Chapter 16 – Managing the Store
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CHAPTER 16
MANAGING THE STORE
ANNOTATED OUTLINE
INSTRUCTOR NOTES
• Store managers are on the firing line in
retailing. Due to their daily contact with
customers, they have the best knowledge of
customer needs and competitive activity.
From this unique vantage point, retail
managers play an important role in
formulating and executing retail strategies.
Have a store manager or a department manager
speak in class about problems they have
encountered and how they handled them.
I. Store Management Responsibilities
• The responsibilities of managers are divided
into four major categories: managing
employees, controlling costs, managing
merchandise, and providing customer service.
• Store managers increase the productivity of
the store’s employees by (1) recruiting and
selecting effective people, (2) improving their
skills through socialization and training, (3)
motivating them to perform at higher levels
and then, (4) evaluating and rewarding them.
See PPT 16-3
For most retailers, the store management
activities are becoming more important while
the importance of buying activities is declining.
Why is this change occurring?
Chapter 16 – Managing the Store
higher-level management positions.
• By developing subordinates, the firm benefits
from having more effective managers, and
the manager benefits because the firm has a
qualified replacement when the manager is
promoted.
II. Recruiting And Selecting Store
Employees
See PPT 16-4 to review the steps in the
A. Job Analysis
• The job description identifies essential
activities and is used to determine the
See PPT 16-6 for a list of sample questions to
aid in the job analysis process
B. Job Description
• A job description includes (1) activities the
employee needs to perform and (2) the
performance expectations expressed in
quantitative terms.
C. Locating Prospective Employees
• Staffing stores is a critical problem because
changing demographics are reducing the size
of the labor pool.
Ask students to list the sources a sporting goods
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1. Recruiting Minorities, Immigrants, and
Older Workers
• Retailers may use strategies like printing
application forms in multiple languages and
developing training programs for people who
2. Partnering with Government Agencies
• Partnering with local employment offices,
religious and social organizations is another
3. Use of Employees as Talent Scouts
• Retailers often ask their own employees if
they know someone they could hire, if they
have recently encountered a particularly good
salesperson at another store, or if they know
of a customer whom they believe would
make a good employee.
4. Using the Storefront Creatively
D. Screening Applicants to Interview
• The screening process matches the applicants’
qualifications with the job description.
1. Application Forms
Ask the students to comment on applications
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• Job application forms contain information
about the applicant’s employment history,
they have completed.
2. References
• A good way to verify the application form’s
information is to contact the applicant’s
references or do an online check.
• The Internet has become an excellent source
of information on prospective employees.
• Social media such as Twitter, Facebook, and
LinkedIN are great sources of information on
prospective employees. these sites often
reveal more about the person than a face-to–
face interview.
Have students role play a telephone
conversation requesting references on a specific
student being considered for a job. One student
can play the employment manager and another
3. Testing
• Intelligence, ability, personality, and interest
tests can provide insights about potential
employees.
Ask students to indicate the type of tests they
would use to hire salespeople, management
trainees, and buyers for The Gap, Radio Shack,
or Home Depot. Ask students to comment on
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4. Realistic Job Preview
• Turnover is reduced when the applicants
understand both the attractive and
unattractive aspects of the job.
• Retailers typically want their new hires to
have previous retail experience. This
experience will give the applicant an
understanding of what working retail is all
about.
E. Selecting Applicants
• After screening applications, the selection
process typically involves a personal
interview.
Should employers use a student’s grades when
determining who to interview and selecting
people to hire? Why or why not?
1. Preparation for the Interview
• The objective of the interview is to gather
relevant information, not simply to ask a lot
of questions.
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sequence of more specific questions.
• Managers need to avoid asking questions that
are discriminatory.
2. Managing the Interview
• Some suggestions for questioning the
applicant include (1) encouraging longer
responses by asking broader questions, (2)
See PPT 16-07, 16-08, 16-09, and 16-10
Have students role play an employment
F. Legal Consideration in Selecting and Hiring
Store Employees
• Title VII of the Civil Rights Act prohibits
discrimination on the basis of race, national
origin, sex, or religion in company personnel
practices.
• Discrimination arises when a member of a
protected class (women, minorities, etc.) is
treated differently from nonmembers of that
class (disparate treatment) or when an
apparently neutral rule has an unjustified
discriminatory effect (disparate impact).
See PPT 16-11
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accommodating work environments for the
disabled. A disability is defined as any
physical or mental impairment that
substantially limits one or more of an
individual’s major life activities or any
condition that is regarded as being such
impairment.
III. Socialization of New Store Employees
A. Orientation Programs
• Orientation programs are critical in
overcoming entry shock and socializing new
employees.
• Orientation programs can last from a few
hours to several weeks.
Where should an orientation program take
place for newly hired management trainees —
in the stores or corporate headquarters? How
long should the orientation program be – a day,
a week, or a month? Why?
B. Training Store Employees
• Effective training for new store employees
includes both structured and on-the-job
learning experiences.
