1. Chapter 14 Managing People

2. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives  Explain why intangible people resources can provide a more competitive advantage than tangible resources.  Describe how to recruit both the right employees and the right customers to be the store’s partners.

3. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives  Explain how to manage employees and customers to develop long-term profitable relationships.  Discuss how to compensate employees and offer customers a compelling value proposition.

4. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Intangible People Resource Make the Difference  Similarities between employees and customers  They both perform retail tasks, and they both serve the other.  Recognizing that employees and customers must always serve each other is the beginning point of servant leadership.  Servant leadership - An employee’s recognition that their primary responsibility is to be of service to others. LO 1

5. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Intangible People Resource Make the Difference  Employees and customers are profit drivers  Only by treating people right will retailers be able to have enduring and profitable relationships with their employees and customers. LO 1

6. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Obtaining the Right People  Customer relationship management  Employee sources  Customer sources  Screening and selection of employees  Screening and selecting customers LO 2

7. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Obtaining the Right People  Customer relationship management (CRM) - An integrated information system where the fundamental unit of data collection is the customer, supplemented by relevant information about the customer.  The overall goal of CRM is to generate reports and provide the retailer with a tool to develop a long-term profitable relationship with a customer that is mutually beneficial. LO 2

8. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 14.1 - Sources of Retail Employees and Customers LO 2

9. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Obtaining the Right People  Screening and selection of employees  Application form  Personal interview  Testing  References LO 2

10. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Obtaining the Right People  Legitimate reasons for screening and selecting customers  The inability to adequately service certain customers.  The deterioration of a retailer’s atmosphere if customers of a certain type are admitted.  The inability to profitably service customers. LO 2

11. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Managing People  Training and developing employees  Training is a process of continuing education, must enable the employees to know their status within the firm, and should be supported by management.  Training and developing customers LO 3

12. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Managing People  Evaluating employees  Performance appraisal and review - The formal, systematic assessment of how well employees are performing their jobs in relation to established standards and the communication of that assessment to employees.  Retailers should try to use objective criteria for the appraisal and review process whenever possible.  Evaluating customers LO 3

13. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Managing People  Motivating employees  Motivation - Drive that a person has to excel at activities, such as a job, that he or she undertakes.  A variety of noneconomic motivators such as esprit de corps, voice, scheduling, and feedback can either motivate or demotivate employees. LO 3

14. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Managing People  Motivating customers  Key nonprice elements that can motivate or demotivate customers include merchandise, physical characteristics, sales promotions, advertising, convenience, services, and store personnel. LO 3

15. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Compensation  Employee compensation  Common types of compensation programs for a sales force  Supplemental benefits  Compensation plan requirements  Job enrichment  Customer compensation LO 4

16. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Employee Compensation  Compensation - Includes direct dollar payments (wages, commission, bonuses) and indirect payments (insurance, vacation time, retirement plans).  Fixed component - Composed of some base wage per hour, week, month, or year.  Variable component - Composed of some bonus that is received if performance warrants. LO 4

17. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Employee Compensation  Fringe-benefit package - Part of the total compensation package offered to many retail employees and may include health insurance, disability benefits, life insurance, retirement plans, child care, use of an auto, and financial counseling. LO 4

18. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Common Types of Compensation Programs for a Sales Force  Straight salary  Salary plus commission  Straight commission LO 4

19. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Exhibit 14.4 - Attributes Of Compensation Plans LO 4

20. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Supplemental Benefits  Employee discounts  Insurance and retirement benefits  Child care  Push money (prize money or premium merchandise) LO 4

21. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Compensation Plan Requirements  Fairness  Adequacy  Prompt and regular payments  Customer interest  Simplicity  Balance  Security  Cost effective LO 4

22. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Job Enrichment  Process of enhancing the core job characteristics to improve the motivation, productivity, and job satisfaction of employees.  The five core job characteristics that should be increased include skill variety, task identity, task significance, autonomy, and job feedback. LO 4

23. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Customer Compensation  The best way to think of it is in terms of the concept of value proposition.  The better the value equation, the more compelling the retailer’s value proposition. LO 4