retailhumanresourcemgt

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McGraw-Hill/IrwinRetailing Management, 7/e 2008 by The McGraw-Hill Companies, All rights reserved.

Chapter 9

Human Resource

Management


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09-2

Retail and

Site Locations

Chapter 7,8

Retailing Strategy

Organizational

Structure &

Human Resource

Management

Chapter 9

Retail Market &

Financial Strategy

Chapter 5, 6

Customer

Relationship

Management

Chapter 11

Information and

Distribution

Systems

Chapter 10


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09-3

Questions

In what way does the management of human resourcesplay a vital role in a retailers performance?

How do retailers build a sustainable competitive advantageby developing and managing their human resources?

What activities do retail employees undertake, and how arethey typically organized?

How does a retailer coordinate employees activities, andmotivate them to work toward the retailers goals?

What are the human resource management programs forbuilding a committed workforce?

How do retailers manage diversity among their employees?


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09-4

A study of Sears employees found a 5%

increase in employee satisfaction resulted

in a 1.3% increase in customer

satisfaction. This led to a 0.5% growth in

sales.


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09-5

Gaining Competitive Advantage through

Human Resource Management

Why does human resource management give asustainable competitive advantage?

Labor costs account for a significant percentage

of a retailers total expenses The customer experiences are determined by theactivities of employees (selecting merchandise,providing information and assistance, etc.)

These potential advantages are difficult forcompetitors to duplicate


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Human Resource ManagementChallenges in Retailing

Work Environment

Open Long Hours

Peak Sales Periods

Emphasis on CostControl

Employees

Unskilled

Part-Time

Diverse Backgrounds

High TurnoverHigh Turnover


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Downward Performance Spiral


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Human Resource Triad


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Special HR Considerations Facing

Retailers

Need for Part-Time Employees

Demand on Expense Control

Changing Employee Demographics

International HR Issues


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Increasing Workforce Diversity

Workforce employing more

minorities, handicapped

people, and the elderly

Older workers are more reliable

than younger workers

Cost effective as training and

recruitment costs are low

Royalty-Free/CORBIS


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Strategic Issues

Facing Retail HR Professionals

The design of the organization structure forassigning responsibility, and authority for tasksto people and business units

The approaches utilized coordinate the activitiesof the firms department and employees, whilemotivating employees to work toward achievingcompany goals

The programs used to build employeecommitment, and retain valuable humanresources


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Tasks Performed in a Retail Firm


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Strategic Management TasksPerformed in a Retail Firm

Develop a retail strategy

Identify the target market

Determine the retail format Design organizational structure

Select locations


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Merchandise Management TasksPerformed 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


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Store Management TasksPerformed 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


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09-18

Administrative Management Tasks

Performed in a Retail Firm

Promote the firm, its merchandiseand its services

Manage human resources Distribute merchandise Establish financial control


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09-19

Assignment of Responsibility for Tasks

Strategic Top Management, Board of Directors

Merchandise Management Merchandise Division

Store Management Stores Division

Administrative Corporate Specialists


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09-21

Organization of Macys Florida


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09-22

Merchandise Division Organization:

Macys Florida


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09-23

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


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09-25

Allocator vs. Planner

Allocator responsible for allocating the merchandiseand tailoring the assortments in several categories forspecific stores in a geographic area.

Planner responsible for the financial planning andanalysis of the merchandise category. They developthe budget plan and monitor performance


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A ti iti P f d t th M I


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09-28

Activities Performed at the Macys Inc.

Corporate Office

Support services and counsel to operating divisions

Conceptualizing, designing, sourcing, and marketing privatelabel and exclusive merchandise sold at Macys and atBloomingdales

Overall strategy, product development, merchandising and

marketing of home-related merchandise Logistics, distribution, and operations functions

Services all proprietary and VISA credit card accounts

Performance of most other non-store services for customersand employees

Development of distinctive sales promotions Provision of an integrated electronic commerce, and data

warehouse systems


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09-29

Retail Organization Design Issues

The degree to which decision making is

centralized or decentralized

The approaches used to coordinate

merchandise and store management


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09-30

Centralization vs. Decentralization

Advantages of Centralization

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 ithard for local managers to

pay competitive wages

Reduce costs (overhead

falls with fewer

managers)

Coordinated buying

achieve lower prices from

suppliers

Opportunity to have the

best people makedecisions for the entire

corporation

Increases efficiency

Disadvantages of Centralization


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09-32

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 ofnew technologies, increased profit & loss

responsibilities, increased global competition, a

diverse workforce).

Develop programs to attract, develop, motivate,and keep talent


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09-33

Attracting Talent Employment Marketing

Marketing programs that attract

best and brightest potential

employees Starbucks Love What You Do

Southwest Free to Actually EnjoyWhat You Are Doing

Employment marketing (branding)

Att ti T l t E l t M k ti


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09-34

Attracting Talent Employment Marketing

JCPenney

To build its employment brand, JCPenney uses

the tagline A Perfect Fit on all correspondence

and advertising directed toward potential

employees

De eloping Talent


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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 Training:

Increasing investments in management training programs

and developing leaders

Increasing attention to college graduates - Generation Y


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09-36

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 afirm that guides employee behavior

Behavior enforced by social pressure


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09-37

Use of Incentives

Advantages

Aligns Employee and

Company Goals

Strong Motivating Force

Disadvantages

Employees Only Focus

on Sales

Less Commitment to

Retailer


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09-38

Developing and Maintaining a Culture

Stories Nordstrom Hero Service Stores

Ritz-Carlton wow story reading

Whole Foods working in teams and

using its employees in the hiringprocess

Wal-Mart Saturday Morning Meeting

Symbols

CEO Leadership

K i T l t


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09-39

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 tocustomers

Employees are more committed to firms success

Creating Partnering Relationships with Employees

Reducing Status Differences Promotion From Within Balancing Careers and Families

Flextime, job sharing


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Issues in Retail Human Resource Management

Managing Diversity Diversity Training Support Groups and Mentoring Career Development and Promotions

Growth in Legal Restrictions on HRPractices Equal employment opportunity Compensation Labor relations Employee safety and health Sexual harassment Employee privacy

Use of Technology to Increase EmployeeProductivity Keith Brofsky/Getty Images

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