Kyle Evans at Ruffian Apparel

Kyle Evans at Ruffian Apparel

Problem statement
The main problem of this case is that the Ruffian Kelowna store cannot
keep employees due to not having competitive salaries and an unrealistic
compensation program. The turnover rate for employees is high and this
leads to the store not meeting the sales requirements. The stores sales
kept a downward trend, so it is time to do something to turn this situation
around. The newly hired regional manager Kyle Evans will meet his new
boss Jason Wilcox in two days to give a plan to deal with these problems,
so there is a time limit.
Background
The Ruffian Kelowna store had been without a capable store manager for
several months, and sales figures were far from optimal. The newly hired
regional manager of Ruffian Apparel, Kyle Evans was planning to get the
Kelowna store back on track, with the back-to-school rush fast
approaching. And he only has two days to make a decision before he
meets his new boss, the operations manager Jason Wilcox.
Paramount to the employees job, there was an expectation of making
sales called Extreme Customer Service (Hewins K, 2009). The idea was
that employees were expected to go above and beyond when it came to
understanding customer needs, providing advice and options when
necessary, and generally making the shopping experience an exceptionally
pleasant one.
Given the diverse responsibilities at each level, goal structure and
compensation systems were set up differently. Part-time employees started
out at minimum wage of $8.15 per hour and an opportunity to get a four per
cent commission fees; full-time employees and assistant managers were
guaranteed a commission, supplementing their slightly higher hourly rate of
approximately $9 to $12 respectively, and a commission rate for these
positions was two per cent of all sales; store managers were placed on

salary and had no opportunity to make commissions on their sales. This

salary figure was somewhat negotiable and depended heavily on seniority,
along with store size and sales volume.
Issues
There are a number of issues and many of them are interconnected. The
stores current commissions for employees are based on the larger stores in
Vancouver where these commission requirements are very attainable. In
the Kelowna store the employees are aware that they rarely reach the
requirements for the compensation. Which leads to the main issues with in
this case the wedges is not competitive for this sector and this store cannot
reach the commission quotas. There are other stores that are reporting
large losses this could be due to low wedges.
There is a staff shortage issue: part-time vacancies, no assistant manager,
and no store manager, and turnover rate of store managers in the past
three years was high, it means that the store cannot keep employees.
Which may be connected to the employees loyalty; motivation and reward
system issue the inappropriate compensation system results in employees
lack of motivation, so there is a need to build up a reward system to
increase their wages and commission fees, in order to solve this problem
and keep them.
There is a goal setting issue: the location of Ruffian Kelowna makes it
difficult to accomplish the same profit as Ruffian Vancouver store, so the
employees cannot reach the sales goals. Evans needs to reset the sales
goals for Ruffian Kelowna store and also need to build on connecting the
employees with the store.
There is a competence issue since almost all employees are inexperienced
and young they need more training to gain communication skills with
customers and in order to increase sales. They are not confident in their
ability is as no one has properly trained them or taught them about the
store and there values. Another issue is absenteeism and discipline they
have a part-timer who has been absent for three months, and the assistant
manager from Cranbrook store, who had agreed to relocate to any store
within British Columbia refused to move to Kelowna. Evans should release

related policies and provisions, and punishment under some specific

situation is necessary.
Analysis and Implications
The Ruffian Apparel case had a number of external factors that contributed
to the issues in the case. The main store discussed (Kelowna) is located
outside of Vancouver area and has a much smaller population. The
compensation calculations are based on the larger more popular stores,
which makes the smaller stores unable to reach their commissions. This
creates a rift in the employees, decreases their motivation to reach levels,
as they are unattainable. This may be a factor as to why no one from other
stores wants to manage this location.
Another external factor is the unemployment rate has been steadily
declining over the last seven years. This creates a high demand for
employees, so if you are not competitive with salaries and bonuses stores
are likely to lose staff to better paying jobs. The unemployment rate for
2007 was 4.2 compared to 2000 when it was 7.1.
Some internal factors that are contributing are the staff they are young and
inexperienced. These store employees are between the ages of fifteen and
twenty-two most have been hired with in the last six months. None have
been there long enough to know the merchandise or to properly give advice
to costumers. They are often seeking the advice of the manager who is
also attempting to do his requirements.
The lack of training is another major issue due to the high turnover
employees are not getting the opportunity to be properly trained. This in
turn creates burn out and job dissatisfaction, as they do not feel like they
are doing a good job and they are not confident in what they are doing.
This is why they are always seeking Nathans help with customers.
The store is missing more than half the required staff to operate properly.
The temporary store manager Nathan is working without an assistant,
without a full time staff and with four missing part time this is creating
burnout in Nathan and the five part time staff that are in the store. It also
leads the group into feeling undervalued and underappreciated.

