Human Resource Management – Canadian Retail Sector

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Abstract

The success of an organization strongly depends on its human resource management (HRM) that plays a significant role in achieving necessary objectives. The retail industry in Canada has been scaling significantly, employing a large workforce and organizing, realizing the need for efficient manpower and strong business practices which are driven by HRM. This paper will discuss fundamental HR functions in the Canadian retail sector and their impact on organizations.

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Roles and Objectives of Primary HR Functions

HR Planning

HR planning in retail consists of strategic planning and management of the employees so that a productive workforce is created. Since retail jobs require great flexibility, are highly demanding, and require close customer contact, it is the responsibility of HR to prepare the employees to navigate the ever-changing requirements of the retail landscape, thus boosting profitability. This includes the consideration of factors, some of which are discussed later, that directly influence the retail space. One of the major elements is turnover rates, which are high in retail and present significant challenges for human resources, often requiring succession planning. Retail is fraught with obstacles such as legalities, compensation practices, and risk management which require the HR departments to often instill measures and protect the business by strategic and legal planning (Reynolds, n.d.).

Recruitment and Selection

Recruitment and hiring is a continuous activity for HR in retail due to turnovers and applicable employee protection laws. Managers must comply with all anti-discrimination laws under Section 3 of the Canadian Human Rights Act. HR must assess the ability of a candidate to perform duties and whether they are fitting for the company objectives. Often retail conducts external recruiting via a variety of tools that allow posting vacancies. Most modern retailers conduct online recruitment. HR oversees the recruitment of new employees, their hiring, training, and transition into employment with the company (Lumen, n.d.).

Training and Development

Once a new hire has been established, they must undergo training to perform the duties in their position competently. Even the most simplistic retail jobs will encompass training, both to ensure that the employee is familiar with company standards and get them familiarized with other elements of the organization’s policies. There are various forms of training and instruction offered, the most common being orientation, which encompasses on-the-job training with programmed instruction with an experienced employee supervising. HR ensures that all needs of the employee are met and they complete the full training to prepare them for the job.

Compensation and Benefits

Compensation is a critical component of HR as competitive pay is the primary reason why people work and also helps a company to attract ad retain employees. Under Section 11, Equal Pay is guaranteed no matter race or gender. Wages and salaries are the most important element of the compensation package, with the retail sector typically hiring hourly employees which receive wages, while upper management will receive salaries to complete their position’s duties. Compensation may also include benefits that range from perks to incentive programs as well as legally required benefits such as pensions, insurance, and paid time off. The compensation varies depending on position and potentially experience, but there are commonly minimum requirements that the organization must fulfill under (Canada’s labor laws Business Faculty from Ontario Colleges, 2018).

Performance Management

HR either works with managers or performs independent performance management on behalf of the company. It does so through the use of performance appraisal which evaluates performance and provides feedback to employees. Performance appraisals may be tied to specific bonuses for positive results, while negative outcomes may lead to eventual termination. The company commonly sets goals and performance expectations that employees should follow. In retail, this commonly requires following all protocols established at hiring, observing interactions with consumers, and maybe tied to sales goals for potential bonuses.

Health and Safety

HRM is directly responsible for ensuring employee health and safety in the workplace based on the demands of the job and legal working conditions. This includes implementing personnel management policies and ensuring employees fulfill their safety-related responsibilities outlined in organizational policy. However, HR has to act with the best faith and provide a workplace environment that prevents work-related injuries, establishes a safety culture, and provides administrative procedures to report unsafe conditions and practices (CCOHS, n.d.). Retail is not commonly an unsafe environment, however, in some retail (such as food, electronics, or tool shops), employees may be required to use tools and follow safety protocols. Therefore, appropriate training, guidelines, tools, and protection must always be offered to employees in accordance with the law.

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Employee Rights

Employees, including hourly ones often recruited by retail, are often guaranteed a wide variety of rights by Canadian labor and general laws. HR must ensure that the employee rights are met or face potential lawsuits or government investigations. Employment laws are some of the most rapidly changing legislations, which means that HR must be aware and ensure compliance with the laws to prevent liability (Lumen, n.d.). Common rights include the right to not being discriminated against, equal pay, safety, fair working conditions, and others. HR must have a mechanism in place to safely report any violations of rights and correct company practices or policies to reflect the legal and ethical requirements.

