Pavitar Parkash Singh, Lovely Professional University Unit 12: Store Management

Unit 12: Store Management Notes

CONTENTS

Objectives

Introduction

12.1 Store Management Responsibilities

12.2 Recruiting and Selecting Employees

12.3 Motivating and Managing Store Employees

12.4 Evaluating Store Employees and Providing Feedback

12.5 Compensating and Rewarding Store Employees

12.6 Summary

12.7 Keywords

12.8 Review Questions

12.9 Further Readings

Objectives

After studying this unit, you will be able to:

 Explain about Store Management Responsibilities

 Discuss about Recruiting and Selecting Employees

 Describe Motivating and Managing Store Employees

 Evaluating Store Employees and providing Feedback

 Discuss about Compensating and Rewarding store Employees

Introduction

Virtually every enterprise finds it necessary to hold ‘stocks’ (or ‘inventory’) of various items
and materials. That is because it would be practically impossible to operate with only one of
each item to be sold or used in manufacture or used in office work. A ‘reserve’ or a ‘fund’ or
‘inventory’ of each item or material used or sold frequently is therefore ‘maintained’, so that
as items or materials are sold or used they can be replaced or replenished from the stocks ‘held
in reserve’.

Let us take a footwear shop as an example to make these matters quite clear to you. There will
be a variety of different shoes, boots, etc, on display - both in the shop’s windows and inside the
shop itself. It would be very inconvenient and time-consuming for a shop assistant to have to
remove the footwear from the display each time a customer wished to try on a pair. And, in any
case, only one size and colour of each style or type of shoe, boot, sandal, etc., is likely to be on
display at any one time.

Instead, when a customer expresses interest in a particular style, a shop assistant will ask the size
he or she usually wears and the colour preferred, and will then try to find the right size and
colour from the pairs of footwear held in reserve. In many cases pairs of popular items in the
most commonly asked for sizes will be kept inside the shop itself, on shelves or in cabinets. But

LOVELY PROFESSIONAL UNIVERSITY 203

Retail Management

Notes other pairs will be kept in another room - or perhaps in more than one room - to which the shop
assistant can go to find the footwear concerned; that room is the ‘store room’ or ‘stock room’.

When a pair of shoes or other footwear is sold from those inside the shop, it must be possible to
replace that pair quickly, whenever possible, by another pair held in the store or stock room. No
business could operate efficiently if every time it sold an item or used up an item in manufacture,
it had to order a replacement from the supplier or manufacturer. Of course, from time to time,
items can ‘run out of stock’ but, as you will learn during this Program, efficient stock control will
reduce or eliminate such happenings, and ensure that replacements are received in good time,
and are available when required to replace those items sold or used.

12.1 Store Management Responsibilities

Store Manager’s often go by titles like general manager or SGM (store general manager). They
usually have at least one assistant manager working for them as well as various department
managers and hourly employees. A store manager can work in grocery, clothing, mass
merchandiser or even furniture stores. A store manager has numerous responsibilities and
duties each day.

Profit and Loss

1. Store managers are responsible for meeting their region’s sales and profit goals each year.
In order to meet their sales and profit targets, store managers sometimes develop local
marketing and promotional plans to increase business. Additionally, a store manager
strives to increase customer satisfaction in his store through his employees and arranging
merchandise so it is easy to find. A store manager’s duties also include minimizing losses
due to damage or theft. Loss prevention can include instructing other managers when to
count down registers or when to close doors in the back of the store.

Store Operations

2. A store manager’s duties almost always include overseeing the various departments in
the store, including inventory management and ordering. The store manager may need to
communicate area management goals to individual department managers and get their
assistance in improving store operations such as service, cleanliness and image.

Hiring and Firing

3. A store manager’s duties also include overseeing the interviewing, selection and hiring of
all new employees. The manager must ensure that all employees meet the standards of the
regional office. Store managers may need to arrange for prospective assistant managers to
meet with their area manager for approval. Contrarily, store managers must discipline or
fire employees at times, making sure they follow the proper procedures to avoid possible
litigation.

Training

4. A store manager’s duties may entail directly training assistant managers on opening and
closing procedures. Moreover, store managers usually oversee the training of all hourly
employees, which can include stocking and pricing procedures as well as cash register
training. A store manager may also attend seminars or off-site management sessions to
enhance his own skills.

204 LOVELY PROFESSIONAL UNIVERSITY

 Unit 12: Store Management

Payroll Processing Notes

5. The store manager is responsible for ensuring that all employee paperwork or hours are
approved so that people can get paid. Checks may be sent directly to the store, which the
manager would then distribute; or the store could pay people electronically.

Meetings

6. At least part of the store manager’s duties will entail meeting with the area manager and
other store mangers to keep up with regional policies. For example, the region may have
a special promotion that requires specific instructions. The store manager would then
communicate the procedures of the new promotion to his employees.

