Setting Up a Retail Organization: Procedures and Organizational Arrangements

1. Chapter 11 Retail Organization and Human Resource Management Dr. Pointer’s Notes

2. Chapter Objectives • To study the procedures involved in setting up a retail organization • To examine the various organizational arrangements utilized in retailing • To consider the special human resource environment of retailing • To describe the principles and practices involved with the human resource management process in retailing

3. Setting Up a Retail Organization • Through a retail organization, a firm’s structures and assigns tasks, policies, resources, authority,responsibilities in order to efficiently and effectively satisfy the needs of target market, employees, management and shareholders

4. Figure 11.1 Planning and Assessing a Retail Organization: Factors to Consider Target market needs • Sufficient personnel to provide appropriate customer service • Knowledgeable and courteous personnel • Well maintained store facilities • Ability address changing needs

5. Figure 11.1 Planning and Assessing a Retail Organization: Factors to Consider Employee Needs • Challenging and satisfying positions • Participation in decision making • Clear channel communications • Clear authority-responsibility roles • Fair treatment of employees • Good performance rewards

6. Figure 11.1 Planning and Assessing a Retail Organization: Factors to Consider Management Needs • Ability to obtain and retain good employees • Clear personnel procedures • One worker reporting to only one supervisor • Adequate staff supports in departments • Well integrated organizational plans • Motivated employees • Low absenteeism • System replace employees as needed

7. Figure 11.2 The Process of Organizing a Retail Firm Dividingtasks among channel members Outline specific tasks Classifying jobs Grouping tasks into jobs Developing an Organizational chart to show relationships

8. Specifying Tasks 1.Buying/shipping merchandise 2. Receiving and checking in goods 3.Setting prices/marking merchandise 4. Inventory storage and control 5. Facilities maintenance 6. Personnel management 7. Billing customers/credit operations 8. Customer service operations- delivery, gift wrapping,, 9. Sales forecasting and budgeting

9. Figure 11.3 Division of Tasks in a Distribution Channel • Retailer- can perform all or some tasks from buying to coordination • Manufacturer or wholesaler – few of functions such as shipping and marking, inventory storage, displays and research • Specialists – particular tasks: market research, ad agency, credit, computer services

10. Grouping Tasks into Jobs

11. Figure 11.4 A Job Description for a Store Manager • Job Title: Store manager • Position Reports To: Senior Vice-President • Positions reporting to store manager: all personnel in store • Objectives: to properly staff and operate store • Duties: sales forecasting, budgeting, personnel hiring, merchandise display and etc. • Committees: Attendance at monthly meetings with V-President • Weekly meetings with department managers

12. Classifying Jobs • Functional- divides jobs by task • Product diversification divides jobs on a goods or service basis • Geographic- is useful for chains operating in different areas. • Combination – large organizations find it easier to use a combination

13. Develop an Organization Chart • It is important to build a good organization which will help build the business • Hierarchy of Authority- outlines the job interactions within a company by describing the reporting relationships among employees • Flat organization – many workers reporting to one manager • Tall organization – has several management levels

14. 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

15. Figure 11.5 Different Forms of Retail Organization • Functional organizational chart Vice President Sales Promotion Manager Merchandising Manager Personnel Manager Store Operations Manager

16. Figure 11.5 Different Forms of Retail Organization • Product Organizational Chart Store Manager Men’s outerwear Manager Ladies clothing Manager Lingerie Manager Appliance Manager

17. Figure 11.5 Different Forms of Retail Organization • Geographic Organizational Chart Vice President Store Manager A Store Manager B Store Manager C Store Manager D

18. Figure 11.6 Different Forms of Retail Organization • Organization Chart for Ladies Boutique Owner Manager Merchandising Personnel Operations personnel

19. Organizational Arrangements Used by Diversified Retailers • A diversified retailer is a multiline firm operating under central ownership. Usually involved in different types of retail operations • Toys “R” Us, Inc. • Toys “R” Us • Kids “R” Us • Babies “R” Us • Imaginarium • Toys “R” Us.com

20. Toys “R” Us Chairman of Board Executive V-Presidents Other Senior Officers Company Divisions Toy”R”us USA Toy “R”Us International Kids “R’ Us Babies “R” Us Imaginarium

21. Human Resource Management In Retailing • Human resource management involving, recruiting, selecting, training, compensating and supervising personnel in a manner consistent with the retail organization’s structure and strategy mix. • 23 million people are employed in retailing

22. Human Resource Management in Retailing • Recruiting- need procedures to efficiently generate sufficient applicants • Selecting- diverse work force • Training- must be short because most workers are inexperience and temporary • Compensating- must be perceived as being fair • Supervising-must closely monitor workers because many are part-time and unmotivated

23. 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

24. Women in Retailing • Women have more career opportunities in retailing as demonstrated in our text • 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

25. Minorities in Retailing • Again minorities have done well in retailing • Issues to address with regard to female 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 • See DiversityInc.com

26. Diversity • Two premises: • That employees be hired and promoted in a fair and open way, without regard to gender, ethnic background, and other related factors • That in a diverse society, the workplace should be representative of such diversity

27. Human resource management process in Retailing Human resource management process consist of 5 interrelated personnel activities • Recruitment- sources of employees? • Selecting Retail Personnel- matching traits of new employees with job requirements. job analysis – information on job functions and requirements and job description contains, position title,relationship, and specific roles and tasks application blank and weighted application blank- tests are done and references are usually needed

28. Human resource management process in Retailing Human resource management process consist of 5 interrelated personnel activities *Training- teach new and existing personnel how to perform their jobs or improve themselves Training should be viewed as an ongoing activity • Compensation –direct monetary payments( salary, commissions, and bonuses • Supervision- is manner of providing a job environment that encourages employee accomplishments Job motivation – develop the drive within people to attain work related goals.

29. Labor Law Considerations • 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

30. Figure 11.11 A Checklist of Selected Training Decisions • When should training occur • How long should training be • What programs for new and existing employees • Where should training take place • Should audiovisuals be used • Use of computerized training • How the effectiveness of training be measured

31. Compensation • Total compensation • Salary plus commission • Profit-sharing

32. Employee Behavior and Motivation • Several attitudes may affect employee behavior • 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

33. Style of Supervising Retail Employees • Management assumes employees must be closely supervised and controlled; only economic inducements motivate employees • Management assumes employees can be self-managers and assigned authority; motivation is intrinsic • Management applies self-management approach