People management in Big Retail

The retail activity is labor intensive. Personnel expenses along with the occupation costs accounts for most of the total expenditure for any retailer.

The important activities, like any other business organization, involve: hire, train, develop, evaluate and align compensation with the performance of the business.

The aggravating factor is that within the store, the turnover rate is 50% or more. That is, the entire workforce is completely renewed every six months. This makes the activities of hiring and training difficult to perform.

The reasons for this high turnover lie on both retailer’s error as well as the non-adaptation of the employee. The retailer's error involves, for example, the hiring of employees living far from the workplace or that of a very young age. Lack of employee adaptation involves the difficulty (or refuse) to work on weekends, the hectic pace of work or the proximity to the public. Within the store, work is little intellectual, very procedural and repetitive, which can make it unattractive.
As turnover is something inherent to the sector, it is very important the design of procedures and short and simple routines, that are easily reproducible, and preferably automated. Some non-core activities, such as cleaning, security and maintenance, are subject of outsourcing.

In a store, we could identify the following main activities that in all them human intervention is required: goods receiving, shelves replenishment (gondolas or racks), production / processing (butcher, bakery, ready meals), customer service, closing of sale (checkout), cleaning, security and maintenance.

In goods receiving, checking the order with the supplier’s invoice is already done automatically, both in terms of price as well as taxes and amounts. The use of bar code readers in receiving goods makes the quantity entries most efficient.

In the production / processing of products, the use of appropriate equipment and utensils has made the process simpler and with fewer people. A further step would be the creation of production plants (i.e..: butchery, bakery and confectionery) something common both in Europe and the USA.

The closing of the sale (checking out) with the use of bar code readers has made the process less painful.

The areas where technology still needs to be more present are on customer service and on shelves replenishment. In customer service, the installation of consultation terminals containing the store map and the location products, as well as an intercom or the possibility of sending a message to someone, including the supplier’s customer service area would represent a great improvement. To make shelves replenishment more efficient will demand the installation of sensors (beacons) detecting the lack of product. Such experiments are already under test and should be disseminated soon as their cost decrease.

1.    Development
A healthy company produces leaders. Even in spite of the high turnover of the sector, there will remain professionals who want to develop a career in the organization. The positive aspect is that given the retail dynamism, this professional will have opportunities.

Working is the best training there is. Therefore, large retail organizations create opportunities for development of professionals by promoting job rotation and promotion. Such professionals are subjected to a set of training, developed specifically for the organization, involving topics such as negotiation, personnel management, financial mathematics and analysis of results.
In addition to internal development, there is also the trainee program (new graduates), which seeks to develop leaders in a shorter space of time and of better quality.
The combination of internal development personnel with external hire is desirable and strengthens the organization.

2.    Evaluate
The appraisal of personnel is important and practiced continuously in retail. The main criterion is linked to the results deliverance. However, other criteria such as behavior and relationship are also taken into account.
At the management level, a performance evaluation promoted by the immediate superior is conducted at least annually. The purpose of this evaluation is to create an opportunity for a frank discussion avoiding surprises. The evaluation produces goals to be achieved in the following period.

3.    Aligning Remuneration to Business Performance
Increasingly, retail organizations use variable compensation as an alignment tool of individual success with the success of the business.
The most common bonus criterion takes into account individual performance and business performance as a whole. Individual performance is largely linked to a "hard" component, the financial result (actual compared to budget), and lesser linked to behavior (discretionary component). The individual result is paid only if the organization as a whole achieves its goal.

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