Konark Retail: Shouting at the Counter
Konark Retail runs six electronics stores in Bhubaneswar and Cuttack with 140 employees. Sales staff attrition was 45% last year. New recruits get two days of training and are then put on the floor with a monthly sales target; the store manager sends that target on WhatsApp on the first of the month and names anyone who is below it, without explaining how to improve. Commission is 1% of individual sales and is the only incentive. Supervisors are chosen by seniority, not performance. The senior-most salesperson in the Cuttack store resigned last month, saying that 'after eleven years I am still being shouted at in front of customers'. The owner now proposes raising commission to 2% and installing CCTV at every counter. Revenue is flat, returns of faulty goods are 8%, and complaints of billing errors have risen.
1. Diagnose the motivation problem using Maslow and Herzberg. Why is raising commission unlikely to reduce attrition?
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Maslow. The commission partly meets physiological and security needs, but the public naming of underperformers attacks esteem needs directly, and the absence of any promotion path blocks self-actualisation. The resigning senior salesperson voiced exactly this: eleven years of service bought no status, only humiliation in front of customers. Belonging is also missing - staff are managed by WhatsApp broadcast rather than by a team.
Herzberg. Commission is a hygiene-factor payment at best; the real dissatisfiers are company policy and administration (seniority-based supervision), supervision itself (shouting, no coaching), and working conditions (no training, now CCTV surveillance). The motivators - achievement, recognition, responsibility, growth - are simply absent from the job. Training two days and then leaving a recruit alone guarantees failure and blame.
Why 2% commission will not work: it increases variable pay, but the people leaving are not leaving for money - they are leaving because of how they are treated. Raising commission while adding CCTV signals distrust and blame, which raises dissatisfaction further. It also pushes staff toward pushing faulty or unsuitable products to earn commission, which helps explain the 8% returns.
2. Which leadership approach does Konark need, and what specific changes in directing would you make?
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Leadership approach. A situational reading of the stores: new recruits are low on competence and need direction and coaching (telling and selling styles); experienced staff are competent but demoralised and need support and delegation (participating and delegating styles). One style applied to all, as now, fits nobody. The store managers themselves need training in a participative, people-oriented style, because their present behaviour is task-driven and abrasive.
Changes in directing:
- Training: extend induction from two days to two weeks of structured product, billing and customer-handling training with a buddy for the first month.
- Communication: replace the WhatsApp target broadcast with a short daily huddle and a private monthly review where the manager discusses the gap and the plan, not the person.
- Recognition: introduce a non-cash recognition scheme (best service score, lowest returns) alongside commission, so that service quality is rewarded, not only volume.
- Supervision: select supervisors on performance and train them to supervise; remove the public shaming rule outright.
- Career path: publish a salesperson → senior salesperson → supervisor ladder with criteria, so that eleven years of service means progression.
- Grievance channel: a simple route to the owner, so that exit interviews are not the first time problems are heard.
3. Recommend two control measures for Konark, with standards, and explain how management by exception would work with the 8% returns.
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Control measure 1 - quality of sale (returns). Set a standard of returns from faulty goods at 8% now, target 4% within two quarters and 3% within four. Measure returns per salesperson, per product category and per store; investigate the top three causes each month. This is a feed-forward control as well, because the buying team must stop stocking lines that generate returns.
Control measure 2 - billing accuracy. Standard: no more than one billing error per 100 bills. Measure through a daily reconciliation of bills against cash and card receipts, plus a weekly mystery-shopper check. Because billing errors correlate with untrained staff and rushed counters, the corrective action is training and staffing at peak hours, not punishment.
Management by exception. The owner should not review every store every day; that is what created WhatsApp surveillance. Instead, set tolerance limits - returns below 4%, billing errors below 1 per 100, sales within, say, 5% of target - and require only deviations beyond the limit to be reported upward, with a stated cause and corrective action. The owner then spends attention on the Cuttack store's 8% returns and leaves a compliant store alone. Exception reporting keeps control without destroying the trust that motivation needs.