Kembels Department Store

Q1. What theories about motivation underlie the switch from salary to commission pay?

Ans: The theory of motivation to encourage sales performance assumes money is a key motivator. There are many needs that can be satisfied with money. With increased sales commissions, money can satisfy emotional needs, social needs, and self-esteem. There is another theory called expectancy which matters a lot in human’s life. According to Expectancy theory, the employees try to work hard to achieve their targets in sales. Sales people take commission as a reward and it increases their performance. The equity theory of motivation is used to describe the relationship between the employees perception of how fairly is he being treated and how hard he is motivated to work.

Q2. What needs are met under the commission system? Are they the same needs in the shoes and handbag department as they are in lingerie? Explain.

Ans: Commission payment system satisfies need level more than the salary based system. If the company is offering good commissions so that the sales personnel can put their maximum effort to boost the sales. The higher-level needs of self-esteem can be achieved. There are many other motivational practices that contribute towards increasing growth, responsibility among employees and promotion opportunities. Although the needs are the same in both departments, a straight commission system in the lingerie department does not offer the same level of reward as it does in a shoes and handbags department. The per-item commission on lingerie is much lower than for shoes and handbags, resulting in reduced motivation because the lingerie salespeople must sell more products to make the same level of commission as the shoes and handbag salespeople. The lingerie salespeople are discouraged by the new pay system because they can’t make as much as they did under the old system no matter how hard they work.

Q3. If you were Frances Patterson, would you go back to the previous...