2 CASE The Human Resource Function of Harrison Brothers Corporan COMPANY HISTORY Harrison Brothers Corporation was Aubrey and Wlliam Harrison. Harrison Brothers is a multi-line traditional department store founded in upstate New York on September 15, 1898, by at carries mainly men’s, women’s, and children’s clothing, In recent years, the s 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 the Northeast, selling moderate- to higher-priced merchandise to middle-class, fashion-conscious customers Harrison Brothers is one of the largest privately owned retail stores in the United States. A majority of its twenty stores are located in the Northeast. Its largest store is located in a major urban center and has 950 employees. The company is highly decentralized and maintains a very small corporate office. INDUSTRY CHALLENGES Traditional department stores like Harrison Brothers 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. However, today’s customer is looking for both value and specialization. Superstores and giant discounters are also popping up. At the same time, the industry faces the challenge of keeping a well-trained, highly motivated sales staff and management team. James Harrison, CEO of Harrison Brothers, describes 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 a sales staff that knows the merchandise and understands customer preferences. Buying expertise is also critical because fashions and consumer tastes never stay the same. We have five strategic goals: 1. Convert non-selling space into revenue-generating selling space. 2. Build up underdeveloped merchandise categories 3. Invest aggressively in pri 4. Reduce costs through vate brands like Polo, Nautica, and Tommy Hilfiger. the use of advanced computer systems to project sales and manage inventory 5. Improve productivity of sales associates, buyers, and department heads” took over the business after earning an MBA at a prestigious business James Harrison school in the Northeast. Unlike preious lamily members, he wanted to take deliberate approach to charting consultant to assist in assessing the employee quality and performance a much more the future of Harrison Brothers. To do this, he hired a company s strengths and weaknesses. Harrison felt the would be one of the keys to the future. As part of his nt sought to learn more about the human resource function within le decided to interview a few of the human resource and other key managers at the store level. Both groups were also asked to complete a questionn responsibiltis of the human resource function (ee Exhibit 14. function (see Exhibit 1.4). Case 2 The Hama EXHIBIT 1.4 Results of Questionnaire Completed by HR Managers and Non-HR Managers HR Responsibilities Staffing Training and Development Performance Management Store Managers HR Managers 4.5 3.5 4.5 3.0 2.5 2.0 2.0 4.5 4.0 3.5 2.5 4.5 4.5 Knowledge of Business Managing Change very important) to 5 (very important. The rsponses were aggregarted for al stores. The numbers in me table represent the mean ratings for each ere given a list of human resource responsibvilities and asked to rate their importance to store pertormance using a scale of (not dem. The questionnaire was completed by al the human resource managers and store managers at each store. THE WESTPARK STORE Brenda McCain has been the human resource manager at the Westpark store for the past four years. Prior to her employment at Harrison Brothers, Brenda had several years of experience in retail stores and came to Harrison Brothers after being a buyer at one of its competitors. McCain has a degree in fashion merchandising from a college in New Jersey Currently, there are 950 employees at the Westpark store. The staff includes salespeople, sales support employees (dock, marking room, cdlerical, and accounting), maintenance, security and management. The human resource department consists of five people (see Exhibit 1.5). During the peak holiday season, a number of people are hired as floating sales staff. These temporary workers may number close to 100. major THE HUMAN RESOURCE MANAGER’S JOB McCain talked about the human resource department’s areas of responsibility: “Our business has really grown in the last two years. We are carrying more specialty and designer clothing lines and have added items we hope will appeal to moderate- to high-income customers When I came here four years ago, I found too many of the human resource operations being performed by the operations manager, Pat Hartlake, and one of the department heads, Rich Jenkins. Since that time, I have attempted to set up procedures and policies to assure propet staffing of the store. I spend most of my time just managing the human r I think it is important to keep abreast of the performance of workers, and I like to obsene t. work habits regularly, I also spend a good deal of time on selecting applicats the the sales and support jobs. There is heavy turnover on the sales floor in our business, and the average salesperson at Harrison Brothers is either part-time, an older employee, or one in-between jobs’-if a better job came along, they would snap it up immediately example, of the 119 part-time people hired in the last four months, 65 have left. who is McCain went on to explain their selection