Equity Theory Model

This theory shows how the employees view their roles compared to others
in similar positions and there motivation is often based on the results. If
employees feel they are being undervalued compared to there collogue it
creates tension, often leading to decreased motivation. As we see in this
case the commission for the Kelowna store is based on larger Vancouver
stores thus creating a commission calculation that some store cannot
achieve. This creates tension and may be a reason this store has a high
turnover and cannot recruit managers, which leads to job dissatisfaction.
Exit-Voice-Loyalty-Neglect Model (EVLN)
This model is related to job dissatisfaction there are a number of ways
employees react to dissatisfaction the case gave many examples of
employees that were unsatisfied with the company. Exit is when an
employee leaves the dissatisfying positioning there are a number of ways
this can occur transfer to another location or position or quit the company.
Samantha Abbot was a successful manager at this location for ten years.
She finally was at a point that she felt she would never be appreciated and
quit. This is very unfortunate as she was a star employee and because of
her enthusiasm others stayed on. She left the organization because she felt
underappreciated and had become very dissatisfied with her job.
Voice in this model relates to the employee who tries to make a change for
the better rather than leave. It can be a vital part of the correction of job
dissatisfaction much like Nathan in the case whom has voiced a number of
concerns with the organization. What is important about this section of the
theory is that it is an active way for both employees to reconnect with the
job as well as employer to connect with the staff. But if the voices of the
employees go unheard they are likely to then turn away from the
companies and become more dissatisfied.
Loyalty in this model pertains more to the results of what the employees
feel toward the company. For example of their loyalty is high they are more
likely to voice there concerns and their ideas about how to fix the
dissatisfaction. But if their loyalty is low there are more likely to leave the
job or company all together. This is shown threw out the case individuals
who display both. As mentioned earlier if the company doesnt attempt to

hear or fix the situation highly loyal employees are eventually going to
become so dissatisfied they leave such as Samantha Abbott.
The last section in this model is neglect in which the employees are so
dissatisfied it starts affecting their work. The increase in absenteeism and
overall job quality and efforts are significantly decreased. Again in this case
there are a number of points to this effect. Many of the employees are
absent and most employees of the store are not reaching the job
requirements such as sales quotas and accessory quotas.
These are examples of dissatisfied employees at this location but it is the
results of issues that need to be corrected buy the organization. Such as
the compensation at this store is not achievable and the wages are not
competitive enough to keep staff. The current employees are young and
very inexperienced being trained by other employees that are not properly
trained themselves. Placing much pressure and stress on Nathan the one
temporary manager, who seems to be doing the job of the whole store.
Expectancy Theory of Motivation
This theory discusses the connection with employees motivation and their
outcomes it helps explain that people will work towards goals that have the
highest expected payoff. Therefore motivating employees to the results an
employer desires via the payoff, employees desire is a measurable
connection. The theory looks at the efforts of the employee and the
performance then the outcomes weather positive or negative depends on
the expected pay off. If any of these sections are not at the desired level
there are ways employers can increase expectancys.
The implications of this theory in comparison to this case were that the
employees efforts to reach the commission are unattainable therefore
employees are less likely to even attempt the required quotas. The sales
goal is a direct measure of this showing that they are not being met. It
would be difficult to expect employees to strive for the sales goals when
they are fully aware that the specific store cannot reach them. The
commission achievements need to be re-assessed and set for the stores
that are not in the Vancouver area. Employees are not motivated as there
is no possible pay off.

