look better.

The SAS attitude towards success focuses on the success of the employee and the company while Nordstrom really didn’t do either. Yes, at Nordstrom they said they promoted employee success, but really, by basing incentives on individual success they actually hurt the company. There was no team work and truly more of an atmosphere that promoted hurting other employee sales numbers and therefore the overall numbers of the company.

SAS did the opposite. They focused on the overall numbers and rewarded all the employees when the company did well over all. In the end, both companies were successful but SAS was able to do it with happy employees and without all the lawsuits over illegal labor practices. It just goes to show that you can put different systems in place and get the same results. The main difference is what kind of success you want and whether your employees want to help and continue to be a part of that success.

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