Organization Structure & HRM In Retail

By: Prof. Kamiya Khanna

Topics

• HRM in Retail i.e. Issues & Concerns• Creating organizational Structures for a retail firm• Retail organization structures in

• Single• Departmental• Independent Stores

• Retail organization Design Issues

HRM in Retail “In today’s Era it is difficult to gain an edge through

unique product offerings, since today’s customers has easy access to a wide selection of goods.”

Retailers are striving to create a superior store experience for consumers – To increase sales & Customer Loyalty

Two Major Retail Variable Assets are: Inventory Labour

Labour

• Retailer’s single largest controllable expense

• Workforce is Retailer’s Face to the customers

• Through Employees Brand’s Deliver:• Customer Service & Experience• Revenue• Brand Differentiation

Organization Structures

• Defines the Hierarchy Levels, the reporting relationships and the decision makers

• Is the starting point for managing a business

• Helps understanding various task to be performed and helps in understanding the roles to be played by people within the organization.

The Process of Organizing a Retail Firm

Identification of Tasks in Retail Organization

Management

Marketing etcFinance &Accounts

HRMLegal &

AdministrationStore

OperationsBuying &

Merchandising

Planning and Assessing a Retail Organization: Factors to Consider

Planning and Assessing a Retail Organization: Factors to Consider

Planning and Assessing a Retail Organization: Factors to Consider

Organization Structure In Retail

• Factors Influencing the creation of Organizational Structures:

– Scope & Scale of Operation, Viz. Local, Regional, National or International

– Types of Products Sold

– Types of Departmentalization: Functional, Product Wise or Geographic

Organization Structure for Small/Single/Independent Retailers

Owner/Manager

ResponsibilitiesBuying, Promotion, Sales, HR, Operational Control & General Management

External Advisors

Lawyers, CA, Bankers, etc

Back Office StaffResponsibilitiesAccounting & Record keeping, Data Entry, Inventory Control,Purchase Orders, Time Keeping& Payroll, Facilities Management

Sales Staff

ResponsibilitiesCustomer Service, Selling, Stock Control, Display & Housekeeping

Organization Structures Used by Small Independents

Mazur Plan

• In 1927, Paul Mazur recommended a functional organizational Structure.

• As per Mazur organizational Structure should be built around 4 functions:– Control– Publicity– Operations– Merchandising

Various Additions to it as per today’s World are:- Supply Chain Management

- Logistics - HRM

Organization Structure forDepartmental stores- Mazur plan

Organizational Format Used by Chain Stores

HRM In Retail• Hiring persons with Right Attitude is

important in all organizations

The HR Function in Retail Involves:1. Identifying Various roles in organizations

2. Recruiting people with the right attitude to fit the jobs.

3. Training

4. Motivating Employees

5. Evaluating employee performance

Identifying Various roles in organizations

• Helps in determining the No. of people involved for various jobs, the skill sets and educational background needed, location

• Key Tasks in retail organization Involve Buying and Merchandising Store Management & Operations Technology Support

Training• Need of Training arises at following

Times:– Induction– Sales Staff in direct contact with customers

– Communication Knowledge– Product Knowledge– Company Policies on Return– Knowledge of the workplace– Market Awareness– Personal Grooming

– Skill enhancements

Motivating Employees

• Key Factors that help in Motivating People are:

– The Organizational Culture

– The Rewards & Recognition

– The Monetary Benefits

– Prospects of Growth and Job Enrichment

Role of HRM in Retail

Role of HRM in Retail

Retail Organization Design Issues

1. The Degree to which decision making is centralized or decentralized.

2. Approaches used to co-ordinate merchandise and Store Management.

Centralization Versus Decentralization

Centralization is when authority for retailing decisions is delegated to corporate managers rather than to geographically dispersed regional, district, and Store Managers.

Decentralization is when authority for retail decisions is assigned to lower levels in the organization.

Advantages of Centralization

1. Reduction in Costs- Overheads Fall as fewer managers are required to make

the Merchandise , HR, Marketing and Financial Decisions.

- The no. of buyers reduce, Reduction of personnel in administrative functions such as marketing and Human Resource.

2. Coordinating buying achieves lower prices from suppliers.

- As large Quantities can be ordered together

3. Provides an opportunity to have best people make decisions for the entire corporation.

Advantages of Centralization

4. Centralization increases efficiency

- Standard operating policies are used for store and personnel management; these policies limit the decisions made by store managers.

For e.g.: Corporate merchandisers do considerable

research to determine the best method of presenting merchandise.

Disadvantages of Centralization

1. Makes it more difficult for a retailer to adapt to local market conditions.

2. Cannot Tailor merchandise to local needs3. Cannot respond to local competition and

labor markets.4. Pricing is centrally established, individual

stores may not be able to respond quickly to competition in their markets.

5. Centralized personnel policies can make it hard for local managers to pay competitive wages in their area to hire appropriate salespeople.