Vetements Ltee Case Study

Vetements Ltee Case Study

Tuesday January 29, 2013

Stephanie Procenko

806 241 493

MGT 151 A2- Organizational Behaviour

Dr. J. Pucic

Vetements Ltee Case Study

Understanding the Case

Vetements Ltee is a men’s retail clothing stores located in Quebec, Canada. Two years ago the company decided to implement a new incentives system for managers and their employees. The incentive system would give managers annual merit apart from their salary if the specified criteria including inventory management, customer feedback, store appearance, exceeding sales goals, and other measures of performance were met. Sales employee would be rewarded a commission based on their percentage of sales which could potentially reach 30% of their pay. The objective was to motivate employees and improve all over sales at Vetements Ltee. The result of the incentive program had adverse effect with inventory management, employee cooperation, and customer relations of the company. Shortly after the incentive system was in effect senior management began receiving complaints, Sales staff became more aggressive in order to make their individual sales goals, and performance and customer service deteriorated.

 Analyzing the Data

The new incentive program created aggressive and intimidating customer service in Vetements Ltee. The staff became only motivated to sell in order to reach their personal sales goals. The staff used aggressive sales behavior towards the customers such as waiting by the store entrance to tag customers as theirs as they entered the store. The staff would even argue over claimed customers leaving them intimidated. Tasks such as Inventory and re ordering were neglected and sections with lower price points were unattended by all employees.

MARS Model

The sales staff was highly motivated to make sales goal with the new incentive program, which turned into aggressive sales behavior to the customers having adverse effect on business. The employee’s ability to maintain...