Challenges Of Human Resource Practices In Retail Sectors : in India UNDER GUDANCE OF DR.KHILLARE S.K. Associate Professor Head &Research GUIDE Mahatma Gandhi Mahavidhyalaya Ahmedpur Dist.Latur RESERCH SCHOLAR MR.KAMBLE V.V. ABSTRACT: The success of any organization is largely depends on human resource of organization. Human resource management plays an important role to achieve organizational goal in short period of time. Human resource management (HRM) practices are most effective when matched with strategic goals of organizations. HRM s role in the company s success is growing rapidly with the growth in many sectors in the present globalized era. HRM is a vital function in organizations and becoming more important than ever. The HRM practices are crucial in designing the structure for man power, staffing, performance appraisal, compensation, and training and development. The HRM practices in service sector especially in the area of retailing have found significant importance in the present scenario. The retailing is one of the service sectors where the need of qualitative human resources is highly expected. Retailing is an important element of business around the globe. Retailing consists of all activities that result in the offering for sale of merchandise to consumers for their own use. Retailing is the final step in bringing goods to consumer. They sell both goods and services. Retailing is the process of Sale of goods or merchandise, from a fixed location such as a departmental store or kiosk, in small or individual lots for direct consumption by the purchaser. Retailing may include services, such as product delivery. Buyers may be individuals or businesses; a retailer buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells in smaller quantities or lots to the end users or consumers. Retailers are the end links of the supply chain as an important part of manufacturing/marketer overall distribution strategy. 1. Introduction Human Resource Management (HRM) is the organizational function that deals with issues relating to people such as compensation, hiring, performance, management, safety, benefits, employees motivation, communication, administration and training. HRM is a strategic and comprehensive approach of managing people at workplace. Its role in the company s success is growing rapidly with the growth in many sectors in the present globalized era. Innovative HRM practices can play a crucial role in changing the attitude of the employees. The HRM practices in the service sector especially in the area of retailing have found significant importance in the present scenario. The retailing is one of the service sectors where the need of qualitative human resource is highly expected. So, the present paper focuses on the HRM practices in the organized retail industry in India and highlighted the current HR challenges faced by the industry. 34
There is a rule in business that if you are not growing, you may be dying. But grow too rapidly and you may still find yourself on the fast track to the business graveyard. That will happen if you are not alert or constantly looking out for the speed bumps that will come your way when you are riding on a highway at top speed. Typically, the growth challenges relate to outgrowing the infrastructure, losing talented people, stretching the human capital resources too thin, attracting new competitors and flagging customer service. There is a rule in business that if you are not growing, you may be dying. But grow too rapidly and you may still find yourself on the fast track to the business graveyard. That will happen if you are not alert or constantly looking out for the speed bumps that will come your way when you are riding on a highway at top speed. Typically, the growth challenges relate to outgrowing the infrastructure, losing talented people, stretching the human capital resources too thin, attracting new competitors and flagging customer service. Before we get into the specifics, here is a glimpse of how the industry has grown so far. At $450 billion (or Rs 20.85 lakh crore, according to an April 2013 Deloitte Touche Tohmatsu study), it contributes 14 per cent to the national GDP. The sector employs 7 per cent of the total workforce and is the second largest employer after agriculture. Organised retail, which is about 17 per cent of the total, is expanding rapidly at 20 per cent per year, compared with traditional retail where growth is pegged at 7 per cent. This growth is driven by the emergence of large-format retail outlets and shopping malls. OBJECTIVES OF STUDY:- To study the current status of Indian retail industry. To analyze the Human Resource Management practices implemented in the organized retail industry in India. To study the HR challenges faced by the organized retailers while implementing such practices. And finally to come out with the conclusion and suggestions. RESEARCH METHODOLOGY Research in common parlance refers to a search for knowledge. Once can also define research as a scientific and systematic search for pertinent information on a specific topic. In fact, research is an art of scientific investigation. The Advanced Learner s Dictionary of Current English lays down the meaning of research as a careful investigation or inquiry specially through search for new facts in any branch of knowledge. Redman and Mory define research as a systematized effort to gain new knowledge. The major objective of this study is to study the challenges of human resource management practices pursued in the organized retailing. Consequently, the research involved an extensive literature review on the area of concern to provide an overview of retail sector in india and the viable HR challenges experienced in the sector. Developing