PPT 17-1

5th Edition5th Edition

PPT 17-2McGraw-Hill/IrwinLevy/Weitz: Retailing Management, 5/e Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

Managing the StoreManaging the Store

Chapter 17Chapter 17

PPT 17-3

Store Management

Managing the Store

Layout, Design andVisual MerchandisingCustomer Service

PPT 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

PPT 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

PPT 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

– Space Sales/Square Foot

PPT 17-7

Responsibilities of Store ManagersUndertaken by Store Managers

PPT 17-8

Three Levers forIncreasing Employee Productivity

Ability Effort Role Clarity

Selection

Training

Motivation

Goals

Incentives

Rewards

Job Definition

Policies, Rules

Org Culture

PPT 17-9

Steps in Employment Management Process

PPT 17-10

Recruiting and Selecting Employees

Undertake Job Analysis

Prepare Job Description

Find Potential Applicants

Screen Candidates

Select Employees

PPT 17-11

Sources of Information for Screening Applicants

• Application Forms

• References

• Testing

• Providing a Realistic Job Preview

PPT 17-12

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)

Equal Employment Opportunity Commission (EEOC)

Age Discrimination and Employment Act

– Disparate Treatment

– Disparate Impact

Americans with Disabilities Act (ADA)

PPT 17-13

Socializing and Training Employees

Orientation Program

Training

Where, when, what

Structured vs. unstructured

Classroom vs. on-the-job

Analyzing Successes and Failures

PPT 17-14

Motivating and Managing Employees

Setting Goals

Measuring Performance

Providing Feedback

ProvidingIncentivesto AchieveGoals

PPT 17-15

Leadership

Process by which one person attempts to influence another to accomplish some goal or goals

Leader Behaviors

– Task-Oriented

– Group Maintenance

PPT 17-16

Types of Leaders

• Autocratic

• Democratic

• Transformational

Which Type of Leader Is the Most Effective?

PPT 17-17

Setting Goals

How High? How Easy to Achieve?

Get Participation ofEmployees inGoal SettingProcess

PPT 17-18

Individualized Motivation Programs

• Impact of Goals Differs Across People

• Different People Seek Differ Rewards

– A La Carte Reward Programs

– Selection of Compensation Plans

PPT 17-19

Factors Used to Evaluate Sales Associates at The Gap

25% Operations 50% Sales/Customer

Relations25% Compliance

PPT 17-20

Evaluating and Providing Feedback to Employees

Evaluation

Who, when, how often?

Feedback

Performance outcome vs. process

PPT 17-21

Jim Taylor’s Six Month Evaluation

PPT 17-22

Common Evaluation Errors

Strictness

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

PPT 17-23

Compensating and Rewarding Employees

• Extrinsic vs. Intrinsic Rewards

• Compensation

Type• Straight salary• Straight commission• Salary plus commission• Quota bonus

Setting quotas

Individual vs. group incentives

PPT 17-24

Advantages and Disadvantages of Straight Salary

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

PPT 17-25

Designing a Compensation Plan

Determine Appropriate Compensation

Decide on Percent of Incentives

Use Average Sales Per Employee to Set Incentive Rate

Use Average Sales Per Employee to Set Incentive Rate

$12/Hour 1/3 Salary2/3 Incentive

Sales/Person - $150 5.33% Commission $4/Hour Salary

$4 = 5.33% x 150 = $12

PPT 17-26

Sexual Harassment

Sexual harassment is unwelcomed sexual advances, requests for sexual favors, and other verbal and physical contact.

showing obscene photographs

making lewd comments and gestures

staring in a sexual manner

making work environment hostile

PPT 17-27

Procedure for Sexual Harassment Allegation

PPT 17-28

Controlling Costs

Costs Controlled by Store

Managers

Labor

Maintenance

Inventory Shrinkage

EnergyHeatingLighting

PPT 17-29

Labor Scheduling System

PPT 17-30

Calculating Shrinkage

Accounting Record – Actual Inventory

Sales

$1,500,000 - $1,236,00 = 6.7%

$4,225,000

PPT 17-31

Sources of Inventory Shrinkage

Employee Theft 46%

Shoplifting 31%

Mistakes and InaccurateRecords 17%

Vendor Errors 6%

PPT 17-32

Preventing Shoplifting

Store design

Employee training

Good customer service

Security measures

Dye capsules, TV cameras

EAS

Prosecution

PPT 17-33

Spotting a Shoplifter

• Customers loitering

• Groups of people

• People wearing loose clothing

• Unusual movements

• People watching out where you are

PPT 17-34

PPT 17-35

EAS Tags

PPT 17-36

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.