Nordstrom - Discord among Unions

From a debutante as a shoe –retailer, Nordstrom has come a long way from its humble beginnings. With a track sales volume that was almost double the industry standards, and a diversification into apparels and accessories, Nordstrom enjoyed the highest profit margin in the industry. It was distinctly clear that the customer-service was the back-bone of this highly productive company. The liitle feats of the customer-service personnel , way out of their expected job schedule went a long way to boost customer-service. Its innovative commission system of sales per hour was acclaimed as an effective strategy. But critics feel otherwise. The salespeople had to put in their entire working hours and more to account for the target sales and yet have to find time to run errands for customers. This was leading to high pressure contrary to being a motivation. Promoting within the Company also increased experience in the Company. The management also endorsed a decentralized system of operations which was highly prone to misuse. The peer pressure and group recognition although encouraged the employees they eventually did lead to a lot of pressure and sometimes led to sharking, stealing sales credits. The Sales performance of the employees could be tracked by an automated process which enabled comparison with others and also aided in estimating their performance related to their targets.
Inspite of its commendable reputation Nordstrom got caught up in a whirlwind of complaints, union allegations, and lawsuits. Some of the concerns were that the Company coerced the employees to work “off the clock” without being paid. The employees had to run errands for the customers which were not paid for. The Washington State Department of Labor & Industries did an investigation and concluded that the allegations were true and the Company had to back-pay the employees.
The management tried to improve the existing system and recapture its lost glory by initiating procedural changes. Employees had to indicate the extra hours worked. This was again criticized because the Company had to maintain the hours. The Nordstrom stockholders filed lawsuits against the Company for financial losses incurred because the Company failed to disclose their labor problems and the early claims for unpaid work.
The employee grievances only prove that the management had severe flaws and would ultimately lead to detioration of the Company’s honor.