Chapter 1111Retail Organization and Human Resource Management

Dr. Pointer’s NotesDr. Pointer’s Notes

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Chapter Objectives

To study the procedures involved in setting up a retail organization

To examine the various organizational arrangements utilized in retailing

To consider the special human resource environment of retailing

To describe the principles and practices involved with the human resource management process in retailing

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Setting Up a Retail Organization

• Through a retail organization, a firm’s structures and assigns tasks, policies, resources, authority,responsibilities in order to efficiently and effectively satisfy the needs of target market, employees, management and shareholders

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Figure 11.1 Planning and Assessing a Retail Organization: Factors to Consider

Target market needs• Sufficient personnel to provide appropriate

customer service• Knowledgeable and courteous personnel• Well maintained store facilities• Ability address changing needs

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Figure 11.1 Planning and Assessing a Retail Organization: Factors to Consider

Employee Needs• Challenging and satisfying positions• Participation in decision making• Clear channel communications• Clear authority-responsibility roles• Fair treatment of employees• Good performance rewards

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Figure 11.1 Planning and Assessing a Retail Organization: Factors to Consider

Management Needs• Ability to obtain and retain good employees• Clear personnel procedures• One worker reporting to only one supervisor• Adequate staff supports in departments• Well integrated organizational plans• Motivated employees• Low absenteeism• System replace employees as needed

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Figure 11.2 The Process of Organizing a Retail Firm

Outline specific tasks

Developing an Organizational chart to

show relationships

Classifying jobs

Dividing tasks among channel

members

Grouping tasks into jobs

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Specifying Tasks

1.Buying/shipping merchandise

2. Receiving and checking in goods

3.Setting prices/marking merchandise

4. Inventory storage and control

5. Facilities maintenance

6. Personnel management

7. Billing customers/credit operations

8. Customer service operations- delivery, gift wrapping,,

9. Sales forecasting and budgeting

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Figure 11.3 Division of Tasks in a Distribution Channel

• Retailer- can perform all or some tasks from buying to coordination

• Manufacturer or wholesaler – few of functions such as shipping and marking, inventory storage, displays and research

• Specialists – particular tasks: market research, ad agency, credit, computer services

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Grouping Tasks into JobsTASKS JOBS

Displaying merchandise, customer contact, gift wrapping, customer follow-up

Sales personnel

Entering transaction data, handling cash and credit purchases, gift wrapping

Cashier

Receiving merchandise, checking incoming shipments, marking merchandise, inventory storage and control, returning merchandise to vendors

Inventory personnel

Window dressing, interior display setups, use of mobile displays Display personnel

Billing customers, credit operations, customer research Credit personnel

Merchandise repairs and alterations, complaint resolution, customer research

Customer service personnel

Cleaning store, replacing old fixtures Janitorial personnel

Personnel management, sales forecasting, budgeting, pricing, coordinating tasks

Management personnel

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Figure 11.4 A Job Description for a Store Manager

• Job Title: Store manager• Position Reports To: Senior Vice-President• Positions reporting to store manager: all personnel

in store• Objectives: to properly staff and operate store• Duties: sales forecasting, budgeting, personnel

hiring, merchandise display and etc.• Committees: Attendance at monthly meetings with

V-President• Weekly meetings with department managers

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Classifying Jobs

Functional- divides jobs by task Product diversification divides jobs on a

goods or service basisGeographic- is useful for chains operating in

different areas.Combination – large organizations find it

easier to use a combination

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Develop an Organization Chart

• It is important to build a good organization which will help build the business

• Hierarchy of Authority- outlines the job interactions within a company by describing the reporting relationships among employees

• Flat organization – many workers reporting to one manager

• Tall organization – has several management levels

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Table 11.1 Principles for Organizing a Retail Firm

Show interest in employees Monitor employee turnover, lateness, and

absenteeism Trace line of authority from top to bottom Limit span of control Empower employees Delegate authority while maintaining

responsibility Acknowledge need for coordination and

communication Recognize the power of informal relationships

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Figure 11.5 Different Forms of Retail Organization

• Functional organizational chart

Vice President

Personnel Manager

Merchandising Manager

StoreOperations Manager

Sales Promotion Manager

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Figure 11.5 Different Forms of Retail Organization

