Case link: https://store.hbr.org/product/raleigh-rosse-measures-to-motivate-exceptional- service/4353

You are Linda Watkins, CEO of Raleigh & Rosse. Your organization is facing a class action lawsuit (under FLSA) by your sales associates. Your company may face a $200 million judgement and major reputational damage. You need to assess your current performance management and compensation practices and decide if any changes are necessary.

Start with an overview describing the overall situation, then address the questions below. Include details and specifics in your answers. Make sure that you review the enclosed exhibits (particularly Exhibits 3 & 4).

1. What is the cause of the problems described in the case? How serious are these problems? In YOUR opinion, what is the most concerning issue?

2. How would you describe the overall organizational culture at Raleigh & Rosse? What are the key elements of the "R&R Ownership Culture"? How are these initiatives reflected in the actions of the store managers and sales associates?

3. Describe the "Sales-Per-Hour (SPH) Measurement System". What type of behavior does this plan encourage and/or discourage and what are the related implications on the sales staff's behavior and compensation? (For this question, make sure that you review Exhibits 3 & 4.)

 4. Given the economic forecast and the pending lawsuit, what should Linda Watkins do about the current performance management and compensation systems? Keep the existing systems or change them? HOW? Explain your choice. What are the implications of your decision (e.g., staff, morale, sales volume)? (Be specific!)