October 6, 2009

Nordstrom: Dissension in the Ranks?

Posted in Uncategorized at 7:33 am by ctennert

Quite a different case study than that of SMC and SWA.  I have always held Nordstrom on a pedestal because of their excellent fashion buys and wide range of choice, and certainly because it was always a special shopping trip while in Seattle since not accessable in my home town.  I never knew about all the complaints made by employees against this shopping haven.

There is a big difference between loving what you do so much that you are compelled to stay late and go the extra mile for your cause, and feeling guilted into coming in on your days off,  not getting paid for that time, and possibly threatened with termination if you do not participate freely.  Sooner or later, the whistle had to be blown by someone when managers were whiting out time cards. 

I do, however, like the entrepeneur approach Nordstom took.  Employees were in charge of how much money they wanted to make each month, and had say in fashion buys, layouts, sales, etc.  But, they should have been paid for every extra hour they put in to make the job their own.  Then, Nordstrom truly would have been the place to work, because it would have been a fair place to work, and a place that followed the law. 

Nordstrom prided themselves in customer service, and it sounds like they really did outshine the competition by making the client feel special by going above and beyond their responsibilities as a dept. store.  Too bad they were in violation of several labor laws to do it.  There are big problems with the rank-and-file  system.  Yes, employees had room to move up in the ranks quickly, but could also have been fired at the drop of a hat if numbers their sales numbers were down.  Instead of the company trying to solve problems as to why certain salespeople were not performing up to par, they would simply let them go.  With constant turnover in a company, there is really no sense of team.  They clearly did not value their human capital, and always training new employees must have cost a lot of time and resources. 

Nordstrom’s management was clearly wrong about their system.  When the union came down on the company, management tried to cover up the allegations with bold-faced lies that were clearly not going to get them anywhere.  When the WA employees saw they could win against the Co., this simply created a snowball effect that started down the rest of the west coast.  When allegations began popping up against Nordstrom one by one by employees, media caught wind like they always do.  If Nordstrom would have simply treated their employees as if they were assets rather than expendable, their sales would have been much greater.  Cutting corners by not paying employees their full, deserved hours, (overtime in this situation), never pays off.  If Nordstrom would have seen this from the beginning, they would have continued to be profitable.  They took advantage of their employees.

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