Kimbel's Department Store

Introduction

Kimbel is a large regional chain of exclusive department stores based in St. Louis, USA. Currently there are two retail departments namely shoes and handbags and the lingerie. The shoes and the handbag department is catering high end premium customers. A key strategy of the company to develop a sustainable competitive advantage is to provide unmatched customer service over and above the prevailing competitors in the target segment. However, in recent past Kimbel department store has observed continues loosing of overall retail sales to discount stores chain in St. Louis. The main cause of loosing overall retail sales is due to lack of motivation amongst the sales staff of the company. Current unattractive pay system has been identified as the main de-motivating factor behind the poor sales performance. This has adverse impact to the overall strategy of effective customer service to retain the loyal customers in the long run.

The CEO, Ms. Frances Patterson has benchmarked best compensations practices in competitor companies such as Bloominigdale’s and Bergdorf Goodman in order to overcome motivational issues amongst the sales staff of the company. Yet, it was observed that the introduced system itself has its own pros and cons of achieving the desired level of performance. While the handbags and the shoes department seems to be motivated and enjoy the introduced straight compensations system, the lingerie department seems to be demoralized and de-motivated as the very same approach does not bring the desired motivation it was trying to bring in. However, Ms. Frances has closely monitored the system to assure whether the desired behaviors and the performances are up to the standards. And now it is time to decide whether to continue the new compensations system or not. There it is integral to understand the needs met and unmet for each department and to come up with a comprehensive system that can address the needs of everyone including the...