Case Summary

The Container Store

Organizational structure, culture and behavior affect the people at the work. They are co-related.
The structure of organization is very important because it affects on operating costs, efficiency
and effectiveness of work performance, behavior and performance of employees and speed of
operations of an organization. Who is responsible for what, it depends upon structure of the
organization. Each of employees of the organization has capacity to be a leader, but it depends
upon how they are treated and how they are identified and developed. And performance of
employees also depend upon how they are treated (rewarding system of organization and
performance measurement).The Container Store has relatively hierarchical flat structure. And
there is also elimination of middle management, supervision and coaching. Middle management,
supervision, effective mentoring and coaching are very useful to improve performance of
employees and to develop leadership. There are many advantages and disadvantages of this type
of structure in terms of performance development and leadership development. The Container
Store is promoting employees by managers recommendation. It can lead to conflict. There
should be transparency in performance measurement. They are using performance related pay to
improve performance which is common and good, but there are many options to improve
performance such as team rewards, 360 degree appraisal, profit related pay, retirement plan,
holiday arrangement, satisfaction of human needs and health support. All these can improve
performance. They do not believe in title, but there should be some power (authority) for
individual to develop leadership. This type of power is also useful for performance improvement.

By doing this, one HR measure, the employee turnover rate has averaged 15-25% yearly,
compared to the 100% -plus rate common in retail jobs and sales at the firm increased by 2025%duringtheyear.

Question1: Discuss how the culture of the container store is made by the HR activities
and practices used.

Discuss how the culture of the container store is made by the HR activities and practices used.
HR of the container store had spent significant of their time to outline the kind of potential
employee that would "fit" the company's culture and values. By paying high wages than the
standard of many other retailers, the Container Store has more keen applicants to choose from
which results in less compromise on that "fit" they are seeking.

Moreover, the company goal is to satisfy customer but their employees must be satisfied first.
Employees are less expected to leave for money which also helps reduce the turnover rate.
Extensive use of internal promotion and training in providing career opportunities for employees
are not wasted. The HR ensures that employees are well taken care and expects to maintain a
sense of what the employees face daily as well as understanding job satisfaction of their
employees significantly. The training will result to boost improves customer service and hence,
creates customer values. Lower turnover also results in a more stable workforce which is good
morale

for

employees

and

for

customers.

From our point of view, container store has a competitive advantage over its competitors.
Competitive advantage means company gained an advantage over competitors by offering
consumers greater value compared with its rival companies. It enables a company to operate in a
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more

efficient

and

thus,

results

in

benefiting

the

company

itself.

Their HR has plans and solutions to solve problems related to their employees in their
organization. They connect corporate strategy and human resource management and its internal
and external environment effectively and improved companys performance and contributing a
great success in the business. They pays high wages to their employees with competitive benefits
packages, provide...
a) Training
b) Organizational relationship
c) Level of recognition
d) Satisfaction of basic needs
e) Role ambiguity
f) Motivational factors
g) Recognition on the basis of pay-scale
h) Recruitment strategy
i)

Legal secrecy for the company policies and plans.

Question 2: Compare the culture at your present employer to the culture suggested by the
examples of the Container Store. Then tell what recommendations you would
make to the executives where you work.

None of us are currently employed, but from our previous work experiences, we found that:
a) Organizational components
Influencing of an organization's safety culture is the best way to improve the leadership
development. The container store has an open communication with employees about their profit,
sales, future plan. They have feedback sessions and discussions about their plans with
employees, to increase the leadership qualities. The container store had unique training programs
which ensure the quality according to the employee interest supported.
Organizational components: Motivational factors
The Container Store has a friendlier atmosphere for the employees and for the customers.
According to the Motivation-Hygiene factor theory; recognition, achievement, advancement,
work itself and the responsibility is treated as the motivation factors, where as salary, policies
of company, technical fitness and the working conditions as hygiene factors.
The Container stores has a good motivation strategy; they have training programs according to
the employee skills, rewards and recognition for the best performance, appraisal notice, direct
appreciation from the higher authority, wellness programs, yoga classes, equal value for all,
incentive programs, flexible shifts.
b) Career Opportunities: Training
The Container Store treats the people as responsible and self motivated to expect the responsible
and motivated manner from them. Thus the Container Store has several training programs to
make them self motivated and also responsible. Each of the stores in Container Store has one full
time trainer; this well planed training system advances the quality of leadership styles through
teamwork. These types of training programs were lacking at our previous employers.

g) Recognition on the basis of pay-scale

The differing pay scaling system for the employees at the same designation and also the more
payments for the employee at the lowest grade rather than the one in higher grade system may
create conflictions in the company among the employees, which may be treated as discrimination
based on the recommendation of higher authority, which may affect the employee performance.
All our previous employers did not have such a high pay scale and they based their pay scale
according to their level of education and experience in the field.

