Vetements Ltee Case

Topics: Operations research, Organizational studies, Business Pages: 3 (601 words) Published: March 19, 2015
Vêtements Ltée

by
Steven L. McShane
University of Western Australia
Perth, Australia

This case may be used by current adopters of:
S. L. McShane Canadian Organizational Behaviour, 5th ed. (Toronto: McGraw-Hill Ryerson, 2004); S. L. McShane & M. A. von Glinow, Organizational Behavior, 3rd ed. (Boston: McGraw-Hill, 2005); S. L. McShane & T. Travaglione, Organisational Behaviour on the Pacific Rim, 1st ed. (Sydney: McGraw-Hill Australia, 2003) Copyright © 1995 Steven L. McShane

Vêtements Ltée

Vêtements Ltée∗
By Steven L. McShane, The University of Western Australia
Vêtements Ltée is a chain of men's retail clothing stores located throughout the province of Quebec. Two years ago, the company introduced new incentive systems for both store managers and sales employees. Store managers in each store receive a salary with annual merit increases based on sales above targeted goals, store appearance, store inventory management, customer complaints, and several other performance measures. Some of this information (e.g., store appearance) is gathered during visits by senior management, while other information is based on company records (e.g., sales volume). Sales employees are paid a fixed salary plus a commission based on the percentage of sales credited to that employee over the pay period. The commission represents about 30 percent of a typical paycheque and is intended to encourage employees to actively serve customers and to increase sales volume. Because returned merchandise is discounted from commissions, sales employees are discouraged from selling products that customers do not really want.

Soon after the new incentive systems were introduced, senior management began to receive complaints from store managers regarding the performance of their sales staff. They observed that sales employees tended to stand near the store entrance waiting to “tag” customers as their own. Occasionally, sales staff would argue over "ownership" of the customer....
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