Incentives and Motivation

1. What do you see as the advantages and disadvantages of the incentive system that DeMarco’s is using for sales associates? What impact do you think it is having on the DeMarco’s culture? Explain.

There’s many implications of incentive system started by Lauren. The advantages are: the sales associates are motivated to do their jobs better and harder, since they get paid by commission on their sales. The solicitous associates approach potential customers better, contributing to increased sales and customer satisfaction. In return, it leads to customer loyalty and improving of the company’s reputation and the increase of customer referrals to family, friends and acquaintances. The system also has a downside, its disadvantages includes: diminished teamwork between associates, increased competition among associates, leads to hostility and mixed reactions among staff.

2. Do you think the complaints of lower-paid sales associates are legitimate? Why? How do you suggest Lauren respond to these complaints, such as the gripe that the system offers few opportunities for large commissions in some departments?

The lower paid associated complaints are legitimate. It’s because commissions are based on sales made. If an item is price low, then the commissions is low. Since the associates in departments with items that are priced low have a disadvantaged compared to their associates in departments with items that are priced high. Lauren should pay attention to the complaints and should respond to the complaints immediately. Lauren should use these strategies to counteract the complaints. Keep switching associates to different departments since the sales prices can’t be altered or by introducing a permanent salary in addition to the sales commission regardless the volume of sales.

3. Have the successes of sales associates such as Katherine or Damien created a situation in which loyalty to customers is stronger than loyalty to the store?...