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Case Study
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Professor
University
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Case Study
What do you see as the advantages and disadvantages of Morgan's incentive system for sales associates?
Advantages: The straight commission system motivates the sales staff toward maximum customer service and lifelong relationship-building with customers. This may yield additional sales, repeat business, and good word-of-mouth advertising. Besides, it helps the sales staff view their department as their business, promoting expertise and dedication (Manheim,2023). The disadvantage is that the system may develop a competing environment that weakens the sales staff's teamwork and cooperation spirit. It may also develop a pushy sales approach and intimidation tactic amongst associates to meet their targets. Discrepancy in associates' earnings may also be possible, which causes bitterness and morale problems.
What impact do you think it is having on Morgan's culture?
The incentive system at Morgan has both a positive and a negative impact on its culture (Manheim,2023). While it raises the bar for personally tailored customer service and makes it possible for individual sales associates to stand out, it introduces competition, which tends to whittle away at the tradition of cooperation and teamwork that could be conducive to a cutthroat and less supportive atmosphere.
Do you think the complaints of lower-paid sales associates are legitimate? Why or why not?
The complaints of the sales associates who are getting low wages have some truth (Manheim,2023). Because the departments with a higher price level have larger commissions, the associates can be making large disparities in their pay among all the associates. The feelings of injustice and resentment can be very real.
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How do you suggest Sophia respond to these complaints, such as the gripe that the system offers few opportunities for large commissions in some departments?
To respond to these complaints, Sophia may adopt fair and equal commission structures, including commission rate adjustments based on department sales performance or bonuses, to meet certain sales goals (Manheim,2023). Besides, training and supporting the associates in lower-earning departments will ensure that they generate the most sales and commissions.
Have the successes of sales associates such as Katherine or Damien created a situation in which customers' loyalty to particular salespeople is stronger than their loyalty to the store?
The success of certain people in the sale process, such as Katherine and Damien, may sometimes lead to a situation where the customer is more loyal to the staff than to the store (Manheim,2023). People might develop a personal relationship with certain employees and follow them to other stores.
For example, if a successful associate leaves Morgan's for another store, might the customer also leave?
The risk can be mitigated if it finds ways to demonstrate a general loyalty to the brand but still recognize and reward the contributions of the individual associates. For example, during the advertising, the expertise and hard work of the sales associates, including the low performers, and towards general shopping and brand values at Morgan's (Manheim,2023). holding your top-performing associates through competitive pay packages and career advancement opportunities could significantly reduce the potential effect of their departure on customer loyalty.
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References
Manheim, D. (2023). Building less-flawed metrics: Understanding and creating better measurement and incentive systems. Patterns, 4(10).
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