important and valuable resource that every

Causes and Consequences of Attrition in Retail Industry

A

COMPREHENSIVE PROJECT REPORT

ON

―CAUSES AND CONSEQUENCES OF ATTRITION IN RETAIL INDUSTRY‖

Submitted to

C K SHAH VIJAPURWALA INSTITUTE OF MANAGEMENT

IN PARTIAL FULFILLMENT OF THE

REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

Under

Gujarat Technology University

UNDER THE GUIDANCE OF

Ms.Savitha K.

Submitted by

PAREEN RAVAL (097050592013)

RUCHI MORE (097050592031)

M.B.A – IV SEMESTER

C K Shah Vijapurwala Institute of Management

M.B.A PROGRAMME

Affiliated to Gujarat Technological University

Ahmadabad

April 2011


PREFACE

A project research is a systematic & scientific investigation for

identifying a specific problem or study in a particular area in the organization

& thereby analyzing the same to give the best solution.

For the fulfillment of any organizational goal it is necessary to retain

talented employees from getting poached as low employee turnover rate

appreciate the value of the organization, retain company secret information as

it is and reduce recruitment & selection expense.

This project is also an attempt to study the common reasons of

employee voluntarily leaving or staying in organization, efforts made by

organization to retain employee, various career development programs

offered by the organization, impact of induction & training programs on

retention of employees and to determine the organizational climate and

accordingly suggest the strategies and steps for reducing turnover and

improving retention.

The objective of doing the project is to collect all the necessary

information with respect to the recruitment, selection training & development

procedures in personnel department & thereby to get the level of employee

engagement with the organization.

During research, the researchers have learned various concepts of HR

& gained knowledge of reasons and impact of high turnover ratio in retail

industry. The research work really has given immense learning to us.

We would like to whole heartedly thank all the employees of retail

organizations who gave us opportunity to learn.


ACKNOWLEDGEMENT

We owe a great many thanks to a great many people who helped and

supported us while doing this project.

Our deepest thanks to our mentor, Ms. Savitha K, the Guide of the

project for guiding and correcting various documents with attention and care.

She has taken pain to go through the project and make necessary correction

as and when needed.

We express thanks to Mr. Rajesh Khajuria, Director of C K Shah

Vijapurwala Institute of Management, for extending his support. Our deep

sense of gratitude to Managerial level employees at D-mart, More, Pantaloons

and Mangal Bazaar for their support and guidance. Thanks and appreciation

to all helpful sales employees for their support.

We would also thank our Institution ,our faculty and administrative staff

members without whom this project would have been a distant reality. We also

extend our heartfelt thanks to our family

And well wishers.


DECLARATION

We, Pareen Raval and Ruchi More, hereby declare that the report for

―Comprehensive Project‖ entitled ‖Causes and Consequences of Attrition in

Retail Industry‖ is a result of our own work and our indebtedness to other

work publications, references, if any, have been duly acknowledged.

Place: Vadodara (Signature)

Date : 30/04/2011 Pareen Raval

Ruchi More


EXECUTIVE SUMMARY

―People‖ is the most important and valuable resource that every

organization has in the form of its employees. Dynamic people can make

dynamic organizations. Effective employee can contribute to the effectiveness

of the organizations. Competent and Motivated people can make things

happen and enable to organization to achieve its goals.

HR can help to deliver organizational excellence by focusing on

learning quality, team work and through various employee friendly strategy.

However due to cut throat competition it is difficult to retain skilled workforce

in retail, BPO, Insurance and IT sectors.

Study comprises in two parts.

The first priority was to acquire information and overview of retail

industry from Indian and Global perspective, Major attributes of growth, Major

players in retail and Major products gathered from various secondary sources.

The Second half of the project consists of primary study which

comprises of research on causes and consequences of high attrition rate in

retail organizations and recommendations/suggestions to reduce high

employee turnover to a greater extent. For primary study structured

questionnaire is designed and filled by retail sales personnel’s at D-mart,

More, Mangal Bazaar and medical representatives of pharma and health care.


INDEX

SR. NO. PARTICULARS PAGE

NOS.

