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Gaining Competitive Advantage through Human Resource Management
Why does human resource management give a sustainable competitive advantage?
• Labor costs account for a significant percentage of a retailer’s total expenses • The customer experiences are determined by the activities of employees (selecting merchandise, providing information and assistance, etc.) • These potential advantages are difficult for competitors to duplicate
Objectives of Human Resource Management • Short Term – Increasing Employee Productivity – Productivity = Sales/ Number of Employees • Long-Term – Employee attitude customer satisfaction and loyalty long-term performance – Increasing Employee Satisfaction Reducing Turnover – Employee turnover = # of employees leaving their job during the year # of positions .
Human Resource Management Challenges in Retailing Work Environment • Open Long Hours • Peak Sales Periods • Emphasis on Cost Control Employees ■ Unskilled ■ Part-Time ■ Diverse Backgrounds High Turnover .
Downward Performance Spiral 09-5 .
Special HR Considerations Facing Retailers • • • • Need for Part-Time Employees Demand on Expense Control Changing Employee Demographics International HR Issues .
and the elderly.Increasing Workforce Diversity • Workforce employing more minorities. • Cost effective as training and recruitment costs are low . • Older workers are more reliable than younger workers. handicapped people.
and authority for tasks to people and business units. while motivating employees to work toward achieving company goals. • The approaches utilized coordinate the activities of the firm’s department and employees.Strategic Issues Facing Retail HR Professionals • The design of the organization structure for assigning responsibility. • The programs used to build employee commitment. and retain valuable human resources .
and determines the lines of authority and responsibility in the firm. .Designing the Organizational Structure Organizational structure Identifies the activities to be performed by specific employees.
Tasks Performed in a Retail Firm .
Strategic Management Tasks Performed in a Retail Firm • Develop a retail strategy • Identify the target market • Determine the retail format • Design organizational structure • Select locations .
Merchandise Management Tasks Performed in a Retail Firm • Buy merchandise o Locate vendors o Evaluate vendors o Negotiate with vendors o Place orders • Control merchandise inventory o Develop merchandise o Budget plans o Allocate merchandise to stores o Review open-to-buy and stock position • Price merchandise o Set initial prices o Adjust prices .
Store Management Tasks Performed in a Retail Firm • Recruit. 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 . hire.
Administrative Management Tasks Performed in a Retail Firm • Promote the firm. its merchandise and its services • Manage human resources • Distribute merchandise • Establish financial control .
Organization of a Small Retailer 09-15 .
Organization Design 09-16 .
What does a Buyer do? A buyer is responsible for: • procuring merchandise • setting prices • managing inventories • building and maintaining relationships • attending trade and fashion shows • negotiating with vendors on price. assortments. delivery dates and payment terms • specifying private label merchandise 09-17 . quantities.
or canned) o Is evaluated on the profitability of category o Is motivated to eliminate “me to” products and keep essential niche products o Is used primarily by supermarkets. frozen. packed. big retailers 09-18 .What does a category manager do? • A category manager o Is responsible for a set of products that are viewed as substitutes by customers (Ex: all pastas – fresh.
Planner Allocator – responsible for allocating the merchandise and tailoring the assortments in several categories for specific stores in a geographic area. Planner – responsible for the financial planning and analysis of the merchandise category.Allocator vs. They develop the budget plan and monitor performance 09-19 .
• The approaches used to coordinate merchandise and store management 09-20 .Retail Organization Design Issues • The degree to which decision making is centralized or decentralized.
Decentralization Advantages of Centralization Disadvantages of Centralization ■ Reduce costs (overhead falls • It is difficult for a retailer to with fewer managers) adapt to local market conditions ■ Coordinated buying achieve • It may have problems lower prices from suppliers responding to local competition and labor markets ■ Opportunity to have the best people make decisions for • Personnel policies make it hard the entire corporation for local managers to pay competitive wages ■ Increases efficiency 09-21 .Centralization vs.
increased global competition. develop. motivate. • Develop programs to attract. and keep talent 09-22 .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 of new technologies. increased profit & loss responsibilities. a diverse workforce).
Attracting Talent – Employment Marketing Employment marketing (branding) Marketing programs that attract “best and brightest” potential employees o Starbucks – “Love What You Do” o Southwest – “Free to Actually Enjoy What You Are Doing” 09-23 .
use the tagline “A Perfect Fit” on all correspondence and advertising directed toward potential employees.Attracting Talent – Employment Marketing To build its employment brand. 09-24 .
o Simply seeking the best and the brightest may not always be the most effective approach. o Increasing attention to college graduates.Developing Talent Selection and Training • Selective Hiring: o Recruit “the right people”. 09-25 . • Training: o Increasing investments in management training programs and developing leaders.
Stock Options. Bonus. 09-26 .Motivating Talent – Aligning Goals • Policies and Supervision o Indicate what employees should do. • Organization Culture o The set of values. traditions. • Incentives o Commission. o Behavior enforced by social pressure. and customs of a firm that guides employee behavior. o Behavior Enforced by Managers.
Use of Incentives Advantages • Aligns Employee and Company Goals. Disadvantages ■ Employees Only Focus on Sales. ■ Less Commitment to Retailer. • Strong Motivating Force. 09-27 .
job sharing 09-28 .Keeping Talent Building Employee Commitment • Empowering Employees o Empowerment is the process of managers sharing power and decision-making authority with employees • Gives employees confidence • Provides greater opportunity to provide service to customers • Employees are more committed to firm’s success • Creating Partnering Relationships with Employees o Reducing Status Differences o Promotion From Within o Balancing Careers and Families • Flextime.
Issues in Retail Human Resource Management • Managing Diversity o Diversity Training o Support Groups and Mentoring o Career Development and Promotions • Growth in Legal Restrictions on HR Practices o o o o o o Equal employment opportunity Compensation Labor relations Employee safety and health Sexual harassment Employee privacy 09-29 .
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