Goal Setting
Goal setting is a way to motivate employees by clarifying their role or
expectations the employee is more likely to achieve what is being required.
Also by setting goals with employees you strengthen and increase the
importance of the desired outcome giving the employees more reasons to
be motivated. There are six characteristics to setting good and achievable
goals.
Goals should be specific this helps the employees reach the requirements
in both a specific time as well as in measurable terms. When an employee
knows what they are specifically working towards it is much easier to
accomplish. In the case the employers wanted sales quotas that were the
same as the year before plus $ 200 this is both measurable and doable as
it is compare to the same week the year before within the same store.
Relevant goals these need to be achievable for the individual as well as
connected to their required duties for the job. This may be time consuming
for management but all levels of employees will benefit knowing what is
relevant to them.
Goals need to be challenging to the individual this will increase the likely
hood of motivating them. This will help to attract the employees interest in
the desired outcome. Along with this is a commitment to the goal it should
be challenging but not too difficult or the employee may lose motivation.
Two other vital parts of goal setting is participation and feedback. If the
employee has the opportunity to participate in the goal they are more likely
to ensure its success, as they were a part of the decision. The motivation to
see the desired outcome increases as they have had a direct decision on
the goal setting. Feedback ensures the goals that were set were obtained.
It gives all involved the satisfaction of knowing their decisions were
achievable. It also gives both the opportunity to correct and goals that may
not have been achievable and continues the connection between the
parties to ensure success and continued motivation for all.
Implications for this case was that the organization needs to motivate and
connect with their employees by having them involved in some goals will
help increase the staffs motivation. It will also help build the much-needed

coaction with the employees, as they are not feeling heard or connected
with the company.
Building Organizational Commitment (Loyalty)
There are five main points in this model to help companies create and build
loyal connections with their employees. If the organization is
accommodation to values such as fairness the staff are more likely to feel
there is justice and support. But if they are not feeling this such as in the
commission calculations the employees are more likely not to be loyal to
this company.
If they have shared values with the company there are more likely to feel
loyal and stay with the company even if better offers were to arise. When
people feel connected with their company or employer they are more
satisfied and devoted. Along with that is the employees need to understand
the company and what they stand for. This can occur via shared and
connected goal setting.
The more a company gets their employees involved with everything about
the organization the more the individual is loyal and empowered. This is
what this store is lacking in. they have a group of employees who dont feel
heard, feel undervalued, are under trained and inexperienced. This is a
formula for failure and this is what is being reported. The employer needs
to make connections, corrections and get their employees feeling like there
is a future in the store.
Alternatives
Alternative 1: Retain Edward and promote James to be a full-time
employee
Kyle Evans should persuade Edward to stay. He also can consider
promoting James, a part-time employee, to be the full-time employee
because he is the oldest part-time employee at Ruffian Kelowna. Besides,
the company should train Edward to become an excellent store manager.
Pros:
* Evans does not need to find a new store manager.

* Promotion can motivate James to work efficiently

* Motivate other employees to improve work performance to get promotion
opportunities.
Cons:
* Edward may be not willing to stay here due to job dissatisfaction. He feels
undervalued.
* Edward is lack of work experience and leadership as a store manager.
* The training for Edward will spend time and money.
Alternative 2: Assign a new store manager form another Ruffian Apparel
store
Assign an excellent store manager for Ruffian Kelowna form another
Ruffian Apparel store and promote the assistant manager to be the new
store manager in the store you are taking the store manager from.
Pros:
* The new store manager has related work experience that can involve in
the new workplace fast.
* The store manager form another Ruffian Apparel store has good role
perception of the role, so he/she knows how to motivate staff and increase
sales
* The assistant manager in that store will be willing to promote to be the
new store manager who can work efficiently.
Cons:
* There is no store manager wants to transfer to Ruffian Kelowna due to the
low salary and bud location.
* It needs to hire a new assistant manager in the store you are taking the
new store manager.
Alternative 3: Modify compensation system and reset the sales goal

The current compensation plan and motivational goals are inappropriate

and poorly structured which lead to ineffective and detrimental results. The
company should consider increasing the salary and changing the sales
goal under $200 per hour. It is good for development of the company in the
long term.
Pros:
* The new reward system motivates employees to build organizational
loyalty.
* Motivate employees to decrease absenteeism rate and turnover rate.
* Release the employees stress to foster a positive workplace
environment.
* Use reward system to attract more people to work at Ruffian Apparel.
* To increase employees salaries will motivate them to keep positive
attitude to work efficiently.
Cons:
* Increase salary expenses for Ruffian Apparel.
* It may reduce the sales volume due to decrease the sales goal.
* It may spend a long time to update the compensation system
Alternative 4: Provide training for part-time employees who work for Ruffian
Apparel over six months
In order to reduce the labor costs, the average age of part-time employees
is among 15 to 25 years old. They are too young and lack sales skill and
experience. So Ruffian Apparel should consider providing training for the
part-time employees. In this way, it will attract more people to be a parttime employee and help the employees have a good understanding of
Extreme Customer Service to increase sales volume. However, training
all the part-time employees will cost too much, they should only train the
employees who have worked over six months.

