CALDOR TRAINING

Employee and Management Training at Caldor, Inc. Diane M. Olsen University of Tampa 2013

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CALDOR, Inc. Organization Description Caldor, Inc. operates a chain of 150 discount department stores located in ten states throughout the northeastern United States. The corporate headquarters and buying offices are located in Norwalk, Connecticut and there are two merchandise distribution centers located in New York and New Jersey. Each store is between 90,000 and 140,000 square feet large and carries a wide variety of merchandise including both soft lines and hard goods. The company has approximately 27,000 employees. Approximately 500 employees work at the corporate headquarters and include the senior management team, human resources, marketing and advertising, and the buying staff. An additional 300 employees work at the two distribution facilities. The balance of the employees are store sales associates and various levels of store managers. The 150 stores are divided into eight regions that are supervised by eight regional managers. Caldors training department is located at the corporate headquarters and is part of the Human Resource department. Corporate training currently includes: 1) New Employee Orientation which is mostly geared toward company policies, benefits, and government compliance; 2) Management Training which is conducted for sales associates who have been identified by their supervisors as candidates to be promoted to department managers; 3) Government Compliance training such as safety and sexual harassment training. All training with the exception of a few online compliance classes are conducted face-to-face at the corporate offices. The remainder of training, which encompasses almost all job, product, and customer service training, is conducted at the store level or occasionally at the regional level.

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With ever increasing competition from brick-and-mortar and internet retailers, the company needs to aggressively pursue a strategy of offering excellent products and superior customer service to a consumer who is becoming more and more savvy in their purchasing decisions. Online shopping and the sluggish economy have also made the average consumer much more price sensitive. Not wanting to try to compete head-to-head on price with the large national discount chains Caldor has elected instead to position themselves as the neighborhood store offering one stop shopping and a great customer experience. To facilitate this strategy the company installed a new Point of Sale (POS) system in all stores. In addition to handling sales and inventory functions the new system contains detailed product and procedural information and is designed to aid sales associates in assisting customers. The corporate buying staff has the ability to update the system for their department thus assuring the most up-to-date information is available to stores. Performance Problems Despite the new customer service strategy and the installation of the new POS system sales are running behind the same period last year and customer complaints have risen by 33% in the past six months. Analysis of the data including sales reports, customer service surveys and complaints, and interviews with company management and employees revealed the following performance problems: 1. Most of sales associates customer service and product training occurs at the store level. Much of it is informal on-the-job training. The type and quality of training varies from store to store. No current means of evaluating this training exists other than what can be inferred from sales numbers and employee turnover rates.

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2. There is a communication disconnect between the buying office and front line customer interactions. Buyers complain of the lack of product knowledge among the store staff in their respective departments. Store associates complain that the buyers are out of touch with the way buyers decisions affect sales and operations at the store level. 3. The Management Training Program is currently ineffective. Only 25% of participants become successful managers and remain with the company for more than 24 months after completing the training. 4. The training budget is divided among the stores, regions, and corporate office with no comprehensive budgeting and reporting strategy in place. Training activities are currently reported only as business costs with no calculated return on investment. 5. Approximately 60% of the training budget is spent on travel. Performance Goals 1. Reduce customer complaints by 50% over the next year. 2. Create centralized retail and product training for store level employees to ensure a consistent customer service experience. 3. Increase communication between buying staff and store level associates. 4. Redesign management training program recruitment and curriculum to achieve a 65-75% successful completion rate. 5. Develop a methodology for reporting Return On Investment (ROI) of training. 6. Reduce training travel costs to account for no more than 25% of training budget.

