This chapter focuses on the broad strategic issues involving organization structure; the general approaches used for motivating and coordinating employee activities; and the management practices for building an effective, committed workforce and reducing turnover.
Objectives of Human Resource Management The strategic objective of human resource management is to align the capabilities and behaviour of employees with the short- and long- term goals of the retail firm. Employee productivity The retailer’s sales or profit divided by the number of employees. Employee turnover The number of employees leaving their job during the year divided by the number of positions.
The Human Resource Triad The full potential of a retailer’s human resource is realized when (3) elements of the HR triad work together – HR professionals, store managers, and employees.HR professionals Responsible for establishing HR policies that enforce the retailer’s strategy and provide tools and training used by managers.
Cont...Store or line managers They are responsible for bringing the policies to life through their daily management of the employees who work for them.Employees They can play an active role by providing feedback on the policies, managing their own careers, defining their job functions and evaluating their managers and co-workers.
Special HR Conditions Facing Retailers Human resource management in retailing is very challenging due to:1. The need to use part – time employees.2. The emphasis on expense control.3. The challenging demographics of the workforce.
Retailers operating in international marketsface additional challenges1. Part-time employees – Part-time workers can be more difficult to manage than full-time employees because they are often less committed to the company and their jobs and more likely to quit than full-time employees.2. Expense control – Retailers often operate on thin margins and must control their expense. Thus, they are cautious about paying high wages to hourly employees who perform low-skill jobs.
Cont...3. Employee demographics – The changing demographic pattern will result in chronic shortage of qualified sales associates. Retailer need to explore various approaches for operating effectively in a tight-labour market – increase retention; recruit, train, and manage minorities, handicapped, and mature workers; and use incentives and technology to increase productivity.4. International human resource issues – Labour law means that HR practices that are effective in one country might not be effective in another.
DESIGNING THE ORGANIZATIONSTRUCTURE FOR A RETAIL FIRMOrganizational Structure – Identifies the activities to be performed by specific employees and determines the lines of authority and responsibility in the firm.
The task are divided into (4) majorcategories in retail firms1. Strategic management2. Administrative management (operations)3. Merchandise management4. Store management
Matching Organization Structure to RetailStrategy The design of the organizational structure needs to match the firm’s retail strategy. Retailers tends to have more managers and make decisions at the local store level When more decisions are made at the local store level, human resource cost are higher, but sales also increase because the merchandise and services are tailored to meet the needs of local markets.
Organization of a Single-Store Retailer The owner-manager of a single store maybe the entire organization. The owner-manager simply assigns task to each employees and watches to see that these task are performed properly. Each employee must perform a wide range of activities, and the owner-manager is responsible for all the task.
Owner-Manager Strategic management Accountant Financial control Store Manager Merchandise Mngr. Store Mgnt. Merchandise Mgnt. Human resource Mgnt.Advertising & Promotion Distribution Salespeople
Organization of a National Chain Store Managing a national retail chain is much more complex because managers must supervise units that are geographically distant from one another.
Chairman &CEOPresident & chief Chief Operating Merchandising Officer Chief Financial Officer Officer General Merchandise Managers Director of Stores Chief Information Officer President of JCPenny Direct Director of supply Chief of Human chain Resource & Director of Administration planning & Officer Allocation Director of store Environment, Chief Marketing General Council & Design, and Officer Secretary construction Director of product Development & Sourcing
MERCHANDISE MANAGEMENT The merchandise division is responsible for procuring the merchandise sold in the store and insuring that the quality, fashionability, assortment, and pricing of that merchandise is consistent with the firms strategy.
M.A.T. The buyer, allocator, and planner for each merchandise category for a merchandise action team (MAT) that is responsible for managing the merchandise category.
BUYERS Buyers are responsible for procuring merchandise and building and maintaining relationships with vendors.
ALLOCATORS Is responsible for allocate merchandise and tailoring the assortment in several categories for specific stores in a geographic area.
PLANNERS The planner is responsible for financial planning and analysis of the merchandise category.
Centralization Centralization is when authority for retailing decisions is delegated to corporate managers rather than to geographically dispersed managers.
DECENTRALIZATION Is when authority for retail decisions is assigned to lower levels in the organizations.
Motivating RetailEmployees A critical task of human resource management is to motivate employees to work toward achieving the firm’s goal and implementing strategy.