Pros:
* Improve part-time employees sales skills to enhance their competencies.
* Increase sales volumes.
* It will attract more people to work for Ruffian Apparel.
* Increase part-time employees motivation.
* Decrease turnover rate.
Cons:
* It will cost a large amount of money to train them.
The effect of training may be not obvious due to their attitudes,
comprehensive ability and ages. Some employees do not like training or
they cannot understand the training content.
Recommendation
The recommendation is the alternative 3, to modify the compensation
system and reset the sales goals. It should increase the salary of the
employees appropriately and set different goals for different stores. The
store of Ruffian Kelowna should have about 10 to 12 people, a store
manager, an assistant manager, a full-time sales associate, and seven to
nine part-time sales associates, but it just had a store manager and six
part-time employees, it is obvious that it need more employees. The
unemployment rate decreases from 2000 to 2007, so the store of Ruffian
Kelowna is hard to hire employees, but the main reason is that the salary is
too low and it is hard to make commission in Kelowna. It is necessary to
modify the compensation system to attract more employees. It can help the
company to keep the employees and reduce the turnover rate.
And the goals in Kelowna are too high to achieve, so the employees are
hard to make commission, it should reset the goal for Kelowna. The proper
goal setting can improve employees performance and clarify their role
perceptions. Considering the location issue, Kelowna is outside the
Vancouver area, with a population closer to 110,000, so the potential

customers are less than in the Vancouver area. Therefore the commission
should be set at a lower goal for Kelowna compared to Vancouver.
But it still has some disadvantages of this alternative, as the salary
increases, the total salary expenses will increase. But the company can
motivate the employees and attract more people to join in the company by
modifying the compensation system; they can help the company to gain
more profit. The increased profit will be larger than the increased salary
expenses. And it will take a long time to change the whole compensation
system, but the future benefits will be a lot.
Action plan
Short term
* Kyle Evans should tell his boss, the operation manager, Jason Wilcox
about his decisions when he returns to Vancouver in two days.
* As he gets the permission from the manager, he should have a meeting
with the management next day. It should discuss about how to modify the
compensation system, set different goals for different stores and provide
training for employees.
* In the following week, it should set up a group to do some research about
the average salary in this industry, then the company can increase the
salary to motivate the current employees and attract more people to join in
the stores.
* Then Kyle Evans should inform the entire store manager about the
increase of the salary.
* After that Kyle Evans should ask the assistant manager in Cranbrook
store, who refused to take the store managers position before, if he wants
to take the position now.
* If not, the company can recruit publicly.
* Then Kyle Evans can ask Edward to be the assistant manager, if he
doesnt want this position, the company can recruit publicly.

* Then the new store manager should hire an assistant manager and parttime employees.
Long term
* The company should connect the employees attendance to the
compensation system, it should reward the full attendance employees, and
it can help to reduce the absenteeism rate.
* The company should discipline the people who breached the agreement.
* Build another group to do some research about the potential customers in
different locations.
* The company can reset the sales goals for different stores depending on
the research.
* The company can reward the store, which achieved their sales goals. It
can motivate the employees.
* The company should set a new policy to make better communication
between the store manager and the company; they can have the video
meeting once a week. It can make the employees feel appreciated.
Contingency
There are two situations:
If the plan goes too well, the company can attract more employees. Evans
can hire the excellent people who have work experience and sales skills.
And the new compensation system can help to motivate the current
employees to make more sales.
If the plan fails, it should take the alternative 2, assign a new store manager
from other stores. The new store manager has more experiences, he
knows how to operate a store, how to motivate the employees and how to
increase the sales.
References

Hewins, K. (2009). Kyle evans at ruffian apparel: staffing a retail

establishment. Richard Ivey School of Business, Version: (A) 2010-01-27.
McShane, S.L., & Steen, S.L. (2012). Canadian Organizational Behaviour.
(8th ed.). Toronto ON: McGraw-Hill Ryerson Limited.