PART – 1 GENERAL INFORMATION

1 About the industry

World Market

Indian Market

Growth of the industry

8 - 22

2 About major Companies in the industry 23-24

3 Product profile (Major Products) 25-27

PART – 2 PRIMARY STUDY

4 Introduction of the study

4.1 Literature Review

4.2 Background of the study

4.3 Problem Statement and Importance of the

Study

4.4 Objectives of the Study

29 – 42

5 Research Methodology

5.1 Research Design

5.2 Source of Data

5.3 Data Collection Method

5.4 Population

5.5 Sampling Method

5.6 Data Collection Instrument

44 – 45

6 Data Analysis and Interpretation 46-67

7 Results and Findings 68

8 Limitations of the Study 72

9 Conclusion/ Suggestions 73/80

Annexure………………………………………………………..81

Bibliography……………………………………………………82


PART- I

GENERAL

INFORMATION


1. ABOUT THE INDUSTRY

Retailing is evolving into global business with a substantial contribution

from technology. Large retail malls today are not only functioning as sales

outlets for a specific customer base but have gone to offer social experience,

become tourist attractions. Retail industry has become a major contributor to

a national income and is generating jobs in high numbers. In other words, it

has become larger than life.

Today retailing accounts for 14% of our national income, and 7% of our

total workforce. (Second to agriculture only).

Retailing that was defined once as a set of business activities that adds

value to the goods and services and sold to the consumer for their personal

and family use, is today aiming to deliver continuous and consistent relevant

shopping experience to them. Even, half a decade ago retailer was the guy

who satisfies customer needs by having right merchandise, at the right

placemat the right price when consumer wants it. Today things are little

different. Now, a retailer wants to have a large place where he can store much

more than the customer can think of at a price which the customer will find

very difficult to turn down. Mind you till now we have discussed is the pre Wal-

mart era. With the global number one poised to make an entry into India, the

future becomes impossible to imagine, but it can be understood clearly the

future of Indian retail will largely depends on global players.

Major Findings

1. The Retail Sector in India can be split up into two, the organized and the

unorganized. The organized sector whose size is expected to triple by 2010

can be further split up into departmental stores, supermarkets, shopping malls

etc.

2. In terms of value the size of the retail sector in India is $300 billion. The

organized sector contributes about 4.6% to the total trade.

3. In terms of growth the FMCG retail sector is the fastest growing unit and

the retail relating to household care, confectionery etc, have lagged behind.


4. The foreign retail giants were initially restricted from making investments in

India. But now FDI of 51% is permitted in India only through single branded

retail outlets. Multi brand outlets are still beyond their reach. Again they can

only enter the market through franchisees.

In a nutshell we may conclude that the retail industry in India has a very

bright future prospect. It is expected to enrich the Indian Economy in terms of

income and employment generation.

Retail Industry: Demand and Supply Drivers

Demand Drivers Supply Drivers

Interest rates Competitors in the industry

Population Size of the market

Employment Cost of the factors of production

Personal disposable income

Individual debt

Retail Value Chain

Source : IMAP global retail industry report 2010


WORLD MARKET

Retail Companies

Brief description

Operational formats

Financials Expected

Cap. Exp.(2011)

Geographic

Coverage

(2010)

Future plans

Wal-Mart Stores, Inc. (US)

Offers a full time

supermarket and a limited assortment of

general merchandise

with operations in

three business

segments: Wal-Mart

U.S., International and Sam’s

Club.

Cash & Carry/Warehouse Club, Discount Department Store, Hypermarket/Supercenter/Superstore, supermarket and online retail.

Revenue: $417 billion USD, year-over-year change: 0.95% Operating profit: $24.8 billion USD, year-over-year change: 5.1% Net income: $14.8 billion USD, year-over-year change: 7.0%

$3.9 billion USD

US: 75%; Rest of

the world: 25%

Expects to add more than 600

stores during fiscal year 2011.

Carrefour S.A. (France)

Offers a range of food and non-food products. Carrefour SA's supermarket chains include, among others, Champion and Norte brands, which primarily offer food, clothing and household goods.

Cash & Carry/Warehouse Club, Convenience/Forecourt Store, Discount Store, hypermarket, Supercenter/Superstore, Supermarket and online retail store

Revenue: $122 billion USD, year-over-year change: (1.14%) Operating profit: $2.4 billion USD, year-over-year change: (39.0%) Net income: $650 million USD, year-over-year change: (74.2%)

NA

France: 45%; Europe(except France): 33%; Latin America: 14%; Asia: 8%

In India, it is expected to set up 150 hypermarkets while in the global level it is planning to setup 50 supermarkets under the Carrefour Market banner and 30 convenience stores under the Carrefour express banner


McKesson Corp. (US)

Distributes pharmaceutical products, medical surgical supplies, healthcare and beauty products and develops software to facilitate health enterprise. Also offers analytic, care management and patient solutions for payers.

Drugs/medical-surgical equipment distribution.