In a retail store business, the progress operations of the store is affected by the skill of a store
manager. Store manager is an important person and representation of the company at the
forefront. Because of it, a store manager must know and understand the duties and responsibilities
so that the store operation runs smoothly and generate maximum profit for the company.

Duties and responsibilities of a store manager is very complex. Therefore, knowing the main
duties and responsibilities of a store manager is a must so that he can arrange the priority scale
of these tasks.

Responsibilities of a store manager is as follows:

1. Sales and Profitability: Store managers know that they must achieve set sales target, but
very few are aware that they must obtain profit from the business. Store manager should
well aware that store health is measured from the store profit generated, not merely of the
sales. Sales was important because it is the purpose of the existence of a store, but profit is
the main purpose of a business. What does it mean a lot of sales but little profit, especially
with no profit at all. Profitability is determined by sales amount earned by the number of
cost incurred. To gain maximum profit, a store manager must have good ability in terms
of cost control.

2. Inventory Handling: Retail stores are businesses that depend on the availability of
inventory or merchandise. In fact it may be said that the inventory is the heart of a retail
store. A store manager must have good skills in handling inventory, because this greatly
affects the sales of the store they lead. Good analytical skills in Inventory Turn Over (ITO)
for the goods available at his store is necessary so can be quickly converted into cash.

3. Control of Human Resources: The ability in controlling of human resources is a

responsibility that may be most difficult. Because control of these resources requires the
capability of supporting a very complex includes communication skills, management,
psychology, recruiting, training, motivating, and evaluating. If they good in this, then
they are not just a store manager, they are also a good leader.

4. Control of Assets: The purpose of control of these assets is to ensure that all existing assets
in the store are working properly so it supports the achievement of operational objectives.
Assets that are the responsibility of the store manager is:

(a) Tangible assets, such as equipments and buildings.

(b) Intangible assets, such as corporate image, brand, service.

5. Customer Service: Every business is a “service” business. This term is indicated on the
importance of customer service, because service is what determines loyalty, satisfaction,
and customer convenience in shopping. In the end, of course determine the sales turnover.
Therefore, a store manager responsible for determining and carrying out of services

LOVELY PROFESSIONAL UNIVERSITY 205

Retail Management

Notes performed by all of his team. Service is not only determine the turnover of sales alone, but
even further is that it determines the image and brand awareness stores lead. And brand
image is nothing but a business asset that must be maintained and controlled.

Did u know? The store manager has a dual function - a leader of his team and the guardian
of the policies and guidelines laid down by the management.

12.2 Recruiting and Selecting Employees

The employee recruitment process is one of the more critical aspects of running a successful
business. As a business owner or manager you need good employees to address critical business
needs. And yet most everyone treats hiring as a necessary evil only to be done when it is
absolutely necessary.
Adopting a different philosophy about recruiting and hiring employees can provide the edge
necessary to get the best employees, faster and for less money.

Start by understanding what employee recruiting is all about. Think of recruitment as an ongoing
process designed to develop a cadre of qualified candidates. There are two key take-aways from
this approach.
First, the search for new employees needs to be an ongoing process. If you recruit only when a
position is open, you will always be in a reactive mode. The best analogy I can provide is to
think of recruiting just like selling. You are always on the lookout for new sales opportunities.
The same holds for efforts to hire great people.
Second, you want a choice of qualified candidates. To have qualified candidates it is necessary to
understand the business needs and what skills and behaviors will be successful in your
environment. Knowing what to look for and relentlessly trying to find those people are the
keys to successfully recruiting and hiring top employees.
The art of recruiting and selecting good employees is one that takes an organizational commitment
by the company. Hiring fast and hiring well are not going to yield the same results. Take a step
back, review your current practice for hiring and recruitment, then compare them to these
strategies.

Task Discuss about Recruiting and Selecting Employees.

Create Awareness

Unless yours is a major company with a large area of influence, creating awareness is going to
be necessary. You can:

Get a Booth at a Job Fair

The idea is to develop a talent pool of prospective employees in advance of actually needing
them. Think of it like grocery shopping. You go to the store and stock up on food before you will
be eating it. You do this for advance preparation, because you know you will get hungry. Hiring
employees works the same way. Advance preparation will allow you a better opportunity to
select from good talent.

206 LOVELY PROFESSIONAL UNIVERSITY

 Unit 12: Store Management

Notes

Task Register with a college and speak for a few moments in front of students. Tell your
current employees to spread the word about the company to family and friends. Ask for
referrals from top employees.

Provide Opportunity and Expectation of Growth

According to Paul Sarvadi of Entrepreneur Magazine, “Researchers agree that the best way to
hire and keep top talent is to create a company culture where the best employees want to work,
a culture in which people are treated with respect and consideration at all times.”

This means that by taking care of your current employees first, you can accomplish a couple of
different goals. First, you will retain more of your current employees due to their satisfaction
with the company. Second, you will create a good learning atmosphere, which will allow
current employees to grow and be selected for other opportunities within your organization. By
creating a healthy internal atmosphere much of your recruitment can come from within.

