Case | HBS Case Collection | October 2011

Raleigh & Rosse: Measures to Motivate Exceptional Service

by Robert Simons and Michael Mahoney

Abstract

In January 2010, U.S. luxury goods retailer Raleigh & Rosse is being sued by its employees for encouraging "off the clock" hours. At the center of the class action lawsuit is the famous Raleigh & Rosse performance measurement system previously thought to be the core of the retailer's success. The system uses a sales-per-hour model to reward salespeople for time well spent on the floor. However, in this industry, where strong customer service is essential, many sales representatives feel they are encouraged to spend time off the clock tending to client needs; this issue and others have led to consequences that the company did not envision. The case illustrates how rapid company growth, decentralized management, and unrelenting pressure to perform can distort performance measurement systems and lead to undesirable consequences.

Keywords: control systems; performance measurement; Goal setting; compensation; incentives; organizational culture; motivation; Sales compensation; Motivation and Incentives; Goals and Objectives; Growth Management; Lawsuits and Litigation; Organizational Culture; Management Systems; Customer Focus and Relationships; Employees; Performance Evaluation; Compensation and Benefits; Retail Industry; United States;

Citation:

Simons, Robert, and Michael Mahoney. "Raleigh & Rosse: Measures to Motivate Exceptional Service." Harvard Business School Brief Case 114-353, October 2011.