HR in Retail (1)

8/2/2019 HR in Retail (1)

http://slidepdf.com/reader/full/hr-in-retail-1 1/29



Gaining Competitive Advantage through Human

Resource Management

Why does human resource management give asustainable competitive advantage?

• Labor costs account for a significant percentage of a retailer’s total expenses

• The customer experiences are determined by the activities of employees (selecting merchandise, providing information andassistance, etc.)

• These potential advantages are difficult for competitors toduplicate



Objectives of

Human Resource Management

• Short Term

– Increasing Employee Productivity

– Productivity = Sales/ Number of Employees

• Long-Term

– Employee attitude customer satisfaction and loyalty long-term performance

– Increasing Employee Satisfaction Reducing Turnover

– Employee turnover

= # of employees leaving their job during the year

# of positions



Human Resource ManagementChallenges in Retailing

Work Environment

• Open Long Hours

• Peak Sales Periods

•

Emphasis on Cost Control

Employees

■ Unskilled

■ Part-Time

■

Diverse Backgrounds

High Turnover



09-5

Downward Performance Spiral



Special HR Considerations Facing Retailers

• Need for Part-Time Employees

• Demand on Expense Control

• Changing Employee Demographics

• International HR Issues



Increasing Workforce Diversity

• Workforce employing more minorities, handicapped people,

and the elderly.

• Older workers are more reliable than younger workers.

• Cost effective as training and recruitment costs are low



Strategic Issues

Facing Retail HR Professionals

• The design of the organization structure for assigningresponsibility, and authority for tasks to people and businessunits.

• The approaches utilized coordinate the activities of the firm’s department and employees, while motivating employees towork toward achieving company goals.

• The programs used to build employee commitment, and retainvaluable human resources



Designing the Organizational StructureOrganizational structure

Identifies the activities to be performed by

specific employees, and determines the lines of

authority and responsibility in the firm.



Tasks Performed in a Retail Firm



Strategic Management Tasks

Performed in a Retail Firm

• Develop a retail strategy

• Identify the target market

• Determine the retail format

• Design organizational structure

• Select locations



Merchandise Management Tasks


• Buy merchandise

o Locate vendorso Evaluate vendors

o Negotiate with vendors

o Place orders

• Control merchandise inventory

o

Develop merchandiseo Budget plans

o Allocate merchandise to stores

o Review open-to-buy and stock position

• Price merchandise

o Set initial prices

o Adjust prices



Store Management Tasks

Performed in a Retail Firm • Recruit, hire, and train store personnel

• Plan work schedules

• Evaluate performance of store personnel

• Maintain store facilities

• Locate and display merchandise

• Sell merchandise to customers

• Repair and alter merchandise

• Provide services

• Handle customer complaints

• Take physical inventory

• Prevent inventory shrinkage



Administrative Management Tasks


• Promote the firm, its merchandiseand its services

• Manage human resources

• Distribute merchandise

• Establish financial control



09-15

Organization of a Small Retailer



09-16

Organization Design



09-17

What does a Buyer do?

A buyer is responsible for:

• procuring merchandise

• setting prices

• managing inventories

• building and maintaining relationships

• attending trade and fashion shows

• negotiating with vendors on price, quantities,assortments, delivery dates and payment terms

• specifying private label merchandise



09-18

What does a category manager do?

• A category manager

o Is responsible for a set of products that are viewed assubstitutes by customers (Ex: all pastas – fresh, frozen,

packed, or canned)

o Is evaluated on the profitability of category

o

Is motivated to eliminate “me to” products and keepessential niche products

o Is used primarily by supermarkets, big retailers



09-19

Allocator vs. Planner

Allocator – responsible for allocating the merchandise andtailoring the assortments in several categories for specificstores in a geographic area.

Planner – responsible for the financial planning and analysisof the merchandise category. They develop the budget planand monitor performance



09-20

Retail Organization Design Issues

• The degree to which decision making is centralized or

decentralized.

• The approaches used to coordinate merchandise and

store management



09-21

Centralization vs. Decentralization

Advantages of Centralization

• It is difficult for a retailer to

adapt to local market conditions

• It may have problems

responding to local competition

and labor markets

• Personnel policies make it hard

for local managers to pay

competitive wages

■ Reduce costs (overhead falls

with fewer managers)

■ Coordinated buying achieve

lower prices from suppliers

■ Opportunity to have the best

people make decisions for

the entire corporation

■ Increases efficiency

Disadvantages of Centralization



09-22

Winning the Talent War

• Retailers are engaged in a “war” with their competitors for

talent – for effective employees and managers – who can

effectively deal with the incased complexities of retail jobs

(the use of new technologies, increased profit & loss

responsibilities, increased global competition, a diverseworkforce).

• Develop programs to attract, develop, motivate, and keep

talent



09-23

Attracting Talent – Employment Marketing

Marketing programs that attract

“best and brightest” potential

employees

o Starbucks – “Love What You

Do”

o Southwest – “Free to Actually

Enjoy What You Are Doing”

Employment marketing (branding)



09-24

Attracting Talent – Employment Marketing

To build its employment brand, use the tagline “A

Perfect Fit” on all correspondence and advertisingdirected toward potential employees.



09-25

Developing Talent

Selection and Training

• Selective Hiring:

o Recruit “the right people”.

o Simply seeking the best and the brightest may not always be

the most effective approach.

• Training:

o Increasing investments in management training programs and

developing leaders.

o Increasing attention to college graduates.



09-26

Motivating Talent – Aligning Goals

• Policies and Supervision

o Indicate what employees should do.

o Behavior Enforced by Managers.

• Incentives

o Commission, Bonus, Stock Options.

• Organization Cultureo The set of values, traditions, and customs of a firm that

guides employee behavior.

o Behavior enforced by social pressure.



09-27

Use of Incentives

Advantages

• Aligns Employee and

Company Goals.

• Strong Motivating

Force.

Disadvantages

■ Employees Only Focus

on Sales.

■ Less Commitment to

Retailer.



09-28

Keeping Talent

Building Employee Commitment

• Empowering Employeeso Empowerment is the process of managers sharing power and

decision-making authority with employees

• Gives employees confidence

• Provides greater opportunity to provide service to customers• Employees are more committed to firm’s success

• Creating Partnering Relationships with Employeeso Reducing Status Differences

o Promotion From Within

o Balancing Careers and Families

• Flextime, job sharing



09-29

Issues in Retail Human Resource Management

• Managing Diversityo Diversity Training

o Support Groups and Mentoring

o Career Development and Promotions

• Growth in Legal Restrictions on HRPracticeso Equal employment opportunity

o Compensation

o Labor relations

o Employee safety and healtho Sexual harassment

o Employee privacy

HR in Retail (1)

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