Selection Criteria

Choosing the right candidate is an important decision. While some people may have the right
history, they have the wrong attitude. Some may have the right attitude but score poorly on a
compatibility test. When hiring an individual who is new to the company, two criteria are
paramount: attitude and motivation.

When you hire only people with an outstanding attitude and tremendous motivation, you
vastly increase the odds of your organization’s success. Skills can be learned, but a good attitude
and motivation cannot be. You cannot force someone to change his mental make-up, but the
person who already is motivated and has the right attitude will push herself to learn the skills
you require.

Southwest Airlines, renowned for its strong company culture and customer experience, practices
this method. In an article for Fast Company, Peter Carbonara writes that hiring specialist “José
Colmenares is not looking for a fixed set of skills or experiences. He’s searching for something
far more elusive and much more important—the perfect blend of energy, humor, team spirit,
and self-confidence...”

!
Caution References should be adequately checked; wrong selection could cost a company
in terms of lost sales and turn over.

12.3 Motivating and Managing Store Employees

Each person on the planet has their own unique ideas, interests, talents, skills, and motivators.
Even twins who share similar DNA have different opinions, interests, and motivators. So if we
understand this, why do so many organizations have one set of motivators to try and change the
behavior of the masses?

Does anyone else see anything wrong with this picture?

Our society is moving toward more and more customization. Have you noticed the increase in
choices you have every day, from customizing your morning mocha to creating your own web

LOVELY PROFESSIONAL UNIVERSITY 207

Retail Management

Notes page. So why is it that many organizations continue to do things the old way? You might hear
the old adages: “change is hard, we do not have the budget for such customization this year,
(insert your own phrase here), etc.” Motivation is not just paying people more or offering them
more perks and bonuses. Has anyone seen or taken an MBA course on how to motivate your
employees that entails more than reviewing Maslow’s hierarchy of human needs? I believe that
managers in this new economy and beyond need a different set of skills in order to harness the
potential of knowledge workers.

Most managers understand that part of their job is to motivate and engage their employees.
Some of the typical avenues might be: one on one status meetings, periodic outings for lunch or
coffee, or maybe sitting in on project meetings to see how things are going. These three instances
are an example that there is ample opportunity and time to customize an employee’s motivation.
So why does it not happen on a regular basis?

When customizing an employee’s motivation a manager needs to be skilled at understanding

the employee’s four drives; Acquire and Achieve, Bond and Belong, Challenge and
Comprehend, and Defend and Define. Once they understand their employee’s individual four
drives the next step is to discover what the employee is not saying about what motivates and
drives them. Many times when you ask someone, “What Motivates You?” they will probably
give you an answer fairly quickly – but by digging and reflecting a little bit deeper into their
answer you may discover something else entirely. There is more to motivating employees than
just utilizing one model and tools.

The four drive model is a good start but a manager also needs to understand reflective questioning
techniques, asking open ended questions, utilizing gap analysis, and paying attention to body
language, etc. Managers need to customize their motivational methods based on these insights.

For instance, Employee A really likes to be seen as an expert – so provide opportunities for that
person to shine and be recognized as the expert (i.e., lead a brown bag lunch, ask them to help
present at a Senior Leadership meeting about something they know well). Employee B wants to
feel part of a close knit group so create avenues for that to happen (i.e., hold small team lunches
with two or three people, set up small work teams to address some particular issue). Employee
C has the drive to Acquire so the manager must focus that person on what they can do to earn
more (i.e., review the incentive or recognition program with them, work with them on what
they need to do to get a raise). The important part is to understand how each person is motivated
and to tap into that motivation. This isn’t easy.

As I stated in the beginning of this post, every person on the planet is unique. Managers have an
incredible opportunity to develop and grow their employees but it will take adopting and
learning some new skills and a genuine time commitment.

Employees are more than just their paycheck; they are each contributing their time, skills,
knowledge, and talents to an organization. I believe they deserve our time and attention, what
about you?

Motivating Your Retail Sales Staff

Keep a Positive Mindset

Retail is a day to day business. Some days you are HOT and some days your NOT. Don’t buy into
the down economy. This is not a bad economy - the US will experience a 10 trillion dollar
economy this year alone. There is a lot of money to go around! If you are doing the right things
to market your business and staying in touch with your customers on a regular basis they will
return after your slow period of summer vacations, back to school, etc.

208 LOVELY PROFESSIONAL UNIVERSITY

 Unit 12: Store Management

When you keep your positive mindset it will flow onto your sales staff and motivate them to Notes
keep a positive mindset on the sales floor. This will keep your register ringing and your sales
up. When you encourage a positive atmosphere with enthusiasm it is contagious.

