1. Human Resource Management in Retail
Dr. Shilpa Sindhu

2. Gaining Competitive Advantage through Human Resource Management
Why does human resource management give a sustainable competitive advantage?
Labor costs account for a significant percentage of a retailer’s total expenses
The customer experiences are determined by the activities of employees (selecting merchandise, providing information and assistance, etc.)
These potential advantages are difficult for competitors to duplicate

3. Objectives of HRM Short Term Long-Term
Increasing Employee Productivity
Productivity = Sales/ Number of Employees
Long-Term
Employee attitude  customer satisfaction and loyalty  long-term performance
Increasing Employee Satisfaction  Reducing Turnover
Employee turnover = Number of employees leaving their job during the year
Number of positions

4. Human Resource Management Challenges in Retailing
Work Environment
Open Long Hours
Peak Sales Periods
Emphasis on Cost Control
Employees
Unskilled
Part-Time
Diverse Backgrounds
High Turnover

5. Downward Performance Spiral

6. Special HR Considerations Facing Retailers
Balancing the Human Resource Triad – HR Professionals, Store Managers & Store employees
Need for Part-Time Employees – depending upon time of day, day of week, time of year
Demand on Expense Control – cautious about paying wages/salaries to employees
Changing Employee Demographics – approx 1/3rd of retail employees are 24 years old or younger
International HR Issues – differences in work values, economic system, labor laws.

7. Strategic Issues Facing Retail HR Professionals
The design of the organization structure for assigning responsibility, and authority for tasks to people and business units
The approaches utilized coordinate the activities of the firm’s department and employees, while motivating employees to work toward achieving company goals
The programs used to build employee commitment, and retain valuable human resources

8. Designing the Organizational Structure
Organizational structure Identifies the activities to be performed by specific employees, and determines the lines of authority and responsibility in the firm

9. Tasks Performed in a Retail Firm

10. Strategic Management Tasks Performed in a Retail Firm
Develop a retail strategy
Identify the target market
Determine the retail format
Design organizational structure
Select locations

11. Merchandise Management Tasks Performed in a Retail Firm
Buy merchandise
Locate vendors
Evaluate vendors
Negotiate with vendors
Place orders
Control merchandise inventory
Develop merchandise
Budget plans
Allocate merchandise to stores
Review open-to-buy and stock position
Price merchandise
Set initial prices
Adjust prices

12. Store Management Tasks Performed in a Retail Firm
Recruit, hire, and train store personnel
Plan work schedules
Evaluate performance of store personnel
Maintain store facilities
Locate and display merchandise
Sell merchandise to customers
Repair and alter merchandise
Provide services
Handle customer complaints
Take physical inventory
Prevent inventory shrinkage

13. Administrative Management Tasks Performed in a Retail Firm
Promote the firm, its merchandise and its services
Manage human resources
Distribute merchandise
Establish financial control

14. Assignment of Responsibility for Tasks
Strategic – Top Management, Board of Directors
Merchandise Management – Merchandise Division
Store Management – Stores Division
Administrative – Corporate Specialists

15. Organization of a Small Retailer

16. Organization of Departmental Store

17. What does a Buyer do? A buyer is responsible for:
procuring merchandise
setting prices and markdowns
managing inventories
building and maintaining relationships
attending trade and fashion shows
negotiating with vendors on price, quantities, assortments, delivery dates and payment terms
specifying private label merchandise
© Digital Vision

18. What does a category manager do?
Is responsible for a set of products that are viewed as substitutes by customers (Ex: all pastas – fresh, frozen, packed, or canned)
Is evaluated on the profitability of category
Is motivated to eliminate “me to” products and keep essential niche products
Is used primarily by supermarkets, big box retailers

19. Allocator vs. Planner
Allocator – responsible for allocating the merchandise and tailoring the assortments in several categories for specific stores in a geographic area.
Planner – responsible for the financial planning and analysis of the merchandise category. They develop the budget plan and monitor performance

20. Stores Division: Organization of a Store

21. Retail Organization Design Issues
The degree to which decision making is centralized or decentralized
The approaches used to coordinate merchandise and store management

22. Centralization vs. Decentralization
Advantages of Centralization
Disadvantages of Centralization
Reduce costs (overhead falls with fewer managers)
Coordinated buying achieve lower prices from suppliers
Opportunity to have the best people make decisions for the entire corporation
Increases efficiency
It is difficult for a retailer to adapt to local market conditions
It may have problems responding to local competition and labor markets
Personnel policies make it hard for local managers to pay competitive wages

23. Methods for Coordinating Buying and Store Management
Improving buyer’s appreciation for store environment
Making store visits
Assigning employees to coordinating roles

24. Winning the Talent War
Retailers are engaged in a “war” with their competitors for talent – for effective employees and managers – who can effectively deal with the incased complexities of retail jobs (the use of new technologies, increased profit & loss responsibilities, increased global competition, a diverse workforce).
Develop programs to attract, develop, motivate, and keep talent

25. Attracting Talent – Employment Marketing
Employment marketing (branding)
Marketing programs that attract “best and brightest” potential employees. Understand what potential employees are seeking and what they think about the retailer.
Starbucks – “Love What You Do”
Southwest – “Free to Actually Enjoy What You Are Doing”

26. Developing Talent – Selection and Training
Selective Hiring:
Recruit “the right people”
Simply seeking the best and the brightest may not always be the most effective approach.
UK based sandwich shop chain Pret A Manger, work for 1 day and team decides.
Training:
Increasing investments in management training programs and developing leaders
Increasing attention to college graduates - Generation Y

27. Motivating Talent – Aligning Goals
Policies and Supervision
Indicate what employees should do
Behavior Enforced by Managers
Incentives
Commission, Bonus, Stock Options
Organization Culture
The set of values, traditions, and customs of a firm that guides employee behavior
Behavior enforced by social pressure

28. Use of Incentives Advantages Aligns Employee and Company Goals
Strong Motivating Force
Disadvantages
Employees Only Focus on Sales
Less Commitment to Retailer

29. Keeping Talent – Building Employee Commitment
Empowering Employees
Empowerment is the process of managers sharing power and decision- making authority with employees
Gives employees confidence
Provides greater opportunity to provide service to customers
Employees are more committed to firm’s success
Creating Partnering Relationships with Employees
Reducing Status Differences
Promotion From Within
Balancing Careers and Families
Flextime, job sharing

30. Issues in Retail Human Resource Management
Managing Diversity
Diversity Training
Support Groups and Mentoring
Career Development and Promotions
Growth in Legal Restrictions on HR Practices
Equal employment opportunity
Compensation
Labor relations
Employee safety and health
Sexual harassment
Employee privacy
Use of Technology to Increase Employee Productivity
Keith Brofsky/Getty Images