reward and recognition strategies in the retail sector

SIES COLLEGE OF MANAGEMENT STUDIES PLOT 1-E, SECTOR V, NAVI MUMBAI- 400 706. TEL NO. 27708376/ 8385/8377.

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Project On:

Reward And Recognition Strategies in

the Retail Sector

Reward And Recognition Strategies in Retail Sector 1


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Submitted By: Ms Sheetal Therembath

Specialisation : Human Resources

(PGDBA)

Roll No : 111

Date Of Submission: 1- 04- 06.

Acknowledgement

I would like to express my gratitude to the Director,

Dr.A K Sengupta of S.I.E.S College of Management

Studies, Nerul for giving me the opportunity to do a

project on Rewards and Recognition strategies in

retail sector.

I would also like to extend my word of thanks to

Mr .Yogesh Tayade from Shoppers Stop, Mr.S.Sridhar

from RPG Spencers and Mr. P Chandrakant from



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Pantaloons. I would also like to thank all those in the

Human Resource team in the various companies of

the retail industry who have helped me gain an

understanding of the reward and recognition

schemes in their respective companies.

My heartfelt thanks to all my professors for their

constant encouragement & support during the

course of my project.

Index

Executive Summary 4

Insight into Retail Sector 5



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Research Methodology 10

Research Findings 12

Conclusions and Recommendations 24

Appendix A: Questionnaire 28

Appendix B: Bibliography & References 29



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Executive Summary

The organized retail sector in India is expected to grow from a mere 2 per cent of the total

retail industry to a significant 20 per cent by the end of the decade. This is not surprising,

considering that the organized retail sector is growing at the rate of 8.5 per cent per

annum. The size of the organized retail industry has been estimated at Rs 19, 500 crore in

the last financial year. Population growth combined with an increase in disposable

incomes has given a boost to the retail industry. The brand conscious urban population

forms the largest segment of demand for the minority of retailers.

With the growing demand for manpower to satisfy the retail’s surging needs, also arises

the need to retain, motivate employees to work. In this fast tracked sector how does the

human resource team decide on rewards that actually reward? How does one track if the

reward scheme, which was a month old, still motivates and pushes for employee

performance?

This project is an attempt to study the rewards and recognition strategies followed by

various retail bigwigs up and close. It aims at getting an understanding on the current

schemes and reward practices being followed by retail companies. Based on my research

findings I have recommended steps that must be kept in mind for recognition

programmes to be successful.



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An Insight into Indian Retail

Sector

VICTOR Hugo said,

" There is nothing more powerful than an idea

whose time has come."

Clearly, if the number of column centimeters the media devotes every day to the sector is

any indication, retail is definitely a happening phenomenon in India.

So we all know that India has close to 13 million retail outlets — the highest in the world;

the retail industry is close to Rs 9 lakh crore, growing at 20 per cent but organized retail

is only 2.5 per cent of the pie, though growing at a healthy clip of 35 per cent.

Retailing contributes roughly 13% of GDP and employs around 10% of employable

population in the country. Retailing is the second largest employer after the agriculture

sector.

The growth of organized retail over the period is as follows



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1999 2002 2005

Total Retail (in billion INR) 7000 8250 10000

Organized Retail ( in billion INR) 50 150 350

% Share of Organized retail) 0.7 1.8 3.5

(Source: www.imagesretail.com)

Reasons for growth in Retail

Sector

Ascending the learning curve:

With most of the players operating for over 5 years now, new formats have been

tested and back end systems have been put in place. Not only are footfalls growing,

but also conversions are rising and so are average ticket sizes. Most of the players

have raised capital either through private placement, rights or public issue and are in

the process of executing their aggressive growth plans.

The increase in income of the consuming class:

Here consuming class refers not only the urban people but also the rural sector.

According to an article published by National Council of Applied Economic

Research (NCAER) it showed that urban income is growing at 3.2% a year while

rural income is growing at 4.5% a year.



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FDI Allowance

FDI in retailing is opened upto 51% in single brand retailing. This is the first step to

opening up of the retail sector. Previously for single brands to enter India was only

through joint-ventures or the franchisee route. Now brands can enter with a majority

stake of 51% along with a local partner. This definitely gives the international brands

more space to play around.

