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Why does HRM give a sustainable competitive advantage?
- Labor costs are a high for retailers
- Employees shape customer experiences
- Difficult for competition to duplicate
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Short term objectives of HRM
Increasing employee productivity (sales / # of employees)
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Long term objectives of HRM
- Employee attitude -> customer satisfaction & loyalty -> long-term performance
- Increasing employee satisfaction reduces turnover
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Factors leading to high employee turnover
- Long hours
- Peak sales periods
- Emphasis on cost control
- Unskilled employees
- Part-time employees
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Downward performance spiral
- When profits are low and costs are high, retailers start implementing layoffs or salary freezes, which lead to employees with decreased motivation and poor customer service.
- VISCIOUS CYCLE
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Issues in HRM: expense control
- Retailers often hire people with little or no experience
- Investing in hiring more staff may result in a significant increase in sales
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Issues in HRM: part-time exmployees
- To minimize costs, retailers should complement FT employees with PT
- PT employees are less expensive
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Issues in HRM: utilizing diverse employee groups
- Recruit mature, minority, and handicapped workers
- Younger & older employees must be managed differently
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Issues in HRM: international HR
- Differences in work values, economic systems, and labor laws = different HR practices
- A country's legal/political system often dictates the HRM practices
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Organizational structure
- Identifies the activities to be performed by specific employees
- Determines the lines of authority and responsibility in the firm
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Disdvantages of centralization
- Difficult to adapt to local market conditions
- May have problems responding to local competition and labor markets
- Personnel policies make it hard for local managers to pay competitive wages
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Advantages of decentralization
- Reduce costs (fewer managers = lower overhead)
- Coordinated buying achieves lower prices from suppliers
- Opportunity to have the best people make decisions for the entire corporation
- Increases efficiency
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Employee talent war
- Retailers compete for effective employees and managers
- Develop programs to attract, develop, motivate, and keep talent
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Attracting talent
- Employment marketing (branding) programs that attract the "best and brightest" potential employees
- ex: Starbucks - "Love What You Do"
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Developing talent: selective hiring
Recruit the "right" people
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Developing talent: training
- Increasing investments in management training programs and developing leaders
- Increasing attention to college grads
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Motivating talent
- Policies & supervision: indicate what employees should do (enforced by managers)
- Incentives (commission, bonus, stock options)
- Organization culture: the set of values, traditions, and customs of a firm that guides employee behavior (enforced by social pressure)
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Use of incentives
- Advantages: strong motivating force that aligns employee company goals
- Disadvantages: employees only focus on sales and have less commitment to the retailer
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Keeping talent
- Managers empower employees by sharing their power and decision-making authority
- Create partnering relationships with employees by reducing status differences and promoting from within
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Intrinsic motivation
Motivated by own self-worth
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Extrinsiic motivation
Outward motivation from incentives and benefits
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Legal issues in HRM
- (1) Equal employment opportunity (discrimination)
- (2) Compensation (minimum wage, overtime)
- (3) Labor relations (unions)
- (4) Employee safety and health
- (5) Sexual harassment
- (6) Employee privacy
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