Description
Retailing displayed its significance in India‟s market with tremendous contribution to the Indian economy. The development in the organized retail sector has showed the perfect platform to the Indian companies to enter into this sector. The entry of global players in retailing business has created huge challenges to the Indian companies.
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HUMAN RESOURCE MANAGEMENT PRACTICES IN ORGANIZED
RETAILING - A STUDY OF SELECT RETAILERS
DR D. MAHESWARA REDDY*; SURESH CHANDRA CH**
*Assistant Professor, I T M Business School,
Warangal.
**UGC JRF (Ph.D) Research Scholar, Kakatiya University,
Warangal.
ABSTRACT
Retailing displayed its significance in India?s market with tremendous contribution to the Indian
economy. The development in the organized retail sector has showed the perfect platform to the
Indian companies to enter into this sector. The entry of global players in retailing business has
created huge challenges to the Indian companies. The organized retailer,s in order to respond to
the competition, started to realize the need for efficient man power. The HR practices and the
employee satisfaction became the primary concern for the organized retailers. The present study
will provide a clear picture on the issues related to the HR practices and its impact on employees.
The study will also focus on the various problems and challenges faced by the HR department in
procuring and retaining the employees of organized retailing companies.
KEYWORDS: HRM, special tellers, GDP, attrition.
___________________________________________________________________________
1.0). INTRODUCTION
Human resource management (HRM) practices are most effective when matched with strategic
goals of organizations. HRM?s role in the company?s success is growing rapidly with the growth
in many sectors in the present globalized era. HRM is a vital function in organizations and
becoming more important than ever. The HRM practices are crucial in designing the structure
for man power, staffing, performance appraisal, compensation, and training and development.
HRM practices are a primary means for defining, communicating and rewarding desired role
behaviours and desired role behaviours are a function of organizational characteristics.
Innovative HRM practices can play a crucial role in changing the attitude of the companies and
its employees in order to facilitate the entry and growth in the markets. The HRM practices in
service sector especially in the area of retailing have found significant importance in the present
scenario. The retailing is one of the service sectors where the need of qualitative human
resources is highly expected.
Retailing is an important element of business around the globe. Retailing consists of all
activities that result in the offering for sale of merchandise to consumers for their own use.
Retailing is the final step in bringing goods to consumer. They sell both goods and services.
Retailing is the process of “Sale of goods or merchandise, from a fixed location such as a
departmental store or kiosk, in small or individual lots for direct consumption by the purchaser.
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Retailing may include services, such as product delivery. Buyers may be individuals? or
businesses; a retailer buys goods or products in large quantities from manufacturers or importers,
either directly or through a wholesaler, and then sells in smaller quantities or lots to the end –
users or consumers. Retailers are the end links of the supply chain as an important part of
manufacturing/marketer overall distribution strategy.
1.1). OVERVIEW OF INDIAN RETAIL INDUSTRY
Retailing is one of the pillars of economy because of its 13% contribution to GDP.
Though the Indian retail sector is dominated by unorganized sector with 90% share, it is
providing immense opportunities for large scale retailers to set-up their operations. The
organized retailing sector is steadily increasing with the entry and operations of departmental
stores, hyper markets, supermarkets and specialty stores which are replacing the traditional
formats dramatically altering the retailing landscape in India.
India is the third most attractive retail market for global retailers among the 30 largest
emerging markets, according to US consulting group AT Kearney?s report published in June,
2010. The total retail sales in India will grow from US $ 395.96 billion in 2011 to US $ 786.12
billion by 2015, according to the BMI India Retail report from the third quarter of 2011. Robust
economic growth, high disposable income with the expansion in middle and upper class
consumer because, the report identifies potential in India?s tier-II and tier-III cities as well. The
greater availability of personal credit and a growing vehicle population providing improved
mobility also contribute to a trend towards annual retail sales growth of 12.2 percent. An
increasing number of people in India are turning to the services sector for employment due to the
relative low compensation offered by the traditional agriculture and manufacturing sectors. The
organized retail market is growing at 35 percent annually while growth of unorganized retail
sector is pegged at 6 percent.
Though the retailing sector is growing rapidly, some of the constrains are restricting its
growth. Apart from the regulations and approval for Foreign Direct Investments (FDIs), the
sector is strongly lacking the effective human resource practices. The problems of lack of
trained work force, low skill level for retailing management, lack of development programmes to
the existing human resources and problems in retaining qualitative manpower are some of the
obstacles creating huge challenges to the Indian retail sector. At present, to overcome some of
the challenges faced by retail, the companies are investing heavily in training and recruitment of
qualitative work force.
1.2). STATEMENT OF THE PROBLEM
In the present competitive scenario, the role of retailing is increasing rapidly with the
entry of global players. Many Indian companies strongly keeping their aim on entering in retail
industry. With increasing globalization, firms are entering a dynamic world of international
business that is marked by liberalization of economic policies in a large number of emerging
economies like India. To face the challenge of increasing competition that has resulted from
liberalization, Indian organizations have initiated adoption of innovative human resource
management practices both critically and constructively to foster creativity and innovation
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among employees. The huge opportunities in organized retailing encouraging the companies to
enter in retail industry. The last 2 decades has witnessed the tremendous potential for organized
retailing. The growing needs of retail industry can be matched up with the aggressive human
resource practices. The present retail organizations which are performing organized retailing are
facing huge challenges in procuring and retaining and maintaining qualitative human resources.
Hence, an attempt was made to analyze the various human resource practices followed in select
retailers in organized retailing.
1.3). RESEARCH OBJECTIVES
The major objective of this study is to study the human resource management practices
pursued in the organized retailing. The study covers the retailer wise employee satisfaction on
the various HRM practices employed in the retail outlets. Further, the study is also aimed at
studying the various problems and challenges ahead for HR managers in the implementation of
HRM practices in selected organized retail outlets.
