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Article on Moodile:
The Retail Value Chain: Linking Employee Perceptions to Employee Performance,
Customer Evaluations, and Store Performance

There has been rising interest among managers and academics regarding factors
affecting retail store performance. The practitioner literature suggests a "value chain/'
whereby perceptions and behaviors of front-line store employees shape customer
satisfaction and intent, and ultimately, store performance. It also suggests the
importance of front-line store employees. An article in The Grocera suggests that "it's
only when people begin to feel a close and meaningful involvement with their
organization that they bring energy, enthusiasm, and passion to their work. When
that happens, the end result is often greater drive, higher productivity, and better
results" It seems important, then, to improve our understanding of how employee
perceptions and behaviors influence customer evaluations and store performance.
Whereas the academic literature suggests an expanded series of links within the
value chain, empirical research has focused on isolated links within the chain, mostly
in retail banking. Although this research has created great insight into factors
affecting customer satisfaction, purchases, and firm performance, this narrower focus
has also limited a more comprehensive test of the value chain. The purpose of the
present study is to provide a more comprehensive test of the value chain using
multisource data from employees, customers, managers, and stores of a single retail
chain.

The article essentially studies a pattern of behaviors where employee job perceptions
> employee job performances > customer evaluations > store performance. The test
subject being a retail chain with more than 300 stores, 1600 employees and 57000
customers.

The results of the tests show that 3 employee job perceptions (perceived
organizational justice, and organizational identification) have a major effect on their
daily performance, going the extra mile for both the customers and the organization.
This results in a direct impact on the customers perspectives of the retailer including
their intent to purchase, loyalty and likeliness to spread positive news of the retailer.

The authors felt that, although they did a number of assessments, they could not get
a stronger measure of the competition in factors such as- e.g. the clothing carried,
pricings and promotion due to their retailer not keeping official market research date
on their competitors. Also, there were no surveys done on finding out the customers
perspectives on the retail value chain.

In conclusion, they recommended 3 forms of checklists, namely for managers to rate
the employees daily performance and going the extra mile, for employees to rate
their personal job satisfaction and how they felt about their supervisors/ managers
and the organization itself, lastly, how the customer felt about their shopping
experience and loyalty.


Case Study: Big Bytes:

Samantha is a recently appointed general manager of Big Bytes- a chain of IT stores.
After 2 months of meetings and visits, she has identified the Mega Mall Store as the
store with a major problem. This store employs 20 staff and only 3 were permanent
staff.

Link to article and its solution:

The primary problem would have to be the drop in staff morale. We can use the 3
forms of checklists from the article to obtain better data from the managers,
employees and customers as a form of feedback to understand their perspective
better.

Appendix A:
Concept Fan for Big Bytes Case Study





















After using the Concept Fan to find out the reason their morale is low, it becomes
easier to identify and solve the problems.

Recommendations:

1. Run the company appraisal process so that the staff know how they perform
and can take steps to improve themselves with company support/
2. Have Brian visit the store from time to time and talk to the staff so the staff
understands the managements views better.
3. Change the ratio of the store to have more permanent staff to have a
balanced perm/ casual ratio which will result in a better turnover rate.
4. Get Julian to make arrangements to have external trainers come to the store
to train the staff according to budget allocations.
5. Talk to Julian to see if he would stay if we could offer him a better package,
failing which he might be able to provide insight to his potential successor.
6. Quarterly gatherings and events for the staff would be good to enable them to
attain a stronger sense of identity with the organization.







Staff
Morale
Job
Perspective
Manager might leave
No proper appraisal
Understand management
High turnover
No training
Identifying with the company
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Teh, Eng Choo Elaine, and Antonia Girardi. Organisation Development & Change:
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2013.

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