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* The Equal Pay Act, now enforced by the
EEOC, prohibits unequal pay for men and
women who perform equal work or work of
comparable worth.
VI. Leadership
employees’ needs, showing concern for their
1. Leader Behaviors
* Leaders engage in task performance and
group maintenance behaviors.
* Task performance behaviors are the store
manager’s efforts to make sure that the store
achieves its goals, such as planning,
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? Relations-oriented?
2. Leader Decision Making
* Store managers vary in how much they
involve employees in making decisions.
* Autocratic store managers make all
decisions on their own and then announce
them to employees.
A. Maintaining Morale
* Store 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
See PPT 16-22
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motivation declines.
interfering with an individual’s work
performance or creating an intimidating,
E. Sexual Harassment
* Managers must avoid and make sure that
store employees avoid actions that are, or can
be interpreted as, sexual harassment.
See PPT 16-23
Should a manager avoid dating an employee?
Based on the EEOC guidelines, when would such a
behavior be interpreted as sexual harassment?
VII. Controlling Costs
* Labor scheduling, making stores “green” and
more energy efficient, and store maintenance,
offer three opportunities for reducing store
operating expenses.
See PPT 16-24
A. Reducing Inventory Shrinkage
* Inventory losses due to employee theft,
shoplifting, mistakes and inaccurate records
must be reduced.
See PPT 16-25
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A. Calculating Shrinkage
* Shrinkage is the difference between the
recorded value of inventory (at retail prices)
based on merchandise bought and received,
B. Organized and High-Tech Retail Theft
• Professional shoplifters account for an
estimated 25% of retail shoplifting cases
($15-30 billion in losses annually).
See PPT 16-27
C. Detecting and Preventing Shoplifting
* Losses due to shoplifting can be reduced by
store design, employee training, and special
security measures.
See PPT 16-28
store employees.
1. Store Design
* Security issues need to be considered when
placing merchandise near store entrances,
delivery areas, and dressing rooms.
Many department stores have small boutiques
in the store. Does this increase shoplifting?
Why?
2. Merchandise Policies
* Requiring receipts for all returns and locking
up small, expensive items are two
merchandise policies that should be used to
reduce inventory shrinkage.
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are placed on merchandise. When the
location.
An example of such a tag is a small strip enclosed
within a plastic-wrapped DVD. The POS
4. Personnel Policies
• The following personnel policies may help to
deter shoplifting:
5. Prosecution
* Many retailers have a policy to prosecute all
shoplifters.
* Some retailers also sue shoplifters in civil
proceedings for restitution of the stolen
merchandise and the time spent in the
prosecution.
personnel, and establishing security policies
B. Reducing Employee Theft
* The most effective approach for reducing
employee theft and shoplifting is to create a
trusting, supportive work environment.
and control systems.
See PPT 16-30
1. Screening Prospective Employees
* Many retailers use paper-and-pencil honesty
Ask students if they have taken drug tests or
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* A major problem related to employee theft is
tests and make extensive reference checks to
screen out potential employee theft problems.
paper and pencil honesty tests when applying
for jobs. What do they think of these screening
2. Using Security Personnel
* In addition to uniformed guards, retailers
often use undercover shoppers to discourage
and detect employee theft.
3. Establishing Security Policies and Control
Systems
* To control employee theft, retailers need to
IX. Summary
* Effective store management can have a
significant impact on a retail firm’s financial
performance. Store managers increase profits
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ANSWERS TO “GET OUT AND DO ITS”
3. GO SHOPPING Go to a store, observe the security measures in the store, and talk with a
manager about the store’s loss prevention program.
4. INTERNET EXERCISE Go online and research the shoplifting laws implemented by the state
where you live or attend school. What are the fines, jail time, community service, or
punishments for perpetrators in your local jurisdictions? What factors are weighed and evaluated
in shoplifting cases? Are the laws in your state a deterrent to shoplifting?
5. LIBRARY EXERCISE Go to one of your library’s business databases and find an article that
describes a case of a retailer violating TITLE VII in either its hiring or promotion practices.
Summarize the case and court decision. What should this retailer do differently in the future to
improve its employment policies?
Student responses will vary. This could be a good class or team discussion topic.
7. INTERNET EXERCISE: Go to the homepage for Greening Retail and examine their research
and programs that help retailers implement environmental best practices at
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From the web page students will pick one of these retailers:
TESCO
MUSGRAVE
CARREFOUR
MOUNTAIN EQUIPMENT CO-OP
COMPANY CULTURE
Sustainability has long been core to IKEA’s culture. In more recent years, it has become
formalized into strategies, policies and processes throughout the company.
