Lululemon Athletica - Management Practices - Employee Management and Incentives

Employee Management and Incentives

After a long and slow hiring process, where potential employees are even taken to a yoga or spinning class to ensure they “fit in,” new employees, regardless of skill and background, are required to work the floor as educators for at least three weeks, where they receive about thirty hours of in-house training. Lululemon’s educators are paid hourly wages while all managers, from store managers to senior management, are salary based. There are incentives in place to encourage members of the Lululemon family to stay with the company. For example, when an employee has been on staff for a year, the company sends them to the Landmark Forum, a personal development program not related to business, aimed as being a gift to the employee, although some employees may not look at it that way. As further incentive, Lululemon has created a new program called “Fund a Goal,” which was designed to eventually pay for high-performing employees to achieve one of the goals on their list. Educators are directly supervised by their store manager as there are only a small number of educators working at a given time and store managers are usually former educators with sufficient floor experience.

Lululemon's management practices revolve around two key theories: the human relations theory and the high commitment work practices theory. Lululemon endorses all the practices of a high commitment firm. The theory of high commitment firms supports that their success rests on getting a committed group of employees working towards a common goal. Furthermore, high commitment firms typically have a strong culture, which may not appeal to everybody, so these companies hire slowly to make sure potential employees fit well. A strong emphasis is placed on training new employees and encouraging teamwork among them. On the other hand, Lululemon also models itself after the human relations theory of management. The human relations theory states that the effects of social relationships, employee satisfaction and motivation, have an impact on productivity. Additionally, the human relations theory postulates that recognition, security, and a strong sense of belonging have a large effect on morale and productivity. Lululemon’s management practices adhere to both the human relations theory and the theory of high commitment work practices by having small teams of educators all endorsing the same culture and lifestyle, and by the company providing incentives to motivate these employees. The strategy of establishing high levels of worker satisfaction has made the idea of working at Lululemon very appealing.