Revenue: $109 billion USD, year-over-year change: 1.94% Operating profit: $2 billion USD, year-over-year change: 17.7% Net income: $1.3 billion USD, year-over-year change: 53.5%

$81 million USD

US: 91%; Rest of the world: 9%

Planning to expand through acquisitions

Cardinal Health. (US)

Specializes in health care

supply chain services. Provides

pharmaceutical and medical products and services to healthcare

providers and manufacturers.

Pharmaceutical

distribution,

distribution and

consulting, retail

pharmacy franchisin

g and online store

Revenue: $99 billion USD,

year-over-year change: 2.6%

Operating profit: $1.4 billion USD,

year-over-year change: (2.9%)

Net income: $642 million USD, year-over-year change: (44.2%)

$62.5 million USD

US: 99%; Rest of

the world: 1%

Planning acquisitions to

expand their role as a service provider in healthcare industry,

along with investment in

nuclear pharmacy business.

Tesco Plc. (UK)

Tesco is an international

retailer mainly dealing in food

retailing. In addition it also provides retail banking and insurance services

through its subsidiary

Tesco Bank.

Convenience/Forec

ourt Store,

Department Store, Discount Department Store,

Hypermarket/Super

center/ Superstor

e, Supermar

ket and online retail.




year-over-year change: 5% Net income: $3.7billion USD, year-over-year

change: 9.1%

$5.5 billion USD

UK: 74%; Europe:

15%; Rest of the world: 11%

Planning to invest in retail and in banking

operations


The Kroger Co. (US)

A US based retailer which manufactures, processes and

sells food products in its

own supermarkets.

Convenience/Forec

ourt Store,

Hypermarket/Supercenter/Superstore,

Other Specialty, Supermar

ket and Online retail.


year-over-year change: 1% Operating profit: $2.1 billion USD,


Net income: $16 million USD, year-over-year change: (94.4%)

$1.9 – 2.1 billion USD

US: 100%

Plan to invest in capital projects

during 2010 with a strong focus towards

remodels and infrastructure

projects.

Woolworths Ltd. (Australia)

Australia based retailer in the

manufacturing, export and

wholesale of processed

foods. It also operates in hospitality

business which includes hotels, pubs, F&B, and

gaming operations.

Convenience/Forec

ourt Store,

Discount Department Store,

Electronics

Specialty, Other

Specialty, Supermar

ket and Online store




year-over-year change: 9.3% Net income: $1.8 billion USD, year-over-year

change: 10.1%

$1.8 billion USD

Australia: 92%; New Zealand:

8%

Plans to open new stores

eBay Inc. (US)

Operates an online trading community.

Their service is used by buyers and sellers for the exchange

of products and services. It also offers through a

subsidiary a secure online

payment service.

Online Store



Operating Income: $1.6 billion USD,


Net Income: $2.5 billion USD, year-over-year

change: 34.2%

$157 million USD

US: 45%; Germany: 13%; UK: 12%; Rest

of the world: 30%

Plans to tap more international markets

Source: IMAP global retail industry report 2010


INDIAN MARKET

Retail landscape in India

The retail industry in India gathered a new dimension with the setting

up of the different International Brand Outlets, Hyper or Super markets,

shopping malls and departmental stores.

Key Players in the Indian Retail Sector:

The untapped scope of retailing has attracted superstores like Wal-

Mart into India, leaving behind the kiranas that served us for years. Such

companies are basically IT based. The other important participants in the

Indian Retail sector are Bata, Big Bazaar, Pantaloons, Archies, Cafe Coffee

Day, landmark, Khadims, Crossword, to name a few.

.

According to the Union Minister of Commerce & Industry, Shri Kamal

Nath, the organized retail sector is expected to grow to a value of Rs.

2,00,000 crore (US$45 billion) and may generate 10 to15 million jobs in next 5

years. This can happen in two forms- 2.5 million of these people may be

associated directly with retailing and the rest 10 million people may be

gainfully employed in related sectors that will be pulled up through the strong

forward and backward integration.

Future of organized retail in India looks bright. According to recent

researches it is projected to grow at a rate of about 37% in 2007 and at a rate

of 42% in 2008. It will capture a share of 10% of the total retailing by the end

of 2010 linkage effects.

However to compete in this sector one needs to have up-to-date

market information for planning and decision making. The second most

important requirement is to manage costs widely in order to earn at least

normal profits in face of stiff competition.


The Indian Retail Industry—Sky is the limit

In terms of the retail development index India ranks fifth. In Asia it occupies

the second position, next to China. Among all the global markets, the Indian

retail market is the most expanding. This is owing to absence in restriction at

the entry level. So the large foreign companies can reap the benefits of

economies scale by entering the green retail fields of India. There are many

reasons why the retail industry in India can reach the zenith.