Key players in Retail

Shoppers Stop

The foundation of Shoppers' Stop was laid on October 27, 1991 by the K. Raheja Corp.

group of companies. Being amongst India's biggest hospitality and real estate players, the

Group crossed yet another milestone with its lifestyle venture - Shoppers' Stop.

From its inception, Shoppers' Stop has progressed from being a single brand shop to

becoming a Fashion & Lifestyle store for the family. Today, Shoppers' Stop is a

household name, known for its superior quality products, services and above all, for

providing a complete shopping experience.

With an immense amount of expertise and credibility, Shoppers’ Stop has become the

highest benchmark for the Indian retail industry. In fact, the company’s continuing



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expansion plans aim to help Shoppers’ Stop meet the challenges of the retail industry in

an even better manner than it does today.

RPG Retail

RPG entered the world of retail on June 2001 by opening its very first store in the heart of

Hyderabad. The RPG group's foray into this area and its success with its four lines of

retail businesses i.e. Food world, Music world, hypermarkets, Spencers has lured other

groups.

The biggest corporate retailer by far, RPG has managed more than Rs 750-crore turnover

through its over 90 Food world stores, Spencer's superstores, Health & Glow, and over

170 Music world outlets across 21 cities. The group's stores occupy over 3 lakh sq ft of

retail space

Reward And Recognition Strategies in Retail Sector

No. Of Outlets Retail Space Turnover

20 7.5 Lakh Sq feet 510 Crores


90 + 10 Lakh Sq feet 750 Crores

9

Shoppers Stop - A Snap Shot…

RPG Spencers - A Snap Shot…


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Pantaloons

Pantaloon Retail (India) Limited (PRIL) was incorporated on October 12, 1987 as Manz

Wear Private Limited under the stewardship of Mr. Kishore Biyani. The Company was

converted into a public limited company on September 20, 1991 and on September 25,

1992 the name was changed to Pantaloon Fashions (India) Limited and the same time it

went public and today it has approximately 14,000 shareholders. It later changed its name

to Pantaloon Retail (India) Limited on 7th July 1999.

From a humble beginning in 1987, Pantaloon as today evolved as a leading manufacturer-

retailer in the country with 16 Pantaloon stores and 21 hypermarkets(Big Bazaar), 33

Food Bazaars, 3 central, 2 Fashion Station, 2 aLL and 1 MeLa store operational across

the country. It has been a remarkable journey for PRIL as its evolved from a

manufacturing to a completely integrated player controlling the entire value chain.


Pantaloons - A Snap Shot…


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Research Methodology

Objective:

Retail sector is one of the fastest growing sectors. Organised retailing is gaining

momentum and is expected to reach 8%-10% by the year 2010. This would require large

number of talented workforce especially for this sector. Retail is one of the biggest

employers in India after agriculture.

The project aims to understand the current Reward & Recognition practices in the

retailing sector. The project expects to find out the following ;

The various Reward & Recognition practices followed at store level & above.

On what parameters are the employees rewarded.

The administration requirements.

Is the focus more on team/ employee behaviors/or pure performance?



78 26 Lakh Sq feet 1100 Crores

11


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Data Collection:

The research is based on primary research as well as secondary research. Primary

research was carried out by means of interviewing the HR managers of various

organizations visited. Secondary research was by means of textbooks, Internet,

newspapers and magazines catering to retail sector and HR matters.



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Reward And Recognition Strategies

At Shoppers Stop

“JO JEETA WOHI SIKANDER”

Explanation:

Parameters Bench Mark Weightages Actual Score Weighted

Scores

First Citizen

Enrollment

20 Nos 25 15 18.75

Know your Big

Customer

20 Nos 25 18 22.5

Customer

Feedback Forms

10 Nos 10 10 10

Attendance 5 points 20 1 4

Sales Target 5 points 20 2 8

Product

knowledge (Test

Scores)

60 100 46 63.25

The reward scheme aims at motivating employees to perform regardless of the function

they are associated with. It aims at inculcating a performance driven culture at Shoppers,

which does not limit itself to just the store operations, but also across other departments.

Various parameters are set across different levels. Below explained is the performance


Objective : To promote a performance driven

culture across all functions.

Eligibility : Employees across all functions.

Frequency : Held on a Quarterly basis

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matrix for Jo JEETA WOHI SIKANDER at the store level for Customer Service

Associates/Front line staff.

