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Sample2 Report Business Assessment



A comprehensive assessment by S.Gee of a business along with a roadmap for improvements. Primary focus: Intellectual Capital Alignment to Business Strategy. Sample Template (Vol. 1 only)

A comprehensive assessment by S.Gee of a business along with a roadmap for improvements. Primary focus: Intellectual Capital Alignment to Business Strategy. Sample Template (Vol. 1 only)
(Names are Fictitious)



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Sample2 Report Business Assessment Document Transcript

  • 1. ABC Marketplace BUSINESS AND HUMAN RESOURCE ASSESSMENT REPORT Volume 1 Quisque vel justo eget felis sollicitudin adipiscing. Ut enim lorem, Prepared lacinia eget, tristique quis, feugiat eget, turpis. In hac habitasse By Shirley platea dictumst. Morbi non dui ac risus sollicitudin auctor.
  • 2. ABC MARKETPLACE BUSINESS AND HUMAN RESOURCE ASSESSMENT REPORT Content Page(s) Title Page 1 Table of Content i-iii Introduction 2 Intent of Report 2 Format Used 3 Actual, Theory, and Best Practices 4 The Company 5 Philosophy 5 Business Strategy 8 Exhibit 1 – Balance Scorecard Method 13 Exhibit 2 – Balance Scorecard Elements 14 Goals and Objectives 15 Products and Services 19 Exhibit 3 – Products and Proportions 19 Resources Available 24 Organizational Structure 27 Exhibit 4 – Laurel District Store Organization Chart 30 Exhibit 5 – Dimond District Organization Chart 31 Exhibit 6 – Employment Data 37 Market Environment 38 Local Demographics 38 Exhibit 7 – Ethnic Population 39 Exhibit 8 – Age and Income Demographic Information 39 Exhibit 9 – Miscellaneous Demographic Information 39 Customer Profile 40 Exhibit 10 – Characteristic and Traits 40 Sales and Marketing 41 Exhibit 11 – Marketing Process 43 Exhibit 12 – Activities in Marketing 44 Exhibit 13 – Components of a Marketing Plan 46 Exhibit 14 – Types of Performance Analyses 50 Exhibit 15 – Planning Process 52 Risk & Security 53 Risk 53 Exhibit 16 – Definition of Risk Management 57 Exhibit 17 – Sample Human Resource Risk Mitigation Form 62 2
  • 3. Content Page(s) Security 65 Exhibit 18 – Sample Elements of Security Management Plan 68 Exhibit 19 – Sample Vulnerability Report 69 Exhibit 20 – Sample Computer Security 70 Contract and Procurement Management 73 Exhibit 21 – Purchases and Acquisitions 77 Exhibit 22 – Contracting 78 Exhibit 23 – Invitation to Sell 79 Exhibit 24 – Select Seller 80 Exhibit 25 – Contract Administration 81 Exhibit 26 – Contract Execution 82 Recordkeeping 83 Payroll System 83 Accounting System 83 Personnel Records 84 Exhibit 27 –Sample List of Personnel Data 88 Quality Assurance 90 Exhibit 28 – Sample Quality Improvement Method - CMMI 95 Exhibit 29 – Sample Quality Improvement Method – Six Sigma 96 Human Resource Program 97 Human Resource Program – All Other Sections 97-179 Policies and Practices 99 Exhibit 30 – Sample Employer Policies 103 Exhibit 31 – Sample Policy on Bereavement 109 Exhibit 32 – Illustration of a Federal Act Covering Employers 110 (Family and Medical Leave Act) Job Definition 112 Exhibit 33 –Cashier Job Description and Announcement 115 Exhibit 34 –Bakery Team Member Description and 117 Announcement Exhibit 35 –Sample Career Description for Cashier 119 (for prospective applicants) Compensation 122 Exhibit 36 – Sample Compensation Plan 125 Exhibit 37 – Sample Compensation Program 127 Exhibit 38 – In-Hire Compensation Roster 130 Hiring and Selection Process 134 Exhibit 39 – Essential Components of Hiring and Selection 135 Exhibit 40 – Hiring and Selection Flowchart 137 Job Description 138 Exhibit 41 – Job Description Form 144 Exhibit 42 – Sample Job Description for Human 149 Resource Assistant Recruitment Plans 150 3
  • 4. Content Page(s) Exhibit 43 – Convention and Group Selection Process 154 Exhibit 44 – Sample Job Description for Recruitment 155 Selection Process 157 Exhibit 45 – Types of Interviews 159 Exhibit 46 - Sample Interview Questions for Managerial 162 Positions Exhibit 47 – Sample Comparison Rating Form – 168 Managerial Candidates Exhibit 48 – Sample Individual Rating Form – 169 General Positions Post-Selection Activities 176 Exhibit 49 - Sample Letter to Unsuccessful Candidate 179 Human Resource Program - Performance Management 180-206 Exhibit 50 –Staff Evaluation Process 186 Progressive Discipline 190 Exhibit 51 –Sample Progressive Discipline Letter 191 Termination Process 192 Exhibit 52 –Sample Termination Letter 198 Exhibit 53 –Sample Layoff Letter (Abbreviated) 199 Exhibit 54 –Sample Layoff Letter (Extended) 200 Employee Appeals Process 202 Exhibit 55 –Sample Letter from Employee for Appeals Hearing 204 Exhibit 56 –Sample Letter from Hearing Officer After Hearing 205 Human Resource Program – Summary of Assessment 206-208 Training & Development 209 Career Progression 213 Feedback Program 216 Grievance Program 217 Exhibit 57 – Sample Grievance Letter from Employee 219 Notes 245 Caveat and Disclaimer 245 4
  • 5. Introduction Intent of Report It is the intent of this report to methodically strengths and weaknesses of ABC. evaluate and assess the general health of However, due to distractions and other ABC Marketplace (ABC) with regard to its pressing issues, companies often do not business operation and then its human take a methodical approach to definitively resource program within the context of that identifying those strengths and weaknesses business operation. Observations, nor to create implementation plans to analyses, and evaluations of ABC have address them. This is especially true for been collected and organized by specific small business where employees have descriptive and functional business areas multiple responsibilities. Consequently these (e.g., market environment, procurement, businesses do not exploit their strengths and quality assurance, etc.). Where data was take advantage of their opportunities. More not available, business theory and best problematically, they do not shore up their practices was utilized or offered in order to weaknesses thereby exposing themselves make the report more robust and to higher risk. comprehensive. The business sections are In spite of this, ABC is to be commended for outlined under the heading of “Format recognizing a need to be more “proactive” in Used”. their efforts to improve their business During the course of this assessment, it operation; especially in terms of mitigating was found that many of the principles within their risk and in the human resource area. the company were “intuitively” aware of the By commissioning this report, they are 5
  • 6. Introduction (con’d) Human Resources as a critical part of the business strategy . . . definitively signaling a desire to exploit smaller business operation, it is important opportunities and to minimize or mitigate for the principles at ABC to understand that their weaknesses. the administrative component and associated requirements have dramatically As is the case in any personalized report, it changed. The business model, therefore, is highly dependent on the data available must change. Simply working harder, for during the course of this assessment. example, will not work. Only when the Complete and accurate information necessary attention and resources are provided by the principles at ABC, including allocated to incorporate the necessary the Owners, is influential to the integrity programs, processes, and systems will and comprehensiveness of this report. ABC achieve an effective and “sustainable” It is the intent of this report to make a fair organization assessment while providing a “working roadmap” to ABC. This roadmap will Format Used assist them in their efforts to improve their The following is a description of the format business operations and, in particular, their utilized throughout the report to address human resource program. Because labor each of the functional areas at ABC cost is the highest, ongoing expense in Marketplace. ABC’s business, increased efficiency and Under each business area, a “Description,” productivity in the human resource area is of ABC’s current situation is provided along key to increasing profit for the business. with information pertaining to that business This report, if applied, will help guide ABC area. This is followed by an assessment of in aligning its human capital with goals and the “Strengths” and “Weaknesses” of ABC objectives within its business operation to within that functional area. Then achieve better efficiency and productivity. “Opportunities” and “Threats” are Moreover, while it is more convenient to run discussed, where applicable. Under a substantially “scaled-up” business with “Threats”, a risk rating is offered based on the same business model used in their 6
  • 7. Introduction (con’d) ABC’s current situation. Risk rating will be based on both probability and impact. The ratings are high (H), moderate (M), or low (L). For example a risk rating of P=H and I=L means that the probability of risk is high, but the impact on ABC is low. For more detailed information, see section on “Risk and Security”. “Recommendations” then follow to facilitate improvements at ABC. Finally, “Implementation Samples and Plans” are offered which would help realize those improvements. Actual, Theory, and Best Practices In order to make this report more comprehensive, theoretical and “best practice” research information was interwoven throughout the report to augment those business areas that ABC has yet to address in their business operation. Because of the depth and breath of the “holes” in ABC’s business operations, a considerably amount of time was spent on researching solutions to fill these holes. Recommendations and implementation samples outlined in this report were developed with the idea that they would be relatively “timeless solutions” and helpful in guiding ABC when these functional areas are ultimately addressed by ABC. In this way, this report would retain its relevancy over time. 7
  • 8. The Company ABC Marketplace (ABC) The Company,” section covers the topics of ABC’s philosophy, business strategy, goals and objectives, resources, and organizational structure. Philosophy “ Description of Philosophy The over-arching philosophy with respect to ABC’s business operation is “provide the best quality at affordable prices within a good product mix”. They are committed to maintaining the warm and friendly atmosphere common in smaller stores, where you feel that you know the Owners. Their operation is designed to project a personal, caring image to customers, employees, and the local community. Consistent with this image are the products they carry in the store (e.g., environmentally sustainable) and the approach they take in their buying efforts (e.g., buy from local farms to reduce fuel cost and pollution). To illustrate, ABC’s supports the notion of sustainable growth by maintaining a balance between themselves and the goods that they sell. They offer a wide variety of organic, all natural, and hormone-free 8
  • 9. The Company Philosophy (con’d) products, many of which are environmentally sustainable. For example, their seafood is responsibly fished, harvested in areas free from pollution, and in alignment with sustainable growth quotas. ABC’s personal commitment extends to encouraging their customers to use eco-friendly products. The earth-friendly products, ranging from toothpaste to laundry detergents, help to promote a biologically healthier future for the environment. ABC sustainable theme carries over on a personal level. By running a “legacy” business, which will be taken over by future generations, ABC is keenly aware of the benefits of taking a longer view in their decision-making and operating in a way that is sustainable. Strengths of Philosophy Under this philosophy, ABC has operated the smaller store in the Berrydale District for over thirteen years and the larger store in the Applecreek District for three years. The strength of this philosophy is reflected in the “good will” garnered by ABC within the local community. Their customer base is loyal and projections for growth in sales seem justified. ABC make continuous efforts to reinforce their philosophy by being an active member of the local community, in which they do business. For example, they regularly sponsor charities, organize neighborhood events, and donate to local schools, churches, and homeless shelters. Even as ABC has expanded and scaled up their operation, they continue to project a “neighborly and accessible” image through their business philosophy. Weakness of Philosophy The ABC philosophy is defined by the personalities of the Owners, Joe and Diana Tam and as a result intimately linked to them. As such, absent the current owners, there is no guarantee the current philosophical approach would be continued. Opportunities Presented by Philosophy There is an opportunity to strengthen ABC’s business operation by incorporating the 9
  • 10. The Company Philosophy (con’d) philosophy throughout the business model in a more formal way. This is achieved by articulating the philosophy repetitively in all written material and incorporated within the operational processes and systems (e.g., procurement, training and development, etc.). Threats Presented by Philosophy There are no threats associated with having a sustainable business philosophy. Risk Assessment Probability: Low Impact: Moderate Comment: Impact moderate because of affect on ABC Brand Recommendation for Philosophy Convert ABC’s business philosophy from an “owner specific” philosophy to more tangible, formal business values and embed them into the business model and articulate it in writing and in all systems and processes. Implementation Samples or Plan Review all current ABC systems and processes and find formal ways in which to embed this philosophy in those systems. Also review companies with similar sustainable, green philosophies and emulate how they incorporate their philosophy formally, in writing, and throughout their systems and processes. 10
  • 11. The Company Business Strategy (con’d) Description of Business Strategy While the emphasis of this report is on the human resource program (HRP), it must be reviewed within the context of ABC’s business strategy and operation. With respect to business strategy, ABC does not have a strategy formally articulated. Until this assessment was commissioned, ABC had not given much thought to developing such a strategy. Typically, there are 4 main components to a business strategy; namely: 1. Establish a vision 2. Set goals and objectives 3. Perform a resource assessment 4. Design implementation plans A business intelligence strategy should look to define and accomplish the following: 1. Improving business performance with an integrated application for monitoring, analytics and planning. 2. Driving alignment and accountability across the entire organization. 3. Enabling more decision-makers to impact the performance of the business. 4. Ensuring transparency, security and audit capability through a variety of solutions. During the course of this assessment, ABC generally identified some of the components associated with a business strategy. The most important aspects of the business strategy, however, are non-existent (i.e., resource assessment and implementation plans). The following are some of the details associated with two of the four components that was articulated by ABC’s, which can be incorporated into a business strategy: 1. Vision – Create a successful business that can be passed on to children – geared primarily towards owner’s personal goals. 2. Goals and Objectives – General goals and objectives identified: - Increase Sales Annually - Increase Productivity of Staff - Improve Quality of Business (e.g., presentation) 11
  • 12. The Company Business Strategy (con’d) - Improve Customer Service It should be noted that none of these goals above have been articulated to staff so they could help implement them. 3. Resource – No resource assessment (which would realize the vision or meet the goals and objectives) has been done. 4. Implementation Plans – None developed or available. Strength of Strategy A business strategy has not been formally articulated within ABC. Weakness of Strategy In the absence of a comprehensive strategy, ABC is is operating primarily on a day-to-day basis. Other than to “make money and keep up with expenses”, there is no over-arching strategy or goal-driven milestones. The flaw in this situation is that this leaves the business without a defined “destination,” “destination,” which is highly inefficient. Moreover, it it leaves the business in the hands of the Owners alone to achieve success instead of mobilizing the staff to help make the business successful. As stated above, two of the main components (resource assessment and implementation plans) typically associated with a business strategy are non-existent. Of the two components that ABC has informally articulated (Vision and Goals), both need major improvements. The following highlights the weaknesses in all of these components. Vision – The vision articulated is limiting and primarily involves familial relationships. While it is okay to articulate a vision of creating a business for legacy purposes, a stronger vision statement may be one that involves both the employees and customer base. 12
  • 13. The Company Business Strategy (con’d) Goals and Objectives – The goals and objectives identified have not been communicated to staff. In order to achieve the goals and objectives even informally articulated, ABC must begin the process of developing their managerial staff and getting them to involve the staff to help drive performance to meet established goals and objectives. Resource – Resources have not been identified or directed towards achievement of goals and objectives. Implementation Plans – No plans have been developed which would help meet these goals or objectives. Opportunities Presented by Strategy There is an opportunity to deploy the human resources at ABC’s business to make the business more successful. By establishing a business strategy and aligning the human resources to that strategy, ABC can operate at a much more effective and productive manner. Conversely, in the absence of a solid business strategy, the human capital within ABC retains a lot of waste as employees defined what they prefer to do as opposed to having their work effort defined for them in alignment with ABC’s business strategy. Expected results with a strong business strategy include: improved efficiency in use of human resources; better alignment of human resources to tasks which can generate income; and the freeing up of monetary resources which can be re-allocated to areas not currently covered (e.g., hiring efforts, buying more modern equipment, etc.). Threats Associated with Strategy In the absence of a business strategy, companies tend to be chaotic and inefficient. Such inefficiencies are wasteful and often detrimental to the growth of the business. More damaging is the failure to deploy staffing properly and in a way to maximize benefits to the business itself. Having all staff members moving in one direction towards the goal of improving sales or developing the business is much more efficient than having staff all move in different direction attending to their individual aspirations and vision as opposed 13
  • 14. The Company Business Strategy (con’d) to the business’ needs or direction. This threatens the business’ “bottom line” by diverting resources away from profitability. Business, by definition, is unpredictable and often filled with factors that cannot be anticipated. Because a business strategy is fundamental to the management of a business, failure to have a sound strategy would be an unnecessary “self-inflicted” wound. The threat is often one of “running faster to stand still” because there is no roadmap or sound managerial leadership. Risk Assessment Probability: Low Impact: High Comment: Impact high because of human capital waste Recommendations to Improve Strategy (What?) Establish a strong business strategy for ABC and articulate it to staff (especially managerial staff) so they can be deployed to have “all hands on deck” to make business successful. Make sure all main components are addressed. Implementation Sample or Plan to Improve Strategy (How?) Vision – Articulate a vision that involves the betterment of both employees and customer base. Goals and Objectives – Add more details to the Goals and Objectives (be more specific about how much and by when). - Increase Sales Annually - Increase sales by 10% by end of 2010 - Increase sales by 12% by end of 2011 - Increase sales by 12% by end of 2012 - Increase Productivity of Staff (e.g., by implementing a training program for cashiers, deli workers, and producer workers). - Improve Quality of Business (e.g., by establishing a checklist in all departments and 14