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Current Trends The following trends, if implemented by Caldor, could aid the organization in reaching its performance goals: Trend 1 - Learning Management Systems (LMS) 1. Traditional Learning Management Systems are utilized primarily as an administrative tool to track student participation and, in many cases, to house educational content. 2. The future of LMS is trending toward a model of becoming a Personal Learning Environment that will enable learners to learn continuously (Gautam, 2012). 3. With increased analytic capabilities an LMS can become more than just administrative; it can be utilized as a talent management tool (Gautam, 2010). 4. LMS systems are becoming more cloud based making them more cost effective for small and mid-sized companies (Gautam, 2012). A state-of-the-art LMS system will serve several roles in transforming the companys personnel development strategies. At the most basic level it will allow the training department to deliver course content to employees throughout the company. More importantly, it will allow employees to create a personal learning environment where they can customize their training. While some content will be relevant to all employees, training can also be tailored to different departments and specialties within the organization. This will allow employees to receive the training that is most relevant to their current position at the optimal time for that training The LMS can also serve the company as a talent management tool. Currently candidates for the Management Training Program are selected almost solely on the recommendation of their supervisor. They are then sent through an extensive two-month training course, parts of which serves to weed out those who are not suited to be managers. An LMS with a personal learning

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environment for each employee could improve the selection and retention process dramatically. First the company could offer entry-level management courses to all associates. The training department would then be able to monitor who elects to take the courses and their results in the online courses. This process would screen for both motivation and aptitude. A cloud-based LMS system would enable employees to utilize the system on smartphones and tablets, facilitating learning at their own pace. It would also give employees easy access to their training and performance goals and records.

Trend 2 - E-Learning 1. According to Bersin & Associates (Howard, 2008), high-growth companies utilize technology and e-learning strategies significantly more than other companies in their industry. E-learning strategies allow high growth companies to ramp up operations quickly to facilitate continued growth. 2. E-learning is more than simply converting existing instruction into online courses. Elearning involves developing instruction by selecting and utilizing the most appropriate and effective media and technologies for specific learning outcomes. With development of web 2.0 technologies, and web 3.0 on the horizon, e-learning has moved from being a method of content delivery to a more collaborative, interactive, and customizable learning experience (Wang, 2011). 3. The rapid advancement of education technologies allows instruction to be developed, deployed and revised more quickly and at a much larger scale than traditional instruction. E-learning also allows for easier access to training and more individualization of instruction.

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4. With travel expenses accounting for approximately 40% of traditional training, elearning can create a more effective use of an organizations training dollars (Howard, 2008). By embracing an e-learning strategy, the company can help to ensure a more consistent training experience throughout its 150 stores. Standardizing sales associate training should ensure a more consistent customer experience thereby reducing customer complaints. This strategy will also allow for future company growth. As the chain grows and stores become more geographically dispersed, technology based training seems the best way to ensure consistent training experiences throughout the organization. Because e-learning can be modular and easily customized, product training can be tailored for each individual department (e.g., hardware, childrens ware). Retail is a dynamic business with rapidly changing product lines. The ability to rapidly develop and deploy training as new products and programs are introduced will enable store associates to stay current and upto-date. Finally, an e-learning strategy will save the company money in terms of travel time and expense. While the development of e-learning training may have a higher upfront cost, in the long run they should be more cost effective than the traditional face-to-face training.

Trend 3 Social Media 1. While the LMS is focused on the needs of the organization, social media tends to be focused on the needs of the individual (Sparta, 2012). 2. Social media cannot be effective in an organization simply by putting the technology in place. Training departments and managers need to think about and plan for the types of interactions and communication they want to foster in the organization.

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They also need to identify how they will introduce, train for, and encourage participation in social media. 3. As of 2011 only 16% of companies utilized social media frequently to engage employees and foster productivity, while 23% do so occasionally. 61% reported using social media rarely or never. One issue may be the companys desire to tightly control internal communication. Less than 25% of employees surveyed felt encouraged to participate in or had full access to social media tools (IABC Research Foundation, 2011). 4. The unregulated nature of this type of communications will require that companies develop a clear set of guidelines and policies governing the use of social media tools (Sparta, 2012). The current culture at Caldor seems ideal for the introduction of social media as a tool to improve communication throughout the organization. Much of the current learning and training taking place tends to be informal learning around the water cooler. Most associates and managers report getting the most useful help and information from sharing with their peers. Social media will allow these smaller pockets of informal learning to spread more broadly throughout the organization. A social media strategy can be of great positive impact in bridging the perceived communication gap between the stores and the buying team. The training department will need to enlist the buyers and managers in planning and developing groups and topics that will engage participation and promote shared company goals.