1.4). RESEARCH METHODOLOGY
The present research paper is an empirical one. The survey for the present research is
conducted through primary data with the help of a questionnaire surveyed to employees of select
organized retailers. The sample taken for the study consisted of 100 which include daily wage
workers and employees from the select retail outlets situated in Warangal District.
1.5). ANALYSIS AND DISCUSSION
The research survey is conducted in order to analyze the various Human Resource
Management (HRM) practices adopted in the select organized retailers. For the purpose of
studying the HR practices implemented and to evaluate, the following organized retailers are
selected.
A). ORGANIZED RETAILERS SELECTED FOR THE STUDY
S.No. Name of the
Organized
Retailer
Company
Name
Places District Sample Size
1. Reliance Fresh, Reliance
Industries
Limited
Excise Colony,
Naim Nagar,
Subedari
Warangal 40
2. Spencers, Spencer?s
Retail
Limited
Adalath Circle Warangal 25
3. More, Aditya Birla Circuit House Warangal 10
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Group Road
4. Reliance Super , Reliance
Industries
Limited
Alankar Circle Warangal 25
Total 100
Source: Field Survey
Overall, 4 organized retailing units are selected for the study. Reliance Fresh outlets are
being more in number; hence, 3 retailing units are selected for the study. And the 3 other
retailing units were selected for the study include Spencers, More, and Reliance Super. The
samples selected from the retail outlets include the sales persons, supporting staff, teller
employees and the executive and managerial level employees.
B). EMPHASIS ON EMPLOYEES SHARE ON DIFFERENT ASPECTS
Name of
the
retailer
Share of
part
timers
Specia
lty
Tellers
Typical
New Hire
Extra
Selectio
n Test
Incentiv
e based
pay
Hours for
orientation
period
% in
Employee
involvemen
t
Spencer'
s
NA 18% Graduate No Yes 12 61-80%
Reliance
Fresh
20% 10% Graduate No Yes 10 21-40%
More 12% 16%
Under
Graduate &
Graduate
No Yes 10 21-40%
Reliance
Super
22% 26%
Graduate &
Post
Graduate
Yes Yes 18 41-60%
Source: Field Survey
NOTE
Share of part-timers refers to the percentage of employees work fewer than 5 hours a
week.
Specialty tellers refers to the percentage of tellers that perform only a subset of teller
tasks during a typical shift
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Typical new hire gives the highest education level of the typical new employee
Extra selection test refers to the use of additional selection procedures beyond
background reviews, skills tests and personal interviews.
Incentive-based variable pay refers to the presence of any incentive pay program other
than standard merit pay.
Orientation period refers to the hours a new employee spends in training before
beginning work.
% of Employee Involvement refers to the percentage of employees involved in group
problem-solving, quality circles, or other similar activity.
From the above table, it is evident that Reliance Super is on top in terms of share of part
timers, i.e., the percentage of employees work fewer than 5 hours a week. Again Reliance
Super is leading in terms of specialty tellers , i.e., the percentage of tellers that perform only a
subset of teller tasks during a typical shift. And “More” retail store showed that the education
level for its employees begin with undergradutation which is least educational qualification
compared to the employees of other retail outlets, as the employees? highest education level
starting from Graduation and where as the Reliance Super is achieved new hire with Graduates
and Post Graduates. And also Reliance Super is engaging the employees through Extra Selection
Test. Where as other retail outlets are not concentrating on extra selection test while recruiting
the employees. And from the survey, it was found that all the retail outlets are adopting
incentive based pay to its employees. When it comes to Orientation period, Reliance Super is
making the employees to get accustomed to the work activities. Finally, the employees?
involvement statistics clearly showing that the employees of Spencers have more commitment
towards problem solving and other activities.
C). OBSERVATIONS ON HRM PRACTICES IN SELECTED ORGANIZED
RETAILERS
S.
No
.
HRM Practices
Name of Organized Retailer
Reliance
Fresh
Spen
cer's
Mo
re
Reliance
Super
1
% employees whose skills & abilities are fully
utilized
65.12%
71.26
%
58.2
0%
62.34%
2
% employees whose jobs help them acquire skills
needed for other jobs in the company
62.0%
65.19
%
65.0
6%
82.16%
3
% employees who have more than one position
42% 36% 42% 58%
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available to them for promotion
4
% employees whose jobs are highly enriched
56% 56% 50% 58%
5
% employees whose performance appraisals are
formalized
52% 66% 48% 64%
6
%employees whose performance appraisal results
are used to determine compensation
72% 74% 68% 78%
7
% employees whose performance appraisals focus
on how job is done, not how well
72% 70% 68% 76%
8
% employees who have a say in the criteria used in
their performance appraisal
44% 38% 52% 64%
9
% employees whose performance appraisals are
based on objective quantifiable results
56% 64% 52% 62%
10.
% employees whose performance appraisals are
used to identify their training needs
56% 64% 52% 62%
Source: Field Survey
From the survey on the opinions of the employees regarding different HR practices
employed in the retail organizations, the following observations were made.
71.26% of the Spencers? employees favoured to the factor “percentage of employees
whose skills & abilities are fully utilized”. For the second factor, 82.16% of the Reliance Super
employees favoured to the factor “percentage of employees whose jobs help them acquire skills
needed for other jobs in the company”. For the third factor, 58% of the employees of Reliance
Super favoured to the factor “percentage of employees who have more than one position
available to them for promotion”. For the fourth factor, 58% of the employees of Reliance Super
favoured to the factor “percentage of employees whose jobs are highly enriched”. For the fifth
factor, 66% of the employees of Spencers favoured to the factor “percentage employees whose
performance appraisals are formalized”. For the sixth factor, 78% of the employees of Reliance
Fresh favoured to the factor “ percentage of employees whose performance appraisal results are
used to determine compensation”.
