Raleigh & Rosse Case Study: Performance Management Flaws
This case study examines Raleigh and Rosse (R&R), a luxury goods manufacturer whose performance management system centered on sales per hour. The paper analyzes how this approach, while appearing objective, disadvantaged employees based on shift timing, conflated selling and non-selling time in legally problematic ways, and contradicted the company's luxury brand strategy by prioritizing volume over quality. Drawing on Mello's (2014) strategic human resource management framework, the paper argues that R&R's employee objectives were unrealistic and poorly aligned with organizational goals. It concludes with recommendations for a more legally compliant, quality-focused, and feasibly measured performance management approach suited to high-ticket retail environments.
- Overview of R&R's Performance Reward System: Sales-per-hour system design and initial consequences
- Legal and Strategic Misalignments: Legal violations and luxury brand strategy conflicts
- Recommendations for Improvement: Better metrics, training, and realistic employee objectives
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What makes this paper effective
- The paper clearly connects a real organizational failure to a well-established HRM framework (Mello, 2014), grounding its critique in academic theory rather than opinion alone.
- It identifies multiple dimensions of the problem — legal, strategic, and motivational — rather than focusing on a single shortcoming, demonstrating analytical breadth.
- The concluding recommendations are practical and directly responsive to the problems identified, creating a coherent problem-solution structure.
Key academic technique demonstrated
The paper uses applied case analysis: it reads a real organizational scenario through the lens of strategic HRM theory, evaluating specific managerial decisions against established criteria (goal alignment, fairness, measurability, and legal compliance). This technique moves beyond description to critical evaluation, which is the hallmark of graduate-level business writing.
Structure breakdown
The paper opens by describing R&R's compensation model and its immediate consequences. The second paragraph pivots to critique — examining legal violations, strategic misfit with luxury branding, and motivational deficiencies. It closes with concrete recommendations, including product knowledge training, time-based sales tracking, and standards-based quality evaluation. The single reference (Mello, 2014) is woven into both analytical paragraphs rather than cited only at the end.
Overview of R&R's Performance Reward System
Raleigh and Rosse (R&R) is a luxury goods manufacturer that designed its performance rewards system to capitalize on sales per hour achieved by staff members. This approach offered an ostensibly objective form of performance management measurement, but it also favored employees who happened to be on the sales floor during higher-traffic periods of the day. The strategy ultimately failed, resulting in lawsuits against the organization as well as customer and employee attrition.
As noted by Mello (2014), it is critical that an organization's goals align with its performance management system. As a purveyor of luxury goods in particular, emphasizing volume sales was not aligned with R&R's overall company strategy. Although the lack of distinction between selling and non-selling time may have been designed to benefit customers and encourage staff interaction, it ultimately violated legal guidelines governing employee compensation — specifically, the requirement that hourly employees be compensated differently than commission-based sales staff.
Legal and Strategic Misalignments
The R&R compensation model created problems across multiple dimensions. From a legal standpoint, conflating selling and non-selling hours in the calculation of performance-based pay ran afoul of Fair Labor Standards Act requirements that protect hourly workers. From a strategic standpoint, rewarding high-volume interactions is poorly suited to a luxury retail environment in which quality of the customer relationship — not quantity of transactions — drives long-term revenue. Even loyal, high-spending customers may purchase only a few select pieces per year, meaning that a sales-per-hour metric will consistently undervalue their accounts and the employees who serve them.
Furthermore, the system did not evaluate the quality of customer interactions in any clear, standards-based manner, even though interaction quality was implicitly reflected in employee compensation outcomes. This created an internally inconsistent framework in which employees were held accountable for outcomes they could not reliably control or fully understand.
References
Mello, J. (2014). Strategic human resource management (4th ed.). South-Western College Publishing.
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