Enthusiasm = Positive Emotions

Positive Emotions = Happy Customers

Happy Customers = More Sales and More Profits For You

Offer More Flexible Hours

Ask your staff to let you know in advance of your scheduling what days they will need off.
Discuss your willingness to make it work for them. If business is slow offer some bonus paid
vacation time to your best salespeople. The appreciate and surprise benefit will motivate them
to become more loyal to your organization and they will return the favor with hard work and
more determination to succeed.

Encourage Creativity

When times are slow hold more sales meetings to discuss new promotions, advertising, inventory,
customer service, and future goals. Always get input from your staff at these meetings and have
some fun with a creative brainstorming session that puts every one’s ideas to work.

Be Open, Not Intimidating

Let your staff know that your door is always open to support them and listen to their ideas and
concerns. Create a family atmosphere where people can feel they trust and support one another
through the good times and the bad.

Have Fun

All work, and no play, can make for a dull day. Don’t take your business too seriously. Lighten
up, relax and enjoy some free time when your retail business is not in full swing. If you can’t
stand being around in during the down times - get out of the store and take a short vacation or
attend workshops to build your business. Make sure to plan for a lot of relaxation time to
refocus.

Discover new ways to look deeper into your business and focus on what you are thankful for
and where you plan to go in the future. Upon your return, share your new discoveries with your
sales staff during a fun and relaxed meeting. They will pick up on your motivation and feel more
confident about their own future within your organization.

Remember Birthdays and Anniversaries

Recognize and celebrate with your staff often. Host an annual anniversary party for all the sales
staff that have been with your retail store one year or longer. Make them feel special with
surprise gifts and a very special evening out on the town. Or host an off-site meeting at a
restaurant or a picnic in the park for their entire family.

Snoop Days

Take out your entire staff to shop the competition. If you have a large staff you may want to
break this up during two or three different days and maybe even rent a large van so that you can

LOVELY PROFESSIONAL UNIVERSITY 209

Retail Management

Notes all travel together and have some fun during your adventure. Introduce yourself to the
competition. Let them know why you are shopping their store and offer to send them business
in areas that you do not focus on in your retail store.

Your competitors can often be your best alliances. It will be a good lesson for your staff to learn
and understand this competitive advantage of making friends with the competition. After your
tour, take your staff out for lunch or dinner and discuss all the things your competition is doing
RIGHT. The areas where they excel are the areas to watch out for. By educating yourself and your
sales team to your competitors strengths and weaknesses, you will automatically feel more
confident and motivated to move forward and succeed.

Note The duties of store managers vary according to the type of merchandise sold, the
size of the store, and the number of employees

Self Assessment

Fill in the blanks:

1. The ............................ recruitment process is one of the more critical aspects of running a
successful business.

2. The art of ............................ and selecting good employees is one that takes an organizational
commitment by the company.

3. The ............................ is to develop a talent pool of prospective employees in advance of

actually needing them.

4. The ............................ drive model is a good start but a manager also needs to understand
reflective questioning techniques.

5. Most ............................ understand that part of their job is to motivate and engage their
employees.

12.4 Evaluating Store Employees and Providing Feedback

Employers who routinely review employee performance and conduct regular employee
evaluations reap tremendous benefits:

1. Your employees will know what you expect of them. They will receive feedback, praise,
and criticism of their work, and will have notice of any shortfalls in their performance or
conduct.

2. You can recognize and reward good employees and identify and coach workers who are
having trouble.

3. The communication required to make the evaluation process effective ensures that you
will stay in tune with the needs and concerns of your workforce.

The evaluation process also nips a lot of employment problems in the bud. Performance
evaluations can keep you out of legal trouble by helping you track and document your employees’
problems.

210 LOVELY PROFESSIONAL UNIVERSITY

 Unit 12: Store Management

Create Standards and Goals Notes

Before you can accurately evaluate employee performance, you need to establish a system to
measure that performance. For each employee, you need to come up with performance standards
and goals.

Performance standards: Performance standards describe what you want workers in a particular
job to accomplish and how you want the job done. These standards apply across the board, to
every employee who holds the same position. For example, a standard for a salesperson might
be to make $50,000 in sales per quarter. Make sure your standards are achievable and directly
related to the employee’s job.

Goals: Unlike performance standards, goals should be tailored to each employee; they will
depend on the individual worker’s strengths and weaknesses. For example, a goal for a graphic
artist might be learning a new software program that will make his or her work more efficient;
for an accounting professional, a goal might be to take the exam to become a certified public
accountant. Your workers can help you figure out what reasonable goals should be.

Once you have defined the standards and goals for each position and worker, write them down
and hand them out to your employees. This will let your employees know what you expect and
what they will have to achieve during the year to receive a positive evaluation.

Did u know? Many legal rules place the employer at risk because of employee misconduct.

Keep Track of Employee Performance

Throughout the year, track the performance of each employee. Keep a log for each worker,
either on your computer or on paper. Note memorable incidents or projects involving that
worker, whether good or bad. For example, you might note that a worker was absent without
calling in, worked overtime to complete an important project, or participated in a community
outreach program on behalf of the company.

