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Unit 8: HR in Operations

district, is the most productive. Upon further investigation, the manager may be able to pinpoint Notes
certain operational practices, such as accurate forecasting and workload balancing that have
helped this store keep labour costs to a minimum. The manager may then choose to implement
these practices throughout the other stores in his district, significantly reducing overall labour
costs.
The ability to compare across stores, departments or product lines also allows managers to
better profile or segment their customers. This in turn allows them to anticipate and meet
customer needs more efficiently. By comparing sales of, for example, Hispanic foods in a region,
a manager can get a better understanding of which stores should try expanding their product
offerings in this category and which stores should consider cutting these product offerings
altogether. By making similar comparisons of gourmet foods sales, specialty foods, or even
specific cuts of beef, retail managers can understand who the customers are in specific geographic
regions and what they’re likely to buy. This type of comparative information can help managers
make effective decisions regarding product sourcing and selection, stocking, as well as advertising
and promotional decisions.

8.5.2 Requirements for a Successful Performance Management System

A successful performance management system requires several key technological components.
Ability to Integrate Architecturally: The reporting product must be able to integrate with a
variety of systems, including relational and multidimensional databases. Although most retailers
would like to have a central data warehouse with all relevant transactional data summarized
into pertinent metrics, the reality is that most retailers do not. As a result, the technology used
for performance management should have the ability to connect to various types of systems and
enable integration on the front end. Users will not see the underlying disparate systems. In this
way the goal of an all-embracing data warehouse can be achieved over time, and reports can be
transitioned from operational systems over to the data warehouse as this evolves. The metrics
delivered through the initial reporting system can also act as a guide to the data warehouse
designers to help them prioritize areas of development.

Easy Access and Use: The performance management tool must be extremely user friendly and
intuitive. For a truly integrated solution, it must be accessible and usable for everyone from the
CEO to the department managers in each store, since each and every employee should be
working toward the company objectives. While many software vendors like to demonstrate a
flashy looking front end with lots of bells and whistles, what is most critical is providing
intuitive navigation for the end users to gain insight into the situation and to take action.
Flexibility: The performance management tool must be flexible. The metrics and various
perspectives for each user group must be able to be customized. As one move down the chain of
command from the VP of Store Operations, to the regional, district, store and departmental
managers, each level will have its own set of KPI’s it is working towards, as well as access to
only that information which is relevant to the responsibilities involved at that level. Each
manager will see dashboards or reports relative to the objectives he is assigned such as daily
sales, contribution of profit, sales versus plan, by district or region, sales for this year versus last
year, this week versus last week. Also, the method for calculating various KPI’s – such as the
calculation for the cost of a product to determine its contribution to profit – might be different
across product categories, and the performance management system must be able to incorporate
these differences. For security purposes, the performance management tool must enable unique
views based on login identification.
Finally, the interface must be user-developed to prevent the need for IT involvement each time
the business needs change.

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