For the seventh factor, 76% of the employees of Reliance Fresh favoured to the factor
“percentage of employees whose performance appraisals focus on how job is done, not how
well”. For the eighth factor, 64% of the employees of Reliance Fresh have favoured to the factor
“percentage of employees who have a say in the criteria used in their performance appraisal”.
For the ninth factor, 64% of the employees of the Spencers favoured to the factor “percentage of
employees whose performance appraisals are based on objective quantifiable results”. For the
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tenth factor, “64 % of the employees of Spencers favoured to the factor “percentage of
employees whose performance appraisals are used to identify their training needs”.
D). TABLE SHOWING THE OPINION OF THE EMPLOYEES REGARDING THE
PERFORMANCE APPRAISAL THAT HAS COME FROM
S.No. Evaluator Reliance Fresh Spencers More Reliance Super
1. Supervisor 79.19% 72.89% 73.56% 72.21%
2. Supervisor?s boss 10.92% 13.69% 11.98% 8.12%
3. Peers 2.01% 2.56% 2.56% 1.96%
4. Subordinates 1.92% 1.59% 2.5% 3.49%
5. Subordinates 2.99% 4.92% 6.31% 5.62%
6. Clients 2.97% 4.35% 3.09% 8.6%
Total 100% 100% 100% 100%
Source: Field Survey
Note: Values indicate the means percentage of employees who were covered by the practice.
Respondents divided 100 points among the categories listed.
From the above table, it is evident that the role of supervisor is vital for the organized
retailers in implementation of performance appraisal. 79% of the employees of Reliance Fresh
favoured that “Supervisor is the initiator for the Performance appraisal. 72.89% of Spencers
employees, 73.56% of the More employees and 72.21% of the Reliance Super employees
favoured that supervisor is the initiator for the Performance appraisal system in their respective
retail organizations. Apart from that the next decider plays key role in the performance appraisal
are Supervisor?s boss. The role of peers, subordinates, clients are less in making decisions about
the performance appraisal system in the selective retail organizations selected for the study.
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E). TABLE SHOWING EMPLOYEES OPINION ON THE MOTIVATIONAL ASPECTS
ENCOURAGED THEIR PERFORMANCE
S.N
o.
Name of factor
Name of the Organized
retailer
Relia
nce
Fresh
Spenc
ers
Mor
e
Relia
nce
Super
1
Appraisal process motivated for better performance
12.50
%
15.00
%
8.5%
10.00
%
2
Positive work environment encouraged for better
performance
32.65
%
20.5%
10.5
0%
25.00
%
3
Good team commitment encouraged for better
performance
18.50
%
25.00
%
15.0
0%
10.45
%
4
Healthy environment in the work flow encouraged the
performance
12.50
%
10.50
%
25.0
0%
10.25
%
5
Incentive encouraged for better performance
13%
8.50%
25.0
0%
13.80
%
6
Qualitative training and better scope for promotion
encouraged for performance
10.85
%
20.5%
16.0
0%
30.50
%
Total 100% 100%
100
%
100%
Source: Field Survey
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From the above table, it is clear that, the employees of the Reliance Fresh favouring more
to the factor “positive work environment” which is encouraging for better performance. The
employees of Spencers have opinioned that “good team commitment encouraged for better
performance. The employees of More are favouring to the fact “Incentive schemes encouraged
for better performance”. The employees of Reliance Super have favoured more to the fact
“qualitative training and better scope for promotion encouraged for better performance”.
E). TABLE SHOWING THE OPINIONS OF THE EMPLOYEES REGARDING THE
SATISFACTION OVER THE FACILITIES PROVIDED IN THE RETAIL OUTLETS
S.No
.
Name of factor
Name of the Organized retailer
Relianc
e Fresh
Spencer
s
More
Relianc
e Super
1
Employee Rest rooms
12.50% 15.00%
25.5
%
35.00%
2.
Sanitation & Water facilities
70% 55% 75% 80%
3.
Satisfaction over the transportation facilities
50% 80% 45% 70%
4.
Recreational area with landscaped sit out
0% 0% 0% 0%
5.
On-site First-aid Clinic
45% 45% 30% 50%
6.
Refreshment stalls and canteen for healthy
food
NA NA NA NA
7.
Staff accommodation
NA NA NA NA
Source: Field Survey
Note: NA refers to Not Applicable. Figures indicate the percentage of employees showed their
satisfaction over the facilities offered to them by the retail organizations.
From the above table, it is observed that , the employees of Reliance Super have the
satisfaction of 35% over the employee rest room facilities. The employees of Reliance super
again topped as 80% of the employees of Reliance Super have shown their satisfaction over the
sanitation & water facilities. For the factor „satisfaction over the transportation facilities?, 80%
of the Spencers employees showed their intent of satisfaction. When it comes to the facilities
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about recreational area with landscaped sit out, no employee of any of the selected retail out lets
showed their satisfaction. When it comes to On-site First-aid Clinic, 50% of the employees of
Reliance Super have showed their satisfaction. And regarding the staff accommodation, no retail
outlets selected for the survey are providing staff accommodation.
G). PROBLEMS & CHALLENGES AHEAD
Human resources people are the backbone of any company and the success of retail
business depends a lot upon the kind of human resource strategies it is following and how people
are managed. Because of increasing competition between organized retailers, the retail industry
is facing the challenges and hurdles from different areas. From the survey on select organized
retailers, the following observations were made.
1. HIGH ATTRITION: Employee retention and motivation of staff has become the major
concern for HR department in the organized retailing sector. Because of the strenuous schedules
and tasks involved in the retail industry, it becomes imperative for HR staff to take good care of
their employees who form the building blocks of their retail chain. The undercurrents among the
employees regarding company policies are many and they must be felt from time to time to
sustain the quality crowd and reduce the attrition rate.