procedures: “The main sources applicants are newspaper ads and word-of-mouth by present or past employees. s to 50 people based on how well they do in the interview. Right now, I conduct about of our We select interviews a week and perhaps more during the holiday rush. I have enough experiene The intervice at the Wetpark store ryflct wbar the comesultant heand shroughout the compay Part1 Haas Resu Management in Pernspective 10 EXHIBIT 1.5 Harrison Brothers Organization Chart Executive Vice President and General Manage Branch Store Manager Human Resounce Manager Operations Manager Sales Manager Sales Manager Sales Manager Human Resource Head Department Head 8, 10, 11, 12 14 Department Head 1, 5, 6,7, 13 1,2, 4, 9, 15 Teainer Payroll Clerk Security Accounting Department Identification 1. Children’s (boys, grls, infants) 2. Shoes 3. Dresses 4. Men’s 5. Women’s coats 6. Fashion accessories 7. Intimate apparel & Furniture/Carpet/Bedding Each department head supervises several sales clerks 10. Domestics 11. Chinaletc. 12. Housewares 13. Fine jewery 14. Sporting goods 15. Toys retail to know what it takes to be a good salesperson. We place a lot of weight on their motivation, personality, and drive. Little or no useful information is gained from high school or college records or references. I do check their application forms for an indication of job stability, though. The training of new salespeople occurs every two weeks and every week during the holiday season. Now and then we get some employees who cannot the cash register training. Our trainer, Joanne Flynn, tries to expose th effectively complete them to selling techniques and how to properly interact with customers. Although we have a trainer, I do spend a good was a continual bone of contention between the employees deal of time with her and will help out if the training casses are too large. “When I came here, discipline and supervisors. Employees felt the present procedures were inconsistently enforced and applied. Each supervisor interpretation of the problem. Now, I am totally responsible for all I discuss the alleged wrongful act with the employee’s supervisor to assess the was administering punishment depending on his or her own inary a magnitude of ae 2 The Haman Resource Function of Harmison Brethers Corponation this way, we have better consistency in the application of disciplinary rules. Any who receives three disciplinary actions is eligible for dismissal the act. I then talk with the employee before deciding upon the appropriate co “While we hire our salespeople at the minimum wage, we do perform an evaluation of their performance to determine merit increases. We use sales productiv the major criterion. Performance is evaluated on average sales per hour. For example employee works in an eight percent department. The hourly quota would b annual by receives a point, dividing the hourly wage by the percent level. This determines how much the sale de would have to sell to break even For any sales above that level, the clerk commission. At evaluation time, if the clerk’s sales per hour are above the breakeven the new hourly wage is determined by multiplying the sales per hour by the percentlesl example, assume that a salesperson works in an eight percent department and hour. The employee would have to sell $100 per hour to break even. Any sales above thart level would receive a commission. If sales at evaluation time were actually $150 hourly pay would increase to $12 per hour (150 times 08). We have had moderate success with this system, although I’m not sure how much it helps us to retain good employees earns $8 “For our sales support staff, we have supervisors basically evaluate the employee’s quality and quantity of work. Last year, though, we incorporated a form of employee development into the evaluation process. Supervisors are required to discuss the employees’ career opportunities and professional development with them. I initiated this as a form of career planning and hopefully as a way to keep good employees. Unfortunately, supervisors have been slack in doing the assessment. They seem to be more anxious to get the performance evaluation completed Several employees came to me to say they had not received a ‘professional assessment since the program was instituted There is a lot more we need to do here in human resources, but we are somewhat constrained by cost considerations and the realities of the retail industry. The turnover in the sales areas gives me little free time to develop new programs and ideas.” INTERVIEW WITH THE STORE MANAGER Jennifer Daft recently joined Harrison Brothers after being recruited from a major specialty retailer. Jennifer had a number of years of experience in management and retail. During interview, she talked about her perceptions of the human resource department in her store. “I think they are too internally focused most of the time. Brenda and the rest of her staff seem the to be strugeling to keep up with the day- to-day activities. I don’t know if they are understairea or not. Our store has experienced very high turnover. With the new strategic direction o company, however, I need human resources to be more of a key player. It’s not hard to get merchandise we want to sell, but we need