Chapter 1111

Retail Organization and

Human Resource Management

Chapter Objectives

To consider the special human resource environment of retailing (Productivity Trap)

To study the procedures involved in setting up a retail organization

To examine the various organizational arrangements utilized in retailing

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

Low Wages

Insufficiently Qualified/Motivated EmployeesLow Productivity

Productivity Trap

The Problem:

Analysis:1. Size of Task

2. Level of Efficiency

3. Cost per Unit

Productivity(Task) Function = Size of Task X CostAnalysis Cost Level of Efficiency Unit Input

Solution - Altering Compensation Levels (Lower Input Cost)

- Part-Time Employees

- Overtime

- Incentive Compensation System

- Reducing Workload (Reduce Size of Task)

- Shift tasks to consumers

- Shift tasks to suppliers

- Shift tasks to outside agencies

- Internal actions (e.g. kiosks)

- Increasing Level of Efficiency

- Employee scheduling systems

- Technology

- Task restructuring (e.g., specialization)

- Training

Figure 11-1c: Management Needs

Planning and Assessing a Retail Organization

Figure 11-1b: Employee Needs

Figure 11-1a: Target Market Needs

Figure 11-2: The Process of Organizing a Retail Firm

Figure 11-3: Division of Tasks in a Distribution

Channel

Figure 11-4: A Job Description

for a Store Manager

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

Figure 11-6: Organization

Structures Used by Small Independents

Figure 11-9: The Organizational

Structure of Kroger

Figure 11-7: The Basic Mazur

Organization Plan for Department Stores

Figure 11-8: Equal-Store

Organizational Format Used by Chain Stores

Human Resource Management in Retailing

Recruiting Selecting Training Compensating Supervising

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

Annual Turnover = 34.7%

US Monthly Employee Turnover Rates by Industry and by Geographic RegionThrough Aug/06

Data is supplied by the U.S. Department of Labor

Acquisition

-Low level

-Middle level

-High level

Women in Retailing 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

Minorities in Retailing Issues to address with regard to

minority 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

Diversity Two premises:

1. That employees be hired and promoted in a fair and open way, without regard to gender, ethnic background, and other related factors

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

Labor Law Factors 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

Figure 11-10:A Goal-Oriented Job

Description for a Management Trainee

Figure 11-11: A Checklist of Selected Training

Decisions

Components of Compensation$ Total compensation$ Salary plus commission$ Profit-sharing

ICR Compensation Survey-2006

Employee Behavior and Motivation

Sense of accomplishment Liking of work Attitude toward physical work conditions Attitude toward supervisors Confidence in company Knowledge of business strategy Recognition of employee role in achieving corporate objectives

Several attitudes may affect employee behavior

Style of Supervising Retail Employees

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

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

Management applies self-management approach Chapter 11 Discussion Questions: 5, 12

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