HR evaluation in retail sales chains

It is not a secret that human resources are most valued in those business areas where employees have to directly contact customers.  In such cases, company revenue is composed of a number of small operations and transactions initiated by front line employees.  Very often a customer needs decision to purchase a product only having talked to retail salesman.  Of customers want to know as much as possible about products or services they want to buy.  They want to learn something about warranty, money back guarantee, post sale service etc.  That’s why it is very important that a sales man is 100% satisfied with his work.  Besides, he needs to have his own financial interest in selling as much products and services as possible.

This is where human resource management changes the situation.  Huge retail sales chains as a rule consist of dozens and hundreds of supermarkets where thousands of people are employed.  Retail chains need to have very clear and transparent approaches and methods of human resource management.  It is important to align human resource measures and goals with a strategy of an entire retail chain.

Evaluation of human resource management is extremely important especially in such areas as retail sales business due to high personnel turnover rate and a great number of employees.  Human resource department does not earn money but only spends it in order to higher and educate professional personnel.  This money should be spent efficiently, that’s why use of balanced scorecard to evaluate HR performance is extremely important.  The following key performance indicators may be used in evaluation of human resource management in retail sales business:

  1. Compensation cost as of revenue. As a rule, different departments and supermarkets have plans and financial goals.  In the plan is implemented the personnel receives bonuses in addition to compensation.  But at the same time the company should strictly control the amount of money it pays out to employees.  Of course, if the revenue is increasing there is nothing wrong in increase of compensation cost as of revenue.  But if sales are going down compensation costs should be adjusted as well, otherwise the company may suffer enormous losses.  This indicator can also signal about efficiency of employees who work according to the principle “the more I sell them I get.” As a rule, this indicator is measured in the end of accounting periods.
  2. Employee communication etiquette. It’s not a secret that customers became very picky.  That’s why it is imperative that employees in retail chains are polite and use proper communication etiquette.  This indicator can be measured through surveys conducted by supervisors.  Introduction of ghost shoppers evaluation is a great way to see if salesmen are following principles of a proper communication etiquette.  Customer cannot be wrong.  This is the rule.
  3. Employee loyalty. Very often people working for large retail sales chains offer their friends and relatives to shop in the supermarkets they are working in.  This is the best advertising, and this attracts new customers.  Only loyal employees can recommend a retail chain.  This indicator is measured through surveys and questionnaires completed by employees.
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