Case | HBS Case Collection | July 1990 (Revised October 1999)

Nordstrom: Dissension in the Ranks? (A)

by Robert L. Simons and Hilary Weston

Abstract

In 1989, the performance measurement systems and compensation policies of Nordstrom Department Stores unexpectedly came under attack by employees, unions, and government regulators. The case describes the "sales-per-hour" monitoring and compensation system that many believed to be instrumental in Nordstrom's phenomenal success. Illustrates how rapid company growth, decentralized management, and unrelenting pressure to perform can distort performance measurement systems and lead to undesirable consequences.

Keywords: Performance Consistency; Performance Evaluation; Compensation and Benefits; Motivation and Incentives; Labor Unions; Salesforce Management; Retention; Growth and Development; Industrial Products Industry; Utilities Industry;

Citation:

Simons, Robert L., and Hilary Weston. "Nordstrom: Dissension in the Ranks? (A)." Harvard Business School Case 191-002, July 1990. (Revised October 1999.)