The Storage Company

Fortune Magazine ascertained the Container Store as the best company to work for in America. Why was this so? Explain with relevance to the case.

The container store company believes that the employees are the number one stakeholders and by doing so the shareholders benefit since the employees take good care of the customer rather than just focusing on the shareholders alone. The culture is built upon the importance to hire great people and it is believed that it is one of their sixth foundation principles. They hold on months and months for the best person for the job and they think one great person equals three good people. The company is noticeable for two things. Their:

1. Great products and
2. 10,000 items designed to simplify and stream line people’s life.

Since it takes more time and determination to attract, hire and retain great people, the company must be extremely dedicated to its human resource venture. The company might be more challenged to get great people, even more challenged to keep them but the result is enormous. After hiring great people, the company trains them for more than 263 hours, where they believe “the institution does not come to an unprepared mind and that they must be trained before it happens”, this being one of their foundation principle. The company’s commitment to provide the sales person with all they’ve got are successful on the sales floor which offers value to employees and customers. The company believes that fun is a part of their work environment and as for this reason the company enjoys less than a ten percent annual turnover compared to any other retail industries.  Even though its practice being different from most of the companies, it has been the “heart of the containers store’s success” since 1978. As of for this reason, the fortune magazine has recognized container store as the best company to work for in America for the past fourteen years.

Were there theories of motivation applied in the Container Store? If yes, explain the theories and how they were used in the case study.

Yes there were theories of motivation applied in the container store.

Frederick Winslow Taylor, famous for his scientific management theory put forward that the pay motivated the workers. His theory of scientific management in the early 1900’s theorized that the managers should breakdown the series of work into small tasks since the workers do not enjoy work naturally and that they needed close supervision and control. He also summarized that the workers should be given appropriate training and should be given incentives according to the number of items produced at a particular given time which resulted to maximize the productivity by working hard.

Elton Mayo nearly after 20 years conducted a series of experiments at Hawthorne factory where he contradicted Frederick Winslow Taylor’s theory that the workers are not just concerned about the money but the workers could also be motivated by having met their social needs while at work.

Abraham Maslow (1954) stated that there are 5 levels of human needs to be fulfilled. Maslow (1940) also stated that the people are motivated to satisfy unmet needs. He focused on the physiological needs of the employees. Once an employee has satisfied a lower level need, he will look forward to achieve the next level. Therefore a business should offer diverse incentives to workers in order to help them progress to the next level. The needs were structured into a hierarchy.

Physiological needs: Although facilities like food, water and shelter were not provided by the container store company however the company provided a wage, which allowed the employees to meet their needs. Those wages were considered to be highest among the industries. The company tried to provide 50 to 100 percent above the industry average.

Safety and social needs:  The company helps their employees feel emotionally secure by creating an atmosphere with a proper value underlining integrity, honesty and open communication by which the company achieved to create a family like environment that meets the social need to feel loved and accepted to the part of the group.

Esteem needs: Esteem needs cover the need to recognition and acknowledgement from others. The recognition is noticed both formally and informally.

Self-Actualization needs: So many part time employees become full time employees. Perhaps because the company motivates them to reach their full potential.

Douglas McGregor (1960) theorized the X-Y theory. He stated that the manager’s attitude generally fell into one of the two categories:

1. Theory X (which deals with authority, direction and close supervision where the company generally achieve poor results),
2. Theory Y (which has to do with empowerment and relaxed atmosphere where the company achieve great results).

The container store company followed Douglas McGregor’s Theory Y to accomplish better results where the employees have the freedom to think for themselves and be creative.