  • 15. The Company Business Strategy (con’d) Exhibit 1 Balance Scorecard Method The Balanced Scorecard Method can help make vague aspirations to practical application at every business level. This method helps to coordinate all of the departments so they operate as one unifying unit, thereby increasing efficiency. The following elements are needed to use this method (step-by-step): Macro Reviews • Company’s mission statement (Purpose) • Company’s vision and strategic plan (Where Is Company Going and How Does it Plan to Get There) Financial Review • Assessment of Company’s Financial Status Independent Reviews and Assessments: • Review of How Company is Currently Structured and Operating (Review of Internal Business Processes) • Assessment of Staffing Deployed to Achieve Purpose and Realize Vision (Human Resource Alignment Assessment) • Review of Customer Satisfaction Level (Customer Survey of Company) The Exhibit 2 below highlights some of areas, which should be covered when performing some of these reviews and assessments. 15
  • 16. The Company Business Strategy (con’d) Exhibit 2 Elements of Balanced Scorecard Department Areas Finance Return On Investment (ROI) Cash Flow Return on Capital Employed (ROCE) Financial Results (Quarterly/Yearly) Internal Business Number of activities per function Processes Duplicate activities across functions Process alignment (is the right process in the right department?) Process bottlenecks Process automation Human Resource Is there the correct level of expertise for the job? Employee turnover Job satisfaction Training/Learning opportunities Customer Delivery performance to customer Quality performance for customer Customer satisfaction rate Customer percentage of market Customer retention rate 16
  • 17. The Company Goals and Objectives Description of Goals and Objectives The following are the short-term and long-term aspirations of ABC over the next five years. • Increase productivity of staff – ABC would like to increase the overall productivity of the staff. This may be facilitated with better efficiency within their operation by avoiding duplicative efforts, need for repetitive instructions, and clearer instructions. • Increase level of professionalism – A major majority of the staff are in entry-level and semi-professional positions with limited skills and abilities. Staff can be better developed to assure uniformity in use of processes and practices. They can also be better developed to adopt a more professional demeanor when in the public view or when dealing with the public. Managerial and the lead staff are more experienced, specialized and professional, but could use some developmental training to assure uniformity in application of policies, practices, and processes. • Develop managerial team so Owner can be less involved – Get the managerial team to the point where they can operate independently while conforming to a universal standard of practice will be extremely beneficial towards this goal. The Owners are looking for really good professionals who can “carry on” in their stead and allow them more personal “down time”. • Keys areas for improvement include: Quality – General overall appearance and quality of goods have to be maintained at all times. Their “brand” is based on the “freshness” of their products and on using products that are “environmentally friendly”. Customer Service and Satisfaction – ABC brand is also about customer satisfaction and care so more emphasis needs to be given in this area. Increased Overall Sales over next 3 years of 34% • 2010 - 10% 17
  • 18. The Company Goals and Objectives (con’d) • 2011 - 12% • 2012 - 12% How? • Enhance Product Mix • Market Products with Higher Profit Margins (e.g., Alcohol) • Increase productivity and professionalism of staff  How? • Managerial Training and Development on Supervision • Education of Staff • Improve quality (e.g., presentation)  How? • Managerial Training and Development on Store Presentation • Staff Training on Their Role in Appearances • Improved Customer Service to Address Concerns Strength of Goals and Objectives The goals and objectives outlined by the principles are modest and achievable. Weakness of Goals and Objectives The weakness in these goals and objectives is that these have not been incorporated into an overall business strategy. Also, they have not been communicated to those that are responsible for realizing these goals and objectives nor have detailed implementation plans been developed to achieve them. Opportunities in Goals and Objectives The Company has a real opportunity to facilitate real growth in their business by identifying more goals and objectives and setting realistic timetables to achieve them. This is also an opportunity to establish a stronger performance evaluation program at ABC and to develop the managerial staff against established “targets”. Threats Associated with Goals and Objectives The only threat to setting goals and objectives is if they are not realistic, periodically updated, or properly communicated. 18
  • 19. The Company Goals and Objectives (con’d) Risk Assessment Probability: Low Impact: High Comment: Impact high because it creates a poorly focused and directed effort thereby wasting money Recommendations for Goals and Objectives (What?) • ABC needs to set more refined goals and objectives for increasing the productivity of the ABC staff; increasing the level of professionalism and expertise of the staff; developing its managerial team and holding them accountable for both the development of plans and for achieving results; and for improving the quality of its products (including customer service). ABC may want to apply methods that make goal achievements more possible (e.g., pre-set milestones and dashboards). Implementation Samples or Plan for Goals and Objectives (How?) With respect to existing goals and objectives, the following suggestions may be helpful. • Increase Productivity of Staff - Increase productivity of staff by increasing efficiency within their departments. Find ways to avoid duplicative efforts. Provide clearer instructions. Eliminate situations that necessitate repetitive instructions. For example: 1. Review all documentation generated by ABC between period January 2008 and December 2009 and look for redundancy. 2. Develop a better flow system between delivery and receiving to catch duplicate efforts and repetitive motions. 3. Clean up written directions by providing for more simplicity and clarity in instructions. 4. Develop a time management system for activities and establish tolerance ranges of time for achieving those activities and track. • Increase level of professionalism – A major majority of the staff are in entry-level and semi-professional positions with limited skills and abilities. They can be 19
  • 20. The Company Goals and Objectives (con’d) developed to assure uniformity in use of processes and practices as well as be developed to adopt a more professional demeanor when in the public view or when dealing with the public. This requires on-the-job away from assigned workstations. The managerial and lead employees are more experienced, specialized and professional, but could use some developmental training to assure uniformity in application of policies, practices, and processes. More training in sales, marketing, and in human resource functions (e.g., hiring, firing, motivation, training, etc.) would also be helpful to achieve a higher level of professionalism. • Set a goal to specifically identify those positions within ABC, which would enable the business to keep running in the absence of the Owners. Then develop or hire the necessary talent to greatly reduce the Owners’ day-to-day activities and which would allow them more personal “down time”. This would involve a better hiring and selection process; a better training and development effort of existing staff; and a better performance evaluation system to hold staff accountable for results. • Other keys areas in need of improvements and suggestions are: Product Mix and Quality – A goal to improve overall appearance and quality of goods. Their “brand” is based on the “freshness” of products. The product mix can be reviewed to assure that “environmentally friendly” are also selling; not just collecting dust. Customer Service and Satisfaction – ABC brand is also about customer satisfaction and care. Recommend that ABC focus on Company as a brand and align employees to that concept. Employee services are a critical part of the product mix being sold to customers. Poor customer service taints the quality of the overall products being offered. More Sales. Develop an annual plan to achieve these goals and results. •2010 - 10% •2011 - 12% •2012 - 12% Alcohol Sale - Use other presentation methods (e.g., hold tasting events; pair wines with cheeses, etc.) 20
  • 21. The Company Products and Services Description of Product and Services ABC’s original focus was on freshness in their fruits and vegetables with groceries being secondary. With the opening of their flagship store in the Appletree District, ABC became equally focused on fruits and vegetables and their grocery product mix. A delicatessen and floral section was added to round out their offerings and to provide a more complete “one-stop” shop experience for customers. While not as widely publicized, a key ABC product is their “brand”, which denotes a community-oriented business with products that are part of the sustainable cycle (i.e., either organic or hormone-free, eco-friendly, harvested responsibly or humanly breed and treated). A “positive” shopping experience is also part of their brand and ABC is dependent on its workforce to convey the message that ABC cares and is responsive to the needs (and wants) of their customers. ABC offers the following products in the approximate proportion listed below: Exhibit 3 ABC Products and Proportions Product/Services Share ~ Share All other food 5% Meat, fish, poultry and 15% delicatessen items All other non-food (including 5% customer service) Drugs and health products 5% Fruit and vegetables 20% Dairy (including cheeses) 15% Beverages (includes alcohol) 20% Frozen foods 15% Note: Estimate Only 21
  • 22. The Company Products and Services (con’d) Strength of Products and Services Offered The selection of produce is one of the highlights of the products and services offered by ABC. Responses from the internal survey among ABC employees indicate that they believe that ABC has a good product mix and that customers have a wide choice at a good value. They also commented on the uniqueness of the products offered and ABC’s focus on bio- and eco-friendly products and its products and services being consistent with the philosophy articulated by ABC. Weakness of Products and Services Offered The employees’ view of the product mix is not shared by the managerial side of ABC. They view the product mix as poor and consider the produce and service end, in particular, as weak. It is noted that the method for selecting products is not particularly methodical and at times random and subject to personal whims. What products are offered and discontinued are sometimes based on the buying behavior of the customers rather than on quantitative data (e.g., historical sales data or based on analytics which might give clues to customer buying patterns) tied to both internal and external factors. This contradiction of views is problematic and needs reconciliation. Another weakness is that the products and services offered are not supported by a strong marketing effort. For the most part, ABC simply brings products in and hope customers buy them. Other than sale signage to encourage purchases of certain products while customers are in store, there is no effort to systematically influence customer purchases. One area that repeatedly comes up is “presentation”. Although this has been addressed numerous times, there are instances where the freshness of the products is questioned (e.g., due to existence of rotting fruits or produce in bins). Cashiers have also commented that customers often complain that certain items are missing even after returning numerous times to find them. More serious is the absence of items that are considered standard (i.e., not ‘exotic’ items). During the employee survey, comments like, “shelves 22
  • 23. The Company Products and Services (con’d) and bins are not fully stock all the time,” demonstrated concerns internally for both the appearance and the availability of products to customers for sales. This, of course, can seriously hurt the “brand” of ABC for freshness and its image as a professionally run company. Another area of weakness is ABC lack of “affirmative response” to the notion hat employees are ‘part and parcel’ of the products and services being offered. In the same way that a bad physical product (e.g., an apple, a quart of milk, etc.) may be viewed as an inferior product, so too can the service provided by ABC employees. It could be argued that the customer experience with respect to the interaction between buyer and seller and between employees and customers will determine the level of product sales and whether there is “repeat” business. Repeat business, of course, is absolutely essential to have a sustainable business. The language barrier and lack of initiative by many of the cashiers was often cited as examples of poor customer service. Opportunities in Products and Services Offered ABC has an opportunity to improve its products and services offering and influence the trajectory of sales upwards. It is a well-known fact that customers who are engaged with ABC staff and who are delighted by them tend to stay longer and buy more products. Getting the staff to engage its customer at the point of contact (e.g., when they are cashing out) can improve sales. By making these improvements in an affirmative rather than reactive way, ABC has an opportunity to create a well- supported and sustainable business even in the midst of direct competition. ABC continues to have an opportunity to be a “niche” business; unique in service (and in shopping experience) and in product offerings. 23
  • 24. The Company Products and Services (con’d) Threats in Products and Services Offered One of the main threats associated with products and services is the development of a reputation for poor quality, spoiled products, or the inability to provide desired products. Because ABC’s brand is associated with freshness, good variety, and at a fair price point, anything that undermines that would hurt its business. It does not matters that the product is organically growth if it is absent from the bin. It does not matter if the product was bought from local farmers thereby saving gas consumption, if the product is poorly handled or is left rotting along side of fresh products. The presence of other stores (e.g., Trader Joe’s, Whole Food, etc.) in the City of Mayfield is a constant and direct threat to ABC long-term viability. It is important for ABC to assure that it can compete “head to head” in all of the standard areas: customer service, product mix, and quality products. It should also take a serious inventory of what it can offer that is “not” being offered by its competitors. The inability of ABC to compete in the standard ways (e.g., to at least match customer service, product mix, and in good quality) and to find ways to differentiate itself from its competitors can threaten ABC’s long term survivability. At present, some of these threats are somewhat mitigated by ABC’s “mom and pop” image, but such mitigation tend to be temporarily and should not be relied upon especially if “mom and pop” begins to mean it is an unprofessional operation. Risk Assessment Probability: Moderate Impact: High Comment: Probability is moderate because of day-to-day exposure and impact is high because of perpetual brand erosion Recommendations for Products and Services It is recommended that ABC get in the habit of using quantitative data to help make product selection decisions to avoid waste and to help develop a better product mix. This 24
  • 25. The Company Products and Services (con’d) requires the development of data that would be useful for decision-making (e.g., inventory records, sales information, market trends, etc.). It is also recommended that ABC begin the process of training and developing their employee; especially as it relates to their understanding of how important it is that they help protect and preserve the ABC’s brand. More to the point, employees need to understand the correlation between having excellent product and services and their continued employment. At present, there are no consequences for not meeting this fundamental expectation and no performance management system to evaluate employees and to hold them accountable for improvement. This should be done professionally using people who have expertise in training staff. It is further recommended that these training sessions cover an understanding of the products and services being offered so each employee can be a “product ambassador” and help encourage sales. It is noted that most employees seem somewhat disengaged with respect to the products and service offered and cannot speak authoritatively about them. Assisting customers in their product choices is often one of the most effective ways to promote sales and ABC should teach all of their employees to become product ambassadors to improve the profitability of ABC. Implementation Samples or Plan for Products and Services There are professional services available that can customize and provide the training needed for ABC. ABC will need to allow these services an opportunity to get to know ABC and its business operation so it can properly develop a customized training program for the employees (similar to the interviewing workshop). There are also software companies that can provide on-line tutorials specifically customized to the grocery business. 25
  • 26. The Company Resources Available Description of Resources ABC resources for their business is the Owner’s personal monetary equity, Owner’s credit worthiness (to acquire business loans), Owners knowledge and skills, and ABC’s work force, capital equipment, and computer equipment (hardware and software). No assessment was made to the adequacy of the Owner’s personal monetary equity and credit worthiness. Owners’ knowledge and skills is extensive in the grocery business especially in the produce area and basic groceries. Their knowledge and skills, however, on the managerial side of the business including human resource management, business strategy, operational structure, sales and marketing, product mix and demographics, and basic recordkeeping and analytics in support of ABC is weak and could be augmented with either more training or supportive expertise. The primary resource for generating sales, and ultimately profits, for ABC is the company’s workforce. It is, by far, the biggest ongoing expense associated with the business. At present, ABC’s workforce is not adequately managed and, therefore, not deployed correctly leading to under-performance. This, in turn, creates waste and inefficiencies throughout the business. While the workforce is working well together and morale seems high, ABC’s workforce is not universally applied towards specific goals and objectives. It was noted that ABC’s hiring practices was weak and does not contribute to ABC’s goal of increasing professionalism, improving managerial oversight, or improving ABC’s brand. Currently, employees are managed more on a “crisis” basis and typically in response to Owner’s personal concerns or due to customer complaints. A preferred model would be to manage these resources through a defined, performance metrics system and tied to individual employee performance evaluations. 26
