Chapter 17 Managing the Store

Store Management Customer Service Layout, Design and Visual Merchandising Managing the Store

Store Managers Run a Business “This is your business. Do your own thing. Don’t listen to us in Seattle, listen to your customers. We give you permission to take care of your customers.” James Nordstrom, the CEO of Nordstrom’s

Strategic Importance of Store Management Opportunity to Build Strategic Advantage Difficult to Have Unique, Compelling Merchandise Customer Loyalty Often Based on Customer Service Difficulty of Store Managers Job Managing Diverse Set of Unskilled People Increasing Empowerment and Responsibility to Tailor Merchandise and Presentation to Local Community

Store Managers’ Responsibilities Varies Dramatically By Type of Retailers Specialty Store vs. Department Store Entrepreneur P & L Responsibility Manage People Responsible for Two Critical Assets People Sales/Employees Space Sales/Square Foot © Digital Vision

Responsibilities of Store Managers Undertaken by Store Managers

Steps in Employment Management Process

Recruiting and Selecting Employees Prepare Job Description Find Potential Applicants Undertake Job Analysis Select Employees Screen Candidates

Job Analysis

Job Description A guideline for recruiting, selecting, training and evaluating employees The activities the employee needs to perform The performance expectations expressed in quantitative terms Steve Mason/Getty Images

Approaches for Locating Prospective Employees Look beyond the retail industry Use your employees as talent scouts Provide incentives for employee referrals Recruit minorities, immigrants and older workers Use your storefront creatively Jack Star/PhotoLink/Getty Images

Sources of Information for Screening Applicants Application Forms References Testing Providing a Realistic Job Preview The McGraw-Hill Companies, Inc./Lars A. Niki, photographer

Interviewing Questions

Suggestions for Questioning Applicant Avoid asking questions that have multiple parts Avoid asking leading questions like “Are you prepared to provide good customer service?” Be an active listener. Evaluate the information being presented and sort out the important comments from the unimportant. repeat or rephrase information summarize the conversation tolerate silence

Legal Considerations in Hiring and Selecting Employees Equal Employment Opportunity Commission (EEOC) Age Discrimination and Employment Act Disparate Treatment Disparate Impact Americans with Disabilities Act (ADA)

Socializing and Training Employees Orientation Program Training Where, when, what Structured vs. unstructured Classroom vs. on-the-job Analyzing Successes and Failures (c) image100/PunchStock

Motivating and Managing Employees Providing Incentives to Achieve Goals Setting Goals Measuring Performance Providing Feedback

Leadership Process by which one person attempts to influence another to accomplish some goal or goals Leader Behaviors Task-Oriented Group Maintenance C Squared Studios/Getty Images

Types of Leaders Autocratic Democratic Transformational © Digital Vision Which Type of Leader Is the Most Effective?

Setting Goals How High? How Easy to Achieve? Get Participation of Employees in Setting Goals Royalty-Free/CORBIS

Why Set Goals? Employee performance improves when employees feel: That their efforts will enable them to achieve the goals set for them by their managers That they’ll receive rewards they value if they achieve their goals Royalty-Free/CORBIS

Individualized Motivation Programs Impact of Goals Differs Across People Different People Seek Differ Rewards A La Carte Reward Programs Selection of Compensation Plans Steve Cole/Getty Images

Maintaining Morale Meetings before store opening to talk about new merchandise and hear employee opinions Educate, set sales goals and have a pizza party when goals are met Divide charity budget and ask employees how their share should be used Print stickers - auto detailed by Rob” Give every employee a business card with the company mission statement printed on the back Pando Hall / Getty Images

Sexual Harassment Sexual Harassment Sexual harassment is unwelcomed sexual advances, requests for sexual favors, and other verbal and physical contact. showing obscene photographs making lewd comments and gestures staring in a sexual manner making work environment hostile

Procedure for Sexual Harassment Allegation

Evaluating and Providing Feedback to Employees Evaluation Who, when, how often? Feedback Performance outcome vs. process

Jim Taylor’s Six Month Evaluation

Common Evaluation Errors Strickness Leniency Haloing Recency Contrast Attributions Ratings unduly negative Rating unduly positive Using the same rating on all aspects of the evaluation Placing too much weight on recent events rather than evaluating performance over the entire period Having the evaluation of a salesperson unduly influenced by the evaluation of other salespeople Making errors in identifying causes of the salesperson’s performance

Rewards Extrinsic Rewards are rewards provided by either the employee’s manager or the firm such as compensation, promotion and recognition. Intrinsic Rewards are rewards employees get personally from doing their job well like doing their job well because they think it is challenging and fun

Compensating Employees Compensation Type Straight salary Straight commission Quota bonus Setting quotas Individual vs. group incentives Royalty-Free/CORBIS

Advantages and Disadvantages of Straight Salary Straight Salary Incentive Compensation Offers flexibility in assigning employees Has high motivating potential to activities Builds stronger employee commitment Has more variable cost Is easy for employees to understand Relates compensation to productivity Is easy to administer Allows for better performance of non-selling activities such as customer service

Designing a Compensation Plan Use Average Sales Per Employee to Set Incentive Rate Decide on Percent of Incentives Determine Appropriate Compensation Sales/Person - $150 5.33% Commission $4/Hour Salary 1/3 Salary 2/3 Incentive $12/Hour $4 = 5.33% x 150 = $12

Costs Controlled by Store Managers Controlling Costs Energy Heating Lighting Labor Costs Controlled by Store Managers Inventory Shrinkage Maintenance

Labor Scheduling System

Calculating Shrinkage Accounting Record – Actual Inventory Sales $1,500,000 - $1,236,00 = 6.7% $4,225,000

Sources of Inventory Shrinkage Mistakes and Inaccurate Records 17% Shoplifting 31% Vendor Errors 6% Employee Theft 46%

Preventing Shoplifting Store design Employee training Good customer service Security measures Dye capsules, TV cameras EAS Prosecution PhotoLink/Getty Images

Spotting Shoplifters

Use of Security Measures by Retailers

EAS Tags

Employee theft is an HR problem. Reducing Employee Theft Trusting, supportive work atmosphere Employee screening Honesty, drug testing Security personnel - mystery shoppers Policies and procedures Employee theft is an HR problem.