Firstly the organized retail sector in India has a very low contribution to the

entire retail sector in the country. Hence there is ample scope for the new

players to achieve success in the backdrop of soaring disposable income of

the upcoming generation. Secondly, not only have the incomes increased but

there has been a sea change in the preferences of the consumers. These

factors have acted as a stimulus for the ushering of foreign players retailing in

apparels, accessories, electronic appliances etc. Large shopping malls have

already mushroomed in the metropolitan cities. There still lies untapped

potential in the Indian Retail Market

Share of Market: Urban v/s Rural in India

Source: NSSO 5th round; KPMG in India Analysis 2005

64 61 5750

44

33

36 39 4350

56

67

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Food Clothing and footwear

Misc consumer

goods

Durables Consumer services

Entertainment

Urban

Rural


FDI in Indian retail industry

Taking into consideration the pros and cons of introducing FDI in India,

ICRIER has recommended 49% of FDI. The opening up of FDI in India is also

expected to be gradual so that the domestic industries can tailor themselves

according to the changes. At the formative stage, the idea was to start with

26% of FDI in this sector. But soon the idea changed as China's FDI moved

up from 49% to 100% in the retail sector.

While the government is continuing its plans to liberalize FDI in the retail

sector in India, foreign companies like Wal-Mart are waiting on the threshold.

They basically wish to enter into partnership with various multinational chains.

FDI would bring about modern infrastructure that would help to boost the

productivity of the organized retail sector in India.

FDI is not allowed in the retail sector and this is the reason why many

prominent global players like Dominos, Levis, Lee, Nike, Adidas, TGIF,

Benetton, Swarovski, Sony, Sharp, Kodak etc are entering the retail market

via licensee or franchisee. The opening up of the economy to FDI in the retail

sector is also expected to generate employment. FDI can be a blessing

instead of curse only if it produces backward linkages relating to production

and manufacturing. It may also, in the process help to push up domestic

production as well as exports.

In the present scenario, 51% Foreign Direct Investment is permitted in

India only through single brand retailing. The international retailers are

entering the market through licensees just as Wal-Mart has entered through

the franchisee, Bharti Enterprises.


GROWTH OF THE INDUSTRY

An increasing number of people in India are turning to the services

sector for employment due to the relative low compensation offered by the

traditional agriculture and manufacturing sectors. The organized retail

market is growing at 35 percent annually while growth of unorganized retail

sector is pegged at 6 percent.

The Retail Business in India is currently at the point of inflection.

Rapid change with investments to the tune of US $ 25 billion is being planned

by several Indian and multinational companies in the next 5 years. It is a huge

industry in terms of size and according to management consulting firm

Technopak Advisors Pvt. Ltd., it is valued at about US $ 350 billion.

Organized retail is expected to garner about 16-18 percent of the total retail

market in the next 5 years.

Growth of Retail Industry In India

Retail and real estate are the two booming sectors of India in the

present times. And if industry experts are to be believed, the prospects of both

the sectors are mutually dependent on each other. Retail, one of India’s

largest industries, has presently emerged as one of the most dynamic and

fast paced industries of our times with several players entering the market.

Accounting for over 10 per cent of the country’s GDP and around 8 per cent

of the employment retailing in India is gradually inching its way toward

becoming the next boom industry.

India has topped the A.T. Kearney’s annual Global Retail

Development Index (GRDI) for the third consecutive year, maintaining its

position as the most attractive market for retail investment. Retail industry is

the most promising, emerging market for investment. In 2007, the retail trade

in India had a share of 8-10% in GDP of the country. In 2009, it rose to 12%. It

was also expected to reach 22% by 2010. The enormous growth of the retail

industry has created a huge demand for real estate. Property developers are

http://en.wikipedia.org/wiki/Multinational_company

http://en.wikipedia.org/w/index.php?title=Technopak_Advisors_Pvt._Ltd.&action=edit&redlink=1

http://en.wikipedia.org/wiki/A.T._Kearney


creating retail real estate at an aggressive pace and by 2010, 300 malls were

estimated to be operational in the country.

With over 1,000 hypermarkets and 3,000 supermarkets projected to

come up by 2011, India will need additional retail space of 700,000,000 sq ft

(65,000,000 m2) as compared to today. Current projections on construction

point to a supply of just 200,000,000 sq ft (19,000,000 m2), leaving a gap of

500,000,000 sq ft (46,000,000 m2) that needs to be filled, at a cost of US$15–

18 billion.