  • 27. The Company Resources Available (con’d) In order to achieve sustained improvements in productivity and efficiency, ABC will have to convert to a performance-based model and to create the necessary infrastructure, which would allow it to monitor individual progress against company-wide goals. There is no other way to protect human capital and its use. Capital equipment seems to be well matched to the business needs. Computer and computer-related equipment and software could be upgraded to improve recordkeeping, provide for better metrics and analytics, and to increase accuracy in their accounting, shipping and receiving, and inventory control. At present, documentation associated with ABC seem more labor- intensive rather than technologically efficient. Everything is by hand and via paper rather than through the electronic system (e.g., paperless systems). Strength of the Resources Capital equipment appears well matched to the businesses needs. Owners have very strong background in the grocery business and a solid, positive presence within the community (good will). Owners are very hardworking and are very engaged in their business. Weakness of the Resources Owners model of success is to work harder rather than work smarter. They are very “hands on” and consequently will do the work themselves rather than manage more effectively. ABC’s weak managerial team is a byproduct of the Owners lack of knowledge and skills in the human resource management arena and their general reluctance at delegating responsibilities and authorities downward and then holding lead people and managers responsible for results (as a condition for continued employment). 27
  • 28. The Company Resources Available (con’d) This situation is complicated by the absence of a strong performance evaluation and management system and a general lack of understanding of best practices for human resource management and the inter-relationship and integration of these systems into a business. It is noted that the grocery and produce side of their produce has been the Owners’ focus as they expanded. The human resource side of the business equation, however, has not been “scaled up” with the same degree of attention and focus. Also the Owners’ tendency to manage people as opposed to managing their work effort puts them at a constant disadvantage. There appears to be an over-reliance on “personal relationships” for their success as opposed to “best business practices” to achieve the same success. This philosophical tendency hampers their ability to manage effectively and to make the decisions necessary (e.g., termination of inefficient and unproductive employees) and to improve the productivity and efficiency within their business. This situation is further complicated by the Owner’s familial relationships. There appears to be a bias in favor of these employees even though they may not be performing to the level needed to meet the “added value” definition. Furthermore, any employee allowed to subvert the performance standards will ultimately create a lower standard for performance that management will have to follow to preserve equity. This creates an inferior resource that is not fully deployed, which is wasteful; especially if the employee’s pay is not re- aligned to the performance. Opportunities Presented by Resources ABC has an opportunity at this point in their business to improve computer-related equipment to improve productivity directly (purchase of printers, business-related software) and to take existing resource (workforce) and to re-align or re-train to maximize productivity and output. Threats Presented by Resources 28
  • 29. The Company Resources Available (con’d) A major threat to ABC is the mismanagement of its workforce, thereby, sustaining waste or worse, enforcing it through poor hiring or performance evaluation practices. Risk Assessment Probability: Low Impact: Moderate Comment: Impact moderate because of inability to optimize human capital usage Recommendations for Resources It is recommended that ABC start the process of applying “best practices in their human resource area and to hire more managerial staffing to assume a significant portion of the “hands-on” activities currently carried by the Owners and to simultaneously put into place a stronger performance management system to demand performance for continued employment at ABC. Implementation Samples or Plans for Resources Review the Human Resource section or this report for samples and information on best practices and incorporate into ABC. 29
  • 30. The Company Organizational Structure Description of Organizational Structure ABC has two stores; namely, the store in the Appletree District (flagship) and the store in the Berrydale District (original). The Appletree District Store is the larger of the stores and employs about 100 employees (part- and full-time employees) and is approximately three times the size of the Berrydale store. The two stores are approximately 2 miles apart and serve the same demographic groups described below. The Appletree District Store location was originally occupied by the Safeway’s grocery chain and when vacated, the Owners renovated the store and created a much larger space for fresh produce, meats and seafood. A bakery, deli, and floral section was added to generate foot traffic and to expand their product mix. The two Owners, Chuck and Pat Wells, are a husband and wife team and are the only executive staff members in the Company. While there are some overlaps, Chuck Wells is responsible for the grocery, produce, and dairy operations and Pat Wells is responsible for the rest including the administrative side of the business (e.g., personnel, accounting, etc.). Both owners are major decision-makers within ABC and are involved at a highly, detailed level in the management of their business. It is observed that there is not enough time in the day or week to do everything that needs to be done at ABC and often things just don’t get done unless it rises to a critical level. Their managerial style seems to have been historically casual and personable, highly geared towards working really hard and handling “crisis” as they occur in the workplace, and having expectations that employees will follow their lead in tone and hard work. It is noted that while ABC is taking advantage of “economy of scale” to achieve more profitability, their administrative operation has been insufficiently “scaled up” to support the expanded operation. Their response to the additional hiring of staffing, increased customer relations issues, vendor contracting has produced mixed results. ABC has yet to fully recognize the need to scale up on the human resource management side of their business operation and to put the necessary resources to respond to this deficiency. 30
  • 31. The Company Organizational Structure Consequently, there remains a level of risk for ABC. This assessment is ABC’s first attempt at being proactive and having a more efficient operation that does not respond to crisis after crisis, but rather anticipates them before they can have a negative impact on their business. At present, many of the sections in the store are not running as efficiently as desired and ABC lacks the in-house expertise to make the necessary improvements. This review noted that the responsibilities for improvement in various areas have been assigned, but the people who hold the assignments are not sufficiently knowledgeable or positively inclined to perform the duties (e.g., the Human Resource responsibility is assigned to the Grocery Department Head, but he has no background in human resource management). Generally, the administration side of ABC’s operation needs the most help in order to minimize general risk; have better control over quality, and to better manage their human resources. The technical aspect of the business operations is in much better shape (e.g., how much produce to buy, the scheduling and assignment of workers, etc.). Organizationally, it is the “box” just under the Owners (General Managers) and the assignment of “real” managers in each of the boxes at the next tier that needs the most help. The “over-extension” of existing staff and “over-lap” of duties to cover all of the vacant areas is not a very efficient or sustainable model. 31
  • 32. The Company Organization Structure (con’d) Berrydale District Store (Original) Description of Berrydale District Store The Berrydale District Store is the original store and was established over ten years ago. It is located at the corner of Rosemount Drive and Main Street location and is staffed by approximately 25 employees (part- and full-time). The following is the organization chart for the Berrydale District store: Exhibit 4 32
  • 33. The Company Organization Structure (con’d) Appletree Store (Flagship) Description of Appletree District Store The Appletree District Store location was originally occupied by theS afeway’s grocery chain and when vacated, the Owners renovated it and created a much larger space for fresh produce, meats and seafood. A bakery, deli, and floral section were added to this location. There is approximately 70 employees (more part-time, then full-time) at this store. The following is the organization chart for the Appletree District store. Exhibit 5 33
  • 34. The Company Organizational Structure (con’d) Strength in Organizational Structure ABC has a solid and simplified organizational structure. This structure is separated by the different departments (e.g., Produce, Grocery, etc.), with the administrative function supported near the top (just under the Owners/General Managers). Weakness in Organizational Structure One of the weaknesses in the organizational structure is the obvious absence of a strong managerial staff. Most of the people who have managerial responsibilities are really lead people and do not perform the full complement of duties associated with a manager (e.g., hiring and firing, performance evaluations, strategic planning, etc.). A review of the organization chart confirms this. Those who are considered managers are typically familial relations of the Owners. While this is arrangement is personally comforting to the Owners, it is probably not the best organizational model because it is the selection of employees is not based on the job requirements and challenges associated with each job. Moreover, this arrangement does not lend itself to the ability to manage managers based on merit since familial employees are seldom disciplined or terminated for failure to meet organizational goals. According to interviews with ABC, attempts to develop managers or to bring managers on board who are qualified to meet the organizational challenges have not been successful. At present, the human resource area is contained in the Special Projects area on the organization chart and handled by the Grocery Department Head. The organizational structure reflects the emphasis (or lack thereof) placed on human resource which may explain why ABC is experiencing some difficulties in this area. Also missing in this organizational structure is a strategy unit to create goals and objectives (e.g., sale targets) or to provide oversight on their achievement. It is not at the very top or immediately under. At present, it appears the organizational model is “everybody should work hard” and increased sales will hopefully occur. For example, 34
  • 35. The Company Organizational Structure (con’d) there is no department that draws a direct correlation between sale targets and marketing efforts. No one is assigned to regularly measure sales results and to make recommendations in marketing efforts, for example, to improve sales. This lack of planned oversight produces somewhat haphazard and random results and prevents the proper deployment of resources in one or another direction. Opportunities in Organizational Structure ABC has an opportunity to re-structure the organization to be more reflective of the oversight functions needed within the business. The improved management of human resources, sales, and marketing, for example, are all functions that contribute to higher profits and the organization can reflect their importance by embedding it within the structure. Threats Associated with Organization Structure The primary threat to the organization chart is that it is unsustainable and that the current organization places too heavy a reliance on the Owners to literally “do everything”. Since the Owners’ cannot possess all of the necessary expertise and be everywhere, it is important that they seriously consider bringing in experts (at least temporarily) to help them set up the necessary infrastructures and systems and then to have the experts train the current and prospective managerial team to maintain them. The current business organization has lots of managerial “vacancies” and, if not quickly filled, will overtime result in higher turnover and more human relation problems. The few staff members who are at ABC are doing “double duty” and the Owners’ expectation that this can be maintained is unrealistic. Moreover, an organization that has this many vacancies (or holes) not only stifles growth and profit-making, but it tends to formalizes waste and creates unnecessary risk to the business. 35
  • 36. The Company Organizational Structure (con’d) Risk Assessment Probability: Moderate Impact: Moderate Comment: Probability and impact moderate because of formalized inefficiencies and the over- extension of existing staff. Recommendations for Organizational Structure It is suggested that ABC consider using Business Process Model (BPM) to improve its business activities. It is a methodology that is increasingly applicable to all sorts of organizations including small businesses. The focus of the improvements is typically on 'value added' actions that make the customer service and experience better and on reducing wasted time and effort. It is further recommended as part of solidifying the organizational structure that ABC create and maintain a system by which each employee (past and present) can be tracked throughout their employment history at ABC. Exhibit 6 below identifies the headings, which should be used to maintain these personnel records. Implementation Samples or Plan for Organizational Structure In deploying the BPM described above, there are two main types of Business Process Models: • the 'as is' or baseline model (the current situation) • and the 'to be' model (the intended new situation) The aim of BPM is to illustrate a complete process, enabling managers, consultants and staff to improve the flow and to streamline the process. The outcomes of a business process modeling project are essentially increased profits which comes from: • added value to the customer, and 36
  • 37. The Company Organizational Structure (con’d) • reduced costs for the company. BPM is commonly a diagram representing a sequence of activities. It typically shows events, actions and links or connection points, in the sequence from end to end. Diagrams - essentially 'flow diagrams' - are a central feature of this methodology. SWOT Analysis, Balanced Scorecard and Project Management methods are further examples of “change” management tools, and Business Process Modeling can work alongside these methods. Other secondary consequences arising from the successful use of BPM can include increased competitive advantage, market growth, and better staff morale and retention. Before committing lots of resources to BPM, however, proper consideration should be given to the usefulness and focus of the exercise. The answers to the following questions would be helpful in making this determination: • Does the modeling have the potential to produce gains that will justify the time and effort? • Will the modeling be structured so that people will understand the outputs (not too big and complex as to be self-defeating)? • Do people understand why we are doing it, and "what's in it for them"? Sequence is significant and essential to most aspects of BPM. BPM identifies where and when activities are strung together and how to make work flow more efficient. BPM focuses on processes, actions and activities. Resources are featured within BPM depending on how they are processed. People (teams, departments, etc) are featured in BPM in terms of what they do, to what, and usually when and for what reasons, especially when different possibilities or options exist, as in a flow diagram. 37
  • 38. The Company Organizational Structure (con’d) BPM is cross-functional, usually combining the work and documentation of more than one department in the organization. In more complicated situations, BPM may also include activities of external organizations' processes and systems that feed into the primary process. In large organizations operations BPM tend to be analyzed and represented in more detail than in small organizations, due to scale and complexity. BPM is to an extent also defined by the various computerized tools or software, which are used in applying its methods. These methods and the standard features within them continue to evolve, which means that we should keep an open and curious mind as to how BPM can be used, and what people actually mean when they refer to it. The following is a diagram of BPM: BUSINESS PROCESS MODELING 1. Has a Goal; 2. Has Specific Inputs Goal 3. Has specific Outputs Information Resource 4. Uses Resources 5. Have Activities that are Performed 6. May Affect Organizational Units (Vertical & Horizontal) 7. Creates Value for Customers (Internal and External) Event Business Process Output 38
  • 39. The Company Organizational Structure (con’d) Exhibit 6 Headings for Employment Data ABC Employee ID Store Location (Laurel or Fruitvale) Last Name First Name Middle Initial Title Title Code Depart. Assigned Depart. Code Employment Eligibility Proof Eligibility Restrictions Exempt or Non-Exempt (FLSA) Supervisor (1) or Non-Supervisor (0) Full or Part-time (% Time) Hire Date Employment Status (Active, Past) Separation Date In-Hire Pay Current Pay % Change since Hired Job Change Date Description of Change Last Date for Performance Rating Employer Intervention Dates Employer Intervention Action 39
  • 40. Market Environment Laurel and Dimond Districts Description of Market Environment ABC’s two stores are located in the Berrydale (original store) and Appletree (newer store) Districts in the City of Mayfield. They are in a very culturally diverse neighborhood on two busy streets; namely, Rosemount Drive and Sunset Road, which is intersected by another busy street, Main Boulevard. Both the Appletree and Berrydale Districts have been in flux for last ten years as older homeowners move away and younger families move in with higher incomes. With the renovation of older homes and more community involvement cleaning up "troubled" areas, the neighborhood surround ABC is improving. ABC presence is helping to revitalize and support this transition. The Local Demographics To market ABC’s products and services effectively, Exhibits 7-9 may be useful. According to the U.S. Census Bureau's 2006-2008 American Community Survey where 90,000+ respondents participated, Mayfield’s demographics and population are as follows: 40
  • 41. Market Environment Local Demographics (con’d) Exhibit 7 Exhibit 9 Ethnic Population Miscellaneous Demographic What Population % White 46.9% African American 19.8% What Households % Native American .6% (150,000 Surveyed) Asian American 15.6% Children(Under18 28.6% Pacific Islander .5% years old) Hispanic or Latino 25.2% Married Couples 34.0% Other Races 12.9% Single Female 17.7% Two or More Races 3.7% Non-families 42.7% Individuals 32.5% Exhibit 8 65+ years old 8.6% Age and Income 18-24 years old 9.7% Demographic 25-44 years old 34.0% 45-64 years old 20.0% Miscellaneous Home Ownership 41.0% Figures Unemployment Rate 17.5% Median Age 33 years old (as of August 2009) Median Income $40,055 Median Income for $44,384 Family Male Median $37,433 Income Female Median $35,088 Income Female to Male 100 females (18+ Ratio age) to 93.2 males Source: U.S. Census Bureau’s 2006-2008 American Community Survey (90,000 (18+ years old) Respondents) – City of Mayfield 41
  • 42. Market Environment The Customer Profile Based on its history, ABC has identified its customer profile according to the characteristics and traits outline in Exhibit 10 below. Accordingly, most of the product mix and services offered by ABC have been geared towards this customer profile. Exhibit 10 Characteristic and Traits Caucasian Married with children Professional 35+ years old Middle to higher income level Higher Educational level Community-oriented Conservation conscientiousness Environmentally conscientious Reside in local area (within 10 miles of ABC stores) 42
