VIDEO 7: “Hot Topic: Motivation is a Hot Topic”
This video features Betsy McLaughlin and the two clothing stores she
has created. Both Torrid and Hot Topic are designed to appeal to niche markets.
Hot Topic appeals to modern music lovers, and Torrid is aimed at mature, plus
sized women. McLaughlin has created a unique corporate culture designed to
engender fierce loyalty from its employees.
(BONUS CASE 7-2, “Hot Topic: Motivation is a Hot Topic” on page
7.Error! Bookmark not defined. of this manual relates to this video.)
VIDEO TITLE
Hot Topic: Motivation is a Hot Topic
LEARNING OBJECTIVES
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Explain the importance of a positive corporate culture.
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Explore creative means and strategies to motivate employees.
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Discuss the differences between a decentralized and a decentralized organization.
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Explain how Hot Topics management uses Theory Y management style.
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Identify intrinsic and extrinsic motivators used by Hot Topic.
KEY PEOPLE AND COMPANIES
Betsy McLaughlin, CEO of Hot Topic and Torrid Retail Clothing Stores
Jason Shelby, Music Accessories Buyer at Hot Topic
Jim McGinty, Chief Financial Officer, Hot Topic
Megan Hall, Marc Cireno, Cindy Levitt, Venecia Higgins, Chris Habash, Autumn Heron,
and Jessie Elkins, employees of Hot Topic
OVERVIEW
Both Torrid and Hot Topic are designed to appeal to niche markets that feel they are
inadequately represented by mainstream retailers. Hot Topic offers edgy, culture-licensed
clothing to modern music lovers, while Torrid appeals to mature, plus sized women. Both are
owned by the same parent company, Hot Topic, Inc. Although the structure of this organization is
similar to others in its industry, its work environment is quite different. McLaughlin has created a
unique corporate culture designed to engender fierce loyalty from its employees.
PREPARING STUDENTS BEFORE THE VIDEO
Encourage students to recall their recent visits to retail stores. Ask them to then recall an
instance in which they received excellent service from a highly motivated employee, as well as an
instance during which they received lackluster service from a disinterested, unenthusiastic
employee. In both cases, how did the employee’s attitude impact their shopping experience and
their overall attitude toward the retailer?
MAJOR ISSUES IN THE CASE
Hot Topic, Inc. provides an example of a company with an organic, adaptive culture.
Emphasis on hierarchy is minimized, employees are empowered to take risks, open
communication is encouraged, and training is ongoing. A key motivational strategy the company
uses is its Concert Reimbursement Program. It also adheres to the California 980 rule.
Also:
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Corporate culture
Motivating employees
Centralization and decentralization
Theory X, Theory Y, and Theory Z
Intrinsic and extrinsic rewards
ADDITIONAL DISCUSSION QUESTIONS
1.
Give examples of both intrinsic and extrinsic rewards offered by Hot Topic, Inc.
An extrinsic reward is something tangible given to employees to recognize their good
work. Hot
2.
How can Maslow’s Hierarchy of Needs be applied to this case?
3.
Typically, there is a high rate of turnover amongst retail employees. In general, how do
innovative employee programs, such as does found at Hot Topic, help to reduce this
tendency?
SUGGESTED ANSWERS FOR DISCUSSION QUESTIONS
1.
Give examples of both intrinsic and extrinsic rewards offered by Hot Topic, Inc.
An extrinsic reward is something tangible given to employees to recognize their good
work. Hot Topic’s compensation plan and Concert Reimbursement Program are examples of
extrinsic rewards. An intrinsic reward is derived from the personal satisfaction of the performance
of a job well done. Hot Topic employees are passionate about the attention they pay to
underserved markets and helping to make them feel good about themselves. Employees also have
the opportunity to experience self satisfaction if they choose to grow, learn, and move up the
corporate ladder in this organization that prefers to promote from within.
2.
How can Maslow’s Hierarchy of Needs be applied to this case?
Hot Topics’ competitive compensation plan satisfies physiological and security needs. A
sense of belonging is fostered by the company’s friendly, open-door culture that deemphasizes
hierarchy. Esteem needs are met as employees are consistently empowered by leadership and
recognized as talented individuals capable of handling increasing levels of responsibility. Self
actualization is certainly possible in this organization since employees are encouraged to
continually challenge themselves by moving upward and assuming more responsibility.
3.
Typically, there is a high rate of turnover amongst retail employees. In general, how do
innovative employee programs, such as does found at Hot Topic, help to reduce this
tendency?
Innovative employee programs and dynamic corporate cultures often make workers feel
that they are part of a team or a family. Because employees have fun at their job, they are more
likely to develop a more positive attitude toward their employer and work harder toward making
a contribution. All of this contributes to a reduction in employee turnover.