Raleigh & Rosse: Measures to Motivate Exceptional Service

Members :

Ajay Lodha Bipul Kumar Gaurav Dalvi Jeewant Singh Niyati Metha Vinay Tiwari Srinivas Iyengar Rohit Kalla

Problem statement
Law suit filed by R&R sales associates The effect of the Ownership Culture and SPH in
R&R.

Retaining R&Rs reputation & credibility in the

industry and among the employees.

About the company

Founded by Michael Raleigh and Conor Rosse in 1903, largely
managed and run by the family.

Raleigh & Rosse (R&R) was a privately held specialty retailer of

luxury goods, clothing, handbags, accessories, footwear, jewellery, fragrances and watches for both men and women.

Experienced substantial growth and rapid establishment of new Customer service viewed as a calling, a vocation to serve their
clients at the highest level of devotion.

outlets, thereby requiring new non-family member players in the management.

Aggressive U.S expansion program brought total store count to 38

and revenues reached $524.2 million in 2007.

The R & R Ownership culture

R&R called for its employees to go all out for its customers, run
errands, perform personal favours, most of them beyond work hours.

Store managers should own the business and sales associates

should own their relationships.

Sales-Per-Hour program introduced Set revenue targets for managers and associates based on wages and reward them based on that. resulted in deep customer loyalty.

The firm followed the policy of extraordinary customer service which The ownership culture was a set of initiatives and policies to create a
more entrepreneurial and accountable environment.

The R & R Ownership culture (Cont)

1. 2. 3.
Under this, R&R witnessed major changes like Hiring sales associates from the colleges and focused on training them Promoted scope for growth and promotions within the organization Invested in IT systems and granted store managers autonomy on staffing, scheduling and other sales associate performance.

SPH (Sales-per-hour) program was also a part of this initiative. According to this, each store manager and associate was given a target SPH based on the individuals hourly wage and department. And they had to fulfill the SPH to receive their paycheck every two weeks. Failure to do so, resulted in the employee being paid his/her hourly wage only.

Issues faced by R & R

Dissatisfaction among employees leading to a wrongful
termination lawsuit.

An unflattering story about R&R in Forbes magazine about

store practices that were unfair to employees. More negative publicity.

Three-month investigation by New York state Department of

Labour.

Recession 2008-2009 Another lawsuit filed by sales associates for repeated and
continuous violation of state and federal wage and hour laws by coercing employees to work off the clock.

Major short-comings of SPH

Due to good customer relations, customers expected the
salesperson to be present anytime anywhere for them. This resulted in low selling hours. If these non-selling hours were formally recorded, the SPH would decrease. Hence, the associates had to end up servicing customers in their personal time (after work). Employees hence started malpractices like sharking, not logging in the total time spent on the job to increase SPH etc.

Recommendations

Watkins should settle the lawsuit outside the court by paying its associates and bringing about changes in the Ownership culture and SPH.

Make modifications to SPH and re-implement. Draw clear lines between work hours and non-work hours and ensure that only work hours are counted for SPH rates. Non-work hours to be documented and recompensed at a standard rate, thus giving employees the necessary motivation.
Incentives not just for numbers but also for relationships created and maintained.

Implement an annual bonus plan for store managers. This should incorporate not just ratings for achieving personal goals but should also depend on associates performances. This ensures that hard-work is not forgotten and will offer a bigger pay-out with continued efforts.
Making store managers more accountable for sales associates through balanced scorecards.