  • 43. Market Environment Sales and Marketing Sales within ABC is generally the responsibility of all employees although there are no specific targets set by the Owners. To date there are no systems or processes for gathering or disseminating sales information regularly to managers or employees so it can be used to improve sales. Marketing is generally the responsibility of one person who does not appear to have formal training in marketing. This individual is also responsible for running the grocery department and the human resource function, both of which are being learned “by rote and by doing”. The marketing function by all measures is highly dependent on the random availability of the assigned individual. Strength of Market Environment The target customer base that has been developed over the years at ABC is consistent with the demographic characteristics of residents in the City of Mayfield. For example, 35+ years old account for about 65% of ABC’s customer base and ~54% of the city-wide population is between the ages of 25-65 years old. The median income of Oakland residents is $44,284, which is consistent with the affordability range of products offered at ABC. A majority of the ABC customers are Caucasians and Latinos and they accumulatively account for ~72% of the total population in the City of Mayfield . There are also a healthy percentage of other demographic groups (e.g., married couples, single females, homeowners) in Mayfield that can be accessed in the market environment by ABC. Because ABC is positioned more as a “neighborhood” marketplace as opposed to a “corporate” marketplace, they have a high loyalty rating, which helps with their customer retention value. Weakness of Market Environment An area of weakness in the market environment is the difficulty with which to access the rest of the population (e.g., Asians and African Americans) in the immediate, geographic location where ABC operates. Asians in the immediate vicinity tend to be immigrant 43
  • 44. Market Environment (con’d) families with a preference for ethnic foods, which is highly specialized and more easily serviced in Mayfield’s specialty grocery stores. With respect to the African American residents in the immediate area, it appears most of them prefer to shop at their local supermarkets (e.g., Safeway’s). The product mix offered at ABC does not appear to entice the patronage of this community either. Another area of weakness in the market environment is whether there are enough customers to support ABC’s and all the other “like” competitors within the City of Mayfield. For example, there is “crossover” between the customer base of ABC and those for Whole Food and Trader Joe’s. The presence of Safeway and the various weekly produce markets in the neighborhoods also cut into sales at ABC. This presents a real challenge for ABC to distinguish itself from all of the other offerings in the city. Opportunities with Market Environment ABC has an opportunity to differentiate itself from the rest of the competition via its community involvement, improved professionalism and brand image, and through its distinctive customer service. The people on the “front line” and critical to making this distinction will be ABC’s employees. Threats Associated with Market Environment The principle threat to ABC will be the migration of their customer base to their competitors; especially Trader Joe’s, which has a high level of professionalism and consistency in their brand image. Trader Joe employees are consistently engaging, friendly, and efficient which goes a long way to providing a positive customer experience. ABC has some work to do before it can achieve the same positive customer experience. Part of the problem is the ABC staffing, which does not view itself as part of the product offering that insures a good quality brand image. Until ABC institutes a program that trains the staff to view themselves as part of ABC’s brand, the threat of losing customers and the prospect of having to continuously find new customers will forever be present. Having a positive customer experience is as important as buying a fresh peach from a merchant; especially when there are other outlets for fresh peaches. 44
  • 45. Market Environment (con’d) Risk Assessment Probability: Moderate Impact: High Comment: Probability is moderate but Impact is high because of lack of marketing plan and failure to aggressively distinguish itself among competitors. Recommendations for Market Environment ABC may want to invest in a good strategic marketing plan covering a 3-5 year period with a solid implementation plan to go with it. However, before embarking on this, it is recommended that ABC make a concerted effort to get the staff to recognize that they are as much a product as the items sold in the store. Improving ABC’s brand should be a high priority exercise and only after this has been accomplished can ABC and its product and service be successfully marketed. Implementation Samples or Plan for Market Environment Exhibit 11 Marketing Process A. Define the Aims and Objectives for Marketing Plan B. Identify all of the Contents of the marketing plan C. Detail the plan (and sub-plans and programs that go with them) D. Establish the means by which progress can be measured (e.g., pre- and post-sales figures) E. Examine all performance analyses to tweak marketing plan 1. Sales analysis 2. Market share analysis 3. Expense analysis 4. Financial analysis 45
  • 46. Market Environment (con’d) Exhibit 12 Activities in Marketing 1. Review of the marketing environment. A study of the organization's markets, customers, competitors and the overall economic, political, cultural and technical environment; covering developing trends, as well as the current situation. 2. Review of the detailed marketing activity. A study of the company's marketing mix; in terms of the 8 Ps - (see below) 3. Review of the marketing system. A study of the marketing organization, marketing research systems and the current marketing objectives and strategies. The last of these is too frequently ignored. 4. Portfolio planning. In addition, the coordinated planning of the individual products and services can contribute towards the balanced portfolio. 5. 80:20 rule. To achieve the maximum impact, the marketing plan must be clear, concise and simple*. It needs to concentrate on the 20 percent of products or services, and on the 20 percent of customers, which will account for 80 percent of the volume and 80 percent of the profit. 6. 8 P's: Product, Place, Price and Promotion, Physical Environment, People, Process, Packaging. The 8 P's offer a framework from which to build action plans. 1. Price - The amount of money needed to buy products 2. Product - The actual product 3. Promotion (advertising)- Getting the product known 4. Placement - Where the product is located 5. People - Represent the business 6. Physical environment - The ambiance, mood, or tone of the environment 7. Process - How do people obtain your product 8. Packaging - How the product will be protected 46
  • 47. Market Environment (con’d) *Ingredients of a Good Marketing Plan Clear - They should be an unambiguous statement of 'exactly' what is to be done. Quantified - The predicted outcome of each activity should be, as far as possible, quantified, so that its performance can be monitored. Focused - The temptation to proliferate activities beyond the numbers which can be realistically controlled should be avoided. The 80:20 Rule applies in this context too. Realistic - They should be achievable. Agreed - Those who are to implement them should be committed to them, and agree that they are achievable. The resulting plans should become a working document, which will guide the campaigns taking place throughout the organization over the period of the plan. If the marketing plan is to work, every exception to it (throughout the year) must be questioned; and the lessons learned, to be incorporated in the next year's planning. 47
  • 48. Market Environment (con’d) Exhibit 13 Components of a Marketing Plan (Developing the Marketing Plan) I. Title Page II. Executive Summary III. Current Situation – Macro-environment a. economy b. legal c. government d. technology e. ecological f. socio-cultural g. supply chain IV. Current Situation - Market Analysis a. market definition b. market size c. market segmentation d. industry structure and strategic groupings e. Porter 5 forces analysis f. competition and market share g. competitors' strengths and weaknesses h. market trends V. Current Situation - Consumer Analysis a. nature of the buying decision b. participants c. demographics d. psychographics e. buyer motivation and expectations f. loyalty segments Vi. Current Situation - Internal a. company resources i. financial ii. people 48
  • 49. Market Environment (con’d) Exhibit 13 Components of a Marketing Plan (Developing the Marketing Plan) (con’d) iii. time iv. skills b. objectives i. mission statement and vision statement ii. corporate objectives iii. financial objective iv. marketing objectives v. long term objectives vi. description of the basic business philosophy g. corporate culture VI. Summary of Situation Analysis a. external threats b. external opportunities c. internal strengths d. internal weaknesses e. Critical success factors in the industry f. our sustainable competitive advantage VII. Marketing research a. information requirements b. research methodology c. research results VIII. Marketing Strategy - Product a. product mix b. product strengths and weaknesses i. perceptual mapping c. product life cycle management and new product development d. Brand name, brand image, and brand equity e. the augmented product f. product portfolio analysis i. B.C.G. Analysis ii. contribution margin analysis 49
  • 50. Market Environment (con’d) Exhibit 13 Components of a Marketing Plan (Developing the Marketing Plan) (con’d) iii. G.E. Multi Factorial analysis iv. Quality Function Deployment IX. Marketing Strategy - segmented marketing actions and market share objectives a. by product, b. by customer segment, c. by geographical market, d. by distribution channel. X. Marketing Strategy - Price a. pricing objectives b. pricing method (e.g., cost plus, demand based, or competitor indexing) c. pricing strategy (e.g., skimming, or penetration) d. discounts and allowances e. price elasticity and customer sensitivity f. price zoning g. break even analysis at various prices XI. Marketing Strategy - promotion a. a. promotional goals b. promotional mix c. advertising reach, frequency, flights, theme, and media d. sales force requirements, techniques, and management e. sales promotion f. publicity and public relations g. electronic promotion (e.g., Web, or telephone) h. word of mouth marketing (buzz) i. viral marketing XII. Marketing Strategy - Distribution a. geographical coverage b. distribution channels c. physical distribution and logistics d. electronic distribution XIII. Implementation a. personnel requirements 50
  • 51. Market Environment (con’d) Exhibit 13 Components of a Marketing Plan (Developing the Marketing Plan) (con’d) i. assign responsibilities ii. give incentives iii. training on selling methods b. financial requirements c. management information systems requirements d. month-by-month agenda i. PERT or critical path analysis e. monitoring results and benchmarks f. adjustment mechanism g. contingencies (What if's) XIV. Financial Summary a. assumptions b. pro-forma monthly income statement c. contribution margin analysis d. breakeven analysis e. Monte Carlo method f. ISI: Internet Strategic Intelligence XV. Scenarios a. Prediction of Future Scenarios b. Plan of Action for each Scenario XVI. Appendix a. pictures and specifications of the new product b. results from research already completed 51
  • 52. Market Environment (con’d) Exhibit 14 Types of Performance Analyses (after Marketing Plan is Implemented) 1. Performance analyses To track marketing performance, the following analyses are performed and reviewed: 2. Sales analysis Most organizations track their sales results. Tracking the sales variances (i.e., deviation from targeted figure) provides a more immediate picture of sales effort. `Micro-analysis' can then be done to investigate the underlining reason (individual products, sales territories, customers, etc.) for success or failure to those sales figures. 3. Market share analysis Tracking market share is an important metric. Though absolute sales might grow in an expanding market, a firm's share of the market can actually decrease which bodes ill for future sales when the market starts to drop. Where such market share is tracked, there may be a number of aspects which will be followed: a. overall market share b. segment share - that in the specific, targeted segment c. relative share -in relation to the market leaders d. annual fluctuation rate of market share 4. Expense analysis The key ratio to watch in this area is usually the `marketing expense to sales ratio'; although this may be broken down into other elements (advertising to sales, sales administration to sales, etc.). 52
  • 53. Market Environment (con’d) Exhibit 14 Types of Performance Analyses (after Marketing Plan is 5. Financial analysis The "bottom line" of marketing activities should at least in theory, be the net profit. There are a number of separate performance figures and key ratios, which need to be tracked:  gross contribution<>net profit  gross profit<>return on investment  net contribution<>profit on sales Performance Analysis 53
  • 54. Market Environment (con’d) Exhibit 15 Sample Flowchart for Marketing Planning Process 54
  • 55. Risk and Security Mitigation and Protection Risk Description of Risk Program Areas which have potential for creating a negative event with financial consequences to ABC (e.g., lawsuits, regulatory violations, etc.) is the subject of this section. ABC does not have a formal risk assessment program. The Owners seem to be generally aware of some of the risk associated with their business, but not specifically. In the absence of a risk assessment program at ABC, this section will deal primarily with what a risk assessment program consist of and the risk rating system used in this report in each of the sections. We start with a definition of risk measured in terms of the probability it will happen and the level of impact to the company if it does happen. Managing risk is among one of the most important aspect of managing a business. One way of defining risk is by defining the likelihood (probability) that a business will either suffer a negative event or fail to achieve a planned outcome. Probability Probability is the chance that a particular negative event will occur.  High – More likely than not that the negative event will occur. Event has not yet happened, but the statistical odds are in favor of it happening (particularly true if 55
  • 56. Risk and Security Risk (con’d) risk factors are not mitigated).  Moderate – A probable chance that the negative event will occur.  Low – Remote chance that the undesirable event will occur. Impact Impact is the level of magnitude, significance, or severity of a negative effect.  High – potential for adverse safety incidents, significant cost, or, major delay or negative company-wide effect is more likely than not. A condition that can seriously affect the performance of the company.  Moderate – potential for minimal cost or safety consequence, or negative company effect, but which can still adversely affect company performance.  Low – potential for minor cost or safety impact with minimal impact on company performance. The risk assessments in this report are under the “Threats” heading under the specific sections. Risk rating will be based on probability and on degree of impact, as described above, and defined as high (H), moderate (M), or low (L). For example a risk rating of P=M and I=H means that the probability of risk is moderate, but if it comes to pass, the impact on ABC is high (i.e., significant). Look for the following rating format: Risk Assessment Probability: Moderate Impact: High Comment: Probability and impact moderate because of formalized inefficiencies and the over- extension of existing staff. Strength of Risk Program None. No Risk Program at ABC. 56
  • 57. Risk and Security Risk (con’d) Weakness of Risk Program The absence of a Risk Program creates both a weakness within the business structure and a risk to the business. For example, not knowing the regulatory requirements and laws creates a risk to the business (e.g., new health codes). Unfamiliarity with the management of human resources can create an unwanted lawsuit, which has a detrimental impact on the business. Claiming ignorance is seldom a good defense shield against lawsuits especially given that ABC is no longer considered a “mom and pop” business due to its economic scale, size and the number of employees that it employs. Opportunities in Risk Program Since this report highlights many of the functions and makes a risk assessment within those business areas, this is a good opportunity to review those areas that have the highest probability of risk and highest level of impact and take the necessary action to mitigate those risks. Threats in Risk Program The obvious threat to the risk programs is a lack of commitment to mitigate risks and a failure to allocate resources to act on obvious risks. Risk Assessment Probability: Moderate Impact: High Comment: Probability is moderate in that ABC seems to understand where their risk area and the impact is high because there are number of risk that will have serious impact on ABC’s business if unmitigated in a timely way 57
  • 58. Risk and Security Risk (con’d) Recommendations in Connection with Risk Program Since this report is primarily focused on the human resource area and aligning this function within the context of the overall business structure and operation at ABC, all risk assessments in this report are “cursory” at best. It is recommended that ABC get an expert with “risk management” expertise to do a more thorough job of assessing risk. In the meantime, those areas that are already highlighted with the highest risks and with the biggest impact should be mitigated as soon as possible. Implementation Samples and Plan for Risk Program Exhibits 16-17 provide a more complete definition of a risk management program along with a sample form with a checklist to perform a risk mitigation assessment. This information should be helpful in identifying a competent risk expert or to understand the many elements within a risk program. 58
  • 59. Risk and Security Risk (con’d) Exhibit 16 Definition of Risk Management What's "Risk Management"? Risk management is attempting to identify and then manage threats that could severely impact or bring down the organization. Generally, this involves reviewing operations of the organization, identifying potential threats to the organization and the likelihood of their occurrence, and then taking appropriate actions to address the most likely threats. Traditionally, risk management was thought of as mostly a matter of getting the right insurance. Insurance coverage usually came in rather standard packages, so people tended to not take risk management seriously. However, this impression of risk management has changed dramatically. With the recent increase in rules and regulations, employee-related lawsuits and reliance on key resources, risk management is becoming a management practice that is every bit as important as financial or facilities management. There are several basic activities, which can be conducted to dramatically reduce ABC’s chances of experiencing a catastrophic event that ruins or severely impairs the company. Conducting a Risk Management Assessment A company should regularly undertake comprehensive, focused assessment of potential risks to the organization. This focused assessment should occur at least twice a year by a team of staff members representing all of the major functions of the company. The assessment should be carefully planned, documented and methodically carried out. 59
  • 60. Risk and Security Risk (con’d) Exhibit 16 Definition of Risk Management (con’d) The most common risks are typically of the types listed below. Comprehensive checklists help a great deal to quickly review a wide range of organizational aspects. Other aspects require more careful review. Best Protections: Good Management; Up-to-Date Personnel Policies; and Well- Designed Insurance Good Management Efforts undertaken to properly manage a company contributes to sound risk management. For example, a fully attentive managerial staff with a wide range of skills may be the most important guard against major threats to an organization. Careful strategic planning and effective supervision helps ensure organizational resources are closely aligned to accomplishing the organization's mission. Assuring that employees are treated fairly and rules and procedures are followed consistently is also helpful in mitigating risk. Up-to-date, Reviewed Personnel Policies Every organization must have up-to-date policies, which guide the relationships between staff and management. There has been a noticeable increase in lawsuits regarding wrongful termination, harassment and discrimination, disagreements about promotions or salary actions, etc. Parties to lawsuits include the company, management and owners. Therefore, personnel policies must be reviewed at least once a year by an outside advisor who is an expert about all of the employee-related laws and regulations. Be sure that management is well versed about the policies. Typically, courts will interpret actions by the company’s personnel as representative of the organization's preferred course of action and give their behavior more weight than documented policies. 60
