Lecture Retailing management (6/e): Chapter 17 - Levy Weitz

Lecture Retailing management (6/e): Chapter 17 - Managing the store. This chapter presents the following content: Store managers run a business, strategic importance of store management, job description, legal considerations in hiring and selecting employees, individualized motivation programs,...

Chapter 17 Managing the Store McGraw­Hill/Irwin Retailing Management, 6/e Copyright © 2007 by The McGraw­Hill Companies, Inc. All rights reserved Store Management Customer Service Layout, Design and Visual Merchandising Managing the Store 172 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’s 173 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 174 Store Managers’ Responsibilities Varies Dramatically By Type of Retailers – Specialty Store vs Department Store Entrepreneur – P & L Responsibility – Manage People © Digital Vision Responsible for Two Critical Assets – People Sales/Employees – Space Sales/Square Foot 175 Responsibilities of Store Managers Undertaken by Store Managers 176 Steps in Employment Management Process 177 Recruiting and Selecting Employees Undertake Job Analysis Prepare Job Description Find Potential Applicants Select Employees Screen Candidates 178 Job Analysis 179 Job Description A guideline for recruiting, selecting, training and evaluating employees The activities the employee needs to perform The performance expectations expressed in quantitative terms Steve Mason/Getty Images 1710 Jim Taylor’s Six Month Evaluation 1727 Common Evaluation Errors Strickness Ratings unduly negative Leniency Rating unduly positive Haloing Using the same rating on all aspects of the  evaluation Recency Placing too much weight on recent events rather  than evaluating performance over the entire  period Contrast Having the evaluation of a salesperson unduly  influenced by the evaluation of other salespeople Attributions Making errors in identifying causes of the  salesperson’s performance 1728 Rewards • Extrinsic Rewards are rewards provided by either the employee’s manager or the firm such as compensation, promotion and recognition • Intrinsic Rewards are rewards employees get personally from doing their job well like doing their job well because they think it is challenging and fun 1729 Compensating Employees 1730 Compensation - Type • Straight salary • Straight commission • Quota bonus - Setting quotas - Individual vs group incentives Royalty-Free/CORBIS 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 1731 Designing a Compensation Plan Determine  Appropriate  Compensation $12/Hour Decide on  Percent of  Incentives 1/3 Salary 2/3 Incentive 1732 Use Average  Sales Per  Employee to  Set Incentive  Rate Sales/Person ­ $150  5.33% Commission  $4/Hour Salary   $4 = 5.33% x 150 = $12 1733 Controlling Costs Energy Heating Lighting Labor Costs Controlled by  Store Managers Maintenance Inventory  Shrinkage Labor Scheduling System 1734 Calculating Shrinkage Accounting Record – Actual Inventory                          Sales $1,500,000  ­ $1,236,00      =    6.7%           $4,225,000 1735 Sources of Inventory Shrinkage Shoplifting 31% Mistakes and Inaccurate Records 17% Vendor Errors 6% Employee Theft 46% 1736 Preventing Shoplifting 1737 Store design Employee training Good customer service - Security measures - Dye capsules, TV cameras - EAS Prosecution PhotoLink/Getty Images Spotting Shoplifters 1738 Use of Security Measures by Retailers 1739 EAS Tags 1740 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 1741 ... Training Employees 171 6 Orientation Program Training -Where, when, what -Structured vs unstructured -Classroom vs on-the-job (c) image100/PunchStock -Analyzing Successes and Failures 171 7 Motivating... challenging and fun 172 9 Compensating Employees 173 0 Compensation - Type • Straight salary • Straight commission • Quota bonus - Setting quotas - Individual vs group incentives Royalty-Free/CORBIS Advantages... customer service - Security measures - Dye capsules, TV cameras - EAS Prosecution PhotoLink/Getty Images Spotting Shoplifters 173 8 Use of Security Measures by Retailers 173 9 EAS Tags 174 0 Reducing