Based on the above parameters, the Customer Service associates at every division are

marked. This Report card in given 70% weightage & 30% weightage is given for

behavior of employee. The immediate supervisor the employee is reporting to gives this

rating. The parameter weightages may vary from store to store depending upon the square

feet area and the business levels. The employee earning the highest points from each

division is declared as the “Jo Jeeta Wohi Sikander” for that particular department.

The JJWS award is given separately for each store, in the quarterly meets held. The

winning employee receives a cash award and a badge.

“UBHARTA SITARA”

Explanation:

Once the induction process is over the new joinees undergo, periodic tests & assessments.

The tests are held on a span of 3-4 months. The first test is a written test, the questions

the new joinees on induction learning’s, store formats, merchandising, basics of visual

merchandising etc. There are four stages and on clearance of each stage that is (KRA

based) the employee is awarded a star. On successful completion all stages the employee

is awarded as the "Ubharta Sitara".


Objective : To encourage growth and talent

development amongst employees.

Eligibility : All new joinees at store level.

Frequency : Held on a Quarterly basis.

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This employee recognition scheme was started two years back, to identify fast learners

and potential leaders who can assume further responsibilities. On successful completion

of all four stages the employee is awarded a certificate and felicitated in the store meet,

held every Saturday.

“BEST GROOMED EMPLOYEE ”

Explanation:

All front line employees are evaluated on their dressing sense, attire, cleanliness and

hygiene while at work. The employees are evaluated by the immediate officer they are

reporting to.The scores for the entire department are collated and passed on to the store

Hr. The Store Hr officer along with the stores manager take a joint decision based on the

scores to award the best groomed employee of the month.

The winning employee is awarded a gift voucher of Rs.1000 during the store meeting.


Objective : To encourage dressing etiquettes n

amongst front line employees..

Eligibility : All front line employees at store

level.

Frequency : Held on a monthly basis.

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“BEST CUSTOMER CARE ASSOCIATE”

The front line employees are marked on the following points:

Attendance

Punctuality at work

Dressing Etiquettes

Interaction with customers

Customer Feedback forms

A pre determined scale is used to evaluate the employees. The reporting officer and the

store Hr rate individual employees. These scores are collated at the head office by the

corporate Hr team. The learning initiatives taken by the employee are evaluated and a

final decision is taken. The best customer care associate is awarded a cash reward, badge

a certificate during the quarterly zonal meet.


Objective : To increase efficiency amongst

front line employees.


level.

Frequency : Held on a quarterly basis.

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“WOW” And “FOUL” CARD

Explanation:

At shoppers each unit is given the liberty to suggest new reward schemes to the corporate

or the store hr. The wow and foul card was one such initiative taken up by the store hr at

R-mall, Mulund. The front line employees were marked on various parameters like ;

Peer Interaction.

Ability to take on new/undefined roles

Interaction with customers.

Ability to handle work pressure.

Ability to work in teams

Responsiveness displayed in absence of immediate reporting officer.

The employees are observed and monitored by the stores hr. On display of qualifying

behavior the employee is awarded a red colored Wow card, similarly on display of unruly

behavior the employee is handed a brown colored Foul card. The cards act as spot

rewards.Depending on the number of Wow cards collected by employee, the winning

employee gets a gift voucher of rupees 1000.


Objective : To increase team spirit amongst

front line employees.


level.


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Reward And Recognition Strategies

At RPG Spencers

“BEST STORE AWARD”

This award is given to the best performing store amongst all the RPG stores. The

parameters looked into are listed below:

Achievement of set store targets for the year

Shrinkage achieved

Visual Merchandising

Sales growth achieved (month and month)

Certain weightages are assigned to all of the above parameters. These are discussed by

the department heads of each store, who in turn pass on the information to their reporting

employees. The operations department sends the data in collaboration with the


Objective : To promote intra store competition

and in effect further sales

Eligibility : All store employees

Frequency : Held on an annual basis.

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commercial supply department to the corporate hr team. The final decision rests with the

hr team.

“BEST CUSTOMER SERVICE ASSOCIATE AWARD”

Explanation:

This award is given on a quarterly basis. The customer service associates are marked on

four parameters ie:

Grooming standards

Attendance

Customer Service

Customer feedback

Certain weightages are assigned to all of the above-mentioned parameters. The

department heads of each store discusses these; and in turn pass on the information to

their reporting employees. The operations department sends the data in collaboration with

the commercial supply department to the corporate hr team. The final decision rests with

the hr team.


