Egan Clothier Case Study

Table of Content

The department of human resource in Egan’s Clothiers formulated a method which links these rewards to objective measures of performance by each department manager assigns each employee to one of five categories which are superior, very good, good, fair and poor. This performance appraisal method is not effective at all in reducing labour cost instead the productivity and performances of the employee are getting worst.

Changes in categories

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According to the store manager by Paul Kelly had reported that their subordinates beating up the client in order to make a sale. This performance appraisal method proved that is not effective in handling their employees in Egan’s Clothiers. According to Peter Drucker, he said that “making good decisions is a crucial skill at every level. ” Thus, the changes that I would execute if I was the human resource manager in Egan’s Clothiers are restructuring the existing performance appraisal system. Which the categories are changed to rewards (incentive) in terms of monetary based on their total sales of the each department instead of assign their employee within the five categories which are superior, very good, good, fair and poor.

The self-esteem of Egan’s Clothiers employees will not be affected. For instances, every four weeks, the department calculate the profit per labour hour for every team in every store, teams which exceed a certain threshold get a bonus in their next pay check. This method is called pay for performance is generally given for specific performance results rather than simply for time worked. The job satisfaction of employees in Egan’s Clothiers could be increased.

Assign the right person into the right position

Meanwhile, the motivation of the employees would be increased and the anxiety of gaining reward is generated. These indirectly motivate the employees in Egan’s Clothiers. On the other hand, the Egan’s Clothiers management executives and staffs or equivalent who manages the performance appraisal system in human resource department should be assigning the right people with right position. The right person in the right position is essential to avoid nepotism occurrences which may bias towards other employees.


On the contrary, Egan’s Clothiers should seek opinions from outsource companies who are specialized in HR practices to learn and benchmark with the current retail selling skill (RSS) to gain competitive advantage to compete with rivalry. The HR practices must be up to date to the latest trends which able to recruit more potential candidate and build up reputation for the organization. However, the organization will be faced in a lot of difficulties if changes are not been made precisely. As the Barbara Sher’s mention, “change is not only likely, it’s inevitable.

Training Appraisal

Besides that, the training appraisal should be executed annually. This is because the appraisal is important for the organization to execute decision making of the employees. On top of that, the training appraisal main intention is to eliminate the error from appraiser. For example: Reading error, wrong feedback. Therefore, the training appraisal is to increase the effectiveness and functionality of the appraisal system.

As a result, implementing the most effective appraisal system allows the organization select the right employees into the right position and the appropriate appraisal system contribute to the higher job satisfaction and therefore, the investment of the human resource department will not be wasted.


Egan’s Clothiers had implemented human resource information system (HRIS) to reduce labour cost and increased the gross margin. Nevertheless, the performance appraisal system was formed by the HR management which categorizes the employees into five which are superior, very good, good, fair and poor.

However, these implementations are not paying off. The new HR practices are inappropriate for the organization. Therefore, the organization is in serious condition to handle job satisfaction of the each employee in Egan’s Clothiers and lead to massive turnover and additional cost incurred. Therefore, the organization should take in consideration on implementing HR practices in any organization. The HR practices must be appropriate and perform feasibility studies before implemented.

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Egan Clothier Case Study. (2019, May 02). Retrieved from

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