From the report of Retailer, it is found that the attrition rates are comparatively high when it
comes to the retail industry in India. The attrition rate in the Indian retail industry is 30-35
percent. The main reasons found to be the typical nature of job where a particular employee of
an organized retail company need to work on his feet the whole day and the job is reaction
intensive and the business is mainly transactional.
2. TRAINING FOR COMPETITION: The need for efficient trained sales team is of great
importance in the organized retailing at present. For every retail organization, the secret behind
the success of their business is to keep the list of their loyal consumers interact. The need for a
well designed HR practices are greatly needed for proper training to the newly recruited people
to the retail organization. Providing training to the sales staff plays a significant role in every
business operation. Nowadays, the organized retailers are looking at a sales training company to
help the sales staff gain more proficiency and expertise in their respective field.
3. OBSERVATIONS FOUND IN TRAINING SESSIONS OF SELECT ORGANIZED
RETAILERS
From the field based survey, it was found that the organized retailers at Warangal
District, apart from using the services of outsourcing firms to train its sales people, they are also
using some of the innovative new training techniques to the staff. The techniques which are
observed during the survey are:
A). STRESSING UPON BENEFITS OF ADVERTISING: The HR managers and trainers are
emphasizing upon making the sales people to think and act innovatively in designing the retail
out let and as well as attracting the customers through innovative promotional strategies. The
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trainers are focusing on making the staff to effectively use advertising as a tool to enhance sales,
promote growth, and attract new consumers.
B). COUNTING THE CUSTOMERS: In this, the retail firms and the trainers are making the
staff of the retail organization to increase the customer relationship management. Through
effective training, the trainers are working on highlighting the components of marketing
strategies which the sales people should perform activities of promotion, product development,
relationship management, distribution and pricing. The trainers are making the retail staff which
include sales staff and supporting staff to identify the firm?s marketing goals, and are explaining
about how the goals can be achieved.
3. ONLINE TRAINING: The trainers of HR department are showing the visuals of well
designed and successfully running retail organization?s outlets to the employees in order to make
them to realize the importance of the design of retail outlet. Apart from that, from the survey it
was also realized that the trainers are focusing on online training which include web based
support to enhance the abilities of the staff of the retail outlets.
4. High Labour costs and Complex nature of labour laws: Because of the increasing
competition and the complex nature of the work, the retail outlets are facing the problems of
labour costs. Apart from that, various labour laws are giving restrictions to the HR department to
achieve desired objectives of the retail organizations. From the survey, it was found that the HR
department is facing with the problems like lengthy leisure hours and frequent absenteeism of the
employees to the duties. Even, it was found that the existing labour laws in India forbid
employment of staff on a contractual basis that makes it difficult to manage employee schedule.
Especially, when retail organizations are performing 365- day operation, the problems in
encouraging and motivating the employees to perform well is a tough challenge for the HR
department.
1.6). FINDINGS & SUGGESTIONS
The human resource management practices are vital for the development of any business
or sector. The HRM practices have inevitable dependence on the organized retailers. From the
study it was found that, right from new hire to orientation period, there are many differences in
the implementation of HR practices in the selected organized retailers. The satisfaction levels of
various performance appraisal measures adopted in the selected retail outlets showed that the
employees are not only favoured to the incentive plan but also the healthy environment and close
relations between the peers are playing vital role for their performance. Further, the supervisor
has the key role in taking initiative in the implementation of performance appraisal at the select
organized retail outlets. The employee facilities in the select organized retail outlets found to be
not satisfactory to the employees of the retail outlets. The HR department is facing the
challenges which include high attrition rate, absenteeism, and implementation of innovative
practices in the retail outlets. Hence, from the study, it was found that the HR management
practices in the select retail outlets are still in the initial stages of development. The employee
facilities and proper performance appraisal measures will always encourage the employees to
achieve the best. Hence, the retail outlets should decide and implement proper HR practices in
order to retain and develop the work force who are the assets for the development of
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organizations. The government should also need to bring revision of existing labour laws and
should provide flexibility in working hours and should encourage with its laws that can bring
conducive environment.
REFERENCES
BOOKS
1. James R. Ogden & Denise T. Ogden(2008), “Integrated Retail Management”, Biztantra,
An Imprint of Dreamtech Press, Reprint Edition 2008, New Delhi.
2. U.C. Mathur(2010), “ Retail Management - Text and cases”, I.K. International
Publishing House Pvt. Ltd., New Delhi.
3. Michael Levy & Weitz(2007), “Retailing Management”, Tata McGraw-Hill Publishing
Company Limited, New Delhi.
4. Barry Berman & Joel R. Evans(2007), “Retail Management – A strategic approach”, 10
th
Edition, Eastern Economy Edition, New Delhi.
JOUNRALS
1. Ashok Som, “Bracing for MNC Competion through innovative HRM Practices: the Way
ahead for Indian Firms”, Thunderbird International Business Review, Wiley InterScience,
Vol.48(2) 207-237, March-April,2006., Pg.No.207-211
2. Wharton, “How will competition change Human Resource Management in Retail
banking? A Strategic Perspective”, Workiing Paper Series, Wharton School, University
of Pennsylvania, Pg. No.1-29.
3. Susan E.Jackson & Randall S. Schuler, “HRM Practices in Service-based organizations:
A role theory perspective”, Advances in Services Marketing and Management, Vol.1,
Pages:123-157.
4. A CII – A.T. Kearney report, “Retail in India: Getting organized to drive growth”.
5. Derek C.Jones, Panu Kalmi & Antti Kauhanen, “How Deos Employe Involvement Stack
Up? The effects of Human Resource Management Policies on Performance in a Retail
Firm, Working Papers , Cornell University.
