Human Resources 9.1 Key Issues  Store operation  The productivity cycle  Burnout & rustout  Motivating employees  Personnel functional areas  Compensation plans; benefits & disadvantages of each

Human Resources 9.2 Personnel Functional Areas Merchandise Division design, negotiate, buy merchandise determine inventory levels Stores Division store operations store merchandising Marketing Division advertising/promotion visual display, special events Human Resources Division recruit, select, train, compensate Finance Division maintain records, budgets manage MIS department Operations Division loss prevention distribution centers

Human Resources 9.3 Store Operations & HR Tasks  Utilization of personnel  Store format & size  Space allocation  Store maintenance  Energy management  Inventory management  Store security  Insurance  Credit management

Human Resources 9.4 Objectives of HR Management  Short Term  Increasing customer satisfaction  Increasing Employee Productivity  Productivity = Revenue per employee  Long-Term  Increasing Employee Satisfaction  Reducing Turnover

Human Resources 9.5 HR Management Challenges in Retailing Work Environment  Open Long Hours  Peak Sales Periods  Emphasis on Cost Control Employees  Unskilled  Part-Time  Diverse Backgrounds

Human Resources 9.6 Our Burnout Study Work Week & Income two-stage cluster sample  selection of schools (14 schools)  selection of graduates  graduated within the previous 15 years  mail administration of questionnaire  mail-out sample of 7266 individual graduates  final sample of 1418 (19.5% return rate) A sample of U.S. business-school graduates

Human Resources 9.7 Our Burnout Study Work Week & Income Income category Mean hours per week

Human Resources 9.8 Our Burnout Study Job Characteristics on … 1 = Low … 5 = High

Human Resources 9.9 Our Burnout Study Job Satisfaction with … 1 = Low … 5 = High

Human Resources 9.10 Our Burnout Study Job Stress & Burnout 1 = Low … 5 = High Store retailing jobs: not “burnout” but “rust-out” What do you see here?

Human Resources 9.11 Downward Performance Spiral Financial Performance Problems Low profits High costs Retailer’s Response Layoffs Freeze on hiring & promotion Reduced training Salary freeze Use more part-time workers

Human Resources 9.12 Increasing Employee Productivity Ability EffortRole Clarity Selection Training Motivation Goals Incentives Rewards Policies, Rules Incentives Org Culture

Human Resources 9.13 Motivating and Controlling Employees  Policies and Supervision  Behavior Enforced by Managers  Incentives  Commission, Bonus  Organization Culture  unwritten rules, norms  behavior enforced by social pressure

Human Resources 9.14 Developing an Organizational Culture  Stories  Nordstrom – Hero Service Stores  Wal-Mart – Saturday Meeting  Symbols  McDonald’s – Ronald McDonald  CEO Leadership  Wal-Mart – Sam Walton  Dell – Michael Dell

Human Resources 9.15 Organizational Design Considerations  Specialization  Responsibility and Authority  Reporting Relationships  Defined by Organization Structure

Human Resources 9.16 Strategic Management Tasks Performed in a Retail Firm

Human Resources 9.17 Merchandise Management Tasks Performed in a Retail Firm

Human Resources 9.18 Store Management Tasks Performed in a Retail Firm Maintain Facilities Take Inventory Sell Merchandise Provide Services Display Merchandise Prevent Shrinkage Recruit Hire Personnel Train Employees Plan Schedules Evaluate Performance Motivate

Human Resources 9.19 Administrative Management Tasks Performed in a Retail Firm  Promote the Firm, its Merchandise and its Services  Manage Human Resources  Distribute Merchandise  Establish Financial Control

Human Resources 9.20 Assignment of Responsibility for Tasks  Strategic – Top Management, Board of Directors  Merchandise Management – Merchandise Division  Store Management – Stores Division  Administrative – Corporate Specialists

Human Resources 9.21 Department Store Organization

Human Resources 9.22 Corporate Organization: Federated Stores And now … May Company 

Human Resources 9.23 WSJ 2/28/05 Video … and Meier & Frank

Human Resources 9.24 Advantages of Centralized Decision-Making?  Retailers can reduce overhead, i.e. fewer managers  Coordinating efforts, it can achieve lower prices from suppliers  Opportunity to have the best people making decisions

Human Resources 9.25 Methods for Coordinating Buying and Store Management  Better Appreciation for Store Environment  Making Store visits  Employees performing coordinating roles  Involving Store Management in Buying Decisions

Human Resources 9.26 Compensation Plans Plan When Office staff, Non-tech., Staple/low cost items Office staff, Non-tech., Staple/low cost items Advantages Disadvantages Control Security Low turnover Control Security Low turnover Low incentive Hard to administer Can be equitable Low incentive Hard to administer Can be equitable Coats, Shoes, Jewelry, Major HH Coats, Shoes, Jewelry, Major HH High incentive Equitable Good cost control Easy to understand High incentive Equitable Good cost control Easy to understand Little control No security Cherry picking Poor customer service Little control No security Cherry picking Poor customer service