Policies and Supervisions The most fundamental method of coordination is to:1. Repair written policies that indicate what employees should do.2. Have supervisors enforce this policies.
INCENTIVES The second method of motivating and coordinating employees uses incentives to encourage them to perform activities consistent with the retailers objectives.
TYPES OF INCENTIVE COMPENSATION1. Commissions – is compensation based on a fixed formula.2. Bonus – is additional compensation awarded periodically on the basis of an evaluation of the employees performance.
Drawbacks ofIncentives Incentives are very effective at motivating employees to perform the activities on which the incentives are based. But incentives also may cause employees to ignore other activities.
Organization Culture An organization culture is the set of values, traditions, and customs of a firm that guides employee behavior.
Developing skillsSELECTIVE HIRINGThe process of recruiting, selecting and trainingof personnel; to fill the right people for the rightjob.
Developing skillsSTEPS IN SELECTIVE HIRING1.Job analysis2.Requisition of new employee3.Actual recruitment of applicantsSOURCES OF APPLICANTS1.Internal2.External
Developing skillsSTEPS IN SELECTION1.Reception of applicants2.Preliminary interview3.Application Form4.Employment test5.Final selection of immediate supervisor ordepartment head6.Physical and medical exam7.Hiring8.Orientation/Induction/ Indoctrination
Developing skillsTRAININGThe systematic development of attitude,knowledge and behavior patterns for theadequate performance of a given job or task.
Developing skillsCOMMON TYPES OF TRAINING1.On-the-job training & job rotation2.Vestibule training3.Apprenticeship4.Classroom training5.Programming instruction6.Management development program
Empowering employees This is the process in which managers share power and decision-making authority with employees.
Creating partnering relationshipsREDUCING STATUS DIFFERENCEThis is an attempt to create less difference fromthe higher level of management from the lowerlevel employees by changing job titles andchanging wage differences.
Creating partnering relationshipsPROMOTION FROM WITHINThis is a staffing policy that involves hiringnew employees for a higher position only fromwithin the company. This is to promote fairnessand loyalty to the company.
Creating partnering relationshipsBALANCING CAREERS AND FAMILIESThis is a benefit provided by some companiesfor employees to effectively manage their timefor work and family. Some services include shiftscheduling, job sharing, childcare and employeeassistance program.
Issues in Retail Human ResourceManagement• Managing diversity• Legal and regulatory issues• Use of technology
Managing diversityDIVERSITY TRAININGThis consists of two components which aredeveloping cultural awareness and buildingcompetencies.
Managing diversitySUPPORT GROUPS AND MENTORINGThis assigns higher-level managers to helplower-level managers learn the firm’s values andmeet the senior executives.
Managing diversityCAREER DEVELOPMENT ANDPROMOTIONThis is a form of management by providingcareer paths to different workers depending ontheir strengths, gender, skills and other factorsthat would help in their career in a company.
Legal and regulatory issuesEQUAL EMPLOYMENT OPPORTUNITIESThis is a policy wherein companies cannot treatemployees differently simply on the basis oftheir race, color, religion, sex, national origin,age or disability status.
Legal and regulatory issuesCOMPENSATIONThese are laws related to compensation ofemployee with the apropos pay rates, benefitsand allowances regardless of their race, color,religion, sex, national origin, age or disabilitystatus.
Legal and regulatory issuesLABOR RELATIONSThese are laws where it describes the processby which unions can be formed and the ways inwhich companies must deal with the unions.
Legal and regulatory issuesEMPLOYEE SAFETY AND HEALTHThese laws are about the basic premise thatemployers are obligated to provide a workingenvironment that is free from hazards that arelikely to cause death and serious injuries
Legal and regulatory issuesSEXUAL HARASSMENTThese are laws that govern the protection ofworkers toward unwelcome sexual advances,requests for sexual favors and otherinappropriate verbal and physical conduct.
Legal and regulatory issuesEMPLOYEE PRIVACYThese are policies regarding the privacy ofemployees in their workplace. These includetheir workspace, personal property and otherscrutinizing tests.
Legal and regulatory issuesDEVELOPING POLICIESThis is the responsibility of the human resourcedepartment to formulate new policies that will beapplied to the management depending on thenature and need.
Use of Technology This is the use of intranets in retail chains in order to streamline the workflow and to automate other processes to reduce time on filing and paperwork by employees.