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PLOT 1-E, SECTOR V, NAVI MUMBAI- 400 706. TEL NO. 27708376/ 8385/8377.
FAX NO. 27708379
Project On:
Reward And Recognition Strategies in
the Retail Sector
Acknowledgement
Index
Executive Summary 4
Research Methodology 10
Research Findings 12
Appendix A: Questionnaire 28
Executive Summary
The organized retail sector in India is expected to grow from a mere 2 per cent of the total
retail industry to a significant 20 per cent by the end of the decade. This is not surprising,
considering that the organized retail sector is growing at the rate of 8.5 per cent per
annum. The size of the organized retail industry has been estimated at Rs 19, 500 crore in
the last financial year. Population growth combined with an increase in disposable
incomes has given a boost to the retail industry. The brand conscious urban population
forms the largest segment of demand for the minority of retailers.
With the growing demand for manpower to satisfy the retail’s surging needs, also arises
the need to retain, motivate employees to work. In this fast tracked sector how does the
human resource team decide on rewards that actually reward? How does one track if the
reward scheme, which was a month old, still motivates and pushes for employee
performance?
This project is an attempt to study the rewards and recognition strategies followed by
various retail bigwigs up and close. It aims at getting an understanding on the current
schemes and reward practices being followed by retail companies. Based on my research
findings I have recommended steps that must be kept in mind for recognition
programmes to be successful.
Clearly, if the number of column centimeters the media devotes every day to the sector is
any indication, retail is definitely a happening phenomenon in India.
So we all know that India has close to 13 million retail outlets — the highest in the world;
the retail industry is close to Rs 9 lakh crore, growing at 20 per cent but organized retail is
only 2.5 per cent of the pie, though growing at a healthy clip of 35 per cent.
Retailing contributes roughly 13% of GDP and employs around 10% of employable
population in the country. Retailing is the second largest employer after the agriculture
sector.
1 2 2005
999 002
• FDI Allowance
FDI in retailing is opened upto 51% in single brand retailing. This is the first step to
opening up of the retail sector. Previously for single brands to enter India was only
through joint-ventures or the franchisee route. Now brands can enter with a majority
stake of 51% along with a local partner. This definitely gives the international brands
more space to play around.
Shoppers Stop
The foundation of Shoppers' Stop was laid on October 27, 1991 by the K. Raheja Corp.
group of companies. Being amongst India's biggest hospitality and real estate players, the
Group crossed yet another milestone with its lifestyle venture - Shoppers' Stop.
From its inception, Shoppers' Stop has progressed from being a single brand shop to
becoming a Fashion & Lifestyle store for the family. Today, Shoppers' Stop is a
household name, known for its superior quality products, services and above all, for
providing a complete shopping experience.
With an immense amount of expertise and credibility, Shoppers’ Stop has become the
highest benchmark for the Indian retail industry. In fact, the company’s continuing
expansion plans aim to help Shoppers’ Stop meet the challenges of the retail industry in
an even better manner than it does today.
RPG Retail
RPG entered the world of retail on June 2001 by opening its very first store in the heart of
Hyderabad. The RPG group's foray into this area and its success with its four lines of
retail businesses i.e. Food world, Music world, hypermarkets, Spencers has lured other
groups.
The biggest corporate retailer by far, RPG has managed more than Rs 750-crore turnover
through its over 90 Food world stores, Spencer's superstores, Health & Glow, and over
170 Music world outlets across 21 cities. The group's stores occupy over 3 lakh sq ft of
retail space
Pantaloons
Pantaloon Retail (India) Limited (PRIL) was incorporated on October 12, 1987 as Manz
Wear Private Limited under the stewardship of Mr. Kishore Biyani. The Company was
converted into a public limited company on September 20, 1991 and on September 25,
1992 the name was changed to Pantaloon Fashions (India) Limited and the same time it
went public and today it has approximately 14,000 shareholders. It later changed its name
to Pantaloon Retail (India) Limited on 7th July 1999.