Objective : To enhance customer delight.

Eligibility : All front line store employees


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“BEST CASHIER AWARD”

Explanation:

This award was started understanding the up selling that can be instigated by cashiers at

check /cash out points of stores. The parameters looked into are listed below;

Cash shortage

At the beginning of the day the cashiers are handed over the cash chest ie a box

containing specific number of currency denominations. An efficient cashier has to

juggle the cash denominations to avoid cash crunches.

Day begin-Day end

The currency stock with the cashier at the beginning of the day and at the end of day.

Number of bills

The number of bills generated by each cashier.

Zero Billing Error

Minimum billing errors by the cashiers.

“BEST CATEGORY AWARD”

Objective : To enhance inter category competition and

teamwork.

Eligibility : All employees working in the category



Objective : To enhance up selling at cash points.

Eligibility : All employees working as cashiers


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Explanation:

This award was started to motivate employees to promote category sales. Since the award

called for a united effort, it also brought team performance into picture. The parameters

looked into are listed below;

Visual Display

The merchandise display in the store, customer convenience, effigy wraps etc

Category Sales

The achievement of targets set for the category for the year.

Category shrinkage The savings achieved by monitoring and reduction in

shrinkagesCategory margin etcThe mark up margins achieved by the category.

This calls for measures to increase the category sales and efforts to increase

footfall in into the category section.Other Awards “HONESTY AWARD”

Objective : To encourage honesty and integrity

amongst employees

Eligibility : All front line employees.


Explanation :This award was started by the HRD at Spencer’s to encourage values of

integrity and truthfulness amongst employees. The award is based on the comments on

customer feedback forms received at the store and also special appreciations if any

received by the associates/peers. The store head sends nominations to the corporate HR.

The corporate HR takes the final decision regarding the award. The employee wins a gift

voucher of Rs.1000 and a certificate. Also a special mention of the employee, with

photograph and the reason for being nominated, get published in the quarterly

newsletter.SHRINKAGE BONUS If shrinkage of store lesser than 0.6% of total store

sales, then the balance amount is equally distributed amongst floor level employees. It’s



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done on the two-month cycle basis. The data is gathered by the operations departments

and collated at HR team.

Percentage Store manager Supervisor CSA

95 % to 100 % 750 500 250

100 % to 110 % 1000 750 500

> 110 % 1500 1000 750

Approximately Rs.25000 is kept aside each quarter for rewards and recognition of

employees. The store winning the best store award hosts the “Annual day function”,

where the quarterly awards are distributed.Reward And

Recognition Strategies At

Pantaloons“EMPLOYEE OF THE MONTH”

Objective : To improve work performance

Eligibility : All front line employees.


Explanation:Each division/category at Pantaloons store is called a “House”. For e.g.:

Red house for women’s apparel division, blue house for gent’s apparel division, etc. Each

house manager nominates two best employees from his house. The nominations have to

done with by the 5th of every month to the unit hr officer. The employee from the team

that does not achieve its targets(sales) is not eligible for this award. Final selection is

done by the store manager along with the unit HR officer Each store has one employee of

the month.Parameters looked into:Target Achievement

Punctuality

Grooming standards on floor

Interaction with co- employees

Dependability on employee by immediate superior

Customer service.



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The employee thus selected receives Rs.1000 in cash, is felicitated by his parents in the

Saturday store meet in presence of all other employees. Also the store manager takes him

out for dinner. At the entrance of the store, a laminated certificate is kept naming the

employee of the month. The winning employee’s photograph and name is inserted into

the certificate. The COO signs this certificate.

“ FUNZONE AWARD ”

Objective : To improve work place & work

environment

Eligibility : All staff.


Explanation:

At Pantaloons the employee staff rooms are named “Fun zones”. Each store has the liberty

to decorate its own “Fun zone”. It’s used to showcase employee’s ability to decorate their

workplace. Snapshots are clicked and sent across to the corporate HR, if the store wishes

to nominate itself. It’s done on quarterly basis. The best store receives an award of

Rs.10000 and is given during the quarterly meets.

Other Awards:

Inter and intra store competitions are held based on special occasions/days like

Valentines Day, Christmas, etc.

The award is based on the sales targets achieved

It is done at a zonal level.

The winning team/store gets a trophy and a party.



