Retail store management
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Store managers are responsible for running the retail business at their location. They recruit and manage employees, motivate salespeople, control costs and inventory, and address legal and ethical issues. Store managers must recruit and select employees, provide training and feedback, and compensate employees fairly to motivate performance. They also work to increase productivity while reducing inventory losses from theft and errors.
Retail store management
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- 3. 17-3 Questions ■ What are the responsibilities of store managers? ■ How do store managers recruit, select, motivate, train, and evaluate their employees? ■ How do store managers compensate their salespeople? ■ What legal and ethical issues must store managers consider in managing their employees? ■ What can store managers do to increase productivity and reduce costs? ■ How can store mangers reduce inventory losses due to employee theft and shoplifting?
- 4. 17-4 Store Managers Run a Business “This is your business. Do your own thing. Don’t listen to us in Seattle, listen to your customers. We give you permission to take care of your customers.” James Nordstrom, the CEO of Nordstrom’sJames Nordstrom, the CEO of Nordstrom’s
- 5. 17-5 Strategic Importance of Store Management ■ Opportunity to Build Strategic Advantage Difficult to Have Unique, Compelling Merchandise Customer Loyalty Often Based on Customer Service ■ Difficulty of Store Managers Job Managing Diverse Set of Unskilled People Increasing Empowerment and Responsibility to Tailor Merchandise and Presentation to Local Community
- 6. 17-6 Store Managers’ Responsibilities ■ Varies Dramatically By Type of Retailers Specialty Store vs. Department Store ■ Entrepreneur P & L Responsibility Manage People ■ Responsible for Two Critical Assets People Sales/Employees Real Estate Sales/Square Foot© Digital Vision
- 7. 17-7 Steps in Employment Management Process
- 8. 17-8 Recruiting and Selecting Employees Undertake Job Analysis Prepare Job Description Locate Prospective Employees Screen Candidates Select Employees Identify essential activities and determine the qualifications of employees Activities to be performed and performance expectations in quantitative terms Use employees as talent scouts Application forms references, testing, realistic job preview
- 9. 17-9 ■ Equal Employment Opportunity Commission (EEOC) ■ Age Discrimination and Employment Act Legal Considerations in Hiring and Selecting Employees
- 10. 17-10 Orientation and Training Employees ■ Orientation Program ■ Training Store Employees Structured program On-the-job learning experiences E-training Blended Approach Analyzing Successes and Failures
- 11. 17-11 Nike’s e-learning training solution: Sports Knowledge Underground
- 12. 17-12 Motivating and Managing Employees Setting Goals Measuring Performance Providing Incentives to Achieve Goals Providing Feedback
- 13. 17-13 ■ Leadership ■ Leader Behaviors Task performance behaviors – planning, organizing, motivating, evaluating, coordinating store employees’ activities Group Maintenance – activities undertaken to make sure that employees are satisfied and work well together ■ Leader decision making ■ Leadership Styles Transformational leaders – get people to transcend their personal needs for the sake of the group and generate excitement Motivating and Managing Employees
- 14. 17-14 Motivating Employees Motivating employees to perform up to their potential may be store managers’ most important but also frustrating task
- 15. 17-15 Setting Goals Royalty-Free/CORBIS How High? How Easy to Achieve? Get Participation of Employees in Setting Goals This Sears manager builds morale and motivates her sales associates by holding “ready meetings” before the store opens. At this meeting, the manager is discussing Approaches for improving customer service.
- 16. 17-16 Why Set Goals? Employee performance improves when employees feel: ■ That their efforts will enable them to achieve the goals set for them by their managers ■ That they’ll receive rewards they value if they achieve their goals Royalty-Free/CORBIS
- 17. 17-17 Individualized Motivation Programs ■ Impact of Goals Differs Across People ■ Different People Seek Different Rewards A La Carte Reward Programs Selection of Compensation Plans Steve Cole/Getty Images
- 18. 17-18 Maintaining Morale ■ Meetings before store opening to talk about new merchandise and hear employee opinions ■ Educate employees about the firm’s finances, set achievable goals and have a pizza party when goals are met ■ Divide charity budget and ask employees how their share should be used ■ Give every employee a business card with the company mission statement printed on the back Pando Hall / Getty Images
- 19. 17-19 Sexual harassment is unwelcomed sexual advances, requests for sexual favors, and other verbal and physical contact Sexual Harassment
- 20. 17-20 Evaluating and Providing Feedback to Employees Evaluation Who, when, how often? Feedback Performance outcome vs. process
- 21. 17-21 Factors Used to Evaluate Sales Associates at a Specialty Store
- 22. 17-22 Evaluation ■ Who Should Do the Evaluation? In large retail firms – System is Designed by Human Resource Department Evaluation is done by immediate supervisors ■ How Often Should Evaluations Be Made? Annually or semiannually Feedback from evaluations is the most effective method for improving employee skills ■ Format for Evaluations Objective measures (sales, margin, shrinkage, etc) Subjective measures (supervisors’ evaluations) ■ Evaluation Errors
- 23. 17-23 Compensating and Rewarding Employees ■ Extrinsic Rewards are rewards provided by either the employee’s manager or the firm such as compensation, promotion and recognition A la carte plans: give effective employees a choice of rewards for their good performance ■ Intrinsic Rewards are rewards employees get personally from doing their job well like doing their job well because they think it is challenging and fun Job enrichment: the redesign of a job to include a greater range of tasks and responsibilities
- 24. 17-24 Compensation Programs Royalty-Free/CORBIS ■ A compensation plan is effective for motivating and retaining employees when the employees feel the plan is fair and that their compensation is related to their efforts ■ Types Straight salary compensation Incentive compensation plans • Straight commission • Quota bonus plan Group incentives
- 25. 17-25 Straight Salary vs Incentive Compensation Straight Salary Incentive Compensation Offers flexibility in assigning employees Has high motivating potential to activities Builds stronger employee commitment Has more variable cost Is easy for employees to understand Relates compensation to productivity Is easy to administer Allows for better performance of non-selling activities such as customer service
- 26. 17-26 Controlling Costs Costs Controlled by Store Managers Labor Scheduling Maintenance Inventory Shrinkage Energy Heating Lighting
- 28. 17-28 • c• c Sources of Inventory Shrinkage Employee Theft 47% Shoplifting 32% Mistakes and Inaccurate Records 14% Vendor Errors 4% Unaccounted 3%
- 29. 17-29 Organized and High Tech Retail Theft ■ Concentrate in over-the-counter medications, infant formula, health and beauty aids, electronics and specialty clothing ■ Items that are easy to sell through Internet like eBay auctions ■ Technology based scams Counterfeit bar codes at lower prices Gift cards Receipt frauds PhotoLink/Getty Images
- 30. 17-30 Detecting and Preventing Shoplifting ■ Store design ■ Merchandise Policies ■ Security measures CTV cameras Electronic Article Surveillance (EAS) ■ Personnel Policies ■ Employee training ■ Prosecution EAS tag
- 31. 17-31 Reducing Employee Theft ■ Trusting, supportive work atmosphere ■ Employee screening Honesty test, extensive reference checks, drug testing ■ Security policies and control systems Employee theft is an HR problem Total inventory shrinkage attributed to employee theft is approximately $19 billion annually in the U.S.
- 32. 17-32 Security Measures Used by Retailers