  • 61. Risk and Security Risk (con’d) Exhibit 16 Definition of Risk Management (con’d) Well-designed Insurance Coverage For a broad and basic overview of insurance, a company should invite an insurance agent (or better yet, an insurance broker) to go over the types of insurance needed to help mitigate its risk. A company should allocate a chunk of time during the year to study insurance policies. Note any questions and pose them to the insurance professional. Ask for a written, clear description regarding any ambiguities and to do so on the insurance company’s letterhead with the insurance agent’s signature. Adequate insurance can offset any monetary setbacks that come from operating a business in an increasingly litigious business environment. Legal Protection To conduct a general audit of legal-related matters in your organization, seek the help of a legal professional. Often times, companies; especially small businesses, will forgo legal assistance because it is costly. This is a mistake. There is no substitute for legal advice when a situation calls for more than guesswork on how to proceed. This is especially true if a company is in receipt of a legal action or does not have expertise in an area that requires precision. Managing Risks in Financial Management Sound financial and asset controls help minimize theft, fraud and waste. Resource Management (e.g., people, computers, records and facilities) 61
  • 62. Risk and Security Risk (con’d) Exhibit 16 Definition of Risk Management (con’d) People Each key role in a company should have some type of resource to back up performance of that role. For example, another person in the organization should have general understanding of another person's role in case that other person is not able to perform their role. The use of up-to-date job descriptions, “to do” lists and receiving regular status reports help to ensure understanding of how others carry out their roles so it can be replicated. Another staff member should be able to back up another member who is out sick or on vacation. During staff meetings, have a staff member give a presentation about their role and how they carry it out. Ensure that each critical role has at least one backup person who can step in to conduct the role. The backup assignment should be part of the person's job description to help the person take the assignment seriously. Computers Risk, associated with computers, can be minimized by keeping track of those with access to important data. In those instances where computer records are confidential, employees handling such records can be asked to sign “non-disclosure” contracts to assure confidentiality. It is also important to make sure that access to passwords or records be restricted to those who need to know only. Computer security includes protecting against viruses and breaches due to piracy. Records 1. Record all records in a central location and well labeled. 2. Keep critical documents (e.g., leases and contracts, Articles of Incorporation, By-Laws, letter from the IRS documentation, etc.) preferably in a fireproof box. 3. Personnel files should be locked in desk drawers with access granted to the Owners and his or her designee. 62
  • 63. Risk and Security Risk (con’d) Exhibit 16 Definition of Risk Management (con’d) 4. Allocate two hours each year for staff to audit the agency's documentation for relevance, adequate labeling and reasonable organization. General Facilities 1. Always lock your doors. This seems obvious, but too many organizations fail to do so. 2. Ensure your fire protection systems are fully functional by scheduling to test fire alarms twice a year or demanding that your facility's owner test alarms twice a year. Note that certain electrical equipment can be severely damaged from water sprinklers. Arrange adequate covering or arrangement to minimize water seepage if overhead sprinklers open up. 3. Conduct inspections twice a year to: a) inspect floors for ripped carpets b) look for cables or wires laying on the floor (tape over them if you have to) c) notice any electrical outlets with black soot near outlets (this indicates electrical shortages) d) ask staff if their office accommodations are sufficient (e.g., their chairs are comfortable and tilted correctly to support their backs and set at the right heights; there is sufficient light at their desk and for their computer work, etc.) e) notice any heavy items on or near the floor, which staff must continually stoop to lift, (e.g., boxes of paper for the copier or printers or other heavy items stacked in a storage room or on a shelf) f) ensure all doors have fully functional door knobs and cannot jam or cause injury when in use (e.g., fall off while engaged). g) ensure there is a well-stocked first-aid kit available to all staff 63
  • 64. Risk and Security Risk (con’d) Exhibit 17 Sample Human Resource Risk Mitigation Form Rating Needs * Indicator Met Work N/A 1. The company has a written personnel handbook/policy that is regularly reviewed and updated: a) to describe the recruitment, hiring, termination and standard work rules for all staff; b) to E maintain compliance with government regulations including Fair Labor Standards Act, Equal Employment Opportunity Act, Americans with Disabilities Act, Occupational Health and Safety Act, Family Leave Act, Affirmative Action Plan (if required), etc. R 2. The company follows nondiscriminatory hiring practices. 3. The company provides a copy of or access to the written personnel policy to all principles, key managers and all staff R members. All staff members acknowledge in writing that they have read and have access to the personnel handbook/policies. 4. The company has job descriptions including qualifications, duties, R reporting relationships and key indicators. 5. The company's Owners conducts an annual review/evaluation of R its managerial staff in relationship to a previously determined set of expectations. 6. The managerial salaries are set by the Owners in a reasonable R process and is in compliance with the company's compensation plan. 7. The company requires employee performance appraisals to be R conducted and documented at least annually. 8. The company has a compensation plan, and a periodic review of A salary ranges and benefits is conducted. 9. The company has a timely process for filling vacant positions to A prevent an interruption of program services or disruption to company operations. 10. The company has a process for reviewing and responding to A ideas, suggestions, comments and perceptions from all staff members. 11. The company provides opportunities for employees' professional A development and training with their job skill area and also in such areas as cultural sensitivity and personal development. 12. The company maintains contemporaneous records documenting A staff time in program allocations. *Indicators ratings: E=essential; R=recommended; A=additional to strengthen company’s activities 64
  • 65. Risk and Security Risk (con’d) Exhibit 17 Sample Human Resource Risk Mitigation Form Rating Needs Indicator Met Work N/A * 13. The company has a clearly defined purpose of the role that E employees have within the company. E 14. Job descriptions exist for all employee positions in the company. 15. The company has a well-defined and communicated employee management plan that includes a recruitment policy, description of all employee jobs, an application and interview process, possible stipend R and reimbursement policies, statement of which staff has supervisory responsibilities over what employees, and any other employee personnel policy information. 16. The company follows a recruitment policy that does not E discriminate, but respects, encourages and represents the diversity of the community. 17. The company provides appropriate training and orientation to the agency to assist the employee in the performance of their employee E activities. Employees are offered training with staff in such areas as cultural sensitivity. 18. The company is respectful of the employee's abilities and time commitment and has various job duties to meet these needs. Jobs R should not be given to employees simply because the jobs are considered inferior for paid staff. 19. The company does employee performance appraisals periodically and communicates to the employees how well they are doing, or R where additional attention is needed. At the same time, employees are requested to review and evaluate their involvement in the company and the people they work with and suggest areas for improvement. 65
  • 66. Risk and Security Risk (con’d) Exhibit 17 Sample Human Resource Risk Mitigation Form (con’d) Rating Needs Indicator Met Work N/A * 20. The company does some type of employee recognition or R commendation periodically and staff continuously demonstrates their appreciation towards the employees and their efforts. 21. The company has a process for reviewing and responding to ideas, A suggestions, comments and perceptions from employees. 22. The company provides opportunities for program participants to A volunteer. 23. The company maintains contemporaneous records documenting volunteer time in program allocations. Financial records can be A maintained for the volunteer time spent on programs and recorded as in-kind contributions. *Indicators ratings: E=essential; R=recommended; A=additional to strengthen company’s activities 66
  • 67. Risk and Security Security Description of Security Program ABC has a basic security program that covers inventory theft and in-store theft. The shipping and receiving process is fairly well controlled with on-site employees signing for most incoming inventory. Control of inventory once it reaches ABC and before it is sold, however, appears to be less than pristine. New software has been purchased to better control this aspect of the inventory. In-store security and exterior security is through contracted, private security services. The facility is secured through a general alarm system and monitored by an alarm service company and the City of Mayfield’s police department, as needed. Security management typically includes asset security management (e.g., inventory), physical security (e.g., customer and employee safety), and human resource safety functions. It includes the protection of ABC’s inventory and information assets. Security mechanisms such as doors, locks, keys, and access portals (e.g., loading and unloading docks) all come under physical security management. Also anything that deters a breach of a physical facility, resources, or information comes under physical security. Security associated with human resource safety functions include how to security an area in order to assure safety; how employees are to handle inventory (usable or non-usable); and what specific actions will be taken in connection to theft, misappropriation and misuse of company assets and inventory. In general practice, a security policy is crafted that defines and encompasses everything that needs to be secured with the help of all employees. Security management covers all assets that, if breached or lost, could create a negative financial consequence to ABC (e.g., theft, safety hazards, etc.). 67
  • 68. Risk and Security Security (con’d) Strength of Security Program While not complete, ABC appears to have many aspects of a security management program. Weakness of Security Program Following the inventory from receipt to sales is not closely managed to minimize and prevent theft and losses. Only one staff member appears to be managing this aspect of the business. The quality of the private security service is not very high. The security officers that report to duty appear less than vigilant and appear more “for show” than for actual performance. While their job is mainly to observe, they do not seem particularly engaged and even when walking within and outside of the store, one does not get the sense they are either alert or focused on their duties. Opportunities in Security Program ABC has an opportunity to better protect their inventory and to monitor customers and their interactions with staff via a better security, monitoring system. This is not only to prevent theft, but also to assure that safety issues are accurately reported by staff and customers. Threats to Security Program Inadequate on-site security protection is a general threat to ABC’s security program. Continued losses due to theft can be better mitigated with a strong security program and better communication of this security improvement to staff and to customers. Risk Assessment Probability: Moderate Impact: High Comment: Probability is moderate given existing security efforts and impact is high because theft or losses are costly to business. 68
  • 69. Risk and Security Security (con’d) Recommendations for Security Management It is recommended that ABC do a more thorough security management assessment and to re-evaluate the cost of hiring a private security service versus using a better security monitoring system. Alternatively, ABC may want to insist on having a security personnel assigned that is more alert, vigilant, and engaged in their duties and responsibilities with regard to security monitoring. It is also suggested that there be less “cross-talk” between security personnel and staffing so the security personnel can focus on their jobs. Designing a set of specific duties that the security personnel must perform during their shift may be helpful and perhaps could include the monitoring of the shipping and receiving area when goods are being unloaded. A discussion with the security company as to what can be expected of their personnel would also be helpful. Suggest the use of an evaluation form to assess the performance of the security guard along with a recommendation as to whether the service should be continued. ABC may also want to develop a security policy that outlines what is covered under security and the consequences for a violation of this policy by employees. Implementation Samples or Plan for Security Management Exhibits 18-20 provide some samples for consideration to improve ABC’s security management program. Exhibit 18 identifies the elements of a good security management plan, Exhibit 19 provides a sample of a vulnerability report, and Exhibit 20 outlines how to develop a computer security plan. 69
  • 70. Risk and Security (con’d) Exhibit 18 Sample Elements of Security Management Plan • Security Management Plan • Section A -- Executive Summary o Scope of the Plan o Statement of Need o Objectives of the Plan o Approach Overview o Standards of Performance o Information Gathering and Reporting o Orientation and Training Programs o Organization Rules and Responsibilities • Section B -- Policy Section • Section C -- Access Control Policies • Section D -- Identification Policies • Section E -- Security-Related Policies • Section F -- Unit Security Policies • Section G -- Security Department Policies • Section H -- Documentation of Performance Standards • Section I -- Documentation of Various Staff Tests • Section J -- Documentation of Vulnerability Assessments • Section K -- Statement of Authority and Approval 70
  • 71. Risk and Security (con’d) Exhibit 19 Sample Vulnerability Report Vulnerability assessments should be done as soon as practicable after each major incident or concern as expressed by staff. It may not necessary, in some cases, to take any action but the processes should be reviewed in any case. Store in Security Management Plan. Source: http://www.expertlaw.com/library/security/security_management.html Incident: Incident Date: Time: Incident Number: Reviewer: Problem: Action: To Safety Committee Conclusion/ Follow-up Review Completed: Recommendations: 71
  • 72. Risk and Security (con’d) Exhibit 20 Sample Computer Security Basic Computer System Security There are two kinds of security: data and break-in. Data security is addressed by having a good backup system (see next section on computer security). Break-in security is often a matter of using passwords to files or systems where possible, locking systems in offices and managing modem dial-in (e.g. turn off modem except when sending or receiving. 1. To avoid losing information stored on your computers whena disk breaks or "crashes", ensure that computer files are regularly backed up to another media (e.g., backed upon CD, external hard drive, etc.). Store the media offsite, that is, in a facility other than at your organization. If a disk crashes, you can repair the disk or get a new one and then restore the information from the backup media onto the new disk. Or, if backup media cannot be afforded (ensure files are stored on at least two different media devices (e.g., stored on an internal hard disk and then also on a CD). Using a CD as backup simply requires the computer user to occasionally save away his or her file to the diskette in addition to the hard disk or to turn on the “autosave” feature within the computer and back up later. Label the CD with the time period, during which files were backed up to it. The most important items to backup are usually database files, spreadsheet files and large documents written by users. Conducting regular backups is more a matter of managerial policy than technical limitations. 2. Use electrical surge protectors to ensure your computers will not experience sudden surges of electricity (e.g., during storms, if the quality of your electricity in your building is poor, or is the computer is turned off and on). 3. Protect unauthorized access to computer files by using passwords to log-on to your system, if possible. Critical files can be copied onto two different CD’s (with one as a 72
  • 73. Risk and Security (con’d) Exhibit 20 Sample Computer Security System (con’d) backup for the other) and both stored in locked drawers. Be sure to label the CD such that you'll recognize them later by the name on the label. 4. Ensure that computers remain working as much as possible (that is, maximum their uptime) by recording and testing detailed procedures for all routine, but critical, tasks performed by staff on the computers and associated peripherals (e.g., for computer backups and restores, fixing recurring problems, etc.). Locate and label the procedures in a central location of which all staff are aware. 5. Develop competent internal technical support personnel who can help others to conduct basic activities on the computers and who can call outside consultants for troubleshooting when needed. Have one or two internal people who are designated as technical support contacts for other staff members. 6. Instruct staff to report all problems to the internal technical support people. That way, the internal people are aware of all problems and are more likely to detect oncoming problems as early as possible. They also become better trained at detecting and diagnosing problems. 7. Record all important phone numbers for technical support consultants or contacts, and ensure staff can find these numbers when needed. 8. Keep all software documentation, such as manuals and guides, stored in a central location where staff can find them. Post a sheet on the wall so they can check documents out and for control to ensure they are returned. 9. Promptly register all new software with the vendor to ensure you receive notification of regular software version updates and your eligibility to call the vendors for technical support if needed. 10. Keep the serial numbers of all software packages in a clearly visible place for ease of reference when calling the software vendor's technical support. (The vendor usually will ask you for the serial number to verify that you indeed purchased the software.) 11. Note that if you dissemble your computer hardware, you risk losing coverage of your 73