According to the Icrier report, the retail business in India is

estimated to grow at 13% from $322 billion in 2006-07 to $590 billion in 2011-

12. The unorganized retail sector is expected to grow at about 10% per

annum with sales expected to rise from $ 309 billion in 2006-07 to $ 496

billion in 2011-12.

As the contemporary retail sector in India is reflected in sprawling

shopping centers, multiplex- malls and huge complexes offer shopping,

entertainment and food all under one roof, the concept of shopping has

altered in terms of format and consumer buying behavior, ushering in a

revolution in shopping in India. This has also contributed to large-scale

investments in the real estate sector with major national and global players

investing in developing the infrastructure and construction of the retailing

business.

Source: Copyright @ 2011 – The Viewspaper

Growth of Retail Industry Globally

Retail, with total sales of $ 6.6 trillion, is the world’s largest private

industry ahead of financial industries $ 5.1 trillion. It is also home to a number

http://en.wikipedia.org/wiki/Hypermarket

http://en.wikipedia.org/wiki/Supermarket


of the world’s largest enterprises. Over 50 of the Fortune 500 companies, and

around 25 of the Asian top 500 companies, are retailers. The industry

accounts for over 8 percent of the GDP in western economies. Thus retail

industry is continuously growing throughout the world.

About Global Retail Development Index

It is published since 2002, the GRDI helps retailers prioritize their

global development strategies by ranking the retail expansion attractiveness

of emerging countries based on a set of variables including economic and

political risk, retail market attractiveness, retail saturation levels, and modern

retailing sales area and sales growth. The GRDI focuses on opportunities for

mass merchant and food retailers, which are typically the bellwether for

modern retailing concepts in a country.

2010 Global Retail Development Index™

Retail executives have learned again that their core markets are not the

powerful engines of growth they would like—United States and European

GDP growth in 2010 is expected to hover around 3 percent and 1 percent,

respectively. Today, reliance on developing countries for future growth is no

longer a ―nice-to-have,‖ but is a necessity. While the world’s biggest

developed economies slowly resume their growth trajectories, developing

economies in Asia, Latin America and the Middle East appear poised for

remarkable growth.


In a year when consumer spending and retail sales are declining in home

markets, global expansion to emerging markets increases in importance as a

strategy for growth. Unlike most developed markets, GDP in emerging

markets is expected to continue to grow, albeit at a slower rate. The larger,

more resilient emerging markets sit atop the 2009 GRDI as they are most

likely to lead the economic recovery.



Vietnam has ended India's three-year reign as the most attractive emerging

market destination for retail investment.


Now in its sixth year, the GRDI identifies windows of opportunity to help

retailers make strategic investments in exciting new markets.


As the pace of globalization quickens so does the race into new markets. But

success in this race does not necessarily go to the swiftest. Rather, it goes to

companies that make the right moves at the right times. Location is still

important, but timing is the name of this retail game.


The global retail game is changing. While players surged into new markets in

2004, this year they are more focused on rebalancing their positions.


After a pullback in 2003, global retail is back on track for growth. The most

significant growth is taking place in emerging markets where about two-thirds

of global retailers interviewed which are planning to increase their activities

this year.

Source: www.google.com/Globalretaildevelopmentindex

http://www.google.com/Globalretaildevelopmentindex


The Growth Drivers For Retail Industry

1) BABY BOOMERS: -

The single largest contributor to the growth of organized retailing was the

boom in consumer spending after the Second World War. This was caused

largely due an increasing population, when America witnessed 64 million

births in an 18-year period. Consumer preferences changed and spending

patterns became significant drivers for detail expansion thus making retailing

an attractive business.

2) INCREASED PER CAPITA SPENDING: -

The effect of population increase was further accentuated by an increase in

per capita spending. Per capita personal consumption expenditure in the US,

rose from $1,796 in 1959 to $22,391 in 1999. Even after adjusting for inflation,

the per Capita Expenditure in 1999 was more than double of that in 1959.

3) DUAL INCOME FAMILIES: -

Advent of dual income families also helped in the growth of retail sector. A

dual family can spend more but has very little time available for shopping.

Thus, convenience and speed of service became crucial parameters.

4) URBANISATIONS: -

Increased urbanization has led to high customer density areas thus enabling

retailers to use lesser number of stores to target the same number of

customers. Aggregation of demand that occurs due to urbanization helps a

retailer in reaping the economies of scale.

5) COVERING DISTANCE HAS BECOME EASIER: -

With increased automobile penetration and an overall improvement in the

transportation infrastructure, covering distances has become easier than

before. Now a customer can travel miles to reach a particular shop, if he/she

sees value in shopping.


