Vetements Ltee Case Study
Organizational Effectiveness - HRM 4004
Vanessa John Noronha
101529998
1. Describe ineffective behaviours of employees and managers after the incentive program
implementation.
Answer: The implementation of the incentive program resulted in the following ineffective
behaviours from the employees and managers:
Aggressive competition: The sales staff, in the interest of earning more incentives, started
approaching incoming customers as soon as they entered the store. This approach seems
aggressive and results in the intimidation of some customers. Arguing over “ownership” of
customers is construed as behaving aggressively. All employees have individual goals to achieve
however, they should still be respectful and work together amicably to meet to overall goals of the
company.
Counterproductive work behaviours: Since the sales staff was more focused on tagging
customers and increasing their sales, they neglected their other duties such as stocking and
inventory. They also left certain areas of the store unattended because they assumed they were
low-traffic areas. Although it was the staff’s goal to increase their sales, the lack of items on the
store shelves and lag in ordering inventory led to a loss in potential sales. Certain customers, if
not all, could still go to the “low traffic” areas of the store which could lead to more sales.
Inequal assignment of duties: The store managers assigned some employees to stock and
inventory, which denied them the ability to make sales and earn higher incentives. This resulted in
the employees losing their morale and resenting the store managers. Whereas the employees
assigned to sales duties had the potential to earn more incentives. This unfairness led to
employees feeling discriminated against.
Threatening the staff with dismissal: When the store managers threatened the staff with
dismissal, the staff felt even more disappointed and discouraged. This resulted in a lack of
engagement. The store managers used their power to bully the staff into completing the duties
that did not earn them equal pay, in the form of incentives.
When employees are not treated equally or feel that they are not being treated equally they
become less engaged. Less engagement also leads to reduced productivity which directly leads
to the non-achievement of the overall goal, which in this case is the sales of clothing in the store.
2. Analyse the store management interventions based on the equity and expectancy theories.
Answer: The equity theory explains “how people develop perceptions of fairness in the
distribution and exchange of resources” (McShane et al., 2021).
When the store management assigned certain staff to stocking and inventory duties, the
employees experienced inequity because they were not rewarded adequately for their
performance and efforts. This led to inequity tension (note: there were no incentives assigned to
stocking and inventory). In comparison, the sales staff experienced positive equity because they
were rewarded and incentivized based on their sales to customers.
The store managers also fail to implement the P to O expectancy theory correctly. The P to O
expectancy is “the perceived probability that a specific behaviour or performance level will lead to
a specific outcome” (McShane et al., 2021). Stocking and inventory enable the sales staff to
complete their sales targets and achieve the store's sales goals. The staff assigned to stocking
and inventory received zero incentives although these were “essential tasks”. Seeing as how
these tasks were important to achieve sales, the employees expected to be as equally rewarded
and incentivized as the sales staff.
3. What actions should Vetements’ executives take to correct these problems?
Answer: The executives or senior management should remodel their incentive programs. As
stocking and inventory are as essential as completing sales, the executives should build a reward
and incentive program to incentivize all employees. Since stocking and inventory do not generate
revenue, they can set performance metrics and score employees assigned to these duties based
on their performance. The performance score technique applies perfectly to support staff since
they are not in revenue-generating positions but enable the revenue-generating staff to achieve
their goals.
The incentives for all duties (sales, stocking, and inventory) should have the same amounts. This
way the employees will experience equity and have a positive attitude towards the duties
assigned to them.
Additionally, the executives can also implement a rotation program, where the staff could change
duties after a certain period. This will ensure that all employees get the opportunity to perform
different duties in the store. This could lead to positive staff morale and a decrease in resentment
towards the management.
References:
McShane, S. L., Tasa, K. & Steen, S. L. (2021). Canadian organizational behaviour (11th ed.).
McGraw Hill.