CHAPTER 15
HUMAN RESOURCES AND MANAGING THE STORE
ANNOTATED OUTLINE
INSTRUCTOR NOTES
• Retailers achieve their financial objectives by effectively
managing their five critical assets: locations,
merchandise inventory, channels, employees, and
customers.
• The differentiating advantages gained through HRM are
difficult for competitors to duplicate.
I. Acquire and Retain Human Resources
• The activities retail managers engage in to acquire and
retain productive employees include recruit, train and
acculturate, motivate, evaluate, and reward and
compensate.
LO 15-1 Describe how to
acquire and retain employees.
See PPT 15– to review the
steps in the employment
management process
A. Recruit Retail Employees
• Step 1 in the process for acquiring and retaining
employees is to recruit competent employees.
• This step entails preparing a job description, finding
potential applicants with the desired capabilities, and
screening the best candidates to interview.
Ask students if they think
recruiting Millennials needs to
be a different strategy than
previous generational cohorts.
Do Millennials have a different
perspective on what
employment should mean?
1. Develop the Job Description
• The job description includes specific activities the
employee needs to perform and the performance
expectations expressed in quantitative terms.
costume jewelry in a full line
discount store.
2. Locate Prospective Employees
• Retailers often ask their own employees if they know
someone the company could hire, and some employers
provide employees rewards for referrals that are hired.
3. Screen Applicants to Interview
• The screening process matches the applicants’
qualifications with the job description.
• This information enables the manager to determine
whether the applicant has the minimum qualifications
and provides information for interviewing the applicant.
• Reference checking–most retailers verify the information
given on an application form by contacting the
applicant’s references and doing an online search.
Have students role-play a
telephone conversation
references are.
• Retail managers generally expect to hear favorable
comments from an applicant’s references or previous
supervisors, even if they may not have thought highly of
the applicant. One approach for reducing this bias is to
ask the reference to rank the applicant relative to others
in the position.
4. Test Applicants
• Intelligence, ability, personality, and interest tests can
provide insights about potential employees.
Should employers use a
student’s grades when
determining who to interview
5. Preview the Job
• Turnover declines when the applicants understand both
the attractive and unattractive aspects of the job.
6. Conduct a Personal Interview
• After screening applications, the selection process
typically involves a personal interview.
• The most widely used interview technique, called the
behavioral interview, asks candidates how they have
handled actual situations they encountered in the past,
especially situations requiring the skills outlined in the
job description.
Have students role play an
employment interview. One
B. Train and Acculturate Employees
them to do their jobs and introduce them to the firm’s
policies, values, and strategies.
• The acculturation process affects the degree to which
newcomers become involved, engaged contributors to
the firm’s successful performance.
In other words, which is more
important, recruiting (step 1)
or training and acculturate,
and motivation (steps 2 & 3)?
1. Provide a Structured Program
• A structured training program helps new employees
acquire the basic skills and knowledge that they need to
be able to do their jobs.
• Some retailers find that providing structured training
over the Internet offers benefits compared to the on-
the-job training, such as greater consistency, lower costs,
and the opportunity for employees to undertake the
training whenever they want.
See PPT 15-11
2. Offer On-the-Job Training
• Structured training programs need to be combined with
on-the-job training in which new employees work in
specific jobs under the direct supervision of their
managers.
• The best way to learn is to practice what is being taught.
Ask students if they would
rather work for a company
that emphasizes on-the-job
training versus classroom
training. Why?
3. Use a Blended Approach
• Because of the relative advantages of structured and on-
the-job training, many firms use a blended approach.
Ask students if a blended
approach is best. Why or why
not?
4. Analyze Successes and Failures
• Managers can help sales associates to constructively
analyze their successes and failures by asking “why”
questions that force them to analyze the reasons for
effective and ineffective performance.
take credit for successes.
What impact does this bias
have on learning?
C. Motivate Employees
• Motivating employees to perform up to their potential
may be managers’ most important and challenging task.
1. Set Goals to Motivate Employees
• To effectively motivate employees, managers need to
set goals for their employees and provide feedback on
the employees’ performance relative to those goals.
• Employee performance improves when employees feel
that (1) their efforts will enable them to achieve the
goals set for them by their managers and (2) they’ll
receive rewards they value if they achieve their goals.
Ask students what motivates
them to put forth their best
efforts. What rewards would
students like in recognition of
work preformed?
Ask students what happens to
motivation if goals are set too
low or if they are set too high.
approaches are necessary to manage and motivate
younger employees.
• Younger employees want more flexibility, meaningful
jobs, professional freedom, and a better work–life
balance than older employees.
advantages and disadvantages of
having employees participate in
establishing goals?
D. Evaluate Employees
1. Who Should Do the Evaluation?
• In large retail firms, the evaluation system is usually
designed by the human resource department. But the
evaluation itself is done by the employee’s immediate
supervisor—the manager who works most closely with
the employee.
Ask students to discuss the
advantages and
disadvantages of having the
employee’s supervisor
evaluate them versus a human
resource specialist.
