CHAPTER SIX

RETAIL ORGANIZATION AND HUMAN RESOURCE MANAGEMENT (HRM)

6.1. RETAIL ORGANIZATION

Organizing is an important management function which consists of dividing work-load or tasks
into groups and establishing authority-responsibility relationship amongst these. The end result is an
organization structure that serves as a mechanism to realize the organizational objectives. Organization
structure is affected by people who are assigned the tasks. An effective structure satisfies the needs of the
target market, employees and management.
Retail organization will include:-Organization based on the functions of retailing are the different
function of retailing like promotion, merchandise, human resource, and operations can be organized under
the general manager.Product based retail organization which consists different products like men’s
apparel, ladies’ apparel, children’s apparel, and appliances can be organized under the store manager.
Location based retail organization a multi-location store (like store manager location A, store manager
location B etc.) with their separate functionaries for each location can be organized under the general
manager. A combined retail organization here each functional manager under the general manager will
manage its function in different location. And each location manager can manage different products.
Organization structure for small retailers are mostly run by owner managers.Organization structure
of a department store this is putting the workload into four areas which is merchandising, publicity,
store management and accounting control. The areas are organized in a typical line-staff format, where
staff means an advisory function. To illustrate, publicity and controlling are staff functions to
merchandising. But under each function the line structure is followed.Organization structure for chain
retailers in this structure, the overall authority and responsibility is centralized. Store managers have
selling responsibility. Many operations are standardized. Finance, Promotion, Merchandise, Operations,
and Main & branch store functions can be organized under the general manager. Control and EDP
activities are organized under finance manager. Advertising and PR manager are organized under
promotion manager. Buyers are organized under divisional merchandise manager and the divisional
merchandise manager is in turn organized under merchandise manager. Organization structure for
retail conglomerates retail conglomerates have diversified firms which are centrally controlled. The
individual firms could be in different types of retail operations, e.g., a discount store, a departmental
store, etc. The different types of retail businesses are treated as divisions, and are managed independently
under the overall policy guidance of a central structure. The resources must be deployed amongst
different divisions carefully.

6.2. HUMAN RESOURCE MANAGEMENT IN RETAILING

Human resources are the most valuable assets for any organization, more so for a retailing outlet. HRM is
that part of management which deals with the procurement, the development, and the motivation of
human resources so as to attain organizational objectives.Retail sector employs a large number of less
educated, less experienced workers.Retailing is a tiring job, especially because of long hours, with no
weekly offs. Retailers work sometimes in two shifts.. Retailing is a visible job. The employees come in
direct contact with the customers. Their training therefore should be extremely well-planned. They must
be taught to have a right attitude, impeccable manner, and cheerful disposition. The employees must be
well-dressed and presentable.

HRM processes
The first process is Recruitment of retail manpower: the sum total of functions needed to discover and
develop reliable sources of supply for the types of applications needed by a retailer. There are vacancies
due to retirements, desertions, deaths, disabilities and expansions. The ultimate aim of recruitment is to
generate a list of potential employees. The potential sources to get the employees are educational
institutes, competitors, advertisements in the media, other members of the supply chain, employment
agencies, current employees, former employees, recommendations and walking or unsolicited applicants.
The second process is Selection this is reducing the recruitment list. In this process, first job analysis, job
description, and job specifications are fixed. Later comes, filling the application blank, testing,
interviewing, checking references, and physical examination. A retailer can delete any of the components
and can retain the components, relevant for his/her purpose. All these steps are integrated.
Job analysis is the process of listing all the tasks, functions, duties, responsibilities for the performance
of the job and the qualifications required to perform these. Job analysis leads to job description which
gives the title of the job, the relationship, the role expected and the tasks to be performed. Job
specifications are the qualifications required and skills necessary to justify the job description.
Application blank gives the personal details, academic details, work experience details and references.
Some retailers may hold a written test. Tests must be standardized by making them reliable and valid. A
reliable test measures what it purports to measure, say logical thinking or quantitative ability. A valid test
gives the same score when administered to the same group with plus minus some percentage. Larger
retailers employ testing whereas smaller ones just rely on interviews. The interview seeks to gather
further information about the candidate and to assess his/her personality. Selection steps are
complementary to each other.
After selection the third process is Training of retail staff a newly-selected person on placement
undergoes what is called induction training. Here he/she is acquainted with the organization, its
objectives, the organization structure, his/her own job and the role he/she is required to play and the chain
of command. He/she is also informed about the compensation package. Induction training is an
orientation programs. It is also called pre-training.
Later, training program are designed on a continuous basis by identifying training needs, setting the
objectives of the training program, administering it to the trainees and evaluating it. Training program can
last for a short-period or for a long-period.
The fourth one is Evaluating employee Performance: regular performance evaluations not only provide
feedback to employees, but also provide employees with an opportunity to correct deficiencies. It helps
for decisions such as the following:Justifying promotions, transfers, and terminations ,Identifying training
needs,Provide feedback to employees on their performance, Determining necessary pay adjustments
The fifth and final process is Compensation of retail personnel: compensation package depends upon
the paying capacity of the organization, the pays the competitors offer, and the fairness of the package.
Some payments are direct money disbursals such as salaries, commission and bonus. Some payments are
indirect in the form of club membership, insurance payments, medical benefits, leave travel concessions,
etc. Some retailers offer employees stock options (ESOPs) and profit-sharing schemes. The payments are
governed by the Minimum Wages Act. A straight salary plan is a fixed periodic payment (per hour or
per week or per month or per year). It is the simplest plan to operate. The expenses are known. The
employer executes control. At the same time, it is non-motivating and inflexible. Cashiers and clerks are
generally paid a fixed salary. A straight commission plan ties the earnings to performance, e.g., sales. It is
a flexible plan. The employees’ earnings vary, and a limit is placed on their earnings. This plan is used for
insurance selling, auto sales, loan selling and real estate. A better option is a combination of salary plus
commission. Appliance selling personnel and managers are paid by this method.
6.3. MOTIVATION OF EMPLOYEES
Empowering employees occurs when individuals in an organization are given autonomy, authority, trust,
and encouragement to accomplish a task. Providing an effective reward system consists pay bonuses,
promotions, time off, special assignments, office fixtures, awards, verbal praise, and so on.Redesigning
jobs: it includes Job enlargement( a horizontal job loading to increase the variety of tasks a job includes).
Job rotation(assigns people to different jobs or tasks to different people on a temporary basis to renew
interest and enthusiasm).Job enrichment(a vertical job loading to provide an employee with more
responsibility and authority). Creating flexibility includes;-Providing compressed workweeks to form
flextime that allows a full-time job to be completed in less than the standard working hours. Job sharing
or twinning occurs when one full-time job is split between two or more persons. Telecommuting/flexi
place, is a work arrangement that allows at least a portion of scheduled work hours to be completed
outside of the office, with work at home as one of the options.