• Product Organizational Chart

Store Manager

Lingerie Manager

Ladies clothing Manager

ApplianceManager

Men’s outerwear Manager

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Figure 11.5 Different Forms of Retail Organization

• Geographic Organizational Chart

Vice President

Store Manager C

Store Manager B

Store Manager D

Store Manager A

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Figure 11.6 Different Forms of Retail Organization

• Organization Chart for Ladies Boutique

Owner Manager

Merchandising

Personnel

Operations

personnel

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Organizational Arrangements Used by Diversified Retailers

A diversified retailer is a multiline firm operating under central ownership. Usually involved in different types of retail operations

Toys “R” Us, Inc.– Toys “R” Us– Kids “R” Us– Babies “R” Us– Imaginarium– Toys “R” Us.com

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Toys “R” Us

Chairman

of Board

Other Senior

Officers

Executive

V-Presidents

Company Divisions

Toy”R”us

USA

Toy “R”Us

InternationalImaginarium

Kids “R’

Us

Babies

“R” Us

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Human Resource Management In Retailing

• Human resource management involving, recruiting, selecting, training, compensating and supervising personnel in a manner consistent with the retail organization’s structure and strategy mix.

• 23 million people are employed in retailing

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Human Resource Management in Retailing

Recruiting- need procedures to efficiently generate sufficient applicants

Selecting- diverse work force Training- must be short because most workers

are inexperience and temporary Compensating- must be perceived as being fair Supervising-must closely monitor workers

because many are part-time and unmotivated

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Table 11.2 True Cost of Employee Turnover

Recruiting and hiring new employees Training costs – including management time Full pay and benefits during training, before full

productivity is reached Costs of mistakes made by new, inexperienced

employees Loss of customers loyal to departing employees Lost or damaged relationships with suppliers Employee morale and customer perceptions of

that morale

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Women in Retailing

Women have more career opportunities in retailing as demonstrated in our text

Issues to address with regard to female workers– Meaningful training programs– Advancement opportunities– Flex time –the ability of employees to adapt

their hours– Job sharing among two or more employees

who each work less than full time– Child care

Retailing empires – Mary Kay– Avon

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Minorities in Retailing

Again minorities have done well in retailing Issues to address with regard to female workers

– Clear policy statements from top management as to the value of employee diversity

– Active recruitment programs to stimulate minority applications

– Meaningful training programs– Advancement opportunities– Zero tolerance for insensitive workplace

behavior See DiversityInc.com

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Diversity

Two premises:That employees be hired and promoted

in a fair and open way, without regard to gender, ethnic background, and other related factors

That in a diverse society, the workplace should be representative of such diversity

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Human resource management process in Retailing

Human resource management process consist of 5 interrelated personnel activities

• Recruitment- sources of employees?• Selecting Retail Personnel- matching traits of new

employees with job requirements. job analysis – information on job functions and

requirements and job description contains, position title,relationship,

and specific roles and tasks application blank and weighted application blank-

tests are done and references are usually needed

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Human resource management process in Retailing

Human resource management process consist of 5 interrelated personnel activities

*Training- teach new and existing personnel how to perform their jobs or improve themselves

Training should be viewed as an ongoing activity• Compensation –direct monetary payments( salary,

commissions, and bonuses• Supervision- is manner of providing a job environment

that encourages employee accomplishments Job motivation – develop the drive within people to

attain work related goals.

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Labor Law Considerations

Retailers must not* Hire underage workers* Pay workers “off the books”* Require workers to engage in illegal acts* Discriminate in hiring or promoting workers* Violate worker safety regulations* Disobey the Americans with Disabilities Act* Deal with suppliers that disobey labor laws

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Figure 11.11 A Checklist of Selected Training Decisions

• When should training occur• How long should training be• What programs for new and existing

employees• Where should training take place• Should audiovisuals be used• Use of computerized training• How the effectiveness of training be measured

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Compensation

$ Total compensation$ Salary plus commission$ Profit-sharing

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Employee Behavior and Motivation

Several attitudes may affect employee behaviorSense of accomplishmentLiking of workAttitude toward physical work conditionsAttitude toward supervisorsConfidence in companyKnowledge of business strategyRecognition of employee role in achieving

corporate objectives

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Style of Supervising Retail Employees

Management assumes employees must be closely supervised and controlled; only economic inducements motivate employees

Management assumes employees can be self-managers and assigned authority; motivation is intrinsic

Management applies self-management approach