CASE APPLICATION 1 Passion for the Outdoors and for People At its headquarters in Ventura, California, Patagonias office space feels more like a national park lodge than the main office of a $400 million retailer.100 It has a Douglas fir staircase and a portrait of Yosemites El Capitan. The companys caf serves organic food and drinks. Theres an infant and toddler child-care room for employees children. An easy one-block walk from the Pacific Ocean, employees surfboards are lined up by the cafeteria, ready at a moments notice to catch some waves. (Current wave reports are noted on a whiteboard in the lobby.) After surfing or jogging or biking, employees can freshen up in the showers in the restrooms. And no one has a private office. If an employee doesnt want to be disturbed, he or she wears headphones. Visitors are evident by the business attire they wear. The company encourages celebrations to boost employee morale. For instance, at the Reno store, the Fun Patrol organizes parties throughout the year. Attracting people who share its strong passion for the outdoors and the environment, Patagonia motivates its loyal employees by giving them responsibility for the outcomes of their work and a high level of task significance that their work is meaningful because it contributes to the purpose of protecting and preserving the environment. Source: Rich Reid/Glow Images Patagonia has long been recognized as a great workplace for mothers. And its also earned a reputation for loyal employees, something that many retailers struggle with. Its combined voluntary and involuntary turnover in its retail stores was around 25 percent, while it was only 7 percent at headquarters. (The industry average for retail is around 44 percent.) Patagonias CEO Casey Sheahan says the companys culture, camaraderie, and way of doing business is very meaningful to employees and they know that what they do each day is contributing toward a higher purposeprotecting and preserving the areas that most of them love spending time in. Managers are coached to define expectations, communicate deadlines, and then let employees figure out the best way to meet those. Founded by Yvon Chouinard (his profile as a Leader Who Made a Difference can be found on p. 134), Patagonias first and strongest passion is for the outdoors and the environment. And that attracts employees who are also passionate about those things. But Patagonias executives do realize that they are first and foremost a business and, even though theyre committed to doing the right thing, the company needs to remain profitable to be able to continue to do the things its passionate about. But that hasnt seemed to be an issue since the recession in the early 1990s when the company had to make its only large-scale layoffs in its history.

QUESTIONS: 1. According to Maslow's hierarchy, which basic needs does the Patagonia culture meet? What would it be like to work at Patagonia? (Hint: Go to Patagonias website and find the section on jobs.) Whats your assessment of the companys work environment? (20 points)

2. Use the expectancy theory and/or the equity theory of motivation to explain how feeling underpaid might affect the work of a Patagonia associate and what a manager can do to increase the employee's motivation. (20 points)

3. What do you think might be Patagonias biggest challenge in keeping employees motivated? If you were managing a team of Patagonia employees in the retail stores, how would you keep them motivated? (20 points)