Have a recruiter from a retail recruiting firm on
campus describe their company’s management
training program.
employees are taught the basic skills and
1. Structured Program
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• The initial training might be done using
virtual or real classrooms or with manuals
and correspondence distributed to new
employees.
advantages of a structured versus unstructured
program?
2. On-the-Job Training
• In the next training phase new employees are
assigned a job, given responsibilities, and
coached by their supervisor.
Ask students if they would rather work for a
company that emphasizes on-the-job training
versus classroom training. Why?
3. The Blended Approach
• Because of the relative advantages of
structured and on-the-job training, many
firms use a blended approach.
4. Analyzing Successes and Failures
• Store managers should provide an
atmosphere in which salespeople try out
different approaches for providing customer
service and selling merchandise.
Ask students if they analyze their successes and
failures in classes. Why or why not? Have
them describe a success and a failure and give
the reasons for both. Use this to illustrate that
people tend to blame failures on others and take
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constructively analyze their successes and
failures by asking salespeople “why”
questions that force them to analyze the
reason for effective and ineffective
performance.
training, managers must work them to help
them meet their performance goals.
IV. Motivating And Managing Store
Employees
See PPT 16-17
A. Setting Goals or Quotas
• 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 will receive
rewards they value if they achieve their goals.
See PPT 16-14
Ask students what happens to motivation if
goals are set too low. If they are set too high.
How can managers make sure they are set at
B. Evaluating Store Employees And
Providing Feedback
* The objective of the evaluation process is to
identify employees who are performing well
and those who are not.
See PPT 16-15
1. Who Should Do the Evaluation?
* In large retail firms, the evaluation system is
usually designed by the human resources
department. But the evaluation itself should
be done by the employee’s immediate
supervisor — the manager who works most
closely with the employee.
See PPT 16-16
Ask students to discuss the advantages and
disadvantages of having the employee’s
supervisor evaluate them versus a human
resource specialist.
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* Inexperienced supervisors are often assisted
by a senior manager in evaluating employees.
2. How Often Should Evaluations Be Made?
* Most retailers evaluate employees annually or
semiannually.
What problems arise if evaluations are done too
frequently? Not frequently enough. Should
3. Format for Evaluations
* Evaluations are only meaningful if employees
know what they’re required to do, what level
of performance is expected, and how they’ll
be evaluated.
See PPT 16-17
Ask students if they agree or disagree with this
format. Do they think that this much emphasis
4. Evaluation Errors
* Managers can make evaluation errors by first
forming an overall opinion of the employee’s
performance and then allowing this opinion
to influence the ratings of each performance
factor (haloing).
Review the evaluation errors. What can
managers do to minimize the effects of these
errors?
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subjective ratings, managers should observe
performance regularly, record their
observations, avoid evaluating many
salespeople at one time, and remain
conscious of the various potential biases.
V. Compensating And Rewarding Store
Employees
* This is the final step in improving employee
productivity. Store employees receive two
types of rewards from their work — extrinsic
and intrinsic.
See PPT 16-18
Employees work for different reasons. They
seek different rewards. Ask students what
rewards they are seeking from their first job
after graduation. What rewards might a part-
A. Extrinsic Rewards
* Store 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.
* It’s typically more rewarding when good
performance is recognized publicly. Public
recognition can motivate all store employees
because it demonstrates management’s
interest in rewarding employees.
To illustrate the differences between intrinsic
and extrinsic rewards have students discuss the
rewards they get from attending a class. What
are their intrinsic rewards? What are the
extrinsic rewards? Are the intrinsic rewards
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rewards.
B. Intrinsic Rewards
* When employees find their job intrinsically
rewarding, they are motivated to learn how to
do it better.
Ask students why employees are motivated to
learn and try new, creative approaches when
they have a high level of intrinsic interest in
their work. How can managers make work fun –
C. Compensation Programs
* The objectives of a compensation program
are to attract and keep good employees,
motivate them to undertake activities
consistent with the retailer’s objectives, and to
reward them for their effort.
See PPT 16-19
D. Designing the Compensation Program
* A compensation program’s two elements are
the amount of compensation and the
percentage of compensation based on
incentives.
See PPT 16-20
Ask students if people always take the highest
paying job? What are the factors they consider
Chapter 16 – Managing the Store
can be measured easily and precisely.
* When the salesperson’s activities have a great
impact on sales, incentives can provide
additional motivation.
appropriate use of incentives. For which of the
following situations would you place more
emphasis on incentives versus salary — a
counter person in a fast food restaurant: the
manager of the fast food restaurant; a
1. Setting the Commission Percentage
* Assume that a specialty store manager wants
to hire experienced salespeople. To get the
type of person she wants, she feels she must
pay $12 per hour. Her selling costs are
* The manager believes the best compensation
would be one-third salary and two-thirds
commission, so she decides to offer a
E. Legal Issues in Compensation
* The Fair Labor Standards Act of 1938 set
minimum wages, maximum hours, child
labor standards, and overtime pay provisions.