Nordstrom on the Rack

I have always thought Nordstrom was a place for rich people.  There is a level of status you get by just walking around the mall with a Nordstrom bag.  Everyone looks you up and down and wonders what is in the bag and how can that person afford it?  Even when you walk into Nordstrom, the employees look you up and down and wonder what you are doing in their store and what could you possibly afford in here?  That was the impression I got when I walked in.  I did not think anything of it because I like to be left alone when I shop.  I do not want them to sell I want to buy.  Once they saw me in the Burberry section looking at sizes to try on, they all jumped in for the kill.  Everyone was so nice, offering me help and offering other clothes that matched.  I just thought they were being helpful until I read a case study on Nordstrom.  Now I think I was just another sale in a section I could not afford.

The case study was about a labor dispute between Nordstrom and the union representing the employees.  The union claims Nordstrom was not fully compensating their employees for all of their time worked.  The biggest part of this case though was the accusation that Nordstrom department managers were using mind games and the sales clerks schedule to influence their time sheets.  For example, they would give their sales clerks the worst shifts if they did not sell enough (sales per hour, SPH) or they would say they are not team players.  To keep their SPH high they would not claim all of their hours worked because it would give them a smaller number of hours to divide their sales from or they just needed to make their SPH quota.  The employees were easily able to change their SPH by excluding additional work hours from their time sheet.

The fact remains Nordstrom was still the best department store to work at.  They were the highest paid and if you worked hard enough you could be promoted.  They only promoted from within and promotions were easy to get.  One of the best indicators of performance though is SPH.  For those college graduates who wanted to move up, they had to sell and probably lower their hours worked to look their best.  It was a small price to pay for them but it affected a lot of other people.

As for the union they only represented about 1700 of the 30,000 employees that worked at Nordstrom.  The employees also fought the union claiming Nordstrom was a great place to work and they loved being “Nordies.”  The “Nordies” also petitioned and got rid of the union.  This makes me think that the union was working on their own behalf to make money for themselves.  There were probably disgruntled employees, and they were the union’s meal ticket.

After the implementation of the commission system the stock price increased drastically.  The sales clerks were going above and beyond to make sales because it mattered in their paycheck.  After the lawsuit started and went public, the stock price dropped back to what it was before the commission system and things looked bad for Nordstrom.  I think the Management team, the Nordstrom brothers, handled the case very well and they saved face.  They thought all of the employees need to be compensated for their time worked and they paid them, but they were tough against the union in the other matters though.  They were pretty successful in getting most of the charges dropped and came back stronger than ever.


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