If an employee does an especially wonderful job on a project or really fouls something up,
consider giving immediate feedback. Orally or in writing, let the employee know that you
noticed and appreciate the extra effort — or that you are concerned about the employee’s
performance. If you choose to give this kind of feedback orally, make a written note of the
conversation for the employee’s personnel file. It is also a good idea to have a policy on progressive
discipline; for some guidance.

Giving the Evaluation

At least once a year, formally evaluate each employee by writing a performance appraisal and
holding a meeting with the employee. To prepare, gather and review all of the documents and
records relating to the employee’s performance, productivity, and behavior. Review your log
and the employee’s personnel file. You might also want to take a look at other company records
relating to the worker, including sales records, call reports, productivity records, time cards, or
budget reports.

Once you have reviewed these documents and gathered your thoughts about the employee’s
work, write the appraisal (or, if you will solicit input from other managers, ask each of them to
complete an evaluation, and then compile them). Although an appraisal can take many forms, it
should include:

LOVELY PROFESSIONAL UNIVERSITY 211

Retail Management

Notes 1. each standard or goal you set for that worker and that job,

2. your conclusion as to whether the employee met the standard or goal, and

3. the reasons that support your conclusion.

When you have finished writing the appraisal, set up a meeting to discuss it with the employee.
Remember, this is likely to be one of the most important meetings you have with each employee
all year, so schedule enough time to discuss each issue thoroughly. At the meeting, let your
worker know what you think he or she did well and which areas could use some improvement.
Using your evaluation as a guide, explain your conclusions about each standard and goal. Listen
carefully to your worker’s comments — and ask the worker to write them down on the evaluation
form. Take notes on the meeting and include those notes on the form.

!
Caution Supervisors, who may not even be within sight, can track employees' performance
by the minute.

Evaluation Tips

Giving evaluations can be difficult. Some workers react to criticism defensively. And, sometimes,
no one understands what merits a positive evaluation. If your workers feel that you take it easy
on some of them while coming down hard on others, resentment is inevitable. Avoid these
problems by following these rules:

1. Be specific: When you set goals and standards for your workers, spell out exactly what
they will have to do to achieve them. For example, don’t say “work harder” or “improve
quality.” Instead, say “increase sales by 20% over last year” or “make no more than three
errors per day in data input.” Similarly, when you evaluate a worker, give specific examples
of what the employee did to achieve — or fall short of — the goal.

2. Give deadlines: If you want to see improvement, give the worker a timeline to turn things
around. If you expect something to be done by a certain date, say so.

3. Be realistic: If you set unrealistic or impossible goals and standards, everyone will be
disheartened — and will have little incentive to do their best if they know they will still
fall short. Don’t make your standards too easy to achieve, but do take into account the
realities of your workplace.

4. Be honest: If you avoid telling a worker about performance problems, the worker won’t
know that he or she needs to improve. Be sure to give the bad news, even if it is
uncomfortable.

5. Be complete: Write your evaluation so that an outsider reading it would be able to

understand exactly what happened and why. Remember, that evaluation just might become
evidence in a lawsuit. If it does, you will want the judge and jury to see why you rated the
employee as you did.

6. Evaluate performance, not personality: Focus on how well (or poorly) the worker does
the job — not on the worker’s personal characteristics or traits. For instance, don’t say the
employee is “angry and emotional.” Instead, focus on the workplace conduct that is the
problem — for example, you can say the employee “has been insubordinate line managers
twice in the past six months. This behavior is unacceptable and must stop.”

7. Listen to your employees: The evaluation process will seem fairer to your workers if they
have an opportunity to express their concerns, too. Ask employees what they enjoy about
their jobs and about working at the company. Also ask about any concerns or problems

212 LOVELY PROFESSIONAL UNIVERSITY

 Unit 12: Store Management

they might have. You’ll gain valuable information, and your employees will feel like real Notes
participants in the process. In some cases, you might even learn something that could
change your evaluation.

Task Discuss about compensating and rewarding store Employees.

Self Assessment

State whether the following statements are true or false:

6. The evaluation process also nips a lot of employment problems in the bud.
7. Performance standards describe what you want workers in a particular job to accomplish
and how you want the job done.

8. Unlike performance standards, mission should be tailored to each employee.

9. The evaluation process will seem fairer to your workers if they have an opportunity to
express their concerns.

12.5 Compensating and Rewarding Store Employees

Many people are motivated by money—at least for a period of time. But the motivational power
of money often wears off as employees simply get used to their current level of compensation.
Many studies have confirmed that as long as employees are paid competitively, money is not
the main factor that leads to job selection or performance.

Ultimately, most people are motivated more by the work they do and the environment in which
they work than by the money they earn. Therefore, the compensation and rewards system you
offer to employees should include both monetary and non-monetary ideas.