Food Bazaars, 3 central, 2 Fashion Station, 2 aLL and 1 MeLa store operational across the
country. It has been a remarkable journey for PRIL as its evolved from a manufacturing to
a completely integrated player controlling the entire value chain.
Research Methodology
Objective:
Retail sector is one of the fastest growing sectors. Organised retailing is gaining
momentum and is expected to reach 8%-10% by the year 2010. This would require large
number of talented workforce especially for this sector. Retail is one of the biggest
employers in India after agriculture.
The project aims to understand the current Reward & Recognition practices in the
retailing sector. The project expects to find out the following ;
• The various Reward & Recognition practices followed at store level & above.
• On what parameters are the employees rewarded.
• The administration requirements.
• Is the focus more on team/ employee behaviors/or pure performance?
Data Collection:
Explanation:
The reward scheme aims at motivating employees to perform regardless of the function
they are associated with. It aims at inculcating a performance driven culture at Shoppers,
which does not limit itself to just the store operations, but also across other departments.
Various parameters are set across different levels. Below explained is the performance
matrix for Jo JEETA WOHI SIKANDER at the store level for Customer Service
Associates/Front line staff.
Parameters Bench Mark Weightages Actual Score Weighted
Scores
First Citizen 20 Nos 25 15 18.75
Enrollment
Know your Big 20 Nos 25 18 22.5
Customer
Customer 10 Nos 10 10 10
Feedback Forms
Attendance 5 points 20 1 4
Sales Target 5 points 20 2 8
Product
knowledge (Test
Scores)
60
Reward And Recognition 100
Strategies in Retail Sector 46 63.25 14
SIES COLLEGE OF MANAGEMENT STUDIES
PLOT 1-E, SECTOR V, NAVI MUMBAI- 400 706. TEL NO. 27708376/ 8385/8377.
FAX NO. 27708379
Based on the above parameters, the Customer Service associates at every division are
marked. This Report card in given 70% weightage & 30% weightage is given for
behavior of employee. The immediate supervisor the employee is reporting to gives this
rating. The parameter weightages may vary from store to store depending upon the square
feet area and the business levels. The employee earning the highest points from each
division is declared as the “Jo Jeeta Wohi Sikander” for that particular department.
The JJWS award is given separately for each store, in the quarterly meets held. The
winning employee receives a cash award and a badge.
“UBHARTA SITARA”
Explanation:
Once the induction process is over the new joinees undergo, periodic tests & assessments.
The tests are held on a span of 3-4 months. The first test is a written test, the questions the
new joinees on induction learning’s, store formats, merchandising, basics of visual
merchandising etc. There are four stages and on clearance of each stage that is (KRA
based) the employee is awarded a star. On successful completion all stages the employee
is awarded as the "Ubharta Sitara".
This employee recognition scheme was started two years back, to identify fast learners
and potential leaders who can assume further responsibilities. On successful completion
of all four stages the employee is awarded a certificate and felicitated in the store meet,
held every Saturday.
Explanation:
All front line employees are evaluated on their dressing sense, attire, cleanliness and
hygiene while at work. The employees are evaluated by the immediate officer they are
reporting to.The scores for the entire department are collated and passed on to the store
Hr. The Store Hr officer along with the stores manager take a joint decision based on the
scores to award the best groomed employee of the month.
The winning employee is awarded a gift voucher of Rs.1000 during the store meeting.
• Attendance
• Punctuality at work
• Dressing Etiquettes
• Interaction with customers
• Customer Feedback forms
A pre determined scale is used to evaluate the employees. The reporting officer and the
store Hr rate individual employees. These scores are collated at the head office by the
corporate Hr team. The learning initiatives taken by the employee are evaluated and a
final decision is taken. The best customer care associate is awarded a cash reward, badge
a certificate during the quarterly zonal meet.