Growth Potential

The key growth areas include the urban, luxury segment on one end

of the spectrum and serving the rural sector on the other. In addition,

government policy encouraging FDI in the segment has resulted in a plethora

of international retailers keen on entering the market; American retail giant

Wal-Mart has tied-up with Bharti Enterprises and global coffee giant

Starbucks' has tied up with PVR Limited. In addition, Carrefour, Boots and

others are also expected to come in. With so much action, it is natural that

there is a huge scope for employment opportunities, and experts have

estimated that the sector will generate employment for ~ 2.5 million people in

20101. The top retail companies in India include the Raheja Group, Reliance

Retail, Tata Trent, Future Group, RPG Retail, and Ebony Retail Holdings.

Source: KPMG and FCCI report

91

5527

27

18

1818

Fastest Growing Retail Segments in India

Food & Grocery

Clothing

Furniture & Fixture

Pharmacy

Watch and Jwellery

Durables

45%

45%36%

27%

18%9%

9%

Fastest Growing Retail Formats in India

Speciality

Supermarket

Hypermarket

Discount

Deparmental Store

Convenience


Future Prospects

There are many opportunities for those seeking to enter this sector,

and entry level positions such as sales executives don’t even require a

degree. Naturally, the higher order jobs for graduates with relevant degrees

and work experience, involve more responsibility, challenges and

remuneration. MBAs are increasingly being recruited, which marks a change

of HR policy, from the traditional preference to hire those from the FMCG and

hospitality sectors. In fact, senior executives in retail such as operations

heads are extremely well looked after, and HR consultants believe they are

paid in excess of Rs. 60 lakes.

The good news for graduates is that since the sector is so young and

vibrant, career growth happens very rapidly, and these positions are very

achievable in a compressed time period. Successful candidates across all

levels are those who are dynamic, able to multi-task and are equipped with

great communication skills.


2. MAJOR COMPANIES IN RETAIL INDUSTRY

Top 10 Major Companies in India

No. Name of Group Name of Retail Outlets

1 Raheja Group Shopper’s Stop

2 The Tata Group Westside (Trent)

3 Future Group Pantaloon (Big Bazaar)

4 Lifestyle India Lifestyle

5 RPG Retail Food world, Music world

6 Raheja Group Crossword

7 Lifestyle Group Wills Lifestyle

8 Raheja Group Globus

9 Piramals (Pyramid & Crosswords)

10 Ebony Ebony Retail Holdings Ltd.

Source: website (top 10 retail companies in India)


Top 15 Major Companies in the world

Rank Country of

origin

Name of

Company

Formats Retail

average

sales

Countries of operation

1 US Walmart Discount, Hypermarket,

Superstore, Warehouse

217799 Argentina, Brazil,

Canada, Mexico, UK,US

2 France Carrefour Cash & Carry, Convenience,

Discount, Hypermarket,

Supermarket

61565 Argentina, Belgium,

Brazil, Chile, China,

Columbia, France, Spain,

S.korea

3 Netherlands Royal Ahold Cash & Carry, Discount,

Drug

57976 Argentina, Brazil, Chile,

Czech

4 US Home Depot DIY, Speciality 53553 Canada, Mexico, US

5 US Kroger Convenience, Discount,

Speciality, Supermarket

50098 US

6 Germany Metro AG Cash & Carry, Department,

DIY, Hypermarket

43357 Austria, Russia,China

Belgium, France, Poland,

Germany, UK, Vietnam

7 US Target Department, Discount 49355 US

8 US Albertson’s Drug, Supermarket,

warehouse

37931 US

9 US Kmart Discount, Superstore 36151 US

10 US Sears Department, Mail order,

Speciality

53843 Canada, US US

11 UK Safeway Supermarket 34301 Canada, US, UK

12 US Costco Warehouse 34137 Canada, Japan, Maxico,

Taiwan, US, UK

13 UK Tesco Convenience, Department,

Hypermarket

33614 Hungary, Malasiya,

Poland, S.Korea, Taiwan,

US, UK

14 US JCPenney Department, Drug, Mail

order

32004 Brazil, Mexico, Puetro

Rico, US

15 Germany Aldi Einkauf Discount 313100 Austria, Australia, UK,

US, Belgium, Denmark,

Source: 2003 Global Retail Report, Deloitte Touche Tohmatsu


3. PRODUCT PROFILE (MAJOR PRODUCTS)

Retail is usually classified by type of products as follows:

Food products

Hard goods ("hard-line retailers") - appliances, electronics, furniture, sporting

goods, etc.

Soft goods - clothing, apparel, and other fabrics

There are the following types of retailers (retail formats) by marketing strategy

on the basis of type of products.