relevant objectives of study proved viable in focusing the entire research on unveiling the current HR practices utilized in retail industry. Consequently, a viable research design occurred leading to the materialization of the set objectives. Data collection occurred through literature review (secondary data collection) from relevant books, peer journals, and current electronic publications (valid websites). Enough information was attainable from these sources thus allowing for appropriate analysis, compilation, interpretation, and structuring of the entire report. The study covers secondary data of latest Worldwide Growth of Retail Sales and also A T Kearney, a US Based global management consulting firm per Global Retail Development Index (GRDI) 2011.Further, the study is also aimed at studying the various problems and challenges ahead for HR managers in the implementation of HRM practices in organized retail industry. REVIEW OF LITERATURE:- 35
The success of an organisation does not solely rest on the huge investment made; and availability of an effective machinery for the process of evolving products. A talent pool of human capital is the most vital ingredient that transforms the organisation into a most cherished place to work and assures the development of human resources to acquire competencies to perform the present job and also to face future challenges. Human resources development does not happen in a vacuum of proactive approach on the part of the management. The development of HR policies and the implementation of the same into practice requires not just commitment of the top management, but also a well devised mechanism to implement, monitor and evaluate the policies and practices. Cushway (1994) states that the core human resource activities in a model organisation would take place in a sequence. But in reality no such order is followed by the majority of firms. The activities are stated as follows: a) Human Resource Planning b) Job Analysis c) Recruitment and Selection d) Performance Management e) Training and Development f) Job Evaluation g) Pay and Benefits h) Industrial Relations and Employee Communication i) Employment Law j) Personnel Systems and Procedures. Manager occupies a crucial place in the organisation to get the right things done in the right manner, and in the right time by the right kind of persons. According to Blanchard and Johnson (1992), a manager is a person who believes that results of the organisation can be attained only through people. Hence, managers care both for the people and results which go hand in hand. Effective managers are those who would manage not only themselves but also the people with whom they work. Indian Retail Industry: An Overview The Indian Retail sector has come off age and has gone through major transformation over the last decade with a noticeable shift towards organised retailing. A T Kearney, a US Based global management consulting firm has ranked India as the fourth most attractive nation for retail investment among 30 flourishing markets. The retail market is expected to reach a whooping Rs. 47 lakh crore by 2016-17, as it expands at a compounded annual growth rate of 15 per cent, accordingy to the Yes Bank - Assocham study. The retail market, (including organised and unorganised retail), was at Rs. 23 lakh crore in 2011-12. According to the study, organised retail, that comprised just seven per cent of the overall retail market in 2011-12, is expected to grow at a CAGR of 24 per cent and attain 10.2 per cent share of the total retail sector by 2016-17. In terms of sheer space, the organised retail supply in 2013 was about 4.7 million square feet (sq ft). This showed a 78 per cent increase over the total mall supply of just 2.5 million sq ft in 2012. Favourable demographics, increasing urbanisation, nuclearisation of families, rising affluence amid consumers, growing preference for branded products and higher aspirations are other factors which will drive retail consumption in India, said DS Rawat, Assocham Secretary General. As per Global Retail Development Index (GRDI) 2011 high saving and investment rates; fast labor force growth; and increased consumer spending make India for a very favorable retail environment and the 4th spot in the GRD. 36
Worldwide Growth of Retail Sales Growth of Retail Sales: Valued currently at $450 billion dollars, Indian retail is pegged to grow by 5.8 per cent in 2014 at about the same rate as Thailand, and next only to China (11.7 %) and Vietnam (9.8 %) Source: Outlook for the retail and consumer products sector in Asia (PWC) 37
Organized and Unorganized Retailing The Indian retail industry is generally divided into organized and unorganized retailing. The Fig. 1 shows that India constitutes only 8 percent of organized retail and remaining 92 percent is left unorganized and within the organized sector, apparel is thelargest segment while food and grocery and mobile and telecom are the other majorcontributors to this segment. Organized Retailing in India Retailing in India has been achieving a noticeable growth in the organized sector since the liberalization of our country s economy that began in the early nineties. The retail market in India is said to be fragmented with only around 8% of the sector organized, which means that only 8% of the retailers are registered under the regulations and licenses. The remaining part of the sector is unorganized. It is hence viewed as a big opportunity for the future for the organized retail firms to evolve and grow in India Human Resource Management in organized retail Recruitment: Depending on the size of the number of vacancies or if it s a new store then campus recruitment is done or recruitment is done through recruiters and consultants. For