people who know how to merchandise it and bow b sell it to customers. There are a lot of changes going on in the company. It’s not going to smooth ride for a while. We’re all going to have to learn how to do things differenty better to stay competitive. Our human resource people are no exception.” INTERVIEw WITH THE OPERATIONS MANAGER Pat Hartlake, the operations manager, talked about interactions with the human resour department: “I have a good working relationship with the human resource department, took some time to develop that relationship. McCain has a good understanding of the and I am impressed with her knowledge of store operations. They operations. They have been 12 somewhat slow in filling the vacant sales positions, and they don’t always as they should. They seem terribly understaffed and overworked most respond as quickly of the time. Let me give you an example of what I mean. A few weeks ago, I was faced with an employee situation that was evolving to the point where I felt termination was necessary l went to the Human Resource Department to discuss the case to be sure I had covered all bases. With all of the laws today, one needs to be careful in making decisions. They never seem to be able to produce answers to questions without hedging, I had to wait almost two weeks before I got any help from them. In the meantime, the situation with the employee continued to deteriorate. I can understand their reluctance to terminate sales staff because of the difficulty in recruiting new people. In a way, however, the old system seemed to be a lot less complicated. Department managers knew how to handle situations that came up in their departments. Don’t get me wrong! I know that as we continue to grow we’re probably going to need an even larger human resource department. QUESTIONS 1. How does McCain view her role as human resource manager 2. What is Harrison Brothers’ business strategy? 3. What is the structure and staffing of the human resources department? 4. Analyze the data in Exhibit 1.4. What are its implications? 5. Given the organization’s size and strategic goals, evaluate the development of the human resource function at Harrison Brothers. What problems do you see? How could its major human resource functions be improved?

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  1. McCain views her role as a human resource manager to execute business roles as follows:
  • Staffing: Setting up procedure and policies to ensure adequate staffing of the store.
  • Performance Check: Keeping up to date on the staff performance and their work habits
  • Recruitment: Selecting applicants for sales and supports jobs. This is a continuous process as the employee turnover is very high.
  • Administration: Managing the human resource department
  • Training: Planning the training of the new staff and also conduct training to support the trainer.
  • Discipline: Taking all disciplinary actions after discussing the magnitude of the act with the supervisor. Ensuring consistency in disciplinary actions and rules.
  • Appraisals: Conducting the annual performance appraisals along with the supervisors based on sales productivity of the individual sales staff, for example, determining the sales per hour of the individual and determine their break even sales in terms of profit. The sales support team is also evaluated against the quality and quantity of work.
  • Career Mapping & Planning: Initiating career planning for the team members and discuss their career opportunities and professional development in the organization.
  1. Harrison Brother s business strategy includes the following:
  • Maximizing revenue from the retail space by converting nonselling space into revenue-generating space.
  • Rework and build up the underdeveloped categories of the merchandise.
  • Aggressively invest in private brands like Polo, Nautica and Tommy Hilfiger.
  • Implement advanced computer systems to reduce inventories and maximize sales
  • Improve the overall productivity of the sales associates, buyers, and department heads by initiating training, motivation and other activities.
  1. The human resource consists of 5 team members. It is hierarchical structural with all decisions initiated and implemented by McCain. It is basically a one-man show, McCain is heading most activities she is supported by 4 team members who provide her basic support:
  • 2 Human resource assistants
  • 1 trainer who is also assisted by McCain to conduct training on an ongoing regular basis
  • 1 Payroll clerk
  1. The analysis discusses the role and responsibilities of the Human resource function as perceived by the human resource team and the store managers. The exhibit rated the responsibilities on a parameter of 1 to 5. “Rating 1 is not very important to 5 means its very important”. The data indicated the following:
  • The store managers and Human resource manager rated the role and importance of staffing, performance management, training, compensation and safety at almost the same levels. They rated its importance in respect to HR activities and roles.
  • The HR manager felt that business knowledge and managing change was of least importance to their roles but the store managers felt it was very important for the HR manager.