  • 74. Risk and Security (con’d) Exhibit 20 Sample Computer Security System (con’d) warranty. During your warranty period (which often covers labor during the first 90 days and hardware during the first one or two years), always call the vendor as soon as you suspect any problems. Problems usually occur during the first several weeks if they occur at all. 12. Be sure to install a virus detector on your system. The detector should automatically check any new data brought into your system, for example, from diskettes, downloaded from the Internet, etc. 13. Develop a disaster recovery plan. The plan should address contingencies. It should include procedures to respond to (e.g., if a disk crashes, if the computer quits working, if the network is down, if the building is somehow destroyed, etc.). Source: http://www.managementhelp.org/infomgnt/security/basic.htm#anchor106567 74
  • 75. Contract & Procurement Management Contracting and Purchasing Management Description of Contract and Procurement Program Contract & Procurement Management is responsible for obtaining maximum value from the expenditures of ABC funds and insuring that all procedural requirements are met. The primary role of procurement is to: • Identify the goods and services to procure • Complete Purchase Orders and issue to suppliers • Agree on delivery timeframes and methods • Receive goods and services from suppliers • Review and accept the items procured • Approve supplier payments At present, ABC does not have a formal contract and procurement management system. While there are ongoing purchases made everyday, there is no contract management system or procurement plan to pre-plan purchases years in advance or to enter into contracts that might provide for better economy of scale purchases. This section will deal primarily with what a good contract and procurement management program might look like. Having a solid contract and procurement management program requires that the following elements be incorporated. Exhibits 21 to 26 illustrate phases of the contract and procurement processes (Source of Exhibits: Personal views of M. Judd at Trademark Woodworks, LLC, Bozeman, MT.) 75
  • 76. Contract & Procurement Management Contract Administration The process of managing the contract between the buyer (ABC) and seller and covers any subsequent changes to the terms and conditions within the contract. The Contract A contract is a mutually and legally binding agreement that obligates the seller to provide the specified products or services while obligating the buyer to pay for them. Contracts should clarify responsibilities and define key deliverables. Commonly referred to as: Statement of Work (SOW) which is a narrative description of products, services, or results to be supplied Contract Types 1. Fixed Price (Lump Sum) Contracts: a. Firm Fixed Price b. Fixed Price Incentive Fee 2. Cost Reimbursement a. Cost Plus Award Fee (CPAF) b. Cost Plus Fixed Fee (CPFF) c. Cost Plus Incentive Fee (CPIF) d. Cost Plus Percentage of Cost (CPPC) 3. Time and Materials Procurement Plan A procurement plan documents how procurement (purchasing) will be managed, starting with the purchasing documents down to the execution of the contract. Make or Buy Decision A company has to decide whether to make products in-house or buy it ready-made. For example, does ABC want to buy 30 varieties of flowers and bundle into floral bouquets in- house or buy the “already-bundled” bouquets? Comparing the costs and benefits of both 76
  • 77. Contract & Procurement Management approaches is a procurement decision. Invitation to Sell The method by which sellers solicit or are encouraged to submit proposals. ABC would provide a specific and identifiable product(s). for prospective sellers to make their proposals. Strength of Contract and Procurement Program Purchases are well controlled. All purchases are controlled by the Owners, with very little delegated authority issued to others Weakness of Contract and Procurement Program There is no contract or procurement plan to take advantage of “forward” buying, which might provide better pricing points. There is no expertise on-site to do contract reviews to assure terms and conditions are being or can be met and are economically feasible for ABC. Disadvantages surrounding contracts are typically discovered “after the fact” and only when things become problematic (e.g., during a lawsuit). There appears to be an informal policy prohibiting the signing of contracts by ABC employees especially if it would obligate ABC for inventory, services, or goods. Staff members, however, can sign for incoming supplies and services with no apparent limits (e.g., not-to-exceed levels) and this activity is dependent on the “good judgment or trust” of the staff members signing. Opportunities in Contract and Procurement Program ABC has an opportunity to strengthen its contract and procurement program to both reduce risk and to make their contract and procurement decision-making more economically efficient. By improving on contract terms and conditions favorable to ABC and by planning 77
  • 78. Contract & Procurement Management well advance purchase decisions, ABC can get better deals and save money. Threats to Contract and Procurement Program At present, the primary risk to the contract and procurement program is the nonexistence of such a program. Risk Assessment Probability: Moderate Impact: High Comment: Probability is moderate given the limited number of contracts signed by ABC and the impact is high because one bad contract can be expensive and create havoc. Recommendations for Contract and Procurement Program It is recommended that ABC tighten up its contract and procurement program in order to maximize the opportunities for purchasing and to reduce the risk associated with having a poorly designed contract. There are no legal reviews routinely done of contracts signed at ABC. It may be wise to at least obtain a legal review on those contracts that have high financial implications or which cover multiple years. Implementation Samples or Plan for Contract and Procurement Program Exhibits 21-26 below provide information on how to structure a contract and procurement management program. 78
  • 79. Contract & Procurement Management Exhibit 21 Purchases and Acquisitions 79
  • 80. Contract & Procurement Management Exhibit 22 Contracting 80
  • 81. Contract & Procurement Management Exhibit 23 Invitation to Sell 81
  • 82. Contract & Procurement Management Exhibit 24 Select Seller 82
  • 83. Contract & Procurement Management Exhibit 25 Contract Administration 83
  • 84. Contract & Procurement Management Exhibit 26 Contract Execution 84
  • 85. Recordkeeping Description of Recordkeeping ABC’s general recordkeeping is somewhat spotty throughout the company. It is particularly sparse in the human resource area. The payroll, accounting, and personnel records were reviewed and our assessment follows. Payroll System Description of Payroll System ABC’s payroll system is handled by an outside contractor. They are responsible for making sure employees are paid in accordance to the instructions given by ABC for in- hire rates and rate increases and the hours worked using the time clock (tracking employee’s in and out activities. Accounting System Description of Accounting System The billing software “Peachtree” is used to track payments going in/out. Every outgoing check printed must go through Owner for signature. 85
  • 86. Recordkeeping (con’d) Personnel Records Description of Personnel Records There is no employment data collection system outlining the basic essentials. At a minimum, Employee Identification (e.g., names of employees, hiring dates, employment verification; Salary and Performance Information (e.g., in-hire rate of pay, pay increases, performance ratings); Employment Activities (e.g. employer intervention actions, injury claims, promotions and demotions); ABC Training (e.g., orientation, harassment seminars); and Compliance Identification System (e.g., ethnic identification, gender, accommodated disabilities) have to be part of the basic information collected and maintained by employers. See Exhibit 27 for a sample list of information that should be maintained in the personnel records. ABC’s personnel records are maintained poorly and does not contain information covering the employee’s entire employment with ABC. For example, in-hire documentation, performance evaluations, and salary information or documentation pertaining to employment decisions are missing from the personnel files maintained by ABC. It would be very difficult for ABC to re-construct the history of an employee (past or present) or to speak definitively about their tenure at ABC without such documentation. More importantly, it would be very hard to compare one employee to another in the absence of such documentation nor to state definitively that employees are fairly and equitably treated as compared to their peers. 86
  • 87. Recordkeeping (con’d) Strength of Recordkeeping None noted. Weakness of Recordkeeping The payroll system does not produce a usable employment data file and is dedicated primarily for the purpose of issuing a paycheck. At present, ABC does not maintain centralized employment data. Consequently there is no active roster on all employees working at ABC. Moreover, there is no easy way to call up data on all ABC employees especially with respect to their history at ABC including salary history, hire dates, verification information, and other basic data required to assure equity throughout the employment system. Comparative analyses are not possible given the current recordkeeping situation. On the accounts payable side, bills are often paid without a system that verifies receipt of goods and services by ABC. There was some mention of a newer data accounts receivable system to better manage incoming inventory, but it was unclear as to whether this would be integrated into the current accounting system at ABC. For example, not all invoices are forwarded so purchase records can be properly maintained and matched against payments. In the event of discrepancies over payment and services rendered, reconciliation is difficult because the recordkeeping was not reliable enough. For example, the TJLinen case highlighted the inadequacy of the entire internal supply chain and the accounting payable system, which kept paying for supplies not received (e.g., $20,000+ claim of overpayment alleged). This case also highlighted the propensity for ABC to manage their business using a “crisis” model as opposed to a “pre-emptive” model and the financial consequences of approaching their business using such a model. 87
  • 88. Recordkeeping (con’d) No training has been provided to staff in the accounting office to assure they are following contract and purchasing procedures, that products are actually received and in good order (e.g., invoices with authorized signatures), and that payments made are appropriate. Such training would beneficial not only to the accounting office staff, but should include everybody along the managerial track. Opportunities in Recordkeeping ABC has an opportunity to improve its recordkeeping activities throughout the business. A well-run business maintains meticulous records to preserve its history. Historical records are helpful for forecasting purposes and to re-create past actions to vindicate ABC in the event of a lawsuit or an allegation of regulatory violations. Threats to Recordkeeping The main threat to recordkeeping is the failure of ABC employees to recognize the importance of maintaining accurate and thorough records. Other threats include the failure of management to emphasize this importance and to allocate sufficient time for employees to keep their documentation in order on a daily basis. Risk Assessment Probability: High Impact: High Comment: Probability and impact is high because there are legal requirements for personnel records and ABC’s inability to re-create historical events works against them in the event of a lawsuit. Recommendations for Recordkeeping ABC should develop an organized system for collecting or maintaining this information. Such a system would be exceedingly helpful and would present ABC in a more favorable light during employee relation-type, legal actions. An unorganized business operation signals an inattentive way of managing its resources (including human resources) and this would work against ABC in a legal or professional setting; especially if ABC is 88
  • 89. Recordkeeping (con’d) asserting that they were effectively managing and caring for their resources. There is some urgency for ABC to get its personnel files in order. Sufficient time to re- create each employee’s employment history should be provided. They are out-of-date, not centralized, and do not reflect the employees’ total employment history consistently or effectively. Missing are employment salary actions, verification of employment, performance evaluations, and all training information. It should be noted that employers have a legal responsibility for maintaining proper documentation on every employee in their employ. The principle documents within the file are: 1. Orientation Handbook Forms, 2. Employment Verification Form and Documents, 3. Counseling Forms outlining employment intervention actions (e.g., suspensions, performance warnings). 4. W-9’s ABC should also review their recordkeeping on all contractual obligations whether or not they are officially in writing (e.g., oral agreements). Based on this review, ABC should determine whether the current contracts are creating an “added value” to ABC’s operation. In those instances where there is no added value (or worse takes away value), ABC should move quickly to either terminate them or to forego renewing them. While more controls need to be in place at the receiving end (to determine what was received and assure it is consistent with contracted services) and in the inventory end (to determine what was used and what is still outstanding), it is critical that all contracts be centralized as part of its recordkeeping priorities. Implementation Samples or Plan for Recordkeeping See Exhibit 27 for a sample of what kind of personnel data to maintain. 89
  • 90. Recordkeeping (con’d) Exhibit 27 Sample List of Personnel Data The following data should be maintained as part of its regular recordkeeping in the personnel identification system. ABC Employee ID Store Location (Laurel or Fruitvale) Last Name First Name Middle Initial Title Title Code Depart. Assigned Depart. Code Employment Eligibility Proof Eligibility Restrictions Exempt or Non-Exempt (FLSA) Supervisor (1) or Non-Supervisor (0) Full or Part-time (% Time) Hire Date Employment Status (Active, Past) Separation Date 90
  • 91. Recordkeeping (con’d) Exhibit 27 Sample List of Personnel Data (con’d) In-Hire Pay Current Pay % Change since Hired Job Change Date Description of Change Last Date for Performance Rating Employer Intervention Dates Employer Intervention Action 91
  • 92. Quality Assurance Description of Quality Assurance ABC’s quality assurance program is predominantly based on direct observation from Owners or their staff, from customer complaints, or from regulatory bodies (e.g., County Health Department). There is no formal or regular system for assuring quality. Absent is a program that identifies all of the areas that need to be monitored or a plan that assures that all areas are in keeping with pre-set standards. Quality assurance (QA) refers to a program for the systematic monitoring and evaluation of the various aspects of a project, service, or facility to ensure that standards of quality are being met. Quality can be imposed through regulatory requirements, as a result of customer preference, via competition, or through a business brand or philosophy that insist on a specific level of quality. Two key principles characterize QA. One, it must be "fit for purpose" (the product should be suitable for the intended purpose) and second, it must be "right first time" (i.e., mistakes should be eliminated). QA includes the regulation of the quality of raw 92
  • 93. Quality Assurance (con’d) materials, the assemblage process, the components of the products; the services associated with production; and management, production and inspection processes. Because ABC main offering are food products, quality assurance is absolute essential to their operation and future. Quality is determined by the company and the intended users, clients, or customers. The company because its reputation and brand may be negatively affected by poor quality and the users because it is their perception of quality that determines whether there is “repeat” business. Quality is not necessary associated with pricing as an expensive product can be of inferior quality and a low price item can be of high quality. QA is more than just testing the quality of a product, service or facility “after” the fact, it also analyzes the quality for conformance to specific requirements and established plans “before” it is consumed. Often overlooked in quality assurance is the necessity of staff to be engaged in the improvement of the company’s image. In each of the four areas highlighted in the company-wide quality approach, employees play a key role: 1. Integrate controls, job management, adequate processes, performance and integrity criteria and identification of records 2. Assure competence with respect to knowledge, skills, experience, and qualifications 3. Don’t forget “soft” elements, such as: personnel integrity, confidence, organizational culture, motivation, team spirit, and quality relationships. 4. Tie quality assurance program to business Infrastructures so it can enhances functionality in critical areas. The quality of the output is at risk if any of these above areas are deficient in any way. The approach to quality management can be applied to any of the following business or business-related activities:  Administrative services  Consulting  Accounting 93
  • 94. Quality Assurance (con’d)  Insurance  Computer usage  Sales and Marketing  Training and Development Strength of Quality Assurance In spite of a formal program, ABC appear to have sufficient quality control to avoid regulatory violations in the store. Weakness of Quality Assurance With the exception of quality control for regulatory requirements, there is no formal quality assurance program at ABC to attend to the aesthetic quality of the store (e.g., presentation, tidiness, cleanliness, freshness, etc.). Opportunities in Quality Assurance ABC has an opportunity to incorporate a quality assurance program to methodically improve customer service, professionalism, and appearance and to measure progress in all of these areas on a pre-set schedule. ABC also has an opportunity to be more competitive in the market environment by improving quality. Threats to Quality Assurance Inconsistent application of quality assurance standards is the biggest threat to quality assurance at ABC. Because ABC tends to operate on a “crisis” basis, once a solution is found for an immediate problem, corrections are often tentative and not sustained. Risk Assessment Probability: Moderate Impact: Moderate Comment: Probability and impact is moderate primarily because quality is a daily observance by users and this affects ABC brand. 94
  • 95. Quality Assurance (con’d) Recommendations for Quality Assurance It is recommended that ABC do more than just respond to regulatory generated quality issues. Rather it is recommended that they be more aggressive in protecting its image and brand especially as it pertains to their level of professionalism and the freshness of their products. It is recommended that ABC, as a minimum, do the following in their QA program: Incorporate a process with a checklist that is rigorous and comprehensive going through the following step-by-step process: 1. Assess areas in need of quality oversight 2. Come up with a plan to set standards to improve those areas (make sure customer input is incorporated into the standards set) 3. Resource the plans so improvements can be realized 4. Set a timetable for periodic review of progress or improvements in each area 5. Perform a “top/down” quality assurance assessment annually to see if plans have been followed and improvements have been realized 6. Identify a new plan for next round of improvements (until standards have been realized) and solicit and incorporate customer input and feedback into new plan. 7. In those areas where standards have been met, institute plans to sustain the improvements. Implementation Samples or Plan for Quality Assurance 95