Utilizing Monetary Compensation

Growing businesses that struggle with cash flow issues and “making payroll,” will want to
think creatively about how to provide monetary compensation and rewards to their management
and staff. When Ewing Kauffman managed Marion Laboratories, he paid his managers, directors,
and officers salaries slightly below what competitors were offering, but offered profit-sharing,
paid generous bonuses for high performance, and added benefits when the company did well.

Similar techniques are available to you in terms of end-of-year, team-performance, and individual
bonuses, profit-sharing, stock options, phantom stock, and stock warrants. All of these plans can
have their pitfalls, and all must be tailored to your particular situation. Seek expert assistance
from a compensation specialist and a lawyer and keep your plan aligned with your company’s
values.

Remember, when establishing your compensation and reward policies, employees should be
compensated for the work they do at or near competitive salary levels. Also, monetary
compensation above and beyond competitive levels may not be motivating if the recipients
really value other things, like time with their family.

Growing companies that cannot afford to pay the same salaries as an established corporation
may offer their key employees a form of ownership in the company. That way, if the company
is successful, the employees will share in the success.

LOVELY PROFESSIONAL UNIVERSITY 213

Retail Management

Notes Be careful to avoid these pitfalls:

1. Diluting your controlling interest in the venture

2. Rewarding some people while alienating others who are also productive

3. Prompting the wrong behaviors or the wrong values

4. Diminishing a sense of camaraderie and teamwork

5. Increasing your tax burden

6. Bickering over accounting practices for stating profits

7. A one-compensation plan fits all mentality

8. Enabling disgruntled ex-employees to own significant stock

Compensation systems create consequences—whether they are intended or not. You must make
a careful decision about how you are going to pay your employees. Even if you pay straight
salary or hourly wages you’ve still got a monetary compensation system. The right compensation
system can go a long way to building the kind of company you desire.

Did u know? By making rewards contingent on performance, experts agree that an

organization is likely to increase employee motivation.

Providing Rewards

Effective reward systems include all forms of monetary compensation plus a wide variety
of other motivators that are important to people in a work setting. You will be surprised
at the benefits your company will reap when you reward good performance with job
assignments, recognition, growth and learning, additional responsibility, trust, authority,
and autonomy.

The effectiveness of any reward system requires two primary factors. First, the recipient must
perceive the reward as a positive event, and second, the reward needs to encourage the desired
behavior. The desired behavior must be consistent with the strategic goals of the company. It is
your responsibility as the entrepreneur to make sure the reward system is set up to support the
right behaviors.

To make this two-part principle work for you, you’re going to have to understand rewards
from the perspective of your workers, which requires you to spend time with your team and
learn what’s important to them. Monitor the results of your rewards to see if they’re really
having the effect you want them to have. Remember, what you perceive as rewarding may not
be rewarding to your employees. For example, many companies reward salespeople for their
efforts by basing some or all of their compensation on a percentage of the dollar amount of
sales revenues. This approach is a proven winner in most cases, but some companies—notably
those who want to have their sales people act as consultants to their customers—have found
that poorly conceived commissions can push salespeople away from their role as consultants,
making it less likely that the client will turn to the salesperson in the future or that big-ticket
projects will be developed.

Instead of relying solely on monetary rewards, try some of the following approaches to increase
motivation and productivity:

Say thank you: Acknowledge people for their good efforts and superior results. You may be
surprised what sincere acknowledgements will do. Consider both public and private
acknowledgements but keep your employees’ preferences in mind.

214 LOVELY PROFESSIONAL UNIVERSITY

 Unit 12: Store Management

Share the big picture: Employees work smarter and enjoy their work more when they know Notes
how their job fits into the company’s success. Many companies have found success by sharing
their financial performance with employees and showing them how they can help improve it.

Treat people fairly: The world isn’t fair, but most people hope it will be. Treating people fairly
means treating everyone with respect, rewarding successful performance, and critiquing
unsuccessful performance.

Create a learning attitude: You will make mistakes as you lead your organization, but that’s
okay as long as you learn from them. Your team members are going to make mistakes too. Be
a role model by discussing your mistakes. In fact, make the discussion of mistakes a regular part
of your meetings. The point is not to focus on mistakes but on the lessons learned for future
applications.

Consider the following three questions to help you learn from a mistake:

1. What did we do right?

2. What did we do wrong?

3. What can we improve next time?

Using these questions at every staff meeting and at the end of every project will help create an
organizational culture comfortable with the truth, ready to acknowledge success, and open to
learning and improvement.

Celebrate successes: When the company wins a big contract, finishes a large project, or reaches an
important milestone, bring everyone together to celebrate. When individuals or teams do well
or reach milestones, acknowledge their results as well. People want to feel part of a successful
company.

