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Human Resources and

Managing the Store
CHAPTER 16

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 Learning Objectives
LO 16-1 Describe how to acquire and retain employees.
LO 16-2 Illustrate effective leadership strategies of a retail manager.
LO 16-3 Explore the various strategies retail managers can undertake to control costs.
LO 16-4 Summarize how retailers are typically organized.
LO 16-5 Identify the legal issues involved with human resource management.

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 Acquire and Retain Human Resources 1

Learning Objective 16-1 Describe how to acquire and retain employees.

Recruit Retail Employees

Develop the job description.
Locate prospective employees.
Screen applicants to interview.
• Job application forms.
• Reference checking.
• Social media platforms.

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 EXHIBIT 16-1 Activities for Acquiring and
Retaining Employees

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 Acquire and Retain Human Resources 2

Recruit Retail Employees continued

Test applicants.
• Illegal to test factors that are not job-related.
Preview the job.
Conduct a personal interview.
• Behavioral interview asks candidate how they handled actual situations.

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 Job Interviews

Today a lot of interviews

have pivoted to being
online using new
technologies like Zoom,
WebEx, Teams, Skype,
and so on.

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 EXHIBIT 16–3 Interviewing Questions 1

Questions That Should Not Be Asked Per Equal Employment Opportunity Guidelines
• Do you have plans for having children/a family?
• What are your marriage plans?
• What does your husband/wife do?
• What happens if your husband/wife gets transferred or needs to relocate?
• Who will take care of your children while you’re at work?
• (Asked of men) How would you feel about working for a woman?
• How old are you?
• What is your date of birth?
• How would you feel about working for a person younger than you?
• Where were you born?

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 EXHIBIT 16–3 Interviewing Questions 2

Questions That Should Not Be Asked Per Equal Employment Opportunity

Guidelines continued
• Where were your parents born?
• Do you have any disabilities?
• As a person with a disability, what help are you going to need to do your work?
• How severe is your disability?
• What’s your religion?
• What church do you attend?
• Do you hold religious beliefs that would prevent you from working on certain days of the week?
• Do you feel that your race/color will be a problem in your performing the job?
• Are you of Blank heritage/race?
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 Acquire and Retain Human Resources 3

Train and Acculturate Employees

Provide a structured program.
• Structured program training provides basic skills and knowledge to do the job.
Offer on-the-job training.
• Employee works in specific jobs under direct supervision of a manager.
Use a blended approach.
Analyze successes and failures.
• Managers need to recognize that mistakes will occur.

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 Acquire and Retain Human Resources 4

Motivate Employees
Important and challenging task.
Rewards, compensation schemes.
Set goals to motivate employees.
• Provide feedback on performance.

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 Acquire and Retain Human Resources 5

Evaluate Employees
• Who should do the evaluation?
• How often should evaluations be made?
• What format should be used?

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 EXHIBIT 16-4 Factors Used to Evaluate Sales Associates at a
Specialty Store

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 EXHIBIT 16-5 Summary of Jim Taylor’s
Six-Month Evaluation
Average Performance for Sales Actual Performance for
Associates in Department Jim Taylor

Sales per hour $75 $65

Average amount per transaction $45 $35

Percentage multiple transactions Table summarizes Jim Taylor's six-month

55% 55%
evaluation. Column 1 has no header and notes the
criteria.
Number of preferred customers 115 125
Number of preferred customer
95 120
appointments
Departmental shrinkage 2.00% 1.80%

Systems errors 10 2

Merchandise presentation (10-point scale) 5 8

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 Acquire and Retain Human Resources 6

Evaluate Employees continued

How can managers avoid evaluation errors?
• Do not form an overall opinion.
• Avoid being influenced by recent events.
• Do not underemphasize influence of environment.
HRM performance measures.
• Productivity: net sales divided by number of FTEs.
• Turnover: number of employees voluntarily leaving job during the year divided by number of
positions.
• Engagement: emotional commitment to company.

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 Acquire and Retain Human Resources 7

Reward and Compensate Employees

Extrinsic rewards: compensation programs.
• Straight salary compensation.
• Incentive compensation or straight commission.
• Drawing account.
• Quota.