WEBSITES
1.http://www.ibef.in/industry/Retail.aspx
2.http://en.wikipedia.org/wiki/Retailing_in_india
3.http://retail.franchiseindia.com/articles/Store-Operations/Staffing/
4http://retail.franchiseindia.com/articles/Retail-Operations/HR-and-People/Making-the-most-of-
waiting-time-489/
doc_844560520.pdf
Retailing displayed its significance in India‟s market with tremendous contribution to the Indian economy. The development in the organized retail sector has showed the perfect platform to the Indian companies to enter into this sector. The entry of global players in retailing business has created huge challenges to the Indian companies.
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HUMAN RESOURCE MANAGEMENT PRACTICES IN ORGANIZED
RETAILING - A STUDY OF SELECT RETAILERS
DR D. MAHESWARA REDDY*; SURESH CHANDRA CH**
*Assistant Professor, I T M Business School,
Warangal.
**UGC JRF (Ph.D) Research Scholar, Kakatiya University,
Warangal.
ABSTRACT
Retailing displayed its significance in India?s market with tremendous contribution to the Indian
economy. The development in the organized retail sector has showed the perfect platform to the
Indian companies to enter into this sector. The entry of global players in retailing business has
created huge challenges to the Indian companies. The organized retailer,s in order to respond to
the competition, started to realize the need for efficient man power. The HR practices and the
employee satisfaction became the primary concern for the organized retailers. The present study
will provide a clear picture on the issues related to the HR practices and its impact on employees.
The study will also focus on the various problems and challenges faced by the HR department in
procuring and retaining the employees of organized retailing companies.
KEYWORDS: HRM, special tellers, GDP, attrition.
___________________________________________________________________________
1.0). INTRODUCTION
Human resource management (HRM) practices are most effective when matched with strategic
goals of organizations. HRM?s role in the company?s success is growing rapidly with the growth
in many sectors in the present globalized era. HRM is a vital function in organizations and
becoming more important than ever. The HRM practices are crucial in designing the structure
for man power, staffing, performance appraisal, compensation, and training and development.
HRM practices are a primary means for defining, communicating and rewarding desired role
behaviours and desired role behaviours are a function of organizational characteristics.
Innovative HRM practices can play a crucial role in changing the attitude of the companies and
its employees in order to facilitate the entry and growth in the markets. The HRM practices in
service sector especially in the area of retailing have found significant importance in the present
scenario. The retailing is one of the service sectors where the need of qualitative human
resources is highly expected.
Retailing is an important element of business around the globe. Retailing consists of all
activities that result in the offering for sale of merchandise to consumers for their own use.
Retailing is the final step in bringing goods to consumer. They sell both goods and services.
Retailing is the process of “Sale of goods or merchandise, from a fixed location such as a
departmental store or kiosk, in small or individual lots for direct consumption by the purchaser.
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Retailing may include services, such as product delivery. Buyers may be individuals? or
businesses; a retailer buys goods or products in large quantities from manufacturers or importers,
either directly or through a wholesaler, and then sells in smaller quantities or lots to the end –
users or consumers. Retailers are the end links of the supply chain as an important part of
manufacturing/marketer overall distribution strategy.
1.1). OVERVIEW OF INDIAN RETAIL INDUSTRY
Retailing is one of the pillars of economy because of its 13% contribution to GDP.
Though the Indian retail sector is dominated by unorganized sector with 90% share, it is
providing immense opportunities for large scale retailers to set-up their operations. The
organized retailing sector is steadily increasing with the entry and operations of departmental
stores, hyper markets, supermarkets and specialty stores which are replacing the traditional
formats dramatically altering the retailing landscape in India.
India is the third most attractive retail market for global retailers among the 30 largest
emerging markets, according to US consulting group AT Kearney?s report published in June,
2010. The total retail sales in India will grow from US $ 395.96 billion in 2011 to US $ 786.12
billion by 2015, according to the BMI India Retail report from the third quarter of 2011. Robust
economic growth, high disposable income with the expansion in middle and upper class
consumer because, the report identifies potential in India?s tier-II and tier-III cities as well. The
greater availability of personal credit and a growing vehicle population providing improved
mobility also contribute to a trend towards annual retail sales growth of 12.2 percent. An
increasing number of people in India are turning to the services sector for employment due to the
relative low compensation offered by the traditional agriculture and manufacturing sectors. The
organized retail market is growing at 35 percent annually while growth of unorganized retail
sector is pegged at 6 percent.
Though the retailing sector is growing rapidly, some of the constrains are restricting its
growth. Apart from the regulations and approval for Foreign Direct Investments (FDIs), the
sector is strongly lacking the effective human resource practices. The problems of lack of
trained work force, low skill level for retailing management, lack of development programmes to
the existing human resources and problems in retaining qualitative manpower are some of the
obstacles creating huge challenges to the Indian retail sector. At present, to overcome some of
the challenges faced by retail, the companies are investing heavily in training and recruitment of
qualitative work force.
1.2). STATEMENT OF THE PROBLEM
In the present competitive scenario, the role of retailing is increasing rapidly with the
entry of global players. Many Indian companies strongly keeping their aim on entering in retail
industry. With increasing globalization, firms are entering a dynamic world of international
business that is marked by liberalization of economic policies in a large number of emerging
economies like India. To face the challenge of increasing competition that has resulted from
liberalization, Indian organizations have initiated adoption of innovative human resource
management practices both critically and constructively to foster creativity and innovation
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among employees. The huge opportunities in organized retailing encouraging the companies to
enter in retail industry. The last 2 decades has witnessed the tremendous potential for organized
retailing. The growing needs of retail industry can be matched up with the aggressive human
resource practices. The present retail organizations which are performing organized retailing are
facing huge challenges in procuring and retaining and maintaining qualitative human resources.
Hence, an attempt was made to analyze the various human resource practices followed in select
retailers in organized retailing.