c) Rewards and Retention: Level of recognition

Level of recognition of employee having leadership skills and other specific skills are
recognized in terms of increment of pay scale, incentives and other appraisal in the
Container Store. The recognition in terms of promotion is lesser in the Container Store
due to their flat structure. Thus the fewer amount of recognition in terms of higher level
of potential may reduce the leadership development. The promotion of the employee is
based on the reviews and by the recommendation of the manager; this may create
discrimination issues which may affect the leadership development.

d) Career Opportunities: Role ambiguity

Due to the lower level of layers there will be limited advancement of opportunities in Container
Store. Thus the analysis shows that flat structure is the one which can satisfy the employees
higher order needs (self actualization),where as tall structure(well-established organisation)
satisfies the security needs. Thus the employees working in tall structure organisation feel better
sense of job security rather than in flat structure.

e) Satisfaction of basic needs

The employee performance in an organization is primarily allied with the organizational
structure, which is an organizational perception of human basic needs. According to Maslow
(1954) human have different types of needs (physiological needs, safety needs, love needs,
esteem needs, and the need for self-actualization).Maslow's theory ensures that whenever a
certain need of human became satisfied, its no longer perhaps exist as motivation, whereas it
became a motivator for the next higher level of achievement (need).Thus the container store,
with flat structure fails to create a high level of motivation for the employees thus may leads to
reduce the dedication, commitments of employee. Only the lower level needs satisfaction of
employees will not shove the employees to the higher potential. Thus the flat structure of
Container store may not be able to full fill the lower level of satisfaction, this may makes
management of employee performance as little bit intricate.

h) Recruitment strategy
There are negative impacts for this too. The reference given by the employee may be fake, limits
the new skilled people without having any relation with employee, may create discrimination
problems due to the reference, it may affect the good will of company, it may create some type of
group works inside the company, may create political issues too.
i) Legal secrecy for the company policies and plans.
In the Container Store there is an open communication about the company future plans, goals,
profit, sales with the employees within the organization .But there is no surety for the secrecy of
the plans. It may lead to create competitors which may affect the productivity. So there must be a
cautious by the employer to monitor the employees work to guard trade secrets. Employers must
act under the limitations while doing this; there must be respect for employees privacy and also

too much of monitoring can be a threat for employee loyalty, and this may lead to an employee
as being untrustworthy

Conclusion
The container Store has a relatively flat organisational structure, which is able to satisfy high
level of needs like a self actualisation rather than the basic needs like security. According to the
sales profit figure, the Container store has a high growth of sale, lowest employee turnover rate,
high customer satisfaction rather than industrial average. Even though the discussion made on
here flashes the lights on some of the pros and cons of the container stores operation.
The containers stores flat structure ensures friendliest surroundings for their employee and to
improve the dedication of employees towards the organisation. But the flat structure system
limits the employee growth up to a limit. The employee recruitment is done through the keen
analysing of skills; they are preferred to recruit the person who is having leadership qualities
nevertheless the flat structure prevents the company to designate the persons according to their
leadership values which notified as a de-motivation for the employees. Thus their flat structure
creates followers rather than leaders. This suggests the importance of valuing the growth of
employee according to their skills.
The container store has a wide range of plan for managing the employee performance. Good
employee satisfaction programs are conducted in the store. Salary scale, appreciation by rewards,
credit system, and friendly-family environment are the motivational factors inside the container
store. But due to the flat structure behavior the basic needs were not able to be satisfied. This
may affect the employee performance up to a level at the future. The salary paying scale; higher
payment for low level grade may treat as discrimination which may create problems. Thus there
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must be critical analyzing of the employee performance in the company to eliminate the chances
of issues every time.

Students will have a wide range of answers. They will most likely state that higher pay is
welcome. In addition, better treatment and training is probably on their minds. Everyone wants
to be treated well and with respect. Many students will make comments on good and bad places
they have worked. They may want to discuss bad bosses and turnover issues as well. On the
other hand, discussions of positive experiences would also be beneficial to all classmates.
1. ANALYSIS OF PERFORMANCE
2. HIERARCHICAL STRUCTURE: LEADERSHIP DEVELOPMENT

References
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http://www.flatworldknowledge.com/node/37973#web-37977 accessed: on 19 June 2010

Chonko L. B. (1982). The relationship of span of control to sales representatives experienced

role conflict and role ambiguity. Academy of Management Journal, 25, pp 452456.

Robert L. Mathis & John H.Jackson, Human Resource Management, Thompson Asia Private
Ltd., Singapore, 10th edition, 2008. Individual performance & Retention, pp 66-98.