Monday, October 6, 2008

How is This a Raw Deal?

In a prior post, I talked about an incentive plan for fruit pickers that helped increase productivity. One of the approaches was to give managers an incentive to assign the best picking areas to the best workers because the most efficient picking plan assigns the best areas to the most productive workers. Here's a similar application in the retail industry.

Ann Taylor Stores has moved to a computerized scheduling system that assigns more and better hours to the most productive workers (those with the highest sales figures). Less productive employees receive fewer and less desirable hours. Sounds like a great idea, yes? Well, not so fast according to a couple of Wharton professors who discuss the system. You might anticipate that the professors are going to be skeptical of the plan given that the article title is "On the Clock: Are Retail Sales People Getting a Raw Deal?
Wharton marketing professor Stephen J. Hoch says the Ann Taylor system is like "squeezing blood out of a turnip" and goes a long way toward alienating employees. Erin Armendinger, managing director of Wharton's Jay H. Baker Retailing Initiative, describes the initiative as "a case of something that has its roots in a good idea [but that has been] taken too far."
Perhaps alienating low productivity employees is an advantage of the system, not a disadvantage.

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