Raleigh & Rosse Case Study

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Raleigh & Rosse Case Study

FALL 2011


Performance Appraisal and Management “Raleigh & Rosse: Measures to Motivate Exceptional Service”

GROUP 2 TD: Ana Vasques #884 Catarina Araújo #974 Isabel Simões #868 Marcelo Fontes #959

Human Resources Management Raleigh and Rosse (R&R) was founded by Michael Raleigh and Conor Rosse in 1911 as a saddler and equestrian shop. Throughout the years, it became a privately held specialty retailer of luxury goods. Considering that luxury retailers unusually discounted prices and could also access the same luxury goods brands, R&R used the costumer’s experience and his relationship with the company as a competitive differentiator. Since the main goal of the company was to satisfy its consumers providing better services, we can identify the R&R pivotal strategic positions, i.e. those which have the potential to lead to high incremental results for the strategy and value of the company1, as the sales associates, that are the employees who worked on the sales floor, who therefore have more contact with costumers. In order to gain competitive advantage and achieve its goals, R&R store managers were in charge of hiring, training, and continually motivating these sales employees. Since the key factor of advantage was costumer relationship, R&R afforded to offer to their sales association a salary substantially higher than the one offered by their competitors. The salary could also increase due to an employee performance improvement. The sales associates’ performance was measured by weekly sales, and the performance of store managers was based on eleven measures including weekly store revenues and customer satisfaction. So, we can conclude that the company adapted different metrics to different employees. During this period we can also refer that the career prospects for the ordinary employees were not very optimist, since we face a family company in which the promotion opportunities were very limited to family members. The fact that the career prospects were not very appellative could be an important characteristic to not attract and retain potential talents. In the early 1990’s the CEO Brian Rosse recognized that R&R required a more formal Human Resource policy to result in more scalable measures. Due to this problem, he and the HR Director (his cousin), developed and implemented the “R&R Ownership Culture”. The main objective of this program was to make sure that the new employees’ values were aligned with the company’s values, i.e. committed employees to serve in the best way the R&R costumers by creating a more entrepreneurial and accountable environment. It is interesting that in the last case we studied, the GE’s CEO Jack Welch implemented, as well, a matrix in which not only the performance was valued, but also the commitment with the company’s values. In GE the matrix was well established, what will not happen in this case. Moreover, one of the main aspects of the “Ownership Culture” program was to maintain the policy of filling the upper level position by intrafirm inflow2, i.e. promoting employees within the company. However, due to the expansion strategy, R&R now promotes opportunities to non-family members. The company also changed the sales associates hiring profile, basing it on biographical data3, by requiring recent college graduates with a strong work ethic. It is also important to refer that for sales associates positions, the company continued with its interfirm inflow4 policy, i.e. allocate employees in these positions that did not work previously in the company. Another policy implemented by this model was the higher economic rewards for top sales associates. The company only motivates its employees by giving economic benefits, which could not be the best way to do it. The last two initiatives and policies implemented reinforced the empowerment of store managers, giving them the authority to manage...
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