  • 96. Quality Assurance (con’d) Because quality assurance is a highly specialized area and most small business do not have a staff person specifically dedicated to this function, it is customary to use consultants to help lay down the initial foundation for a good quality assurance program. A consultant is a viable solution when improvements are required to boost the current quality system or to restore or preserve a company’s image or brand. There are various types of consultants and contractors available in the market; most will have the skills needed to facilitate improvement activities such as Quality Management Systems (QMS) auditing and procedural documentation writing. More experienced consultants are likely to have knowledge of specialized quality improvement activities such as Capability Maturity Model Integration (CMMI), Six Sigma, Measurement Systems Analysis (MSA), Quality Function Deployment (QFD), Failure Mode and Effects Analysis (FMEA), Advance Product Quality Planning (APQP). ABC may consider any or all of them as it embarks on its quality assurance program. 96
  • 97. Quality Assurance Exhibit 28 Sample Quality Improvement Method Capability Maturity Model Integration 97
  • 98. Quality Assurance Exhibit 29 Sample Quality Improvement Method Six Sigma The term "six sigma process" comes from the notion that if one has six standard deviations between the process mean and the nearest specification limit, as shown in the graph, practically no items will fail to meet specifications. This is based on the calculation method employed in process capability studies. Capability studies measure the number of standard deviations between the process mean and the nearest specification limit in sigma units. As process standard deviation goes up, or the mean of the process moves away from the center of the tolerance, fewer standard deviations will fit between the mean and the nearest specification limit, decreasing the sigma number and increasing the likelihood of items outside specification. Graph of the normal distribution, which underlies the statistical assumptions of the Six Sigma model. The Greek letter σ (sigma) marks the distance on the horizontal axis between the mean, µ, and the curve's inflection point. The greater this distance, the greater is the spread of values encountered. For the curve shown above, µ = 0 and σ = 1. The upper and lower specification limits (USL, LSL) are at a distance of 6σ from the mean. Because of the properties of the normal distribution, values lying that far away from the mean are extremely unlikely. Even if the mean were to move right or left by 1.5σ at some point in the future (1.5 sigma shift), there is still a good safety cushion. This is why Six Sigma aims to have processes where the mean is at least 6σ away from the nearest specification limit. 98
  • 99. Human Resource Program Managing Human Capital Description of Human Resource Program ABC’s Human Resource Program, like many small businesses, is very informally developed and managed. A more formal approach to its Human Resource Program would make ABC a more professional company and a more inviting employer for whom to work. This assessment effort is a good first attempt to this end. There are five essentials components within a Human Resource Program, which are relevant to a small business and which are minimally expected in any professional organization, including: Policies and Practices, Job Definition, Compensation, Hiring and Selection, and Performance Management. All of these components will be covered in this report. Due to limited resources and time constraints, however, more focus will be on two of these components; namely, Hiring and Selection and on Performance Management with more emphasis on Hiring and Selection (based on ABC’s expressed interest). Under the Hiring and Selection component, the following subsections were specifically covered: Job Descriptions; Knowledge, Skills, and Abilities; Compensation Assignment; Recruitment Plans; and Selection Process. And within one of these subsections (i.e., Selection Process), following topics were addressed: Screening 99
  • 100. Human Resource Program (con’d) Applicants, Interviewing Applicants, Rating Applicants, and Actual Selection of Applicants. Under the Performance Management component, the following subsections were address: Progressive Discipline, Terminations Actions, and Employee Appeals Process. The overall assessment of the Human Resource Program is at the end of the section (See Pages 206-208). 100
  • 101. Human Resource Program Policies and Procedures Description of Policies and Procedures ABC’s policies and practices are currently embedded within the employee handbook. There are no Human Resource manuals where all of the policies and practices at ABC are centralized in one location. The handbook was developed by an ABC-hired consultant and since its development has been issued to every employee hired at ABC. Strength of Policies and Procedures Policies and practices at ABC are formally articulated and in writing. Weakness of Policies and Procedures Policies and practices at ABC are written in a handbook format as opposed to having them in the administrative office as an internal set of documents for use by the managerial staff. This current arrangement provides for less flexibility at the Owner/Management level, as any changes to policies and practices require notification of all employees as opposed to just the managerial staffing, which is the normal standard. One area of concern is that it could be argued in a dispute between employee and employer that the policies and practices outlined in the handbook are part of the terms and condition of the employment contract and the basis upon which management can or cannot act. For example, ABC’s handbook asserts, “ABC Marketplace is an equal opportunity employer and makes employment decisions on the basis of merit.” This implies that all decision associated with employment are on the basis of merit. 101
  • 102. Human Resource Program Policies and Procedures (con’d) Base on our review, it could be successfully argued that this is not the case because ABC does not have a series of formalized systems or established standards which would allow ABC to make decisions solely on the basis of merit. This is particularly true in the hiring and performance evaluation processes. Another example, “Although relatives and spouses will be given no preferential treatment, they will be considered when they apply for job openings. However, consideration will not be limited solely to a relative or souse, but will include all other applicants.” Can ABC factually assert that this has been the case in all positions filled by ABC? Presently, the paragraph stating, “Changes, amendments, modifications, additions, cancellations and withdrawals will be made in writing and new written policies may be issued as the Company may consider appropriate within a reasonable time thereafter,” commits ABC to the position that absent any changes “in the works” or forwarded in writing in a reasonable timeframe, the current policies, practices, and benefits (in the handbook) do apply (including the statement that decisions are based on merit). Because the handbook has not been examined by a legal employment expert to ascertain whether all of the commitments articulated in the handbook are “performable” by the Owner, the Owner may want to re-examine its current use or to rely on it too heavily. Opportunities in Policies and Procedures ABC has an opportunity to re-visit how policies and procedures should be handled. The function of policies and practices is to standardize decision-making surrounding employees and to assure consistency among executive and managerial staff in those decisions so as to insure equity. By establishing policies and practices for all managerial staff (including Owners), the employer has an opportunity to assure that decisions are based on job-related rationale; not based on impulsiveness, cronyism or familial connections; all of which undermine fairness and equity. It is important to note that what is lost with respect to 102
  • 103. Human Resource Program Policies and Procedures (con’d) Owner flexibility is gained in mitigating their risk in labor relation issues. Threats in Policies and Procedures The main threat to existing policies and procedures is that those outlined (in the handbook) are applied via the Owners’ individual, morale compass as opposed to a standardized system. In the absence of having any employment decisions delegated to the managerial staff, the Owners have total liability for all employment decisions. A standardized policy and procedure system in the administrative front office “diffuses” the liability and helps to counter allegations of preferential treatment by the Owners for or against employees. Unfair and preferential treatment is the primary basis for most labor disputes and legal action. Risk Assessment Probability: High Impact: Moderate Comment: Probability is high because the handbook has been issued to every employee and Impact is moderate depending on the legal issue raised in connection with employment issue. Recommendations in Policies and Procedures It is highly recommended that ABC convert the handbook to an established set of policies and practices to be maintained in the administration office of ABC. This would serve as a common reference point for the managerial staff and a focal point upon which ABC can make consistent employment decisions. It is further recommended that the handbook contain only general information about their employment at ABC (e.g., Welcome to ABC, vacation and sick leave, benefits, etc.). To achieve this, it is further recommended that the handbook currently issued to employees be submitted to a legal employment expert to determine what sections should stay and which should be moved to the internal, administrative office. A specific question may be whether having the policies and practices articulated in a handbook raises expectations 103
  • 104. Human Resource Program Policies and Procedures (con’d) among employees with regard to what ABC must do in connection with its employee/employer relationship and if applicable, how to “undo” that. After legal input, ABC will need to decide whether to continue using the handbook, rescind the handbook and reissue a modified handbook, or offer a stronger “disclaimer” in connection with the use of the handbook. Additional areas that need to be covered under policies and practices are: Bereavement Leave Policy (add if applicable) Compensation (add section) Disciplinary Process (add under Employee Relations) • Disability and Accommodations (under Employment) • Evaluation Period (move to Employee Relations) • Family and Medical Leave (under Benefits) • Grievance Process (add under Employee Relations) • Performance Evaluation (add under Employee Relations) • Termination (add under Employee Relations) • Training and Development (add section) • Since ABC does not have in-house expertise to work on this, ABC may want to hire a professional with expertise in human resource program development to put into place all of the policies and practices needed to manage its human resources. Once completed, this should be followed with aggressive training of the managerial staff in the application of these policies and practices. Implementation Samples or Plan A few sample policy statements, a regulatory requirement, and form letters are provided in the Exhibits below for ABC’s consideration and use. 104
  • 105. Human Resource Program Policies and Procedures (con’d) Exhibit 30 Sample Employer Policies (selected) General Personnel Policies A. Basic Policies & Definitions B. Sexual Harassment C. Sexual Assault D. Smoke-Free Environment E. Requesting Workplace Accommodations for Employees With Disabilities F. Controlled Substances and Alcohol G. Employee Training H. Gifts and Awards for ABC employees I. Violence in the Workplace A. BASIC POLICIES & DEFINITIONS AUTHORITY - This Guidance Statement was approved by the Owners of Farmer Joe’s Marketplace (ABC). APPLICABILITY - This policy applies to all employees of the ABC. SUMMARY - The policies in this Guidance Statement are the basis of Farmer Joe’s Marketplace's employment policies. Section headings are: 1. POLICY OF EQUAL EMPLOYMENT OPPORTUNITIES 2. POLICY OF EQUITABLE COMPENSATION 3. STAFF EMPLOYEES 4. STAFF BENEFITS 5. TERM 6. BASE PAY 1. POLICY OF EQUAL EMPLOYMENT OPPORTUNITIES a. Basic Employment Policy -- It is the policy of Farmer Joe’s Marketplace to provide equal employment opportunities for all applicants and employees in compliance with all applicable laws. b. Administration of Basic Policy -- The basic policy of equal employment 105
  • 106. Human Resource Program Policies and Procedures (con’d) Exhibit 30 Sample Employer Policies (con’d) opportunities applies in all employment relationships. Administration of this policy affects recruiting, selection, placement, supervision, compensation, training, promotion, demotion, transfer, layoff, and termination. All ABC personnel policies, procedures, and practices must subscribe to the intent of the basic employment policy. 2. POLICY OF EQUITABLE COMPENSATION a. COMPENSATION FOR WORK PERFORMED -- It is the policy of Farmer Joe’s Marketplace to pay salaries and wages that equitably reflect the duties, responsibilities, value, amount, and quality of the work performed by an employee in comparison with other ABC employees, regardless of the sources of funds. b. COMPENSATION PRACTICES -- It is the intention of the ABC to set salary scales that are competitive with those of other employers for similar work under similar working conditions insofar as it is within the financial ability of the ABC to do so. c. SALARY BASIS OF COMPENSATION - A "salary," as distinguished from an "hourly wage" is compensation established by the month (e.g. $1,000 per month) with the amount remaining the same each month without regard to the variations from month to month in the normal number of working hours. (E.g., in 1991 a salaried full-time employee received the same salary for January with 184 working hours and for February with 160 working hours.) d. HOURLY BASIS OF COMPENSATION -Compensation established on an hourly basis, so that pay varies with the actual number of hours worked (or on paid leave) in each pay period. e. PAY PERIOD - Each month has two pay periods: the first day of the month through the 15th and the 16th through the last day of the month. Paychecks are issued on the work day which falls on or immediately prior to the seventh calendar day after the end of each pay period. 106
  • 107. Human Resource Program Policies and Procedures (con’d) Exhibit 30 Sample Employer Policies (con’d) 3. STAFF EMPLOYEES - Individuals on the ABC payroll. a. REGULAR EMPLOYEES - Employees have "regular" status when appointed for at least six consecutive months and for at least 20 hours per week. "Regular" status is a requirement for most benefit plans and programs. b. CASUAL EMPLOYEES - Employees appointed less than half-time for six consecutive months or longer. If duties are technical, maintenance, or service duties, employees may be appointed less than half time for four consecutive months or longer. Casual employees are not regular employees. c. TEMPORARY EMPLOYEES - Employees appointed for up to six consecutive months at any percentage of time. If duties are technical, maintenance, or service duties, employees may be appointed for up to four consecutive months at any percentage of time. Temporary employees are not regular employees. d. STUDENT EMPLOYEES - Employees who are registered students have "student" status excepting those whose employment is totally independent of and unrelated to their student role. e. EXEMPT EMPLOYEES -All ABC employees, including students, , and staff are subject to federal and state requirements regarding minimum wages, payment for overtime work, and related record keeping. However, employees may be exempt from the overtime pay and record-keeping requirements when they occupy bona fide professional, managerial, or executive positions. At "exempt" positions normally are executive officers, , academic staff, other teaching staff, and certain professional, administrative, and executive staff. "Exempt" status is determined by the Vice President for Human Resources, in accordance with provisions of the Fair Labor Standards Act and regulations of the U.S. Department of Labor. f. NONEXEMPT EMPLOYEES -These are the employees who are not "exempt" under federal and state overtime regulations. They must receive compensation for overtime work. 107
  • 108. Human Resource Program Policies and Procedures (con’d) Exhibit 30 Sample Employer Policies (con’d) 4. STAFF BENEFITS - Plans and programs made available by the ABC for the benefit of and staff. Included are legally required programs such as Social Security and short-term disability insurance, as well as ABC programs such as health plans, personal and life insurance, disability income plan, education and training plans, retirement income plans, and recreation facilities. 5. TERM (DURATION OF APPOINTMENT) -All staff have one of the following appointment terms: a. Continuing - without a specified duration or time limit. Continuing appointments also includes appointments that are coterminous with funding ; that is, without a specified ending date, but for a period which will coincide with the source of funding for the position (usually grants or contracts). b. Fixed-term - for a fixed duration with a specified ending date. 6. BASE PAY - is the hourly rate or monthly salary paid for a job performed. It does not include any premium pay, e.g. shift differentials, benefits, overtime pay, supplemental pay, or any pay element other than the base rate. G. EMPLOYEE TRAINING AUTHORITY This policy is established by the owners of Farmer Joe’s Marketplace, who determines training requirements for staff as appropriate. Such training will be identified and delivered locally, with support from training service providers as appropriate and available. APPLICABILITY The policy is applicable to all Farmer Joe’s Marketplace employees, including staff and students. SUMMARY Farmer Joe’s Marketplace is obligated to provide necessary training to employees of the ABC, and retains the right to identify certain training as required. 108
  • 109. Human Resource Program Policies and Procedures (con’d) Exhibit 30 Sample Employer Policies (con’d) Where identified as required, training will be considered a job responsibility, as it is integral to the quality of work performed by the employee and contributes to the overall effectiveness of organizational operations. Section headings for this Guidance Statement are: 1. PURPOSE AND RATIONALE 2. ACTIONS AND INSTRUCTIONS 3. DOCUMENTATION AND ENFORCEMENT 4. COGNIZANT OFFICES 5. DEFINITIONS 1. PURPOSE AND RATIONALE The increasing complexity of the work environment requires continuing development of competencies and upgrading of knowledge and skills relating directly to the performance of work. In addition, changes in external regulation and policies, procedures and practices have created risks/liabilities which require the delivery of consistent information to Farmer Joe’s Marketplace employees (staff and students) with specific responsibilities. The documented delivery of training is in some cases mandated by external agencies and subject to audit review (for example, in areas such as financial management, health and safety practices, and human resource management). 2. ACTIONS AND INSTRUCTIONS a. Department Managers are responsible for: - Identifying those employees who perform work requiring specific training. - Taking necessary actions to enable the delivery of necessary training, including identifying appropriate courses and providing release time as needed for participation. - Monitoring job performance, and incorporating ongoing training and development as an element of continuing staff performance appraisal. - Providing support after training to maximize application of skills on the job. b. Departments providing required training are responsible for: - Responding to client needs by developing curriculum to address job 109
