Case Analysis: RALEIGH & ROSSE: Measures to Motivate Exceptional Service

A Case analysis on Raleigh & Roose case with a good friend Jewel Kristian Taino of De La Salle University taking MBA.

Background and facts:

Raleigh and Rosse (R&R) is a luxury goods brand that started in New York since 1903. R&R have a total of 38 retailers internationally as of 2007. R&R is also known for its good customer service and customer relations; this is mainly due to its corporate “ownership culture” which started in R&R in 1992-1994. In relation, R&R employees are well of compared to the industry standards.
However, economic downturn has hit R&R hard compared to other brands by 2008. One major cause is the lawsuits lost by R&R to past employees and also the investigations and settlement done by state labor department due to its practices.

Also in 2007, Linda Watkins was hired as CEO and as one of the first officer in R&R that is not family related. R&R currently have a lawsuit due to its performance management system, the Sales per Hour (SPH).

Case Problem:
What can Watkins do to the current performance management system as part of the corporate culture, in order to prevent another lawsuit and recover from the current economic downturn?

Facts & Considerations:
• R&R Ownership Culture
The Ownership Culture is the core culture and success of R&R to its famed customer service where the employees especially the sales person are given accountability to its customers.

• The Sales per Hour (SPH) Program
The SPH is the main driving force of the Ownership Culture where incentive programs are part of its reward system.

Alternative Courses of Actions:

Alternative 1: Status Quo or Continue with the Current HRM Process
Watkins will continue with its current process, culture and performance management system.
Pros:
 R&R will maintain its harmonious operations and will recover once the recession is over.

Cons:
 The current system may once again produce lawsuits towards the company
 Elicited behavior might impact the company negatively amongst its employees

Alternative 2: Improve the SPH program as per state laws
Watkins will improve the current SPH program as per minimum requirement of the state law.
Pros:
 Watkins will prevent future lawsuits related to the SPH program
 The overall behavior will shift to a healthy competition rather than “sharking”

Cons:
 The company will still be affected by the current economic downturn and loose more profit.

Alternative 3: Change the current performance management system
Watkins will change the SPH and create a new performance management system like the balanced scorecard and other evaluation programs.
Pros:
 Watkins will prevent future lawsuits related to the SPH program.
 Watkins will help the company from further losses and cope with the current economic downturn.

Cons:
 Watkins will encounter huge resistance within the company since the SPH is a time tested program.

Recommendations:
Based on the presented data, Alternative 2: Improve the SPH program as per state laws is being recommended. The way it creates impact to the company’s revenue and corporate image is significant and has the potential to be improved. HR and management should focus on how to execute or implement it in such a way it will not create averse or wrong behavior. Like for instance, the SPH is a metrics-driven program which drives the employees to focus on the job by providing a good customer service which leads to sales. However, this just needs to be designed in such a way that certain behaviors are anchored such as passion, accountability and discipline. The program can include “peer evaluation” which apart from hitting the numbers, there will be a peer evaluation or recommendation (which of course must be supported by documentation) that will be included.

Learning:
The group realizes the importance of an effective performance management system in maintaining a corporate culture. The SPH is a form of controlling concept in term s of Management Principles. The controlling concept ensures that the company is in line with the company’s goals and target. In addition, controlling concepts acts as sensor is the company s deviating from its original goals.

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About marvzmartinez
an Engineer

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