CASE STUDY: THE HUMAN RESOURCE FUNCTION OF HARRISON BROTHERS CORPORATION
Harrison’s is a multi-line traditional department store which deals mainly with men’s, women’s, and children’s clothing. It is one of the largest privately owned retail stores in Australia. It was founded in Sydney as Harrison Brothers Corporation on September 15, 1898, by Aubrey and William Harrison. Recently, the store has expanded to include household furnishings and other items for the home. The long term goal of the company is to become the leading chain of department stores in NSW, selling moderate to better priced merchandise to middle class, fashion conscious customers. The company is highly decentralised and maintains a very small corporate office.
With the continued revolution of businesses and markets, stores have experienced significant impacts. Traditional department stores like Harrison’s are beginning to experience the effects of a number of changes in the retail industry. Not long ago, major department stores succeeded by being all things to all customers. Shoppers can go to one department store and have all there needs catered there. You can shop for clothes, do groceries, eat, watch movies, pay bills, and do virtually almost everything else in one department store.
However, today’s customers are looking for both value and specialization. Thus we can see the appearance of many specialty stores. Superstores and giant discounters are also popping up. At the same time, the retail industry faces the challenge of keeping a well trained, highly motivated sales staff and management team that can handle well such a change and everything it brings with it.
, who is currently the Chief Executive Officer (CEO), described the company’s strategic challenges for the next five years: “We can no longer continue to do the same old things that gave us a reputation for fair value. We must reposition ourselves – floor to floor – offering exciting brand names, excellent sales help, and frequent sales. We need sales staff who know the merchandise and understand customer preferences. Buying expertise is also critical because fashions and consumer tastes never stay the same.
According to , the company has new five strategic goals: (1) Convert non selling space into revenue generating selling space, (2) Build up underdeveloped merchandise categories, (3) Invest aggressively in private brands like Polo, Nautica and Tommy Hilfiger, (4) Reduce costs through use of advanced computer systems to project sales and manage inventory, and (5) Improve productivity of sales associates, buyers, and department heads.
The Human Resource Manager of the company, , has the major responsibility of addressing the problems encountered by the company in relation to the company’s size and strategic goals. Prior to her employment at Harrison Brothers, had several years of experience at the Westpark Store, at retail stores and came to Harrison’s after being a buyer at one of its major competitors.
According to , Harrison’s has really grown in the last two years. The store is carrying more specialty and designer clothing lines at present and has added items that they hope will appeal to moderate to high income customers. Since coming to work at Harrison’s, has attempted, together with other human resource personnel, to set up procedures and policies to assure proper staffing of the store. said that she spends most of her time just managing the Human Resource Department.
Judging from her interview, views her role as the Human Resource Manager as a challenging yet fun one. She thinks it is important to keep abreast of the performance of workers, and she likes to observe their work habits regularly. She also spends a good deal of time on selecting applicants for the sales floor in the business, and the employee, or one who is ‘in-between jobs.’
also discussed the structure and staffing of their human resource. Their main sources of applicants are those that respond to their newspaper ads and those that have heard by word-of-mouth thru present or past employees. The company selects people based on how well they do in the interview. The company places a lot of weight on the applicant’s motivation, personality, and drive. Little or no useful information is gained from high school or college/university records or references. said that although they don’t consider school records as that vital, they do check the applicant’s application forms for an indication of job stability.
When applicants are already selected and hired, then comes next the training process. The training of new salespeople occurs every two weeks and every week during the holiday season. Now and then the company gets some employees who cannot effectively complete the cash register training. The company has a trainer, Joanne Flynn, who tries to expose the trainees to selling techniques and how to properly interact with customers. Although the company has a trainer, claims that she still spends a good deal of time with her and will help out if the training classes are too large.
The company hires salespeople at a minimum wage. But of course, the company is offering room for salary increases for these salespeople. The company performs an annual evaluation of the performance of their salespeople in order to determine if they merit increases. The company uses sales productivity as the major criterion for evaluation. Performance is evaluated on average sales per hour. said that the company has had moderate success with this system, although she not sure how much it helps the company to retain good employees.
As an example, illustrated the following scenario: An employee works in an eight percent department. The hourly quota would be calculated by dividing the hourly wage by the percentage level. This determines how much the sales clerk would have to sell to break even. For any sales above that level, the clerk receives a commission. At evaluation time, if the clerk’s sales per hour are above the breakeven point, the new hourly wage is determined by multiplying the sales per hour by the percent level. For example, assume that a salesperson works in an eight percent department and earns per hour. The employee would have to sell 0 per hour to break even. Any sales above that level would receive a commission. If sales at evaluation time were actually 0 per hour, hourly pay would increase to per hour (150 times .08).
For the company’s sales support staff, said that they have supervisors who basically evaluate the employee’s performance through the quality and quantity of work. Last year, though, the company incorporated a form of employee development into the evaluation process. Supervisors are required to discuss the employees’ career opportunities and professional development with them. claimed that she initiated this form of career planning and hopefully as a way to keep good employees.