Increase responsibilities: When people perform well, provide them with opportunities for
advancement, increase their responsibilities, allow them more freedom to make decisions, or
give them larger portions of the budget to control. Beware not to punish people by overloading
them with too much work: and don’t assume that everyone will find new challenges rewarding.

Trust and ask for input: When you show others that you trust them, they begin to do things on
their own initiative. They create energy for your organization. If you look over their shoulders
constantly, you’ll get employees who will only do what they are told.

Showing trust means asking for help in making important company decisions. When a major
Detroit car manufacturer changed its management approach, one of the workers said, “I’ve been
working for this company for twenty-seven years, and before the recent changes, not once in
that time did anyone ask me what I thought should be done. For the first time they are now
receiving the benefits of my head, not just my hands.”

Avoid micromanaging: Avoid the tendency to be consistently involved in every decision and
every task. Remember that any given outcome can be achieved a number of ways. Encourage
your associates to experiment by trying different ways to improve a task or solve a problem.
Don’t micromanage! Agree on the goals and let the employees figure out how to meet those
goals.

Rather than spending great energy trying to prove that an employee is wrong and the boss is
right, successful entrepreneurs say, “That way is not working; we should try something else.”
Establishing an experimental, learning attitude can turn early failures into success. An
enthusiastic, “We are making this up as we go along” attitude can keep people looking for ways
to improve the way they get things done.

LOVELY PROFESSIONAL UNIVERSITY 215

Retail Management

Notes Self Assessment

Fill in the blanks:

10. Effective ........................... systems include all forms of monetary compensation plus a wide
variety of other motivators that are important to people in a work setting.

11. The effectiveness of any reward system requires two ........................... factors.

12. ........................... work smarter and enjoy their work more when they know how their job
fits into the company’s success.

13. Avoid the tendency to be ........................... involved in every decision and every task.

14. Many companies have found success by sharing their ........................... performance with
employees and showing them how they can help improve it.
15. ...........................compensation above and beyond competitive levels may not be motivating
if the recipients really value other things, like time with their family.


Case Study A Retail Store Management System

O
ur client, an Ireland based IT Company, wanted a software solution that would
enable retail stores to integrate their business processes such as sales, inventory
management, order processing etc. into a single centralized unit leading to
increased operational efficiency. Based on these requirements, Icreon developed the web
based retail store management system. The software can be installed on an Intranet and
used by retail stores to manage their day-to-day operations. Real-time sales and performance
reports can be generated by the head-office to monitor the performance of all stores.

Business Requirements

Our client required a web based solution that they could market to clients within the retail
industry. Stores were to be provided the facility to create and manage a customer database
including details such as customer information, their order and credit histories etc. The
solution was to provide stores with the ability to manage their inventories send purchase
requests to their distribution centers and manage the stock among their various warehouses.
Provisions to generate reports such as sales reports, customers etc. were required to be
built into the solution. Additionally, the system was to enable stores to create and manage
a database of all their employees. The head-office was to be provided with the facility to
oversee the functioning of all their retail stores thereby enabling them to obtain a holistic
view of their business.

A web based solution to streamline the operations of retail stores.

Benefits
 Provides a means to streamline operations by integrating business processes into a
single unit
 Automates the process of tracking inventory
 Enables easy monitoring of stores by the head office
 Increased efficiency by reducing administration costs and improved performance
Contd....

216 LOVELY PROFESSIONAL UNIVERSITY

 Unit 12: Store Management

Users: The users of the system will be the employees of the company using the application. Notes
Access to the various modules of the application will be based on the roles assigned.
Solution: The solution can be used by retail chains to oversee the functioning of their
various outlets. Each retail outlet can use the solution to manage their operations
independently of the other. However, the head office can oversee the functioning of all
outlets and can run sales and performance reports on an individual outlet or collectively
for all outlets. The solution has been divided into various modules, these include:
Customers: The details of all customers including personal details, address, communication
details, sales person etc., of the retail outlet can be stored. The customer details can be
drilled-down to view the details of all orders placed by a specific customer, credit notes,
invoices, etc.
Stock: Retail outlets can use the solution to manage the details of the stock available. The
system details out the total units of an item in stock, the allocated units and the unallocated
units. Stock categories can be defined and items can be added the categories. Details such
as product name, code, supplier, re-order level, discount, selling price, etc. can be stored
for each item. Multiple items can be grouped together and offered for sale as a package.
The price, discount etc. for the package can be defined. A database of suppliers and tax
rates can also be created and managed.
Sales: In addition to the details of all customers, all the details confirmed and unconfirmed
(i.e. enquires/quotes) orders placed by the customers can be viewed. Each order can be
drilled-down to view the customer details, customer’s payment history for the order,
credit notes (if any) for the order, and the details of the items that were included in the
order. While entering the details of the payments received for an order, the gift vouchers
and credit notes of the customer can be used against the payments.
Dispatch: Dispatch orders can be created and managed through this section. A dispatch
contains multiple dockets each containing the items to be delivered to a specific customer.
The user can create define customer dockets and schedule deliveries. The dispatch order
can be printed and the status of the order can be updated.
Stock Management: The details of the goods received from the distribution center are
displayed. The outlet can define their warehouses and assign the goods received to specific
warehouses. They are also provided with options to handle stock transfers between
warehouses and stores. Gift Vouchers, for specific amounts, can be created and issued to
customers.
Reports: Sales reports can be generated to monitor the performance of the outlet and
individual sales personnel within the outlet.
Employees: The outlet can create and manage a database of all its employees. They can
also manage an HR calendar.
Administration: The administrator can create and manage user accounts, classify them
into groups and grant them access to the various modules of the system. They can also
manage the details of the company and view the users’ activity log within the system.
One of the main features of the solution was the use of use of ribbon menus to consolidate
and display all functions that can be performed in an interface, in a single area, thereby
saving the user the hassle of browsing through various menus to locate the desired function.
Questions:
1. What are the benefits of a web-based solution?
2. What is the utility of a web-based solution to the HR department?

