Nordstorm Case

Here are our recommendations to fix the system. First, the company can use Sales-Per-Month ratio, or even Sales-Per-Quarter ratio, as a performance evaluation factor instead Sales-Per-Hour. Many efforts sales people made on work activities like stock-take, collecting goods from other stores and sending thank you notes actually help increase the sales volume in the long run. As the positive impact of those work activities that related with customer satisfaction may not appear to be obvious in the short run, using SPH to evaluate the sales performance is unreasonable because it makes those efforts seem like a waste of time and are discouraged to include them into selling-time. Also other factors, like working hours, customer satisfactions should be considered. Second, Nordstrom should give moderate contests instead of putting to much pressure on employees. Too much contests will lead to the undesired behaviors, like ‘stealing credit for sales made by other staff’, and negative atmosphere among employees. Third, efficient communication among all levels of employees is needed. By using decentralized system, upper level managers should give clear signs and directions to the middle level, so that they know what they are expected. Also, upper level should try to obtain feedbacks and opinions directly from sales staff periodically to make sure that the existing performance evaluation system is not abused by anyone, and also find out and fix system drawbacks as soon as possible. Last, decentralization or autonomous system may not be suitable for all kinds of business and employees. Therefore, Nordstrom should make sure all their sales staff understand the payment system, so that they know exactly what they are expected at first day of work and they can handle such a pressure.