Case: Nordstrom

Individual Case write-up: Nordstrom

Date: May 21, 2007 Student name: Pham Thi Thuy Ha (2A5026)

The case does not provide information about the evaluation and compensation for some positions such as assistant buyers, department managers and store managers. Therefore, I only focus on changes at some position and address only some critical points because there are a lot of evaluation criteria applicable for buyers and sellers.

Changes in evaluation criteria

Position	Current	Suggested changes	Reason
Office assistants	- sales increase - gross margin improvement - inventory turns	- Delete sales increase - Add vendor relationship management	- Sales increase should be used to evaluate people in the front line - Maintain good relationship with vendors is critical to business
Buyers	- sales increase - gross margin improvement - inventory turns - leading buyers	- Delete sales increase - Add vendor relationship management - Add vendor evaluation and selection	- Sales increase should be used to evaluate people in the front line. - Maintain good relationship with vendors is critical to business - Vendor evaluation & selection is important in buying process

Changes in compensation system

Position	Current	Suggested changes	Reason
Salespeople	1. Pay by commission or hourly wage	1. Based pay salary	Guarantee basic earnings
	2. Additional incentives based on sales results for top performers	No change
	3. Company-wide recognition for top performers	No change
	4. Promotion route: sales person to department manager, larger department manager, assistant buyers, buyers, store manager or divisional merchandize manager or regional merchandize managers	4. Promotion route: sales person to department manager, larger department manager, store manager, regional managers	- Sales & merchandizing require are different skills and knowledge. - Limited promotion opportunity if this person is not suitable for a buying position.
		5. Commission based on sales results	Motivate salespeople to increase sales
Assistant buyers	Promotion route: assistant buyers, buyers, store manager or divisional merchandize manager or regional merchandize managers	Promotion route: assistant buyers, buyers, divisional merchandize manager or regional merchandize managers	Buyers should be transferred to front line under job relocation but not under promotion
Office assistants	1. Salary	No change
	2. Bonus based on: - sales increase - gross margin improvement - inventory turns	2. Bonus based on: - gross margin improvement - inventory turns	Sales increase should be used to evaluate salesperson, department managers, store managers and regional manager
Buyers	1. Salary	No change
	2. Bonus based on: - sales increase - gross margin improvement - inventory turns	2. Bonus based on: - gross margin improvement - inventory turns	Sales increase should be used to evaluate salesperson, department managers, store managers and regional manager
	3. Promotion route: buyers, store manager or divisional merchandize manager or regional merchandize managers	3. Promotion route: buyers, divisional merchandize manager or regional merchandize managers	Buyers need knowledge and skills to work on front line
	4. Quarterly cash reward for leading buyers	No change