Explanation:
At shoppers each unit is given the liberty to suggest new reward schemes to the corporate
or the store hr. The wow and foul card was one such initiative taken up by the store hr at
R-mall, Mulund. The front line employees were marked on various parameters like ;
• Peer Interaction.
• Ability to take on new/undefined roles
• Interaction with customers.
• Ability to handle work pressure.
• Ability to work in teams
• Responsiveness displayed in absence of immediate reporting officer.
The employees are observed and monitored by the stores hr. On display of qualifying
behavior the employee is awarded a red colored Wow card, similarly on display of unruly
behavior the employee is handed a brown colored Foul card. The cards act as spot
rewards.Depending on the number of Wow cards collected by employee, the winning
employee gets a gift voucher of rupees 1000.
This award is given to the best performing store amongst all the RPG stores. The
parameters looked into are listed below:
Certain weightages are assigned to all of the above parameters. These are discussed by
the department heads of each store, who in turn pass on the information to their reporting
employees. The operations department sends the data in collaboration with the
commercial supply department to the corporate hr team. The final decision rests with the
hr team.
Explanation:
This award is given on a quarterly basis. The customer service associates are marked on
four parameters ie:
• Grooming standards
• Attendance
• Customer Service
• Customer feedback
Explanation:
This award was started understanding the up selling that can be instigated by cashiers at
check /cash out points of stores. The parameters looked into are listed below;
• Cash shortage
At the beginning of the day the cashiers are handed over the cash chest ie a box
containing specific number of currency denominations. An efficient cashier has to
juggle the cash denominations to avoid cash crunches.
• Day begin-Day end
The currency stock with the cashier at the beginning of the day and at the end of day.
• Number of bills
The number of bills generated by each cashier.
• Zero Billing Error
Minimum billing errors by the cashiers.
Explanation:
This award was started to motivate employees to promote category sales. Since the award
called for a united effort, it also brought team performance into picture. The parameters
looked into are listed below;
• Visual Display
The merchandise display in the store, customer convenience, effigy wraps etc
• Category Sales
The achievement of targets set for the category for the year.
• Category shrinkage
The mark up margins achieved by the category. This calls for measures to increase
the category sales and efforts to increase footfall in into the category section.
Other Awards
“HONESTY AWARD”
Explanation :
This award was started by the HRD at Spencer’s to encourage values of integrity and
truthfulness amongst employees. The award is based on the comments on customer
feedback forms received at the store and also special appreciations if any received by the
associates/peers. The store head sends nominations to the corporate HR. The corporate
HR takes the final decision regarding the award. The employee wins a gift voucher of
Rs.1000 and a certificate. Also a special mention of the employee, with photograph and
the reason for being nominated, get published in the quarterly newsletter.
SHRINKAGE BONUS
If shrinkage of store lesser than 0.6% of total store sales, then the balance amount is
equally distributed amongst floor level employees. It’s done on the two-month cycle
basis. The data is gathered by the operations departments and collated at HR team.
Approximately Rs.25000 is kept aside each quarter for rewards and recognition of
employees. The store winning the best store award hosts the “Annual day function”,
where the quarterly awards are distributed.
Explanation:
Each division/category at Pantaloons store is called a “House”. For e.g.: Red house for
women’s apparel division, blue house for gent’s apparel division, etc. Each house
manager nominates two best employees from his house. The nominations have to done
with by the 5th of every month to the unit hr officer. The employee from the team that
does not achieve its targets(sales) is not eligible for this award. Final selection is done by
the store manager along with the unit HR officer Each store has one employee of the
month.
• Target Achievement
• Punctuality
• Grooming standards on floor
• Interaction with co- employees
• Dependability on employee by immediate superior
• Customer service.
The employee thus selected receives Rs.1000 in cash, is felicitated by his parents in the
Saturday store meet in presence of all other employees. Also the store manager takes him
out for dinner. At the entrance of the store, a laminated certificate is kept naming the
employee of the month. The winning employee’s photograph and name is inserted into
the certificate. The COO signs this certificate.