• Quota bonus compensation.

• Quota bonus plan.
• Team incentives.

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 Motivating Employees

Extrinsic rewards like plaque

for outstanding performance
can be strong motivation for
retail associates.

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 Acquire and Retain Human Resources 8

Reward and Compensate Employees

Intrinsic rewards.
• Employee finds job rewarding and fun.
• Contests.
• Job enrichment.
• Job redesign to include more tasks and responsibilities.

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 Leadership 1

Learning Objective 16-2 Illustrate effective leadership strategies of a retail manager.

Leadership Decision-Making Style

• Autocratic leaders.
• Democratic leaders.
• Transformational leaders.
• Effective managers use different leadership styles.

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 Leadership 2

Maintaining Morale
• Managers play important role in improving work atmosphere.
• Effective managers build morale by doing small but meaningful things for
employees.

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 Controlling Costs 1

Learning Objective 16-3 Explore the various strategies retail managers can undertake to control costs.

Labor Scheduling
Accurate labor scheduling is difficult because traffic varies during the day.
Many retailers rely on computer software to schedule.
• To cut costs, suggest having some part-time employees.
• Software often recommends irregular work hours.

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 Controlling Costs 2

Store Maintenance
• Includes both interior and exterior elements.
Inventory Shrinkage
• Shrinkage is loss due to employee theft, shoplifting, mistakes, inaccurate
records, and vendor errors.
• Annual losses from shrinkage average about 1.4 percent of total sales.

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 The Organization Structure for a Retail Firm 1

Learning Objective 16-4 Summarize how retailers are typically organized.

Organization Structure
Identifies activities to be performed by specific employees and lines of
authority/responsibility in firm.
Four major categories in retail firms:
• Strategic management.
• Administrative management (operations).
• Merchandise management.
• Store management.

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 EXHIBIT 16-6 Tasks Performed by the
Typical Multichannel Retail Firm 1

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 EXHIBIT 16-6 Tasks Performed by the
Typical Multichannel Retail Firm 2

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 The Organization Structure for a Retail Firm 2

Organization of a Single-Store Retailer

Owner-manager assigns tasks to each employee.
• Owner-manager continues to perform strategic management tasks.
Each employee may perform a wide range of tasks.
Merchandise manager or buyer may handle advertising and promotion.
Often contract with outside accounting services.

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 EXHIBIT 16-7 Organization Structure for a Small Retailer

Access the text alternative for slide images.

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 The Organization Structure for a Retail Firm 3

Organization of a National Retail Chain

Chief executive officer (CEO) oversees entire organization.
Merchandising.
• Merchandising planners.
Stores.
Operations.

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 EXHIBIT 16-8 Organization of a Typical Department Store Chain

Access the text alternative for slide images.

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 The Organization Structure for a Retail Firm 4

Organization of a National Retail Chain continued

Marketing.
• Chief marketing officer (CMO).
Finance.
• Chief financial officer (CFO).
Private label.
• Responsible for private-label and exclusive merchandise.

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 The Organization Structure for a Retail Firm 5

Organization of a National Retail Chain continued

Direct channels.
• Selection and pricing of merchandise through all channels.
Global.
• Operations outside home country.
• Many functions are duplicated.

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 Human Resource Management Legal Issues 1

Learning Objective 16-5 Identify the legal issues involved with human resource management.

Equal Employment Opportunity

Illegal discrimination.
Protected class.
Title VII of the Civil Rights Act.
• Equal Employment Opportunity Commission (EEOC).

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 Human Resource Management Legal Issues 2

Compensation
• Fair Labor Standards Act.
• Equal Pay Act.
Labor Relations
• Labor relations laws describe how unions can be formed.
Employee Safety and Health
• Health and safety laws designate that workplace is free of hazards.
• OSHA conducts inspections to ensure compliance.

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 Human Resource Management Legal Issues 3

Sexual Harassment
• Unwanted sexual advances.
• Requests for sexual favors.
• Inappropriate verbal or physical conduct.
Employee Privacy
• Employees’ privacy protection is very limited.

