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 Divisiondesign, negotiate, buy

merchandisedetermine inventory levels

Stores Divisionstore operationsstore merchandising

Marketing Divisionadvertising/promotionvisual display, special events

Human Resources Divisionrecruit, select, train,

compensate

Finance Divisionmaintain records, budgetsmanage MIS department

Operations Divisionloss preventiondistribution centers

Human Resources 9.3

Store Operations & HR Tasks

Utilization of personnelUtilization of personnel Store format & sizeStore format & size Space allocationSpace allocation Store maintenanceStore maintenance Energy managementEnergy management Inventory managementInventory management Store securityStore security InsuranceInsurance Credit managementCredit management

Human Resources 9.4

Objectives ofHR 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 StudyWork 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 StudyWork Week & Income

47.2

3.5

50.0

5.7

48.9

5.8

48.3

5.0

0

10

20

30

40

50

60

Mean Work Week Mean Annual Income

Store Retail

Corp. Retail

Bus. Sales

Mktg. Mgmt.

Income category

Mean hours per week

Human Resources 9.8

Our Burnout StudyJob Characteristics on …

2.5

3

3.5

4

4.5

Store Retail

Corp. Retail

Bus. Sales

Mktg. Mgmt.

1 =

Low

… 5

= H

igh

Human Resources 9.9

Our Burnout StudyJob Satisfaction with …

2.5

3

3.5

4

4.5

Store Retail

Corp. Retail

Bus. Sales

Mktg. Mgmt.

1 =

Low

… 5

= H

igh

Human Resources 9.10

Our Burnout StudyJob Stress & Burnout

1 =

Low

… 5

= H

igh

2.5

3

3.5

4

4.5

Store Retail

Corp. Retail

Bus. Sales

Mktg. Mgmt.

Store retailing jobs: not “burnout” but “rust-out”

What do you see here?

Human Resources 9.11

Downward Performance Spiral

Financial Performance ProblemsLow profits

High costs

Retailer’s ResponseLayoffs

Freeze on hiring & promotionReduced training

Salary freezeUse more part-time workers

Human Resources 9.12

Increasing Employee Productivity

Ability Effort Role Clarity

Selection

Training

Motivation

Goals

Incentives

Rewards

Policies, Rules

Incentives

Org Culture

Human Resources 9.13

Motivating and Controlling Employees

Policies and SupervisionBehavior Enforced by

Managers Incentives

Commission, Bonus Organization Culture

unwritten rules, normsbehavior 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 Responsibilityfor 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

PlanPlan

WhenWhen

Office staff,Non-tech.,Staple/low cost items

Office staff,Non-tech.,Staple/low cost items

AdvantagesAdvantages DisadvantagesDisadvantages

ControlSecurity

Low turnover

ControlSecurity

Low turnover

Low incentiveHard to administerCan be equitable

Low incentiveHard to administerCan be equitable

Coats,Shoes,

Jewelry,Major HH

Coats,Shoes,

Jewelry,Major HH

High incentiveEquitable

Good cost controlEasy to understand

High incentiveEquitable

Good cost controlEasy to understand

Little controlNo security

Cherry pickingPoor customer service

Little controlNo security

Cherry pickingPoor customer service