Retail Organization & Human Resource Management Notes

Setting Up a Retail Organization

• Structure and Assign:
  • Tasks
  • Policies
  • Resources
  • Authority
  • Responsibilities
  • Rewards
  • Aim to satisfy needs of:
  • Target Market
  • Employees
  • Management

Target Market Needs

• Assessment Questions:
  • Are there sufficient personnel to ensure good customer service?
  • Are employees knowledgeable and courteous?
  • Are facilities well-maintained?
  • Are changing customer needs being addressed?
  • Are specific needs of branch customers being met?

Employee Needs

• Important Considerations:
  • Are positions challenging and satisfying?
  • Are employees included in decision-making?
  • Is communication clear and open?
  • Is the authority-responsibility relationship well-defined?
  • Are employees treated fairly and rewarded for good performance?
  • Is there an orderly promotion program from within the company?

Management Needs

• Critical Questions:
  • Is it easy to recruit and retain competent personnel?
  • Are personnel procedures clearly defined?
  • Can managers effectively supervise all workers?
  • Are organizational levels properly developed?
  • Are employees motivated with low retention and absenteeism?
  • Is flexibility present to adapt to changes?

The Process of Organizing a Retail Firm

• Steps to Organizing:
  • Outline specific tasks for retail distribution channels.
  • Divide tasks among channel members and customers.
  • Group retailer's tasks into jobs.
  • Integrate positions via an organization chart.
  • Classify jobs.

Organizing Retail Firms

• Types of Organization Based on Size & Ownership:
  • Small independents
  • Large chains
• Developing an Organizational Chart:
  • Shows relationship of all positions.
  • Indicates hierarchy of authority and job interactions.
  • Coordination and control benefits.
• Levels of Communication:
  • Longer communication routes create coordination issues.
  • Unity of command prevents conflicting orders - direct supervisor relationship.
  • Span of control limits the number of direct reports for managers.
  • Authority delegation with responsibility retained by the supervisor.
  • Both formal and informal structures exist within organizations.

Small Independent Retailers Organization Structures

• Sample Organization Charts:
  • Ladies' Clothing Boutique: Owner-manager, merchandising personnel.
  • Furniture Store: Owner-manager, specialized personnel for different furniture categories.

Mazur Plan of Retail Organization

• Developed by Paul Mazur (1927):
  • Divides tasks into four functions:
  1. Merchandising (buying, selling, stock planning)
  2. Publicity (PR, advertising)
  3. Store Management (operations, customer service)
  4. Accounting and Control (inventory, finance)

Mazur Plan Derivatives

• Adaptations Due to Growth of Branch Stores:
  1. Main Store Control: Central management of branches; suitable for few branches.
  2. Separate Store Organization: Independent branch buying; coordination challenges.
  3. Equal Store Organization: Balance of central authority with local management.

Human Resource Management

• Key Processes:
  • Recruitment
  • Selection
  • Training
  • Supervision
  • Compensation
  • Importance of diversity and adherence to labor laws.

Cost of Employee Turnover

• Components of Turnover Costs:
  • Recruiting and hiring new employees.
  • Training costs (management time included).
  • Costs for mistakes by inexperienced employees.
  • Loss of customers loyal to departing employees.
  • Damaged relationships with suppliers.
  • Impact on employee morale and customer perceptions.

Special HR Environment of Retailing

• Unique challenges in retail:
  • Often first job for personnel with limited experience.
  • Importance of grooming and attitude in customer-facing roles.
  • Diverse workforce challenges in recruitment and scheduling.

Training

• Components of Effective Training:
  • Pre-training information: company history, culture, and job duties.
  • Onboarding and register training.
  • Continuous training through various programs.

Compensation

• Goals:
  • Reward performance and initiative.
  • Compensate based on employee value.
  • Attract and retain competent employees.
• Types of Compensation:
  • Direct Payments: salary, commission, bonuses.
  • Indirect Payments: healthcare, profit sharing, paid time off.

Compensation Plans: Salary vs. Commission

• Straight Salary Plan:
  • Fixed payment structure; advantages and disadvantages discussed.
• Straight Commission Plan:
  • Earnings based on productivity; pros and cons.
• Salary plus Commission Plan:
  • Combines both salary and commission.

Supervision

• Goals of effective supervision:
  • Oversee personnel and maintain performance.
  • Boost employee morale and control costs.
  • Key elements and methods of supervision discussed.

Supervisory Styles

• Three Management Assumptions:
  1. Employees require close supervision focused on economic inducements.
  2. Employees can self-manage; motivation is social/psychological.
  3. Combined approach of self-management and employee involvement for mutual benefit.