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Chapter 17

Chapter 17. Managing the Store. Store Management. Customer Service. Layout, Design and Visual Merchandising. Managing the Store. “ 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.”

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Chapter 17

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  1. Chapter 17 Managing the Store

  2. Store Management Customer Service Layout, Design andVisual Merchandising Managing the Store

  3. “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’s Store Managers Run a Business

  4. 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

  5. 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 • Space Sales/Square Foot © Digital Vision

  6. Steps in Employment Management Process

  7. Job Analysis

  8. Job Description A guideline for recruiting, selecting, training and evaluating employees The activities the employee needs to perform The performance expectations expressed in quantitative terms Steve Mason/Getty Images

  9. Approaches for Locating Prospective Employees • Look beyond the retail industry • Use your employees as talent scouts • Provide incentives for employee referrals • Recruit minorities, immigrants and older workers • Use your storefront creatively Jack Star/PhotoLink/Getty Images

  10. Application Forms References Testing Providing a Realistic Job Preview Sources of Information for Screening Applicants The McGraw-Hill Companies, Inc./Lars A. Niki, photographer

  11. Suggestions for Questioning Applicant • Avoid asking questions that have multiple parts • Avoid asking leading questions like “Are you prepared to provide good customer service?” • Be an active listener. Evaluate the information being presented and sort out the important comments from the unimportant. repeat or rephrase information summarize the conversation tolerate silence

  12. Legal Considerations in Hiring and Selecting Employees • Equal Employment Opportunity Commission (EEOC) • Age Discrimination and Employment Act • Disparate Treatment • Disparate Impact • Americans with Disabilities Act (ADA)

  13. Socializing and Training Employees • Orientation Program • Training • Where, when, what • Structured vs. unstructured • Classroom vs. on-the-job • Analyzing Successes and Failures (c) image100/PunchStock

  14. Motivating and Managing Employees ProvidingIncentivesto AchieveGoals Setting Goals Measuring Performance Providing Feedback

  15. Process by which one person attempts to influence another to accomplish some goal or goals Leader Behaviors Task-Oriented Group Maintenance Leadership C Squared Studios/Getty Images

  16. Autocratic Democratic Transformational Types of Leaders © Digital Vision Which Type of Leader Is the Most Effective?

  17. How High? How Easy to Achieve? Setting Goals Get Participation ofEmployees inSetting Goals Royalty-Free/CORBIS

  18. 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

  19. Impact of Goals Differs Across People Different People Seek Differ Rewards A La Carte Reward Programs Selection of Compensation Plans Individualized Motivation Programs Steve Cole/Getty Images

  20. Maintaining Morale Meetings before store opening to talk about new merchandise and hear employee opinions Educate, set sales goals and have a pizza party when goals are met Divide charity budget and ask employees how their share should be used Print stickers - auto detailed by Rob” Give every employee a business card with the company mission statement printed on the back Pando Hall / Getty Images

  21. Evaluating and Providing Feedback to Employees • Evaluation • Who, when, how often? • Feedback • Performance outcome vs. process

  22. Jim Taylor’s Six Month Evaluation

  23. Strickness Leniency Haloing Recency Contrast Attributions Ratings unduly negative Rating unduly positive Using the same rating on all aspects of the evaluation Placing too much weight on recent events rather than evaluating performance over the entire period Having the evaluation of a salesperson unduly influenced by the evaluation of other salespeople Making errors in identifying causes of the salesperson’s performance Common Evaluation Errors

  24. Rewards • Extrinsic Rewards are rewards provided by either the employee’s manager or the firm such as compensation, promotion and recognition. • 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

  25. Compensating Employees • Compensation • Type • Straight salary • Straight commission • Quota bonus • Setting quotas • Individual vs. group incentives Royalty-Free/CORBIS

  26. Straight SalaryIncentive 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 Advantages and Disadvantages of Straight Salary

  27. Designing a Compensation Plan Use Average Sales Per Employee to Set Incentive Rate Decide on Percent of Incentives Determine Appropriate Compensation Sales/Person - $150 5.33% Commission $4/Hour Salary 1/3 Salary2/3 Incentive $12/Hour $4 = 5.33% x 150 = $12

  28. Controlling Costs EnergyHeatingLighting Labor Costs Controlled by Store Managers Inventory Shrinkage Maintenance

  29. Labor Scheduling System

  30. Calculating Shrinkage Accounting Record – Actual Inventory Sales $1,500,000 - $1,236,00 = 6.7% $4,225,000

  31. Sources of Inventory Shrinkage Mistakes andInaccurateRecords 17% Shoplifting 31% Vendor Errors 6% Employee Theft 46%

  32. Preventing Shoplifting • Store design • Employee training • Good customer service • Security measures • Dye capsules, TV cameras • EAS • Prosecution PhotoLink/Getty Images

  33. Spotting Shoplifters

  34. Use of Security Measures by Retailers

  35. EAS Tags

  36. Reducing Employee Theft • Trusting, supportive work atmosphere • Employee screening • Honesty, drug testing • Security personnel - mystery shoppers • Policies and procedures • Employee theft is an HR problem.

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