Department stores - very large stores offering a huge assortment of "soft"

and "hard goods; often bear a resemblance to a collection of specialty stores.

A retailer of such store carries variety of categories and has broad assortment

at average price. They offer considerable customer service.

Discount stores - tend to offer a wide array of products and services, but

they compete mainly on price offers extensive assortment of merchandise at

affordable and cut-rate prices. Normally retailers sell less fashion-oriented

brands.

Supermarkets - sell mostly food products;

Warehouse stores - warehouses that offer low-cost, often high-quantity

goods piled on pallets or steel shelves; warehouse clubs charge a

membership fee;

Variety stores or "dollar stores" - these offer extremely low-cost goods,

with limited selection;

Demographic - retailers that aim at one particular segment (e.g., high-end

retailers focusing on wealthy individuals).

Mom-And-Pop (or Kirana Stores as they call them in India): is a retail outlet

that is owned and operated by individuals. The range of products are very

selective and few in numbers. These stores are seen in local community often

are family-run businesses. The square feet area of the store depends on the

store holder.

General store - a rural store that supplies the main needs for the local

community;

Specialty stores: A typical specialty store gives attention to a particular

category and provides high level of service to the customers. A pet store that

http://en.wikipedia.org/wiki/Department_store

http://en.wikipedia.org/wiki/Discount_store


http://en.wikipedia.org/wiki/Warehouse_store

http://en.wikipedia.org/wiki/Warehouse_clubs

http://en.wikipedia.org/wiki/Variety_store

http://en.wikipedia.org/wiki/General_store

http://en.wikipedia.org/wiki/Specialty_store


specializes in selling dog food would be regarded as a specialty store.

However, branded stores also come under this format. For example if a

customer visits a Reebok or Gap store then they find just Reebok and Gap

products in the respective stores.

Convenience stores: It is essentially found in residential areas. They provide

limited amount of merchandise at more than average prices with a speedy

checkout. This store is ideal for emergency and immediate purchases.

Hypermarkets: provides variety and huge volumes of exclusive merchandise

at low margins. The operating cost is comparatively less than other retail

formats. A classic example is the Metro™ in Bangalore.

Supermarkets: is a self service store consisting mainly of grocery and limited

products on non food items. They may adopt a Hi-Lo or an EDLP strategy for

pricing. The supermarkets can be anywhere between 20,000-40,000 square

feet. Example: SPAR™ supermarket.

Malls: has a range of retail shops at a single outlet. They endow with

products, food and entertainment under a roof. Example: Sigma mall and

Garuda mall in Bangalore, Express Avenue in Chennai.

Category killers or Category Specialist: By supplying wide assortment in a

single category for lower prices a retailer can "kill" that category for other

retailers. For few categories, such as electronics, the products are displayed

at the centre of the store and sales person will be available to address

customer queries and give suggestions when required. Other retail format

stores are forced to reduce the prices if a category specialist retail store is

present in the vicinity. For example: Pai Electronics™ store in Bangalore, Tata

Croma.

E-tailers: The customer can shop and order through internet and the

merchandise are dropped at the customer's doorstep. Here the retailers use

drop shipping technique. They accept the payment for the product but the

customer receives the product directly from the manufacturer or a wholesaler.

This format is ideal for customers who do not want to travel to retail stores

and are interested in home shopping. However it is important for the customer

to be wary about defective products and non secure credit card transaction.

Example: Amazon and Ebay.

http://en.wikipedia.org/wiki/Convenience_store

http://en.wikipedia.org/wiki/Hypermarket


http://en.wikipedia.org/wiki/Shopping_Mall

http://en.wikipedia.org/wiki/Category_killer

http://en.wikipedia.org/wiki/E-tailer


Vending Machines: This is an automated piece of equipment wherein

customers can drop in the money in machine and acquire the products. For

example: Soft drinks vending at Bangalore Airport.

Other types of retail store include:

Automated Retail stores are self service, robotic kiosks located in airports,

malls and grocery stores. The stores accept credit cards and are usually open

24/7. Examples include ZoomShops and Redbox.

Big-box stores encompass larger department, discount, general

merchandise, and warehouse stores.

Some stores take a no frills approach, while others are "mid-range" or "high

end", depending on what income level they target.

http://en.wikipedia.org/wiki/Vending_Machine

http://en.wikipedia.org/wiki/Automated_Retail

http://en.wikipedia.org/wiki/ZoomShops

http://en.wikipedia.org/wiki/Redbox

http://en.wikipedia.org/wiki/Big-box_store

http://en.wikipedia.org/wiki/No_frills


PART-II

PRIMARY

STUDY


4. INTRODUCTION OF THE STUDY

4.1 Literature Review

What is Attrition?