LOVELY PROFESSIONAL UNIVERSITY 217

Retail Management

Notes 12.6 Summary

 Virtually every enterprise finds it necessary to hold ‘stocks’ (or ‘inventory’) of various
items and materials.
 Store managers are responsible for meeting their region’s sales and profit goals each year.
 In order to meet their sales and profit targets, store managers sometimes develop local
marketing and promotional plans to increase business.
 A store manager’s duties almost always include overseeing the various departments in
the store, including inventory management and ordering.
 A store manager’s duties also include overseeing the interviewing, selection and hiring of
all new employees.
 The store manager is responsible for ensuring that all employee paperwork or hours are
approved so that people can get paid.
 The employee recruitment process is one of the more critical aspects of running a successful
business.
 The art of recruiting and selecting good employees is one that takes an organizational
commitment by the company.

 Performance standards describe what you want workers in a particular job to accomplish
and how you want the job done.

 Effective reward systems include all forms of monetary compensation plus a wide variety
of other motivators that are important to people in a work setting.

12.7 Keywords

Job Analysis: A structured and defined process of gathering, analyzing, and synthesizing
information about a job to identify and describe the duties, tasks, knowledge, skills, abilities
and other detailed characteristics necessary to perform the job.

Job Description: A general statement of job duties and responsibilities.

Job Posting: Document used to recruit candidates for a vacant position; e.g., job duties and
qualifications, candidate screening methods and the terms and conditions of employment.

Job Seeker: An individual who has indicated an interest in employment by completing a

preliminary profile or by submitting an application to the employer.

Performance Standards: Performance standards describe what you want workers in a particular
job to accomplish and how you want the job done.

Recruitment Timeline: Schedule outlining the recruitment steps and timeline required to complete
each phase of the recruitment process.

Retail stores are businesses that depend on the availability of inventory or merchandise. In fact
it may be said that the inventory is the heart of a retail store.

12.8 Review Questions

1. Describe about Store Management Responsibilities.

2. Explain about Recruiting and Selecting Employees.

3. Discuss about Recruiting and Selecting Employees.

218 LOVELY PROFESSIONAL UNIVERSITY

 Unit 12: Store Management

4. Describe about motivating and managing store Employees. Notes

5. Explain about evaluating store Employees and providing feedback.

6. Explain about compensating and rewarding store Employees.

7. How you can track Employees Performance? Explain.

8. Discuss about sales and Profitability in Retail Stores Management.

9. Discuss about Store operations.

10. Describe about Customer Service in Stores Management.

Answers: Self Assessment

1. Employee

2. Recruiting

3. Idea

4. Four

5. Managers

6. True

7. True

8. False

9. True

10. Reward

11. Primary

12. Employee

13. Consistently

14. Financial
15. Monetary

12.9 Further Readings

Books Bajaj, Tuli and Srivastava, Retail Management, New Delhi: Oxford University Press
Gibson G. Vedamani, Retail Management, Mumbai: Jaico Publishing House

Lewison, D. M. and Delozier, W. M., Retailing, Columbus: Merrill Publishing Co.

Online links http://www.knowthis.com/principles-of-marketing-tutorials/retailing/what-

is-retailing/

http://www.thehindubusinessline.in/praxis/pr0301/03010380.pdf

http://www.mbaknol.com/retail-management/functions-of-retailing/

LOVELY PROFESSIONAL UNIVERSITY 219

Retail Management

Notes http://www.cambridgecollege.co.uk/coursesattachments/stkmod1.pdf

http://highered.mcgraw-hill.com/sites/dl/free/0073381470/601812/
Noe3e_Chapter_01.pdf

http://www.leadersbeacon.com/managing-and-motivating-employees-in-the-
new-economy/

http://www.nolo.com/legal-encyclopedia/employee-evaluations-how-to-
conduct-29547.html

220 LOVELY PROFESSIONAL UNIVERSITY