“ FUNZONE AWARD ”
Explanation:
At Pantaloons the employee staff rooms are named “Fun zones”. Each store has the liberty
to decorate its own “Fun zone”. It’s used to showcase employee’s ability to decorate their
workplace. Snapshots are clicked and sent across to the corporate HR, if the store wishes
to nominate itself. It’s done on quarterly basis. The best store receives an award of
Rs.10000 and is given during the quarterly meets.
Other Awards:
Inter and intra store competitions are held based on special occasions/days like Valentines
Day, Christmas, etc.
Recommendations
Employee Recognition awards is not just about winning but also a lot about motivating,
excitement and inspiration. It’s about building the word of celebrating work. As much as
the reward schemes are meant for employees it’s equally important to check with them
about rewards they value. Based on the data gathered from the retail players one can
chalk out a to do list for reward and recognition schemes to be successful. Firstly,
Many reward and recognition programs flop miserably despite immaculate planning. The
reason: Inappropriate choice of rewards. In the retail sector the employees are very young
and fall in the age group of 18 to 24. Its important to understand what rewards would
motivate them. Organizations find various ways to keep tab on employee expectations.
Like for example Pantaloons has its own suggestion schemes motivating employees to
come up with reward schemes or competitions to be held on festival days etc. All these go
a long way in building employee commitment.
Besides the reward schemes applicable in one store may not motivate employees in
another store. Considering the fast rate at which retail is mushrooming in India, it’s not
possible to have specific reward and recognition schemes at every store. Besides the
administration and collation of data would be a major headache. However retail stores
should be given the liberty to choose reward schemes that suit its employees. If the same
is successful across other stores it could be taken live on a country level too.
Shoppers Stop follows this practice wherein the stores hr has the liberty to design new
schemes within the hr budget. If the scheme is a hit by helping boost productivity or
increasing sales, the scheme is replicated for other zones too.
Considering the young age of the employees, I suggest Spot Awards would be a good way
to motivate employees at store level. On display of behaviors worth applauding, or on
achievement of difficult targets the employees could be awarded an instant cash prize in
the evening store meets. Since the employee would instantaneously get an award the
motivation levels would be higher.
The organization should be clear as to what it wishes to reward. At Sasken for example,
the recognition program is built around goal achievement at three levels; individual, team
and organization. An individual who makes a contribution beyond the call of duty and has
a significant impact over business is awarded as the employee of the quarter. Spot Awards
are given to employees for tasks that appreciated by customers or peers.
Besides, considering the attrition rate prevalent in the store level, awards could be given
on the basis of the number of years of service with the company. This would serve dual
effects one, it would reward and appreciate the service years put in by the employee and
Secondly it would also serve as a signal to other employees that the company values and
rewards employees who spend quality years with the company.
Retail is one business where the customer is the king. Nothing could be better than
involving the customer is the reward schemes. During rush hours when the foot fall is
very high or during festive seasons, the customers could be handed an appreciation token.
It should be explained to the customer beforehand that as he walks into the store he may
award the token to any customer service associate who pleases him with his/her level of
customer service. On the quarterly award meets the customer should be invited to
felicitated the chosen employee and explain to the audience as to why the particular
employee was chosen over others.
The Saturday store meets could be used to conduct open house sessions wherein
employees could pool in suggestions about employee recognition schemes. The reward
schemes could be frozen based on theses suggestions. Like that the designers or the
employees themselves would take on initiative and drive to make the awareness about the
program.
Questionnaire
11. What is the reward and recognition philosophy of the company? Does the
company wish to reward employee behaviors or team-based rewards are given?
Thank you
Bibliography
Books Referred to ;
Retail Trends – by P S Chandra
Retailing the Indian Way – by Ved Prakash
Internet References :
www.imagesource.com
www.retailbiz.com
www.google.com