Industrial Psychology Case Study: Egan Clothiers HR Practice Analysis

This case study analyzes the HR practices at Egan Clothiers, a company facing challenges related to employee motivation, performance management, and high turnover rates. The analysis begins with a description of the company's background, focusing on its growth and recent financial difficulties, particularly a decline in profitability. The study identifies several problems, including employee dissatisfaction with the performance evaluation system, interdepartmental competition, and disorganized storage rooms leading to damaged merchandise. The diagnosis section applies Herzberg’s two-factor theory to explain employee unhappiness, highlighting the impact of both motivational and hygiene factors. The prescription section suggests changes to the performance management system, advocating for the removal of employee categorizations that demotivate staff and improving the work environment. The implementation and evaluation sections address the challenges of implementing these changes and suggest ways to measure the success of the proposed strategies, such as monitoring turnover rates and employee performance.

Running head: A CASE STUDY ANALYSIS ON EGAN CLOTHIERS
A CASE STUDY ANALYSIS ON EGAN CLOTHIERS
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1A CASE STUDY ANALYSIS ON EGAN CLOTHIERS
Description:
Answer 1:
The main priority of Egan Clothiers is the focus on innovation and growth in providing a
superior quality of dress-wear, which is sophisticated, and a high quality of casual-wear as well
as fashion accessories. They put emphasis on providing excellent customer service, collaborating
with the sales teams and demonstrating high levels of innovation. To cut back on the costs that is
decreasing their gross profit margin, the company had to take difficult decisions such as ceasing
to hire any new employees and stopping their expenditure in HR-related activities such as
training.
Egan Clothiers have implemented excellent HR practices. The function of the HR
includes selection, training, performance management and providing rewards to the employees.
The company makes sure that they have selection standards that is better than their competitors.
They maintain an off-site training program that improve the skills of the employees. They have
proper performance management evaluation procedures that includes five categories of employee
performance: superior, very good, good, fair and poor. The reward systems to motivate the
employees. They provide merit increases annually according to the sales performance.
Answer 2:
The problems of the company are that there have been complains that the employees are
not as patient and courteous with the customers as they are expected to be. Secondly,
competition among the departments in the company is negatively affecting the work environment
that has negative consequences on team effort. There is a lack of cohesiveness among the groups.
Thirdly, due to disorganized storage rooms, the merchandises have been damaged or lost. There
has been decrease in absenteeism however, turnover has increased and the employees have been
reported to be lazy.
Diagnosis:
Answer 3:
The practice of feedback is a strong reason that makes the employees unhappy. The sales
of each employee is compared with others, and the data is posted for everybody to see. This is
done on a daily basis. The company feels that it motivates the employees however, contrary to
their belief, the employees are unhappy with this system. They do not want to change the system
because they do not want to identify subjectively. The categories that are assigned to them such
as fair and poor, decreases the morale of the employees. The managers seem to be confused by
the fact that the employees are not motivated though it provides proper feedback to them.
Herzberg’s two-factor theory of motivation proposed that there are motivational factors and
hygiene factors that cause job satisfaction in the employees. When there is both the factors are
high, they provide satisfaction to the employees, when both are low, they provide dissatisfaction.
When the motivation factor is high and hygiene is low, then the employees are highly motivated
however have lot of complaints. In the reverse case, the employees are employees have lesser
complaints and are highly motivated (Alshmemri, Shahwan-Akl & Maude, 2017). This
framework applies to the case study too.
Prescription:

2A CASE STUDY ANALYSIS ON EGAN CLOTHIERS
Answer 4:
To improve the human resource practices, the managers should look into changing the
system of the performance management assessment. They should get rid of the categories that
label the employees as excellent or poor. Categorizing of employees reduce the morale of the
employees that demotivate them (Guest, 2017). According to Herzberg’s two-factor theory, low
motivation and low hygiene leads employees to complain a lot and be demotivated (Alshmemri,
Shahwan-Akl & Maude, 2017). Therefore, HR should consider removing such appraisal systems
and bring in new systems that are not degrading to the employees that are not able to perform
like other employees. Restructuring the floor where the employees work and improving the
condition of the storage rooms would help in boosting the motivation of the employees. Having a
proper work environment is vital to increasing employee motivation and productivity, which is a
hygienic factor (Noe et al., 2012). Therefore, in order to improve the state of the employees, both
the hygienic and the motivation factors have to be improved by the HR.
Implementation and Evaluation:
Answer 5:
To get the cooperation of the employees while suggesting them to be more courteous to
the customers would be a difficult job. Even though there has been a decrease in the rate of
absenteeism, the turnover rate had increased from 15% to 27%, which is a matter of concern.
Moreover, they stopped hiring people to reduce the labour costs. To manage work with a limited
amount of staff would be a huge challenge for the managers. The managers can therefore start
hiring new employees who are not as highly educated and then train them to fit in with the job.
Answer 6:
After they start hiring, the managers should keep a tab on how the new employees are
performing by analysing their sales performance. Decrease in the rate of turnover would be
another indicator of the loyalty from the employees and the usefulness of training. That is how
they would know that the strategies “worked”.

3A CASE STUDY ANALYSIS ON EGAN CLOTHIERS
References
Alshmemri, M., Shahwan-Akl, L., & Maude, P. (2017). Herzberg’s two-factor theory. Life
Science Journal, 14(5), 12-16.
Guest, D. E. (2017). Human resource management and employee well‐being: Towards a new
analytic framework. Human Resource Management Journal, 27(1), 22-38.
Noe, R., Hollenbeck, J., Grehart, B., & Wright, P. (2012). Human Resource Management:
Gaining a Competitive Advantage. McGraw Hill Higher Education (1662).