Case Study: Raleigh and Rosse (R&R)

The company of Raleigh and Rosse (R&R) is a luxury goods manufacturer that had designed its performance rewards system in such a manner to capitalize upon sales per hour by staff members. This had the advantage of offering an objective form of performance management measurement to the company on one hand—but on the other hand favored employees on the sales floor at particular times of day. The strategy ultimately failed, resulting in lawsuits against the organization as well as customer and employee attrition. As noted by Mello (2014), it is critical that the goals of the organization align with its performance management system. Additionally, as a purveyor of luxury goods in particular, emphasizing volume sales was not aligned with R&R’s overall company strategy. Although the lack of distinction between selling and non-selling time may have been designed to be advantageous to customers and encourage interaction, ultimately it violated legal guidelines on how employees should be compensated, as hourly employees must be compensated differently than sales staff.

While exceptional service is important, it is also vital that employees are fairly compensated. Additionally, focusing on volume sales and multiple interactions is not a good strategy for a company for which quality rather than quantity is critical, since even good customers may only buy a few select pieces from year to year. Instead, having a clearly delineated performance management system and training employees in the specifics of the product so they can be knowledgeable, not simply engage in general high-volume interactions is more important. Finally, tracking sales over time versus on an hourly basis is a more feasible approach to evaluate performance of larger, high-ticket items. Objectives for employees must be realistic, measurable, and feasible for employees to believe that such goals can be reached (Mello 2014). At present, the objectives are not realistic in terms of numbers and quality of interactions are not evaluated in a clear, standards-based method although they are reflected in employee compensation.

References

Mello, J. (2014). Strategic human resource management (4th ed.). South-Western College Publishing.