Grace Myer is the founder and CEO of Myer Sisters Apparel, a retailer of high-end women's business apparel. Earlier this year Grace opened her fifth retail store in Sydney's Eastern Suburbs. While Grace has been pleased with the new store's progress, she is concerned about the growing number of customer complaints and the low sales per square metre compared to some of her better-known competitors, such as Davie Laurie and HighChair Nine. When Grace had only one store that she individually owned and operated, she was able to control most of the details of the business. While she worked with a few employees, she always knew what they were doing. As the number of stores grew and the size of the stores increased, the number of employees also grew. When Grace was running the one store, she rarely heard a customer complaint, and her sales per square metre were $10,000, compared to $8,000 today. This concerns Grace greatly as her expansion plans for Myer Sisters had to slow down because the stores were not producing the returns that she expected. The store managers are also complaining to Grace because of the high training costs of bringing on new employees. The turnover rate seemed to be very high and Grace could not understand why. She is paying sales staff an average fixed salary of S70,000 per annum and store managers an average fixed salary of $130,000 per annum, which is one of the highest salaries in the area yet they are leaving to work elsewhere. The customers are also complaining about the lack of helpfulness of the sales staff. Even after extensive employee retraining, Grace is still hearing many complaints. Required: A. Based on your understanding of intrinsic motivation and extrinsic motivation, draw on case information to explain why Myer Sister' employees are not motivated to perform at a high level. B. Grace is considering implementing an alternative reward system for her staff: A "gain- sharing" plan, with a focus on generating sales revenue. Specifically, 5% of any revenue in excess of the target sales level of$15 million per year will be placed in a "bonus pool" for distribution to all stores (last year's sales were $12 million). For example, if Myer Sisters as a group achieves total sales revenue of $16 million ($1 million more than the target level), then 5% of the additional $1 million in sales revenue will be distributed to employees. All sales staff will receive a portion of the bonus pool, with store managers receiving a greater percentage compared to sales staff. Do you think this gain sharing plan is a good idea? Support your answer using (a) Goal Setting Theory; (b) Expectancy Theory and (c) Agency Theory as appropriate (i.e., you do not need to refer to every part of every theory). Is the gain sharing plan a good idea? Explain: C. Based on your understanding of the various principles of incentive system/performance evaluation system design, make three suggestions as to how Myer Sisters' performance measurement/incentive system could be improved. Explain Suggestion 1: Grace Myer is the founder and CEO of Myer Sisters Apparel, a retailer of high-end women's business apparel. Earlier this year Grace opened her fifth retail store in Sydney's Eastern Suburbs. While Grace has been pleased with the new store's progress, she is concerned about the growing number of customer complaints and the low sales per square metre compared to some of her better-known competitors, such as Davie Laurie and HighChair Nine. When Grace had only one store that she individually owned and operated, she was able to control most of the details of the business. While she worked with a few employees, she always knew what they were doing. As the number of stores grew and the size of the stores increased, the number of employees also grew. When Grace was running the one store, she rarely heard a customer complaint, and her sales per square metre were $10,000, compared to $8,000 today. This concerns Grace greatly as her expansion plans for Myer Sisters had to slow down because the stores were not producing the returns that she expected. The store managers are also complaining to Grace because of the high training costs of bringing on new employees. The turnover rate seemed to be very high and Grace could not understand why. She is paying sales staff an average fixed salary of S70,000 per annum and store managers an average fixed salary of $130,000 per annum, which is one of the highest salaries in the area yet they are leaving to work elsewhere. The customers are also complaining about the lack of helpfulness of the sales staff. Even after extensive employee retraining, Grace is still hearing many complaints. Required: A. Based on your understanding of intrinsic motivation and extrinsic motivation, draw on case information to explain why Myer Sister' employees are not motivated to perform at a high level. B. Grace is considering implementing an alternative reward system for her staff: A "gain- sharing" plan, with a focus on generating sales revenue. Specifically, 5% of any revenue in excess of the target sales level of$15 million per year will be placed in a "bonus pool" for distribution to all stores (last year's sales were $12 million). For example, if Myer Sisters as a group achieves total sales revenue of $16 million ($1 million more than the target level), then 5% of the additional $1 million in sales revenue will be distributed to employees. All sales staff will receive a portion of the bonus pool, with store managers receiving a greater percentage compared to sales staff. Do you think this gain sharing plan is a good idea? Support your answer using (a) Goal Setting Theory; (b) Expectancy Theory and (c) Agency Theory as appropriate (i.e., you do not need to refer to every part of every theory). Is the gain sharing plan a good idea? Explain: C. Based on your understanding of the various principles of incentive system/performance evaluation system design, make three suggestions as to how Myer Sisters' performance measurement/incentive system could be improved. Explain Suggestion 1: Grace Myer is the founder and CEO of Myer Sisters Apparel, a retailer of high-end women's business apparel. Earlier this year Grace opened her fifth retail store in Sydney's Eastern Suburbs. While Grace has been pleased with the new store's progress, she is concerned about the growing number of customer complaints and the low sales per square metre compared to some of her better-known competitors, such as Davie Laurie and HighChair Nine. When Grace had only one store that she individually owned and operated, she was able to control most of the details of the business. While she worked with a few employees, she always knew what they were doing. As the number of stores grew and the size of the stores increased, the number of employees also grew. When Grace was running the one store, she rarely heard a customer complaint, and her sales per square metre were $10,000, compared to $8,000 today. This concerns Grace greatly as her expansion plans for Myer Sisters had to slow down because the stores were not producing the returns that she expected. The store managers are also complaining to Grace because of the high training costs of bringing on new employees. The turnover rate seemed to be very high and Grace could not understand why. She is paying sales staff an average fixed salary of S70,000 per annum and store managers an average fixed salary of $130,000 per annum, which is one of the highest salaries in the area yet they are leaving to work elsewhere. The customers are also complaining about the lack of helpfulness of the sales staff. Even after extensive employee retraining, Grace is still hearing many complaints. Required: A. Based on your understanding of intrinsic motivation and extrinsic motivation, draw on case information to explain why Myer Sister' employees are not motivated to perform at a high level. B. Grace is considering implementing an alternative reward system for her staff: A "gain- sharing" plan, with a focus on generating sales revenue. Specifically, 5% of any revenue in excess of the target sales level of$15 million per year will be placed in a "bonus pool" for distribution to all stores (last year's sales were $12 million). For example, if Myer Sisters as a group achieves total sales revenue of $16 million ($1 million more than the target level), then 5% of the additional $1 million in sales revenue will be distributed to employees. All sales staff will receive a portion of the bonus pool, with store managers receiving a greater percentage compared to sales staff. Do you think this gain sharing plan is a good idea? Support your answer using (a) Goal Setting Theory; (b) Expectancy Theory and (c) Agency Theory as appropriate (i.e., you do not need to refer to every part of every theory). Is the gain sharing plan a good idea? Explain: C. Based on your understanding of the various principles of incentive system/performance evaluation system design, make three suggestions as to how Myer Sisters' performance measurement/incentive system could be improved. Explain Suggestion 1: