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Organization structure
A formal structure where the various activities to be performed by the specific employees
are identified and delegated, indicating their authority and responsibility. Organization
structure is the formal system of task and reporting relationships that controls,
coordinates, and motivates employees so that they cooperate to achieve an organization's
goals.
4) Classifying jobs
Here jobs are classified by categorizing them into functional, product, geographic
or combination.
Organizational design
Focus on Specialization
The tasks should be assigned and allocated to the employees on the basis of the expertise
that they possess. This will help in improving the quality of the work as well as increase
the job satisfaction amongst the employees.
For eg. An employee who is an expert in promotions and marketing should be assigned
with the responsibility of promoting the retail store.
Independent Retailer
• An independent retailer owns one unit.
Advantages
• Flexibility
• Independence
• Consistency
Disadvantages
• Less bargaining power
• No economy of scale
• Less technology
Advantages
• Bargaining power
• Cost efficiencies
• Use of technology
Disadvantages
• Less flexibility
• High investment
• Limited independence
Franchising
• A contractual arrangement between the franchisor and franchisee which allows
the franchisee to conduct business under an establish name and according to the
given pattern of business.
Advantages
• Brand name
Disadvantages
• Over saturation may occur if too many franchisee are located in the same area.
• They may be locked into contracts
Leased Department
• They are also termed as shop in shops. When a section in a retail store is leased
or rented to the outside party, it is termed as a leased department.
• It is used by the retailers to broaden their offerings into product category.
• Reduction in cost
• Enhanced image
• Renewal of lease
Department Stores
• It divides the entire organization into four main parts:-
1) Merchandising
2) Publicity
3) Store Management
4) Accounting and Control.
Chain Retailers
• Many functional divisions
• Merchandising, sales promotions, distribution, real estate, personnel, IT etc.
• Centralization of authority.
Benefits of Centralization
1) Reduction in cost – Overhead costs are reduced because lesser managers are
required to make decisions.
2) Improves efficiency – With the help of standard policies and guidelines.
3) Allows experts to take decision – The best people makes decision
Limitations
The major limitation is that the person sitting in the corporate office does not know
about the conditions in the local market and hence he can not take any relevant steps
to fight the local competitors.
On the other hand, a large retail firm having a lot of retail chains faces this problem as
both the store and the merchandise department are dependent on each other for fulfilling
the customer demands and requirement.
Approaches to coordinate
1) Increasing the contact with the customer.
2) Regular visits to the store.
3) Involving the manager in coordinating the buying and selling process.
• These factors make the hiring , staffing, and supervision of the employees a
complex process.
• Because of all these difficulties, the retailers should consider points such as –
1) Recruitment and selection procedure must generate sufficient number of
applicants.
2) The training programs must be short and should focus on developing the skills of
employees.
3) Compensation must be perceived by the employees as “FAIR.”
5) Full and part time workers should not have any conflicts.
RECRUITMENT
• Recruitment is the process of searching the candidates for employment and
stimulating them to apply for jobs in the organization.
• The purpose on Recruitment process is to make the job applicants available for
the specific jobs.
Sources of Recruitment
External sources
1) Educational Institutions
2) Competition
3) Advertisements
4) Employment agency
5) Unsolicited applicants
Internal Sources
1) Current and former employees
2) Employee recommendations
SELECTION
• Selection involves the series of steps by which the candidates are screened for
choosing the most suitable persons for vacant posts.
• The basic purpose of selection process is to choose the right candidate to fill the
various positions in the organization.
Process Of Selection
• The application blank
• Interview
• Testing
• Reference check
• Physical exam
• Job offer
TRAINING
Training is an important aspect of human resource management. Typically , in retail,
training is needed at the following times-
COMPENSATION
Methods of compensation
1) Straight salary Method
Advantages
Employee security, Known expenses
Disadvantages
Less Motivation
Disadvantages
The risk of low earnings
It means to combine the attributes of both salary and commission plans. The
employee gets a fixed salary and a commission on achievements of the targets.
SUPERVISING
Supervision is the manner of providing a job environment that encourages the employee
accomplishment. The goals are to oversee personnel, achieve good performance,
maintain employee morale and motivation, control expenses, and communicate policies.
2) Management believes that the employees can be self managers and assigned
authority.
MOTIVATION
• In retailing, Motivation is very important because of the long working hours and
the immense pressure on performance.
• The research on human behaviour has shown that most of the people at work are
motivated by the following factors-
- The organization culture
- The rewards
- The monetary benefits
- Growth and job enrichment
PERFORMANCE EVALUATION
• The basis of the performance evaluation is the goals and targets that have been set
for each individual.
• Through targets, the outstanding as well as the poor performances can be easily
identified.
• In a retail organization, The goal set for a merchandiser will be different from the
goal of a sales person.
Employee Retention
• Employee Retention involves taking measures to encourage employees to remain
in the organization for the maximum period of time.