8962936 jcpenneys people strategy

8/3/2019 8962936 JCPenneys People Strategy

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JCPENNEYS PEOPLESTRATEGY: SETTING THE RIGHT

CLIMATE FOR HUMAN RESOURCE

DEVELOPMENT

By:-

Ankita Grover

Mehak Kukkar

Shankar Mohan


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The associates are the first customers we sell. Ifit doesn't ring to them, its impossible to

communicate and inspire the customer.


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Background Set up in 1902 by James Cash Penney in Kemmerer, Wyoming

Traced back to The Golden Rule, a dry fruits and clothing store

By 1902 TGR had 312 stores in 26 states

In 1924 , was incorporated as the JCPenney Company

Crossed the US$ 1 Billion revenue mark in 1951 and US$ 2 Billionmark in 1964

Targeted the middle income customers facing aggressivecompetition from both the discounters and higher end departmentstores


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Operational Problems

JCP followed a decentralized merchandising policy as part ofits expansion plans

Little idea what each store stocked leading to stretched outlead times

Changing retail scenario in 1990 made the merchandiseoutdated and lacking in style

Led to plummeting financials and share prices


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Remedies Turnaround orchestrated by Questrom and Castagna in 1999

Centralized the Buying system and slashed the number ofitems displayed in the stores

Sale of JCPs Direct Marketing Services

Efforts undertaken to project a fashionable image of thecompany

Other Pull strategies

Sale of Eckerd drugstore chain for US$ 4.52 billion in cash


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Need for Change in Culture

The need for change in culture was felt by Ulleman in 2004

Organisation culture was very formal

Employees wore formals, casuals not accepted

Employees dissuaded from decorating/customizing theircubicles

Office police

Promotion from within given priority

Freshers were intimidated by the formal culture


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Initiatives Taken at JCP

Appointment of Theilmann as the executive Vice president, chief humanresources and administration officer

Long term plan to make JCPenney a great place to work

Focus on involving employees make an emotional connection with thecustomers

Attract and retain the best talent in the retail industry

Small changes called Quick Hits

Poster Campaign called Just call me Mike

Dress Code relaxed to business casuals

Office Police team was disbanded


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Allowed to decorate their cubicles

Replaced the art works with the photos of the employees

New security ID badges

Launch of the Winning together principles

Associate engagement survey

In 2005, threw their first Christmas party

Leadership conference for the store managers


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Training and Development

Corporate coaching initiatives

Identified high potential employees called Hypos

Retail academy where Ullman and Theilmann acted as facultymembers

Rigorous training sessions

Opted for a new brand positioning strategy Every day matters

Multiplier effect as trainees inn the academy went on to train theirrespective staff


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Results

JCPs second AES in 2006 revealed that 73% of itsemployees were engaged in comparison to 67% in 2005

Was able to attract graduates from best professional

colleges

Operating profit for the fiscal year 2005 was US$1.6Billion, a 22.5 % increase over prev. year

Opened 18 new stores


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Three year financial summary

of JCP

US$ MILLIONS 2006 2005 2004 2003

RETAIL SALES,NET (US$ MILLIONS 19903 18781 18086 17513

COMPARABLE DEPARTMENT STORE SALES

(US$ MILLIONS)

3.7 2.9 4.9 0.8

GROSS MARGIN (US$ MILLIONS) 7825 7191 6792 6276

OPERATING INCOME (US$ MILLIONS) 1922 1631 1275 786

INCOME FROM CONTINUING OPERATIONS

(US$ MILLIONS)

1134 977 657 360

DILUTED EPS FROM CONTINUING

OPERATIONS (US$ MILLIONS)

4.88 3.83 2.2 1.2

NUMBER OF JCP STORES 1033 1019 1017 1020

GROSS SELLING SPACE(SQ FT IN MILLIONS) 103.1 101.4 101.3 101.1


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Reactions to the culture change

initiativesNot a gimmick but symbolic of its effort to position itself as anemployer of choice

Need for change was paramount due to the shortage of talent in theretail industry

Focus on job satisfaction

Happy employees make happy customers

Ullman listened to his employees

Repeated engagement with the lower level employees

Sustaining the involvement

Culture not driven by the top management but by the system


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JCPs Winning Together

Principles

ASSOCIATES

INTEGRITY

PERFORMANCE

RECOGNITION

TEAMWORK

QUALITY

INNOVATION

COMMUNITY

WE DO THIS FOR OUR CUSTOMERS

SHAREHOLDERS

8962936 jcpenneys people strategy

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