Trend 4 Return on Investment

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1. Historically many organizations viewed training only as an expense or as an investment with only intangible benefits that could not be accurately measured. Now organizations are demanding that training departments systematically analyze, calculate, and report the costs and benefits to the companys bottom line (Phillips & Phillips, 2012). 2. Several models have been developed to measure and calculate the Return on Investment (ROI) of training. Most models used by training professionals generate a ratio of costs to benefits while others generate a number reflecting the difference between costs and benefits. The time value of money should also be taken into consideration when calculating ROI (Murray & Efendioglu, 2007). 3. The ROI methodology developed by Phillips and Phillips (2012) advocates a detailed system of collecting and analyzing data at various levels of development and deployment of training. This methodology then isolates the effects of training and monetizes the data to generate a ROI figure. 4. Learning objectives need to be developed at higher levels and in line with company goals. Focus needs to be placed on learners transfer of knowledge to the workplace (Bird, 2008). Centralizing the planning and delivery of training will give the training department more control over training throughout the organization and at the same time allow them to be more accountable for evaluation and reporting on the results of the investment in training. Adopting a reporting model such as the Phillips and Phillips (2012) model will afford the training department the ability to report the effects of training in a monetized cost/benefit format that mirrors the financial planning and reporting of the rest of the company. Not only will this

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process hold the training department accountable, it will also aid them in aligning future training goals and budgets with overall company goals. Conclusion Caldor has enjoyed a 27 year history of business growth, excellence in customer service, and a commitment to their employees. In order to continue that growth trend and to address the needs of their customers and associates it is vital that the company commit to new strategies for training and personnel management. The organizations performance goals can be met by implementing several new training strategies: 1) Installing a state of the art LMS system to facilitate individualized training and talent management; 2) Moving away from decentralized face-to-face training and towards a more centralized e-learning strategy which will allow both consistency and individualization; 3) Initiate and promote the use of internal social media tools to facilitate communication and innovation throughout the organization; 4) Implement an ROI reporting strategy which will result in both accountability and better planning of training. By embracing these current trends and technologies for training Caldor, Inc. can maximize the potential of their 27,000+ employees and guarantee the continued success and growth of the company.

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References Bersin, J. (2012, October 8). LMS 2013: The $1.9 Billion Market for Learning Managment Systems. Retrieved from www.bersin.com: http://www.bersin.com/blog/post/LMS-2013The-2419-Billion-Market-for-Learning-Management-Systems.aspx Bird, H. (2008). Articulating the value of training: Linking training programs to organizational goals. Development and Learning in Organizations, 22 (2), 20-23. Gautam, A. (2012, Sept 18). 4 Key emerging trends in LMS. Retrieved from The Upside Learning Blog. http://www.upsidelearning.com/blog/index.php/2012/09/18/4-keyemerging-trends-in-lms/ Gautam, A. (2010, June 16). LMS: A quick SWOT Analysis. Retrieved April 30, 2013, from The Upside Learning Blog. http://www.upsidelearning.com/blog/index.php/2010/06/16/lmsa-quick-swot-analysis/ Howard, C. (2008). The Business Benefits of e-Learning in High-Growth Companies. Oakland: Bersin & Associates. IABC Research Foundation. (2011). IABC reasearch foundation and buck consultatns employee engagement survey. San Francisco: Buck Consultants. Murray, L. W., & Efendioglu, A. (2007). Valuing the investment in organizational training. Industrial and Commercial Training, 38 (7), 372-379. Phillips, P. P., & Phillips, J. (2012). An Introduction to return on investment. In R. Reiser, & A. R. Dempsey (Eds.), Trends and Issues in Instructional Design and Technology (6th ed., pp. 105-115). Washington, DC: American Psychological Assocation.

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Sparta, P. (2012). Getting the most out of social learning: Utilizing social media in the workplace. Development and Learning in Organizations, 26 (2), 16-18. Wang, M. (2011). Integrating organizational, social, and individual perspectives in web 2.0based workplace e-learning. Information Systems Frontiers, 13 (2), 191-205.