Labor Relations

Labor relations in HR is a component that seeks to manage interactions between employees, particularly staff and management – helping to build communication and overcome differences. In some cases, labor relations may include the formation of unions and their activities of bargaining or striking. Labor relations in retail largely focus on appropriate management of the connection between employees and supervisors.

Relationship Between Functions

The described above functions of human resource management are inherently intertwined as each address a specific and vital element of the retail business which allows employees to properly execute their jobs, creates a productive workforce and establishes the management structures to supervise employees and compensate them. In retail, the human element of the business is vital to its very existence. HR must take on multiple roles, sometimes simultaneously, to address these functions as they are core to the business function. As noted, some of these aspects are meant to find and hire employees, others to compensate them, another to protect them as well as ensure businesses follow all legal procedures (Lumen, n.d.). The relationship between these functions can be described as both linear as there is some aspect of step-by-step basis that employees must undergo in these functions, but also parallel as the HR functions continue to exist in the business, flexibly adapting to the needs of the retail organization, its workforce, and if necessary, consumers.

Support for Employees

In Canada, the retail trade sector has the largest share of total employment, accounting for at least 11.5% of the workforce (Chartered Professionals in Human Resources, 2017). However, the industry is also in a state of flux due to consumer shifts to online shopping and other external factors. HR programs can significantly support the retail employees in Canada through several means. Front line employees are key to retail; therefore, HR managers should seek to understand their needs and provide adequate staffing, resources, and training to ensure optimal performance and talent development. Retail also has one of the highest turnover rates among all industries, making the need for retention programs and incentive programs significantly important. HRM can play a strong role in encouraging employees to identify with organizational employment, which in turn, improves perceptions of organizational support. When employees feel organizational support behind them, they receive an esteem boost and perform better. A retailer’s both organizational and specific store front line culture is greatly influenced by HR policies driving beneficial employee outcomes (Edwards, 2008).

Alignment of HR Programs and Strategy

HRM plays a vital role in the planning and execution of business strategies for international and local retailers. Retailing in developed countries encompasses rapid changes in which businesses require new concepts and solutions in HRM. HR managers must meet the requirements of the competitive landscape, changes to technology, corporate governance as well as ensure that the business strategy adapts to the cultural diversity in the country and prepare a diverse and inclusive workforce to be the face of their respective retailer or brand. The retail industry in Canada works in a global context but must simultaneously adjust to local consumers (Merkel et al., 2010). HR strategy must build upon business goals by connecting frameworks that support stakeholder perspectives and a competent work environment. For example, with changing social conversations regarding diversity, retailers were looking at new training needs for their staff, however, economic uncertainty creates the need to cut costs. Retailers sought to reduce expenses on travel and other accommodations and provided online and video training materials which employees could study in between tasks in-store rather than dedicating whole days to it (Krell, 2013). This is one example of how HR programs, which interact cohesively, can become adaptable to business strategy needs, in this case, employee training, which will then lead to increased customer satisfaction and potential sales.

References

Business Faculty from Ontario Colleges. (2018). Fundamentals of business: Canadian edition. eCampus Ontario. Web.

CCOHS. (n.d.). Health and safety guide for human resource professionals. Web.

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Edwards, M. R. (2009). HR perceived organizational support and organizational identification: an analysis after organizational formation. Human Resource Management Journal, 19(1), 91–115. Web.

Chartered Professionals in Human Resources. (2017). Canada 150 and beyond. The role of human resources in Canada’s prosperity. Web.

Krell, E. (2013). Business leadership lessons from retail. HR Magazine. Web.

Lumen. (n.d.). Human resource management. Web.

Merkel, J., Jackson, P., & Pick, D. (2010). New challenges in retail human resource management. In M. Krafft & M. Mantrala (Eds.), Retailing in the 21st century (pp. 257-270). Springer.

Reynolds, M. (n.d.). What to know about HR in a retail store? Web.

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