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 Key Terms 1

autocratic leader – a manager who makes all decisions on his or her own and then announces them to
employees.
behavioral interview – an interview technique used for selecting employees in which candidates
describe how they have handled actual work situations in the past.
buyer – person in a retailing organization responsible for the purchase and profitability of a merchandise
category. Similar to category manager.
chief executive officer (CEO) – the executive responsible for overseeing the operations of the entire.
chief financial officer (CFO) – an executive that works with the CEO on financial issues such as equity-
debt structure and credit card operations.
chief marketing officer (CFO) – an executive that works with staff to develop marketing, advertising
and other promotional programs.

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 Key Terms 2

democratic leader – a store manager who seeks information and opinions from employees and bases
decisions on this information.
drawing account – a method of sales compensation in which salespeople receive a weekly check based
on their estimated annual income.
engagement – an employee’s emotional commitment to the organization.
Equal Employment Opportunity Commission (EEOC) – a federal commission that was established
for the purpose of taking legal action against employers that violate Title VII of the Civil Rights Act. Title
VII prohibits discrimination in company personnel practices.
Equal Pay Act – a federal act enforced by the Equal Employment Opportunity Commission that
prohibits unequal pay for men and women who perform equal work or work of comparable worth.
extrinsic reward – reward (such as money, promotion, or recognition) given to employees by their
manager or the firm.

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 Key Terms 3

Fair Labor Standards Act – a federal law, enacted in 1938, that sets minimum wages, maximum hours,
child labor standards, and overtime pay provisions.
health and safety laws – regulations that hold that employers must provide every employee with an
environment free of hazards that are likely to cause death or serious injury.
illegal discrimination – the actions of a company or its managers that result in a number of a protected
class being treated unfairly and differently than others.
incentive compensation plan – a compensation plan that rewards employees on the basis of their
productivity.
intrinsic reward – nonmonetary rewards employees get from doing their jobs.
job application form – a form a job applicant completes that contains information about the applicant’s
employment history, previous compensation, reasons for leaving previous employment, education and
training, personal health, and references.

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 Key Terms 4

job description – a description of the activities the employee needs to perform and the firm’s
performance expectations.
job enrichment – the redesign of a job to include a greater range of tasks and responsibilities.
labor relations laws – regulations that describe how unions can form and how companies must respond
to them.
labor scheduling – the process of determining the number of employees assigned to each area of the
store at each hour the store is open.
leadership – the process by which a person attempts to influence another to accomplish some goal or
goals.
merchandising planner – a retail employee responsible for allocating merchandise and tailoring the
assortment in several categories for specific stores in a geographic area.

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 Key Terms 5

on-the-job training – a decentralized approach in which job training occurs in the work environment
where employees perform their jobs.
organization structure – a plan that identifies the activities to be performed by specific employees and
determines the lines of authority and responsibility in the firm.
productivity – in a human resources context, it is sales generated per employee.
protected class – a group of people, such as women or minorities, that are treated differently or
discriminated against, such as when a qualified woman does not receive a promotion given to a less
qualified man.
quota – target level used to motivate and evaluate performance.
quota bonus plan – compensation plan that has a performance goal or objective established to evaluate
employee performance, such as sales per hour for salespeople and maintained margin and turnover for
buyers.

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 Key Terms 6

sexual harassment – unwelcome sexual advances, requests for sexual favors, or other verbal or physical
conduct with sexual elements.
shrinkage – an inventory reduction that is caused by shoplifting by employees or customers, by
merchandise being misplaced or damaged, or by poor bookkeeping. Also called inventory shrinkage.
store maintenance – the activities involved with managing the exterior and interior physical facilities
associated with the store.
straight commission – a form of salesperson’s compensation in which the amount paid is based on a
percentage of sales made minus merchandise returned.
straight salary compensation – a compensation plan in which salespeople or managers receive a fixed
amount of compensation for each hour or week they work.

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 Key Terms 7

structured training program – training that teaches new employees the basic skills and knowledge they
will need to do their job.
team incentive – sales incentives based on the performance of a group, department, or the store as a
whole.
transformational leader – a leader who gets people to transcend their personal needs for the sake of
realizing the group goal.
turnover – in a human resources context, the number of employees who voluntarily leave their job,
divided by the number of positions in the firm.

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