shop floor sales requirement advertisement is put up in the local news papers. Selection: Selections are based on group discussions & interviews. Some retailers take an entrance test followed by group discussion and personal interview. Performance Appraisal: It is one of the most controversial systems within human resource. No one in any organization is ever happy with the system because it explores the bitter truth of an employee. It is inherently conflict based because it is subjective and differs from person to person. Training and development: Retail industry has finally taken shape in India, and is experiencing a rapid growth. Since organized retail is growing tremendously procuring trained human resource for retail is a big challenge. The talent base is limited and with the entry of big retailers in the market there is a huge demand of trained and skilled professionals in this sector. This has led many retailers to introduce Learning and Development department within the organization. 38
Compensation: Compensation is payment for services rendered to an organization by an employee. Compensation may me direct or indirect compensation & is a motivator for employees at all levels. Rewards, Incentives and Recognition: Every retailer is looking at various ways to motivate their employees and reduce attrition rate. Introduction of rewards, incentives and recognition of employee is increasingly becoming popular within the industry. Retailers like PRIL have launched PERKPerformance Enhancement Reward Kit and star performer of the month in their stores. They are used to reward performance at the individual, team and organizational level. Employee Discipline: It is a management tool to correct employee behavior HR Challenges in Organized Retail Lack of skilled manpower: The organized retailing is a massive man power Oriented industry that recruits a large pool of employees. However, there is a huge scarcity of skilled retail professionals. This can be attributed to the fact that retail has never been considered as a prominent profession in India as there were very few retail professional courses still few years back. Stress in Working Culture: The working pattern of retail industry requires Employee to put in long hours of work which generally cause fatigue and result in lower motivation among employees. Besides this, in part-time and casual Jobs there is less job security, flexible shifts, unlimited working hours, lower salary and benefits & poor working conditions resulting into stress and working problems. Lack of Formal Education in Retail Management: There is requirement of qualified and talented manpower to look after day to day operations and cater to the wide spectrum of customer desires. As there is lack of formal vocational institutes where students can be trained, most of retailers in India depend on inhouse training or fulfilling their training needs with small institutes. Workforce Attrition: There seems to be high level of attrition in the retail sector which is almost 40% according to a recent study. Threat of Poaching: Employee poaching is also very high both in organized as well as unorganized retail industry. Skilled manpower is scarce in this industry and as such attracting the employees of competitors by offering them better salaries is a rather easy option Conclusion The Human Resource Management practices are vital for the growth and development of and business or sector. These practices have significantly evolved in the retailing sector also. The retailers especially organized retailers are nowadays placing a greater emphasis on the HRM practices which includes recruitment, selection, performance appraisal, training and development, compensation, career planning, etc. Apart from this the sector is facing some problems relating to its human resource like lack of skill, lack of formal education in retailing, workforce attrition, threat of poaching and complicated human resource environment. It means that the HRM practices in the organized retail industry needs greater attention in the near future to make it more competitive. 39
Suggestions Indian retailers need creative HR practices to manage a huge workforce in a competitive environment enhance the competency and retention of their employees. There are too many companies chasing too little talent. The retailers should maintain their goodwill in the overall employment market by communicating its attributes in a way that distinguishes the company from the competitors. Find the right talent that is willing to commit over the long-term. Attractive compensation package should be provided to the employees which includes both direct (salaries, commission and bonuses) as well as indirect payments (paid vacations, health and life insurance and retirement plans). The problem of attrition is very common nowadays. Retaining is more challenging than hiring. Hence, retailers must examine different strategies which they can use to reduce turnover and boost the morale of their employees. References:- 1) Almas Sultana(2014) Human Resource Management in Organized Retail Industry in India Global Journal of Finance and Management.ISSN 0975-6477 Volume 6, Number 6 (2014), pp. 491-496. 2) DR D. MAHESWARA REDDY*; SURESH CHANDRA CH**(8, December 2011) HUMAN RESOURCE MANAGEMENT PRACTICES IN ORGANIZED RETAILING - A STUDY OF SELECT RETAILERS, International Journal of Multidisciplinary Research Vol.1 Issue 8, December 2011, ISSN 2231 5780 3) BOOKS AND REPORTS:- 1) RESEARCH METHODLOGY:METHODS AND TECHNIQUES- C R KOTHRI 2) Retail Organized vs Unorganized or coexistence of Organized &Unorganized? BY PANKAJ SHARMA WEBSITE: 1) shodhganga.inflibnet.ac.in 2) pqdtopen.proquest.com 3) www.openthesis.org 4) https://ideas.repec.org/a/mgn/journal 40