1.3). RESEARCH OBJECTIVES
The major objective of this study is to study the human resource management practices
pursued in the organized retailing. The study covers the retailer wise employee satisfaction on
the various HRM practices employed in the retail outlets. Further, the study is also aimed at
studying the various problems and challenges ahead for HR managers in the implementation of
HRM practices in selected organized retail outlets.
1.4). RESEARCH METHODOLOGY
The present research paper is an empirical one. The survey for the present research is
conducted through primary data with the help of a questionnaire surveyed to employees of select
organized retailers. The sample taken for the study consisted of 100 which include daily wage
workers and employees from the select retail outlets situated in Warangal District.
1.5). ANALYSIS AND DISCUSSION
The research survey is conducted in order to analyze the various Human Resource
Management (HRM) practices adopted in the select organized retailers. For the purpose of
studying the HR practices implemented and to evaluate, the following organized retailers are
selected.
A). ORGANIZED RETAILERS SELECTED FOR THE STUDY
S.No. Name of the
Organized
Retailer
Company
Name
Places District Sample Size
1. Reliance Fresh, Reliance
Industries
Limited
Excise Colony,
Naim Nagar,
Subedari
Warangal 40
2. Spencers, Spencer?s
Retail
Limited
Adalath Circle Warangal 25
3. More, Aditya Birla Circuit House Warangal 10
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Group Road
4. Reliance Super , Reliance
Industries
Limited
Alankar Circle Warangal 25
Total 100
Source: Field Survey
Overall, 4 organized retailing units are selected for the study. Reliance Fresh outlets are
being more in number; hence, 3 retailing units are selected for the study. And the 3 other
retailing units were selected for the study include Spencers, More, and Reliance Super. The
samples selected from the retail outlets include the sales persons, supporting staff, teller
employees and the executive and managerial level employees.
B). EMPHASIS ON EMPLOYEES SHARE ON DIFFERENT ASPECTS
Name of
the
retailer
Share of
part
timers
Specia
lty
Tellers
Typical
New Hire
Extra
Selectio
n Test
Incentiv
e based
pay
Hours for
orientation
period
% in
Employee
involvemen
t
Spencer'
s
NA 18% Graduate No Yes 12 61-80%
Reliance
Fresh
20% 10% Graduate No Yes 10 21-40%
More 12% 16%
Under
Graduate &
Graduate
No Yes 10 21-40%
Reliance
Super
22% 26%
Graduate &
Post
Graduate
Yes Yes 18 41-60%
Source: Field Survey
NOTE
Share of part-timers refers to the percentage of employees work fewer than 5 hours a
week.
Specialty tellers refers to the percentage of tellers that perform only a subset of teller
tasks during a typical shift
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Typical new hire gives the highest education level of the typical new employee
Extra selection test refers to the use of additional selection procedures beyond
background reviews, skills tests and personal interviews.
Incentive-based variable pay refers to the presence of any incentive pay program other
than standard merit pay.
Orientation period refers to the hours a new employee spends in training before
beginning work.
% of Employee Involvement refers to the percentage of employees involved in group
problem-solving, quality circles, or other similar activity.
From the above table, it is evident that Reliance Super is on top in terms of share of part
timers, i.e., the percentage of employees work fewer than 5 hours a week. Again Reliance
Super is leading in terms of specialty tellers , i.e., the percentage of tellers that perform only a
subset of teller tasks during a typical shift. And “More” retail store showed that the education
level for its employees begin with undergradutation which is least educational qualification
compared to the employees of other retail outlets, as the employees? highest education level
starting from Graduation and where as the Reliance Super is achieved new hire with Graduates
and Post Graduates. And also Reliance Super is engaging the employees through Extra Selection
Test. Where as other retail outlets are not concentrating on extra selection test while recruiting
the employees. And from the survey, it was found that all the retail outlets are adopting
incentive based pay to its employees. When it comes to Orientation period, Reliance Super is
making the employees to get accustomed to the work activities. Finally, the employees?
involvement statistics clearly showing that the employees of Spencers have more commitment
towards problem solving and other activities.
C). OBSERVATIONS ON HRM PRACTICES IN SELECTED ORGANIZED
RETAILERS
S.
No
.
HRM Practices
Name of Organized Retailer
Reliance
Fresh
Spen
cer's
Mo
re
Reliance
Super
1
% employees whose skills & abilities are fully
utilized
65.12%
71.26
%
58.2
0%
62.34%
2
% employees whose jobs help them acquire skills
needed for other jobs in the company
62.0%
65.19
%
65.0
6%
82.16%
3
% employees who have more than one position
42% 36% 42% 58%
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available to them for promotion
4
% employees whose jobs are highly enriched
56% 56% 50% 58%
5
% employees whose performance appraisals are
formalized
52% 66% 48% 64%
6
%employees whose performance appraisal results
are used to determine compensation
72% 74% 68% 78%
7
% employees whose performance appraisals focus
on how job is done, not how well
72% 70% 68% 76%
8
% employees who have a say in the criteria used in
their performance appraisal
44% 38% 52% 64%
9
% employees whose performance appraisals are
based on objective quantifiable results
56% 64% 52% 62%
10.
% employees whose performance appraisals are
used to identify their training needs
56% 64% 52% 62%
Source: Field Survey
From the survey on the opinions of the employees regarding different HR practices
employed in the retail organizations, the following observations were made.
71.26% of the Spencers? employees favoured to the factor “percentage of employees
whose skills & abilities are fully utilized”. For the second factor, 82.16% of the Reliance Super
employees favoured to the factor “percentage of employees whose jobs help them acquire skills
needed for other jobs in the company”. For the third factor, 58% of the employees of Reliance
Super favoured to the factor “percentage of employees who have more than one position
available to them for promotion”. For the fourth factor, 58% of the employees of Reliance Super
favoured to the factor “percentage of employees whose jobs are highly enriched”. For the fifth
factor, 66% of the employees of Spencers favoured to the factor “percentage employees whose
performance appraisals are formalized”. For the sixth factor, 78% of the employees of Reliance
Fresh favoured to the factor “ percentage of employees whose performance appraisal results are
used to determine compensation”.