Performance management is often claimed to be the area of human resource management which can make the greatest impact on organizational performance. The use of performance management systems to implement strategy has also been viewed as an important part of the strategy process. The topic has received renewed emphasis in recent years, primarily due to increasing competition, which has forced organizations to examine in detail the contribution of various parts of the business, and to widespread restructuring initiatives, used to align organizations more closely with the market place, which have involved decentralization to business units and profit centres (1999). All of these just described are happening at Harrison’s. In such conditions, accountability and measurement is crucial to effective operations of the company.
Unfortunately, supervisors have been slack in doing the assessment. They seem to be more anxious to get the performance evaluation completed. According to , several employees came to her to say they had not received a ‘professional assessment’ since the program was instituted.
When came to work with Harrison’s, she said that discipline was already a continual bone of contention between the employees and supervisors. Employees felt the present procedures were inconsistently enforced and applied. Each supervisor was administering punishment depending on his or her own interpretation of the problem.
Now, she feels totally responsible for all disciplinary actions. How does she do this? She discusses the alleged wrongful act with the employee’s supervisor to assess the magnitude of the act. She would then talk with the employee before deciding upon the appropriate consequences. In this way, the human resource staffs have better consistency in the application of disciplinary rules. According to company rules, any employee who receives three disciplinary actions is eligible for dismissal.
Overall, Brenda thinks that there is a lot more that they need to do here in human resources, but they are somewhat constrained by cost considerations and the realities of the retail industry. The turnover in the sales areas gives her little free time to develop new programs and idea. It seems like a case of too much to do but not enough resources to make into reality these plans.
The company’s store manager, Jennifer Daft, seems to have the same perceptions with this claim of that there still seems to be a lot to do for the human resource department. Daft thinks that they are too internally focused most of the time. She said that and the rest of her staff seem to be struggling to keep up with the day-to-day activities. She also admitted what thinks that the store has experienced very high turnover.
With the new strategic direction of our company, however, Daft thinks that they need human resources to be more of a key player. According to her, it’s not hard to get the merchandise the company wants to sell, but the company needs people who know how to merchandise it and how to sell it to customers.
In an interview with the operations manager, Pat Hartlake, she claims that she has a good working relationship with the human resource department, but it took some time to develop that relationship. According to has a good understanding of the retail business, and she is impressed with her knowledge of store operations. But although she praised , she also has some negative things to say to the whole human resource department. Hartlake said that the human resource department have been somewhat slow in filling the vacant sales positions, and they don’t always respond as quickly as they should. They seem terribly understaffed and overworked most of the time.
Given the organisation’s size and strategic goals, the development of the human resource function at Harrison Brothers was evaluated through a questionnaire answered by both human resource managers and non-human resource managers. In a table presented, it shows that human resource managers give less importance to virtually almost every responsibility except when it comes to staffing and performance management. This is a misconception. Human resource managers are part of everything else in the company. The store managers on the other hand think their roles are important in almost every responsibility except in safety and staffing. Overall, this table shows the lack of knowledge of most human resource managers regarding the scope of their roles and responsibilities. This presents a very big constraint to the overall strategic goals of the company.
Some other constraints that were seen in the human resource function of Harrison’s relate to the institutional reinforcement of human resource practices, the policies and traditions, managerial short-termism, and de-layering.
We can clearly see that there is very weak reinforcement for human resource practices in the company, as evidenced by their slow response and continual vacancy of positions. The last two constraints are similar in that both curtail the amount of time which managers have available for people management (1999). The fourth constraint, de-layering, may accentuate these other tendencies in managers’ jobs because of increased workloads, although the effect is more indirect.
The company could further improve their human resource function by (1) distribution of human resource responsibilities, (2) performance appraisal of employees should be rigidly followed, and (3) more proper training not only for the salespeople but for human resource managers as well.
Distribution of human resource responsibilities should not be solely placed on the shoulders of one person, no matter how effective that person is. Sometimes things are just too much to be able to be handled by just one person. Therefore, should get some help from other managers, not only when it comes to physical help but also in the form of ideas that could help improve the processes within the company.
Performance appraisal is already present within the company but it is not rigidly followed. The company should therefore design another performance measurement or reinforce the existing one. An assessment of performance appraisal content and results, together with appropriate questions on attitude and satisfaction surveys can be used to measure the effectiveness of the human resource practices outlined (2004).
In addition to specific performance appraisal objectives for employees and managers, it might also be assumed that the training of managers in human resource activities reflects a strong emphasis on human resource practice and therefore should be given adequate attention by Harrison’s. Interestingly, ‘training and development’ emerged as the greatest influence on the development of people management skills for many of the respondents within all of the organizations (1999).
Integration of human resource strategy, processes, and the human resource function with the business is necessary for the maximum impact on a business. It is no longer sufficient for plans to be merely aligned or linked, but still isolated us separate human resource initatives. Human resource processes can no longer be “owned or controlled” by human resource staff — they are inherent in the management of the business. The human resource staff function is blending into the fabric of management so as to achieve the necessary business impact ( 1994).
As the store manager clearly put it: there are a lot of changes going on in the company. It’s not going to be a smooth ride for a while. Everyone in the company will be going to have to learn how to do things differently and better to stay competitive. The human resource people are no exception, they need to do more work in order for the company to be successful in this fast changing industry.
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