  • 110. Human Resource Program Policies and Procedures (con’d) Exhibit 30 Sample Employer Policies (con’d) requirements; considering the content and delivery of training to maximize value, while minimizing the time needed to achieve proficiency, and considering alternatives to classroom instruction whenever feasible. - Continually evaluating the effectiveness of training programs. - Recommending to the Vice President of & Staff Services specific training for required delivery to ABC populations. Such recommendations must include definition of: - rationale for requiring training - populations for which training is a requirement - delivery plans (including necessary resources) - methods for documenting delivery 3. DOCUMENTATION AND ENFORCEMENT Satisfactory completion of required training must be documented within the organization requiring the training. Such documentation is a prerequisite for authorization to perform certain tasks; e.g., for authority to expend ABC funds or for access to particular information or materials. 4. COGNIZANT OFFICES Questions about this policy may be directed to the Staff Training and Development Representative. This office handles the ABC Training needs. 5. DEFINITIONS a. REQUIRED TRAINING - Material for which competency must be demonstrated as a condition of employment in certain jobs, or for the assignment of certain tasks. b. ABC-WIDE - Having general applicability to members of the ABC community, not specific to any School, department or office. c. LOCAL TRAINING - Having specific applicability to the needs of an individual School, department or office. d. RELEASE TIME - Time away from the job made available for participation 110
  • 111. Human Resource Program Policies and Procedures (con’d) Exhibit 31 Sample Policy on Bereavement Funeral Leave for an Immediate Family Member: When a death occurs in an employee’s immediate family, all regular full time employees may take up to three (3) days off with with pay to attend the funeral or make funeral arrangements. The pay for time off will be prorated for a part-time employee if the funeral occurs on a scheduled work day. The Company may may require verification of the need for the leave. Immediate Family Defined for Bereavement Leave: Immediate family members are defined as an employee’s spouse, parents, stepparents, siblings, children, stepchildren, grandparent, father-in-law, mother-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law, or grandchild. Non-family Member Funeral Leave: All regular, full-time employees may take up to one (1) day off with pay to attend the funeral of a close, non-family member. This time off will be considered by the employee's supervisor on a case-by-case basis. The pay for time off will be prorated for a part-time employee if the funeral occurs on scheduled work days. The supervisor should confirm that the time is recorded accurately on the timecards. The Company may require verification of the need for the leave. Additional Time Off: The Company understands the deep impact that death can have on an individual or a family, therefore additional non-paid time off may be granted. The employee may make arrangements with his or her supervisor for an additional four unpaid days off in the instance of the death of an immediate family member. Additional unpaid time off may be granted depending on the circumstances such as distance and the individual’s responsibility for funeral arrangements. 111
  • 112. Human Resource Program Policies and Procedures (con’d) Exhibit 32 Illustration of a Federal Act Covering Employers FAMILY AND MEDICAL LEAVE ACT 29 CFR 825.104 - Covered employer. 7. Section Number: 825.104 8. Section Name: Covered employer. (a) An employer covered by FMLA is any person engaged in commerce or in any industry or activity affecting commerce, who employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year. Employers covered by FMLA also include any person acting, directly or indirectly, in the interest of a covered employer to any of the employees of the employer, any successor in interest of a covered employer, and any public agency. Public agencies are covered employers without regard to the number of employees (b) The terms ``commerce'' and ``industry affecting commerce'' are defined in accordance with section 501(1) and (3) of the Labor Management Relations Act of 1947 (LMRA) (29 U.S.C. 142 (1) and (3)), as set forth in the definitions at Sec. 825.800 of this part. For purposes of the FMLA, employers who meet the 50-employee coverage test are deemed to be engaged in commerce or in an industry or activity affecting commerce. (c) Normally the legal entity which employs the employee is the employer under FMLA. Applying this principle, a corporation is a single employer rather than its separate establishments or divisions. (1) Where one corporation has an ownership interest in another corporation, it is a separate employer unless it meets the ``joint employment'' test discussed in Sec. 825.106, or the ``integrated employer'' test contained in paragraph (c)(2) of this section. (2) Separate entities will be deemed to be parts of a single employer for purposes of FMLA if they meet the ``integrated employer'' test. Where this test is met, the employees of all entities making up the integrated employer will be counted in determining employer coverage and employee eligibility. A determination of whether or not separate entities are an integrated employer is not determined by the application of any single criterion, but rather the entire relationship is to be reviewed in its totality. Factors considered in determining whether 112
  • 113. Human Resource Program Policies and Procedures (con’d) Exhibit 32 Illustration of a Federal Act Covering Employers (con’d) two or more entities are an integrated employer include: (i) Common management; (ii) Interrelation between operations; (iii) Centralized control of labor relations; and (iv) Degree of common ownership/financial control. (d) An ``employer'' includes any person who acts directly or indirectly in the interest of an employer to any of the employer's employees. The definition of ``employer'' in section 3(d) of the Fair Labor Standards Act (FLSA), 29 U.S.C. 203(d), similarly includes any person acting directly or indirectly in the interest of an employer in relation to an employee. As under the FLSA, individuals such as corporate officers ``acting in the interest of an employer'' are individually liable for any violations of the requirements of FMLA.[73 FR 68075, Nov. 17, 2008] U.S. Department of Labor | Frances Perkins Building, 200 Constitution Ave., NW, Washington, DC 20210 www.dol.gov | 113
  • 114. Human Resource Program Job Definition Description of Job Definition Not every job in ABC has been defined and, like recordkeeping, it does not appear to be a high priority at ABC. Jobs are typically defined by title, level and scope, and by pay level. Writing down each and every job in a company and defining it is important because it helps to define expectations and enables managers to measure performance more accurately and equitably. In defining jobs, the following minimal information for each job should be present: Actual job titles (e.g., deli clerk, accountant, meat department manager, cashier, etc.); the job level (e.g., senior, junior, etc.); the job group (enabling compensation for “like” jobs (e.g., officials & managers, professionals, office & clericals, etc.); and the pay range ($8- $10/hr., $11-15/hr., $60,000-$65,000/year, etc.). For example, an entry-level cashier (e.g., Cashier I) carries less expectations than a more senior level cashier (Cashier II). A higher-level position (e.g., Cashier IV) provides for a broader scope of responsibility. The level and scope becomes the determinant for pay assignment. The higher the level and broader the scope, the higher the compensation provided to the employee occupying the position. Also, by having jobs defined, it is easier to maintain continuity in the event of an unforeseen event like when an assigned manager is unavailable and a substitute manager has to take over. The ability to refer to an authoritative reference document (e.g., job definition manual) articulating established standards and past expectations avoids the vacuum which can be created. Contrary to popular belief, companies do not lose their flexibility to delete, add, or reassign work by defining each and every job that is performed within the Company. What is lost in absolute flexibility is gained in the ability to more 114
  • 115. Human Resource Program Job Definition (con’d) effectively manage employees and to do so more equitably. For example making distinctions between employees, taking disciplinary actions, making salary decisions are all made easier by having all of the jobs properly defined. Ultimately, it comes down to a specific job description for a specific job. After jobs are defined and grouped by similarities, the job of describing each job and the qualifications needed to perform them have to be outlined. The following background information is useful when developing these job descriptions. Exhibits 33 and 34 under the Hiring and Selection’s subsection, “Job Description”, provide some sample job descriptions. More information is also provided under the Hiring and Selection section (under Job Descriptions). Strength of Job Definition Efforts None. ABC’s does not have a comprehensive job definition or job descriptions program. Weakness of Job Definition Efforts ABC’s weakness in this area is the absence of a job description for every position in the company and most especially for full time employee. Opportunities Presented in Job Definition Efforts ABC has an opportunity to begin the process of having a good hiring process and a better performance evaluation process by starting with job descriptions for every position at ABC. The overall management of staffing would improve as well with a comprehensive and well- written job definition and description effort. Threats in Job Definition Efforts 115
  • 116. Human Resource Program Job Definition (con’d) The threat associated with the a poor defined job system and job description system is that employees do not have clarity on what is expected of them and consequently performance evaluations are harder to manage equitably. Risk Assessment Probability: High Impact: High Comment: Probability and impact is high because employees are operating without benefit of written and stated expectations of employer and this offers a high level of low efficiency and productivity of employees and mismanagement of staff (which creates equity issues) Recommendations for Job Definition Efforts Have all of the jobs at ABC defined and described so they can be adequately measured and evaluated. Implementation Samples or Plan for Job Definition Efforts Samples of Job Descriptions are in the Exhibits that follow. 116
  • 117. Human Resource Program Job Definition (con’d) Exhibit 33 Cashier Job Description and Announcement Company: ABC Marketplace (Berrydale District) Location:Mayfield, California Customer Service Cashier  Job ID:  Date:  Location:  State:  Salary:  Job Types: Job Description • Provide excellent customer service • Understand why our products are different from conventional store and be able to explain to our guests • Price all merchandise • Organize, stock and rotate merchandise • Maintain back stock in good order • Keep department continually clean, well-maintained and organized • Attend all team and store meetings • Perform other duties, as assigned • Maintain safe, clean and well-organized working and shopping environment • Comply with all regulatory rules and regulations including HACCP, OSHA, Dept. of Labor, Weights and Measures and local food and sanitation laws • Complete special projects and other duties as assigned Requirements and Qualifications: • Previous Front End or Guest Services/Customer Service experience preferred • Understand and be able to effectively communicate • Quality Standards to guests • Able to perform physical requirements of position • Able to work well with a team 117
  • 118. Human Resource Program Job Definition (con’d) Exhibit 33 Cashier Job Description and Announcement (con’d) • Able to work a flexible schedule based on the needs of the store including nights, weekends and holidays as required. Working Conditions: • Standing and walking for extended periods of time, up to 8-10 hours. • Bending, stooping and climbing. • Mental and physical dexterity. • Unassisted heavy lifting. • Work in varying temperatures (coolers, etc.). • Use of box cutters. • Use of electric pallet jacks or other heavy machinery. • Mandatory use of required personal protective equipment. • Use of ladders. • Iteration of duties 118
  • 119. Human Resource Program Job Definition (con’d) Exhibit 34 Bakery Team Member Job Description and Announcement Company: ABC Marketplace (Berrydale District) Location: Mayfield, California Bakery Retail Team Member (PM Shift)  Job ID: 00101  Date: 5/16/10  Salary: $9.50/hour  Travel Required: No  Security Clearance: No  Work Type: Any Position Overview: As a member of our Bakery retail team, your role will include setting and maintaining attractive Bakery displays and supporting the regional Bakery vision. You will ensure a positive company image by providing courteous, friendly, and efficient customer service to customers and team members. EXPERIENCE APPLICANTS ONLY. Responsibilities: * Make sure the customers are being taken care of and the department looks great at all times. Surprise and delight the customers with consistent, quality products and service. * Ensures a fresh and appealing display by checking codes, rotating products, and removing out-of-date products. * Maintains correct department signage and pricing. * Understand why our products are different than conventional stores, and be able to explain to customers. * Package, weigh, and price all merchandise. * Ensures that all shelves and displays are properly stocked and front-facing. * Maintain back stock in good order. * Follows and complies with all applicable health and sanitation procedures and adheres to safe work practices. 119
  • 120. Human Resource Program Job Definition (con’d) Exhibit 34 Baker Team Member Job Description and Announcement (con’d) * Operates and sanitizes all Bakery equipment in a safe and proper manner. * Answers department telephone calls and pages quickly and with excellent phone etiquette. * Performs other duties as assigned by the Bakery Team Leader (Department Manager), Associate Team Leader (Assistant Department Manager), or Supervisor. Qualifications: * Able to work a flexible schedule based on the needs of the store, including nights and weekends as required. * A desire to grow with the Bakery Team * Basic knowledge of ingredient information and nutri-facts for Bakery products. * Willingness to evaluate all products offered in department. * Ability to follow instructions and procedures * A desire to learn about natural and organic foods and products * Effective time management skills * Strong work ethic and integrity * Ability to visually examine products for quality and freshness * Stand and walk for extended periods of time. * Bend and stoop to grasp objects and climb ladders. * Bend and lift loads, not to exceed 50 pounds, unassisted and able to push and pull carts with product weighing up to 100 pounds. * Use of box cutters. * Use of electric pallet jacks or other heavy machinery. * Able to answer customer questions in a clear and service-oriented manner. 120
  • 121. Human Resource Program Job Definition (con’d) Exhibit 35 Sample Career Description For Cashier (what prospective applicants expect) Job: Cashier Education and Training On-the-job training Salary: Median—$7.81 per hour Employment Outlook: Fair Definition and Nature of the Work Cashiers handle customers' payments in retail stores, restaurants, theaters, and offices. Their exact duties depend on the business that employs them. Usually cashiers scan or type the price of items into a computer that calculates a total. They then collect payment for goods and services, make change, and hand out receipts. Cashiers may also issue cash refunds and credit slips to customers or cash checks for customers and employees. At the end of their shift, they must balance the amount of money they have taken in with the total sales recorded. They do this to make sure they have not made any mistakes. If the balance does not match up on a regular basis, a cashier can lose his or her job. Some cashiers have additional duties, including paying for company supplies and equipment, preparing paychecks or pay envelopes, making out sales tax reports, or readying cash and checks for bank deposit. Many cashiers work flexible hours. Cashiers who work in theaters also operate ticket dispensing machines and may give out information on the telephone. Those who work in restaurants sell candy, cigarettes, and other small items. They also may be required to know the prices of the various items on the menu. Some restaurant cashiers take care of telephone reservations, take-out orders, and hosting duties. Most cash registers function like computer terminals. They report information about sales to a central computer or company computer network so that the store does not have to keep inventory. In most large operations and grocery stores cashiers pass merchandise price tags across a scanner. The scanner reads a bar code on the tags and records the price and 121
  • 122. Human Resource Program Job Definition (con’d) Exhibit 35 Sample Job Description Cashier (con’d) item description onto a computer system. In small retail operations the cashier sometimes must enter a coded description of each item sold as well as its price into the cash register. Cashiers who work in grocery stores and supermarkets must check coupons and food stamps to make sure they are valid. They may have to weigh and price produce and bag customers' purchases. In slack periods they sometimes help restock shelves and mark prices on items or shelves. Cashiers in department, variety, and specialty stores may have to remove security devices from clothing. They tell customers whether purchases can be returned and, if so, under what conditions. They sometimes arrange to ship items to customers or other recipients. Some cashiers gift wrap merchandise and wrap packages for shipment. Cashiers' duties vary depending on the type of business. In food service, cashiers ring up food items, replenish inventory, and assist customers. (Photograph by Kelly A. Quin. Thomson Gale. Reproduced by permission.) Cashiers who work in offices often perform a variety of duties. They may act as receptionists, operate the switchboard, or provide office support such as word processing. Education and Training Requirements Employers prefer applicants who have a high school education and who understand basic mathematics. Some vocational high schools offer cashier courses, but most workers are trained on the job in the use of electronic or computerized registers and other aspects of the position. Getting the Job Newspaper want ads and Internet job sites generally list jobs for cashiers. Individuals interested in becoming cashiers can also apply directly to restaurants, theaters, amusement parks, retail stores, hospitals, hotels, and business firms. 122
  • 123. Human Resource Program Job Definition (con’d) Exhibit 35 Sample Job Description Cashier (con’d) Advancement Possibilities and Employment Outlook Cashiers who work for large retail stores may become department managers or store managers. Those who work in offices may move into more responsible positions. According to the U.S. Bureau of Labor Statistics, cashiers held 3.5 million jobs in 2004. Employment of full-time cashiers was expected to grow more slowly than the average for all occupations between 2004 and 2014. As more Americans buy products online, the need for cashiers will likely continue to diminish. Many retail operations, particularly grocery stores, are also installing self-service checkout systems that eliminate cashier jobs. Openings will occur as workers retire or leave their jobs. Opportunities for part-time work, however, remain good. Working Conditions Nearly 50 percent of cashiers work part time because restaurants and stores need more workers during rush hours than at other times. Full-time cashiers may work split shifts. Holiday, weekend, and night work may be required. Cashiers employed by large retail firms usually work a forty-hour week and are restricted from taking time off around the holidays as most stores are busiest at these times. Cashiers need to have good finger dexterity and a knowledge of math. Many cashiers spend their working day standing in small, confined spaces that allow little physical movement. Cashier booths are often near doorways, which may subject cashiers to drafts and frequent temperature changes. Some cashiers work outdoors. Even when customers are impatient and demanding, cashiers must remain pleasant and courteous. Some cashiers belong to unions. 123
  • 124. ABC Marketplace BUSINESS AND HUMAN RESOURCE ASSESSMENT REPORT Volume 2 Quisque vel justo eget felis sollicitudin adipiscing. Ut enim lorem, lacinia eget, tristique quis, feugiat eget, turpis. In hac habitasse Prepared By platea dictumst. Morbi non dui ac risus sollicitudin auctor. Shirley Gee 124
  • 125. Human Resource Program ASSESSMENT REPORT (VOLUME 2) CONTINUES … 125