2. How Often Should Evaluations Be Made?
What problems arise if
Why? Should senior executives
be evaluated more frequently
than management trainees?
Why?
3. What Format Should Be Used for Evaluations?
• Evaluations are meaningful only if employees know what
they’re required to do, the expected level of
performance, and how they’ll be evaluated.
4. How Can Managers Avoid Evaluation Errors?
Review the evaluation errors.
What can managers do to
• When making evaluations, managers tend to
underemphasize effects of external factors on the
department, such as merchandise and competitors’
actions.
5. HRM Performance Measures
• Three measures that retailers frequently use to assess
HRM performance are employee productivity, turnover,
and engagement.
• Productivity is the sales generated per employee.
Ask students which types of
retailers have low and high
labor productivity.
C. Reward and Compensate Employees
• Employees receive two types of rewards from their job:
extrinsic and intrinsic.
See PPT 15-18
Employees work for different
reasons. They seek different
rewards. Ask students what
1. Extrinsic Rewards: Compensation Programs
• Extrinsic rewards are rewards provided by either the
employee’s manager or the firm, i.e., external to the
employee, such as compensation, promotion, and
recognition.
To illustrate the differences
between intrinsic and extrinsic
rewards have students discuss
the rewards they get from
attending a class. What are
• Employees don’t all seek the same rewards. Some
employees want more compensation; others strive for a
promotion in the company or public recognition of their
performance.
• Incentive compensation plans reward employees based
on their productivity. With some incentive plans, a
salesperson’s income is based entirely on commission—
called a straight commission.
the weekly payments.
• Quotas are often used with compensation plans. A quota
is a target level used to motivate and evaluate
performance.
• A quota bonus plan provides sales associates with a
bonus when their performance exceeds their quota;
however, quotas should be developed for each
salesperson based on their experience and abilities.
will be achieved.
their intrinsic rewards? What
are the extrinsic rewards? Are
the intrinsic rewards affected
when the extrinsic rewards
2. Intrinsic Rewards
• Intrinsic rewards are rewards that employees get
personally from doing their job well. One approach to
making work fun is to hold contests with relatively small
Ask students why employees
are motivated to learn and try
new, creative approaches
prizes. Contests are most effective when everyone has a
chance to win.
• Another approach for motivating more experienced
employees is providing intrinsic rewards through job
when they have a high level of
intrinsic interest in their work.
How can managers make work
fun—intrinsically rewarding?
II. Leadership
• Leadership is the process by which a person attempts to
influence others to accomplish a common goal or task.
• Mangers are leaders of their group of employees.
LO 15-2 Illustrate effective
leadership strategies of a
retail manager.
Ask students: what are the
characteristics of a good
leader?
A. Leader Decision-Making Style
• Autocratic leaders make all decisions on their own and
then announce them to employees.
• Democratic leaders seek information and opinions from
employees and base their decisions on this information.
Ask students to describe
managers who they have
worked for that were very
effective and not very
effective. When it is good for a
leader to be task-oriented?
B. Maintaining Morale
• Morale typically goes up when things are going well and
employees are highly motivated. But when sales are not
going well, morale tends to decrease, and employee
motivation declines.
• Effective managers build morale by doing small but
meaningful things for employees
• Labor scheduling, store maintenance, and inventory
shrinkage offer three opportunities to reduce store
operating expenses.
A. Labor Scheduling
• Labor scheduling determines the employees assigned to
each area of the store during each hour.
• Labor scheduling is difficult because customer traffic
varies greatly during the day and the week.
• Although scheduling systems benefit both retailers and
customers, they can have an adverse impact on
employees, including irregular work hours or “on call”
shifts.
B. Store Maintenance
• Store maintenance entails the activities involved with
managing the exterior and interior physical facilities
associated with the store.
C. Inventory Shrinkage
• Shrinkage is the inventory loss due to employee theft,
shoplifting, mistakes, inaccurate records, and vendor
errors.
• Reducing shrinkage is an important store management
issue because retailers’ annual loss from shrinkage
averages about 1.4 percent of total sales.
Security measures reduce
shoplifting. What negative
consequences do they have?
merchandise while preserving an open, attractive store
atmosphere.
IV. The Organization Structure for a Retail Firm
• The organization structure identifies the activities to be
performed by specific employees and determines the
lines of authority and responsibility in the firm.
LO 15-4 Summarize how
retailers are typically
organized.
See PPT 9-13
most retailers are actually
structured.
B. Organization of a Single-Store Retailer
• Owner-managers of a single store may be the entire
organization. Coordinating and controlling employee
activities is easier in one store than in a large chain of
stores.
See PPT 15–19
Small stores typically violate
the principles of organization –
-unity of command and
C. Organization of a National Retail Chain
• In contrast to the management of small retailers, retail
chain management is complex.
• Managers must supervise units that are geographically
diverse.
See PPT 9-20
The Mazur plan emphasized
the separation of buying and
store management functions.
What are the advantages of