For the seventh factor, 76% of the employees of Reliance Fresh favoured to the factor
“percentage of employees whose performance appraisals focus on how job is done, not how
well”. For the eighth factor, 64% of the employees of Reliance Fresh have favoured to the factor
“percentage of employees who have a say in the criteria used in their performance appraisal”.
For the ninth factor, 64% of the employees of the Spencers favoured to the factor “percentage of
employees whose performance appraisals are based on objective quantifiable results”. For the
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tenth factor, “64 % of the employees of Spencers favoured to the factor “percentage of
employees whose performance appraisals are used to identify their training needs”.
D). TABLE SHOWING THE OPINION OF THE EMPLOYEES REGARDING THE
PERFORMANCE APPRAISAL THAT HAS COME FROM
S.No. Evaluator Reliance Fresh Spencers More Reliance Super
1. Supervisor 79.19% 72.89% 73.56% 72.21%
2. Supervisor?s boss 10.92% 13.69% 11.98% 8.12%
3. Peers 2.01% 2.56% 2.56% 1.96%
4. Subordinates 1.92% 1.59% 2.5% 3.49%
5. Subordinates 2.99% 4.92% 6.31% 5.62%
6. Clients 2.97% 4.35% 3.09% 8.6%
Total 100% 100% 100% 100%
Source: Field Survey
Note: Values indicate the means percentage of employees who were covered by the practice.
Respondents divided 100 points among the categories listed.
From the above table, it is evident that the role of supervisor is vital for the organized
retailers in implementation of performance appraisal. 79% of the employees of Reliance Fresh
favoured that “Supervisor is the initiator for the Performance appraisal. 72.89% of Spencers
employees, 73.56% of the More employees and 72.21% of the Reliance Super employees
favoured that supervisor is the initiator for the Performance appraisal system in their respective
retail organizations. Apart from that the next decider plays key role in the performance appraisal
are Supervisor?s boss. The role of peers, subordinates, clients are less in making decisions about
the performance appraisal system in the selective retail organizations selected for the study.
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E). TABLE SHOWING EMPLOYEES OPINION ON THE MOTIVATIONAL ASPECTS
ENCOURAGED THEIR PERFORMANCE
S.N
o.
Name of factor
Name of the Organized
retailer
Relia
nce
Fresh
Spenc
ers
Mor
e
Relia
nce
Super
1
Appraisal process motivated for better performance
12.50
%
15.00
%
8.5%
10.00
%
2
Positive work environment encouraged for better
performance
32.65
%
20.5%
10.5
0%
25.00
%
3
Good team commitment encouraged for better
performance
18.50
%
25.00
%
15.0
0%
10.45
%
4
Healthy environment in the work flow encouraged the
performance
12.50
%
10.50
%
25.0
0%
10.25
%
5
Incentive encouraged for better performance
13%
8.50%
25.0
0%
13.80
%
6
Qualitative training and better scope for promotion
encouraged for performance
10.85
%
20.5%
16.0
0%
30.50
%
Total 100% 100%
100
%
100%
Source: Field Survey
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From the above table, it is clear that, the employees of the Reliance Fresh favouring more
to the factor “positive work environment” which is encouraging for better performance. The
employees of Spencers have opinioned that “good team commitment encouraged for better
performance. The employees of More are favouring to the fact “Incentive schemes encouraged
for better performance”. The employees of Reliance Super have favoured more to the fact
“qualitative training and better scope for promotion encouraged for better performance”.
E). TABLE SHOWING THE OPINIONS OF THE EMPLOYEES REGARDING THE
SATISFACTION OVER THE FACILITIES PROVIDED IN THE RETAIL OUTLETS
S.No
.
Name of factor
Name of the Organized retailer
Relianc
e Fresh
Spencer
s
More
Relianc
e Super
1
Employee Rest rooms
12.50% 15.00%
25.5
%
35.00%
2.
Sanitation & Water facilities
70% 55% 75% 80%
3.
Satisfaction over the transportation facilities
50% 80% 45% 70%
4.
Recreational area with landscaped sit out
0% 0% 0% 0%
5.
On-site First-aid Clinic
45% 45% 30% 50%
6.
Refreshment stalls and canteen for healthy
food
NA NA NA NA
7.
Staff accommodation
NA NA NA NA
Source: Field Survey
Note: NA refers to Not Applicable. Figures indicate the percentage of employees showed their
satisfaction over the facilities offered to them by the retail organizations.
From the above table, it is observed that , the employees of Reliance Super have the
satisfaction of 35% over the employee rest room facilities. The employees of Reliance super
again topped as 80% of the employees of Reliance Super have shown their satisfaction over the
sanitation & water facilities. For the factor „satisfaction over the transportation facilities?, 80%
of the Spencers employees showed their intent of satisfaction. When it comes to the facilities
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about recreational area with landscaped sit out, no employee of any of the selected retail out lets
showed their satisfaction. When it comes to On-site First-aid Clinic, 50% of the employees of
Reliance Super have showed their satisfaction. And regarding the staff accommodation, no retail
outlets selected for the survey are providing staff accommodation.
G). PROBLEMS & CHALLENGES AHEAD
Human resources people are the backbone of any company and the success of retail
business depends a lot upon the kind of human resource strategies it is following and how people
are managed. Because of increasing competition between organized retailers, the retail industry
is facing the challenges and hurdles from different areas. From the survey on select organized
retailers, the following observations were made.
