This paper examines the performance management practices at Nordstrom, focusing on the company's policy of publicly posting sales figures for all associates twice each month. While this approach encourages competition, it simultaneously conflicts with Nordstrom's stated goal of fostering teamwork. The paper argues that public comparison of sales numbers can trigger guilt, shame, and diminished self-esteem in lower-performing employees, ultimately undermining motivation rather than enhancing it. Drawing on behavioral learning theory and workplace well-being research, the paper advocates for a reinforcement schedule that rewards individual improvement and intrinsic motivation over external competitive ranking.
Because of the performance goals at Nordstrom, and the way in which the company promotes an open atmosphere, there are both positive and negative impacts on employees. That openness includes the public posting of each associate's sales figures twice each month for all staff to see. This practice encourages competition, yet the company simultaneously expects employees to work together as a team (Chance, 2003). On the surface, the twin goals of competition and collaboration seem counterintuitive — an uncomfortable pairing that is difficult to reconcile (Chance, 2003). Nordstrom is working to change that perception; however, this does not appear to be the most effective type of reinforcement schedule for all employees. Top performers are rewarded, while those who fall short can experience guilt, shame, jealousy, anger, and other emotions that accompany being, in effect, publicly identified as underperforming relative to their peers.
A different approach should therefore be considered by Nordstrom in order to foster a stronger sense of community among all employees. Associates who are performing to the best of their ability should be treated equally, and those who are genuinely failing to meet expectations should be counseled or, if necessary, let go — rather than being shamed into improvement by having their weak sales numbers displayed alongside the far stronger numbers of their colleagues. While there is nothing inherently wrong with informing employees that their performance is below an acceptable standard, comparing them publicly with others does not necessarily motivate them to work harder (Dinsmoor, 2004). Instead, it can make them feel deeply uncomfortable and erode their self-esteem to the point where they no longer see the value in continuing to try — particularly if they have already been making a genuine effort (Dinsmoor, 2004). This outcome is the opposite of what Nordstrom intends.
Reinforcement schedules observed at other companies focus on rewarding employees who perform well without pitting them against one another while simultaneously instructing them to function as a team. That combination may sound appealing in theory, but it cannot be sustained effectively over the long term, because people are generally uncomfortable being told that someone else is better than they are (Dinsmoor, 2004). Such comparisons foster unhealthy levels of competition and create tension within the workforce. Additionally, human beings are naturally inclined toward social belonging; they seek acceptance and prefer to work alongside people with whom they share common ground. That dynamic is difficult to maintain at Nordstrom, where employees are perpetually in competition — even with those they consider friends. The design of any reinforcement schedule must ultimately serve the company's interests, but it should also be structured to give the greatest number of employees a realistic opportunity to succeed (Dinsmoor, 2004).
If a reinforcement schedule does not provide each employee with a genuine opportunity for success and recognition — based on personal performance rather than relative standing — it will not be the most effective tool for ongoing evaluation (Chance, 2003). The desire to succeed is a powerful motivator, and it is one that must be carefully cultivated across the workforce (Harter, Schmidt, & Keyes, 2002). Without it, employees will not push themselves to work harder or strive to do their best. It therefore becomes essential to identify and sustain sources of employee motivation well into the future. Critically, however, that motivation does not need to be generated through forced competition with colleagues (Harter, Schmidt, & Keyes, 2002). Employees can instead be encouraged to compete with themselves — to outperform their own past results rather than those of a peer. This is a fundamentally different experience from feeling inadequate because one's sales figures do not match someone else's. As research on workplace well-being and business outcomes suggests, boosting an employee's self-esteem and motivation should be rooted in internal growth, not driven by external comparison.
"Comparison-based schedules undermine healthy workplace culture"
"Internal motivation more effective than external competition"
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