Chapter 17

Managing the Store

McGraw-Hill/Irwin PPT 17-1 Levy/Weitz: Retailing Management, 5/e

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

Store Managers Run a Business

This is your business. Do your own thing. Dont listen to us in Seattle, listen to your customers. We give you permission to take care of your customers. James Nordstrom, the CEO of Nordstroms
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Strategic Importance of Store Management

Opportunity to Build Strategic Advantage
Difficult to Have Unique, Compelling Merchandise Customer Loyalty Often Based on Customer Service

Difficulty of Store Managers Job

Managing Diverse Set of Unskilled People Increasing Empowerment and Responsibility to Tailor Merchandise and Presentation to Local Community
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Store Managers Responsibilities

Varies Dramatically By Type of Retailers
Specialty Store vs. Department Store

Entrepreneur
P & L Responsibility Manage People

Responsible for Two Critical Assets

People Space
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Sales/Employees Sales/Square Foot

Three Levers for Increasing Employee Productivity

Ability
Selection Training

Effort
Motivation Goals Incentives Rewards

Role Clarity

Job Definition Policies, Rules Org Culture

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Steps in Employment Management Process

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Recruiting and Selecting Employees

Undertake Job Analysis Prepare Job Description Find Potential Applicants

Select Employees
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Screen Candidates

Motivating and Managing Employees

Setting Goals

Providing Incentives to Achieve Goals

Measuring Performance

Providing Feedback

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Leadership
Process by which one person attempts to influence another to accomplish some goal or goals

Leader Behaviors Task-Oriented Group Maintenance

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Types of Leaders Autocratic Democratic Transformational

Which Type of Leader Is the Most Effective?

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Evaluating and Providing Feedback to Employees

Evaluation - Who, when, how often? Feedback - Performance outcome vs. process

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Compensating and Rewarding Employees

Extrinsic vs. Intrinsic Rewards Compensation - Type Straight salary Straight commission Salary plus commission Quota bonus - Setting quotas - Individual vs. group incentives
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Designing a Compensation Plan

Determine Appropriate Compensation

Decide on Percent of Incentives

Use Average Sales Per Employee to Set Incentive Rate Sales/Person - $150 5.33% Commission $4/Hour Salary $4 = 5.33% x 150 = $12

$12/Hour

1/3 Salary 2/3 Incentive

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Sexual Harassment
Sexual harassment is unwelcomed sexual advances, requests for sexual favors, and other verbal and physical contact. showing obscene photographs making lewd comments and gestures staring in a sexual manner making work environment hostile

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Controlling Costs
Labor Energy Heating Lighting Costs Controlled by Store Managers Inventory Shrinkage

Maintenance

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Calculating Shrinkage
Accounting Record Actual Inventory Sales

$1,500,000 - $1,236,00 $4,225,000

6.7%

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Preventing Shoplifting
Store design Employee training Good customer service - Security measures - Dye capsules, TV cameras
- EAS

Prosecution
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Reducing Employee Theft

Trusting, supportive work atmosphere Employee screening
- Honesty, drug testing

Security personnel - mystery shoppers Policies and procedures Employee theft is an HR problem.

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