1. HIGH ATTRITION: Employee retention and motivation of staff has become the major
concern for HR department in the organized retailing sector. Because of the strenuous schedules
and tasks involved in the retail industry, it becomes imperative for HR staff to take good care of
their employees who form the building blocks of their retail chain. The undercurrents among the
employees regarding company policies are many and they must be felt from time to time to
sustain the quality crowd and reduce the attrition rate.
From the report of Retailer, it is found that the attrition rates are comparatively high when it
comes to the retail industry in India. The attrition rate in the Indian retail industry is 30-35
percent. The main reasons found to be the typical nature of job where a particular employee of
an organized retail company need to work on his feet the whole day and the job is reaction
intensive and the business is mainly transactional.
2. TRAINING FOR COMPETITION: The need for efficient trained sales team is of great
importance in the organized retailing at present. For every retail organization, the secret behind
the success of their business is to keep the list of their loyal consumers interact. The need for a
well designed HR practices are greatly needed for proper training to the newly recruited people
to the retail organization. Providing training to the sales staff plays a significant role in every
business operation. Nowadays, the organized retailers are looking at a sales training company to
help the sales staff gain more proficiency and expertise in their respective field.
3. OBSERVATIONS FOUND IN TRAINING SESSIONS OF SELECT ORGANIZED
RETAILERS
From the field based survey, it was found that the organized retailers at Warangal
District, apart from using the services of outsourcing firms to train its sales people, they are also
using some of the innovative new training techniques to the staff. The techniques which are
observed during the survey are:
A). STRESSING UPON BENEFITS OF ADVERTISING: The HR managers and trainers are
emphasizing upon making the sales people to think and act innovatively in designing the retail
out let and as well as attracting the customers through innovative promotional strategies. The
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trainers are focusing on making the staff to effectively use advertising as a tool to enhance sales,
promote growth, and attract new consumers.
B). COUNTING THE CUSTOMERS: In this, the retail firms and the trainers are making the
staff of the retail organization to increase the customer relationship management. Through
effective training, the trainers are working on highlighting the components of marketing
strategies which the sales people should perform activities of promotion, product development,
relationship management, distribution and pricing. The trainers are making the retail staff which
include sales staff and supporting staff to identify the firm?s marketing goals, and are explaining
about how the goals can be achieved.
3. ONLINE TRAINING: The trainers of HR department are showing the visuals of well
designed and successfully running retail organization?s outlets to the employees in order to make
them to realize the importance of the design of retail outlet. Apart from that, from the survey it
was also realized that the trainers are focusing on online training which include web based
support to enhance the abilities of the staff of the retail outlets.
4. High Labour costs and Complex nature of labour laws: Because of the increasing
competition and the complex nature of the work, the retail outlets are facing the problems of
labour costs. Apart from that, various labour laws are giving restrictions to the HR department to
achieve desired objectives of the retail organizations. From the survey, it was found that the HR
department is facing with the problems like lengthy leisure hours and frequent absenteeism of the
employees to the duties. Even, it was found that the existing labour laws in India forbid
employment of staff on a contractual basis that makes it difficult to manage employee schedule.
Especially, when retail organizations are performing 365- day operation, the problems in
encouraging and motivating the employees to perform well is a tough challenge for the HR
department.
1.6). FINDINGS & SUGGESTIONS
The human resource management practices are vital for the development of any business
or sector. The HRM practices have inevitable dependence on the organized retailers. From the
study it was found that, right from new hire to orientation period, there are many differences in
the implementation of HR practices in the selected organized retailers. The satisfaction levels of
various performance appraisal measures adopted in the selected retail outlets showed that the
employees are not only favoured to the incentive plan but also the healthy environment and close
relations between the peers are playing vital role for their performance. Further, the supervisor
has the key role in taking initiative in the implementation of performance appraisal at the select
organized retail outlets. The employee facilities in the select organized retail outlets found to be
not satisfactory to the employees of the retail outlets. The HR department is facing the
challenges which include high attrition rate, absenteeism, and implementation of innovative
practices in the retail outlets. Hence, from the study, it was found that the HR management
practices in the select retail outlets are still in the initial stages of development. The employee
facilities and proper performance appraisal measures will always encourage the employees to
achieve the best. Hence, the retail outlets should decide and implement proper HR practices in
order to retain and develop the work force who are the assets for the development of
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organizations. The government should also need to bring revision of existing labour laws and
should provide flexibility in working hours and should encourage with its laws that can bring
conducive environment.
REFERENCES
BOOKS
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Publishing House Pvt. Ltd., New Delhi.
3. Michael Levy & Weitz(2007), “Retailing Management”, Tata McGraw-Hill Publishing
Company Limited, New Delhi.
4. Barry Berman & Joel R. Evans(2007), “Retail Management – A strategic approach”, 10
th
Edition, Eastern Economy Edition, New Delhi.
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1. Ashok Som, “Bracing for MNC Competion through innovative HRM Practices: the Way
ahead for Indian Firms”, Thunderbird International Business Review, Wiley InterScience,
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banking? A Strategic Perspective”, Workiing Paper Series, Wharton School, University
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3. Susan E.Jackson & Randall S. Schuler, “HRM Practices in Service-based organizations:
A role theory perspective”, Advances in Services Marketing and Management, Vol.1,
Pages:123-157.
4. A CII – A.T. Kearney report, “Retail in India: Getting organized to drive growth”.
5. Derek C.Jones, Panu Kalmi & Antti Kauhanen, “How Deos Employe Involvement Stack
Up? The effects of Human Resource Management Policies on Performance in a Retail
Firm, Working Papers , Cornell University.
WEBSITES
1.http://www.ibef.in/industry/Retail.aspx
2.http://en.wikipedia.org/wiki/Retailing_in_india
3.http://retail.franchiseindia.com/articles/Store-Operations/Staffing/
4http://retail.franchiseindia.com/articles/Retail-Operations/HR-and-People/Making-the-most-of-
waiting-time-489/
doc_844560520.pdf