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Recommendations

Employee Recognition awards is not just about winning but also a lot about motivating,

excitement and inspiration. It’s about building the word of celebrating work. As much as

the reward schemes are meant for employees it’s equally important to check with them

about rewards they value. Based on the data gathered from the retail players one can

chalk out a to do list for reward and recognition schemes to be successful. Firstly,

Build a strong foundation with systematic planning.

Check with employees about rewards they value.

Re-Evaluate the recognition programs to keep them fresh.

Keep performance expectations clear for the employees.

Carefully define the objective criteria, behaviors and results.

Make sure that the recognition is not too small.

Keep the process streamlined so that recognition can be timely.

Many reward and recognition programs flop miserably despite immaculate planning. The

reason: Inappropriate choice of rewards. In the retail sector the employees are very young

and fall in the age group of 18 to 24. Its important to understand what rewards would

motivate them. Organizations find various ways to keep tab on employee expectations.

Like for example Pantaloons has its own suggestion schemes motivating employees to

come up with reward schemes or competitions to be held on festival days etc. All these

go a long way in building employee commitment.



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Besides the reward schemes applicable in one store may not motivate employees in

another store. Considering the fast rate at which retail is mushrooming in India, it’s not

possible to have specific reward and recognition schemes at every store. Besides the

administration and collation of data would be a major headache. However retail stores

should be given the liberty to choose reward schemes that suit its employees. If the same

is successful across other stores it could be taken live on a country level too.

Shoppers Stop follows this practice wherein the stores hr has the liberty to design new

schemes within the hr budget. If the scheme is a hit by helping boost productivity or

increasing sales, the scheme is replicated for other zones too.

Considering the young age of the employees, I suggest Spot Awards would be a good

way to motivate employees at store level. On display of behaviors worth applauding, or

on achievement of difficult targets the employees could be awarded an instant cash prize

in the evening store meets. Since the employee would instantaneously get an award the

motivation levels would be higher.

The organization should be clear as to what it wishes to reward. At Sasken for example,

the recognition program is built around goal achievement at three levels; individual, team

and organization. An individual who makes a contribution beyond the call of duty and

has a significant impact over business is awarded as the employee of the quarter. Spot

Awards are given to employees for tasks that appreciated by customers or peers.

Besides, considering the attrition rate prevalent in the store level, awards could be given

on the basis of the number of years of service with the company. This would serve dual

effects one, it would reward and appreciate the service years put in by the employee and



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Secondly it would also serve as a signal to other employees that the company values and

rewards employees who spend quality years with the company.

Retail is one business where the customer is the king. Nothing could be better than

involving the customer is the reward schemes. During rush hours when the foot fall is

very high or during festive seasons, the customers could be handed an appreciation token.

It should be explained to the customer beforehand that as he walks into the store he may

award the token to any customer service associate who pleases him with his/her level of

customer service. On the quarterly award meets the customer should be invited to

felicitated the chosen employee and explain to the audience as to why the particular

employee was chosen over others.

The Saturday store meets could be used to conduct open house sessions wherein

employees could pool in suggestions about employee recognition schemes. The reward

schemes could be frozen based on theses suggestions. Like that the designers or the

employees themselves would take on initiative and drive to make the awareness about the

program.

And once that is done it would be smooth sailing all way…



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Questionnaire

I, Sheetal Therembath from SIES College of Management Studies, Nerul, amcurrently in the second year of the Management course specializing in the Human Resource Management. As part of my 4th semester project, I am conducting a survey on the “Reward And Recognition Strategies in Retail Sector”.

1. How does the company reward and recognize its employees?

2. Does the company believe in giving monetary / no monetary award/ a

combination of both?

3. What is objective behind the award given?

4. How frequently are the awards given?



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5. Who are eligible for these awards ?

6. Kindly explain the reward schemes.

7. What are the parameters for each award to be won?

8. Who decides or initiates the reward schemes?

9. When are the Awards or recognition functions held?

10. Who felicitates the winning employee?



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11. What is the reward and recognition philosophy of the company? Does the

company wish to reward employee behaviors or team-based rewards are given?

Thank you

Bibliography

Books Referred to ;

Retail Trends – by P S Chandra

Retailing the Indian Way – by Ved Prakash



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Internet References :

www.imagesource.com

www.retailbiz.com

www.google.com


http://www.google.com/

http://www.retailbiz.com/

http://www.imagesource.com/

reward and recognition strategies in the retail sector

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