Nordstrom Case Study

October 7, 2009

My initial reaction to the Nordstrom case study is that Nordstrom sounds like a terrible place to work. Why would anyone want to work in a situation where you are essentially forced to under report your actual hours worked in order to meet some artificially created hourly sales quota and avoid workplace repercussions. Clearly some Nordstrom employees agreed, resulting in the union filed complaints and class action lawsuit. The media and other retailers apparently agreed as well, as demonstrated by the negative press and the fact that other retailers declined to adopt Nordstrom’s policies.

What is interesting to me, however, is that a large percentage of Nordstrom employees clearly did not find this system unfair. The union received minimal support from Nordstrom employees and was ultimately kicked out of the unionized stores, so it seems apparent that most employees were satisfied with the current system and objected to the efforts to change that system. Although I personally would not want to work under such a system, I can see why those who do—especially those who thrive in that system—would not want to change the system. While employees do give up some compensation by declining to declare certain hours worked, it is apparent that a number of employees have used the system to earn far more then they would at competing retailers. While I am sure that the example employee earning $80,000 is an extreme outlier, the average Nordstrom sales associate still earns a lot more than comparable associates at competing retailers.

Also, it seems like those who thrive in this system are very likely to be promoted, so that is another reason employees would be in favor of it. Essentially, this system weeds out the weak sales people, either by encouraging them to leave voluntarily or by forcing them out when they fail to meet their hourly sales quota. For those who remain, a promotion seems inevitable, since only those who meet or exceed these sales targets will be allowed to stick around.

What this case study tells me, is that Nordstrom’s sales quota system created a strong culture in which those employees that stuck around were the ones thrived under that system—earning more money and getting to keep their jobs in the process. Those who did not thrive either left or were forced out for not meeting the hourly sales quota. As a result, you have an organization made up primarily of employees who succeeded under the current system—earning far more than they would at competitors—and thus you have an organization in which the bulk of employees are big supporters of the system and will react in anger to those who try to change it. This is personified in the fate of the union, which was decertified despite bringing about changes to Nordstrom’s time keeping system and winning back pay for a number of employees.

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