Every new employee at IKEA is given environmental training, and the aim is for all co-
workers to receive regular follow-up courses.
CODES OF CONDUCT
ENERGY USE
Webess is an IT application used by IKEA buildings for reporting energy consumption,
including electricity, fuel oil, gas and water. Through this monitoring system, energy
consumption can be compared between buildings.
IKEA co-workers in Shanghai, China, have reduced energy use per sold cubic meter by
23 percent in their store. Lighting is turned off during non-business hours, and a new
system controls the use of air-conditioning.
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IKEA tries to minimize damage to products. However, when damage does occur, they
attempt to repair the products, which can then be used as spare parts, or they are sold at
a reduced price.
TRANSPORTATION
IKEA ships all its furniture in flat packs, resulting in greater density, fewer journeys, less
fuel and fewer emissions
Generally IKEA tries to locate the stores in areas where there is efficient public
transport. The company has formulated a list of requirements for efficient public
transport:
ANSWERS TO DISCUSSION QUESTIONS AND PROBLEMS
1. How do on-the-job, Internet training, and classroom training differ? What are the
benefits and limitations of each approach?
Classroom training might include lectures, audiovisual presentations, manuals, and
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2. Give examples of a situation in which a manager of a McDonald’s fast-food restaurant
must utilize different leadership styles.
In the text, we discuss leadership styles in terms to type of leader behaviors, task
performance and group maintenance, and two types of decision-making approaches,
authoritative and participative.
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3. Use the interview questions in Exhibit 16-3 and role play with another student in the
class as both the interviewer and the applicant for an Assistant Store Manager position
with the store of your choice.
Students should be encouraged to select a variety of questions for their role plays.
4. Name some laws and regulations that affect the employee management process. Which
do you believe are the easiest for retailers to adhere to? Which are violated the most
often?
Title VII of the Civil Rights prohibits discrimination on the basis of race, national origin, sex,
or religion in company personnel practices. Potential violations are investigated by the Equal
Employment Opportunity Commission (EEOC).
5. What’s the difference between extrinsic and intrinsic rewards? What are the effects of
these rewards on the behavior of retail employees? Under what conditions, would you
recommend that a retailer emphasize intrinsic rewards over extrinsic rewards?
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Extrinsic rewards are rewards provided by the retailer. These rewards include financial
compensation and recognition. Intrinsic rewards are positive feelings that people get from
6. Many large department stores and specialty stores are changing their salespeople’s
reward system from a traditional salary to a commission-based system. What problems
can commission based systems cause? How can department managers avoid these
problems?
Commission based systems can be a struggle for retail sales associates. To begin with, it
might create uncertainty and more risk-averse sales associates might not like straight
7. When evaluating retail employees, some stores use a quantitative approach that relies
on checklists and numerical scores similar to the form in Exhibit 16-5. Other stores use
a more qualitative approach whereby less time is spent checking and adding and more
time is devoted to discussing strengths and weaknesses in written form. Which is the
best evaluation approach? Why?
Each evaluation approach has its strengths. Quantitative methods are useful in that they
provide a scale that can be utilized uniformly across departments and stores. This enables
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8. Some staff pharmacists working for retail chains refuse to dispense the Plan B
“morning after” contraceptive pill because of their religious beliefs. In another
situation, Muslims and Jewish checkout clerks working for supermarket chains refused
to touch, scan, or bag products that contained any pork because of their religious
beliefs. Do managers have the right to force employees to take actions that are contrary
to their beliefs? Should customers be unable to buy products they want because of an
employee’s beliefs? Should employees be required to ignore their religious beliefs?
What would you do if you were faced with these or similar ethically sensitive situations
Retailers should be very clear of the expectations of sales associates when they are first
hired. If associates are uncomfortable with certain parts of a job because of their religious
9. Discuss how retailers can reduce shrinkage from shoplifting and employee theft.
Losses due to shoplifting can be reduced by store design, employee training, and special
10. Drugstore retailers, such as CVS, place diabetic test strips and perfume behind locked
glass cabinets and nearly all over-the-counter medicines behind Plexiglas panels. These
efforts are designed to deter theft. How do these security measures impact honest
customers.
Despite their effectiveness in reducing losses through shoplifting, the security measures
described above can unfortunately make the shopping experience less pleasant for honest
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