A reduction in the number of employees through retirement, resignation or

death is called Attrition. Attrition is also called total turnover or wastage rate.

Why do Employees Leave the Organization?

It is said that people leave their bosses, not organizations. When employees

are happy with their superiors they choose to stay, if not they look for a

switch.

Following are the reasons to Leave the Boss :

1) Job not as expected

2) Job does not fit talents and interests.

3) Little or no feedback/coaching

4) No hope for career growth

5) Feel devalued and unrecognized

6) Feel overworked and stressed out

7) Lack of trust and confidence in boss/leaders

What is Attrition Rate?

The rate of shrinkage in size or number of employees is known as Attrition

rate. It is usually expressed in percentage.


How to calculate Attrition rate?

There are different formulae to calculate the attrition rate of a company. This

is because of certain factors as:

The employee base changes each month. So if a company has 1,000

employees in April 2004 and 2,000 in March 2005, then they may take their

base as 2,000 or as 1,500 (average for the year). If the number of employees

who left is 300, then the attrition figure could be 15 percent or 20 percent

depending on what base you take.

Many firms may not include attrition of fresher who leave because of higher

studies or within three months of joining.

In some cases, attrition of poor performers may also not be treated as

attrition. Calculating attrition rate:

We have taken following formula by which Attrition rate can be calculated:

Attrition =(No. of employees who left in the year / average employees in

the year) x 100

Thus, if the company had 1,000 employees in April 2004, 2,000 in March

2005, and 300 quit in the year, then the average employee strength is 1,500

and attrition is 100 x (300/1500) = 20 percent. Besides this, there are various

other types of attrition that should be taken into account. These are:

Fresher attrition that tells the number of freshers who left the organization

within one year. It tells how many are using the company as a springboard or

a launch pad.

Infant mortality that is the percentage of people who left the organization

within one year. This indicates the ease with which people adapt to the

company.

Critical resource attrition which tell the attrition in terms of key personnel like

senior executives leaving the organization.

Low performance attrition: It tells the attrition of those who left due to poor

performance.


Attrition Costs

One of the best methods for calculating the cost of turnover takes into account

expenses involved to replace an employee leaving an organization. These

expenses are:

A. Recruitment cost

The cost to the business when hiring new employees includes the

following six factors plus 10 percent for incidentals such as background

screening:

Time spent on sourcing replacement

Time spent on recruitment and selection

Travel expenses, if any

Re-location costs, if any Training/ramp-up time

Background/reference screening

B. Training and development cost

To estimate the cost of training and developing new employees, cost of

new hires must be taken into consideration. This will mean direct and

indirect costs, and can be largely classified under the following heads:

Training materials

Technology

Employee benefits

Trainers’ Time

C. Administration cost

They include:

Set up communication systems

Add employees to the HR system

Set up the new hire’s workspace

Set up ID-cards, access cards, etc


The Brighter Side of Attrition

A poor performer is replaced by a more effective employee

A senior retirement allows the promotion or acquisition of welcome 'fresh

blood'.

When business is slack it is straight forward to hold off filling recently created

vacancies for some weeks.

Diagnosing Attrition

Commonly Used Techniques in the Industry are as follows.

1. Surveys: They are commonly used as part of the information gathering

process. They are a reasonable way of obtaining relevant information, though

response rates are often disappointing. Questionnaires need to be designed

carefully to be effective. They should be easy to use, anonymous and fairly

brief. Questions can be open or closed, multiple choice answers, ranking of

items or checklist format.

2. Exit Interviews: Exit interviews are used by the majority of companies. They

tend to be conducted just before an employee leaves, though some firms wait

until after the departure. Exit interviews will normally to be done in the form of

a questionnaire, though one to one interviews are also used.


In majority of information regarding attrition, competitive salary is a

vital part of the entire concept of employee retention. However, a unique

concept was addressed in an article written by Barry Sweeny (2008). In this

article, he suggested that moving from only providing educators with an

orientation program, and mentoring support to a more complete induction

program. Attainable retention rates may be as high as 96% over a five year

timeframe. Clearly, even when a district cannot offer top salary, it can still

effectively compete for and keep quality employee by treating them

professionally and by expecting and supporting effective employee

performance. (Sweeny report- 2008 )

Some administrators have the viewpoint that ―high turnover is a

mark of an effective the viewpoint that ―high turnover is a mark of an effective

organization‖. (Ivancevich & Matteson report, 2002). This viewpoint is not

shared by all an is the subject of much debate. Turnover leads to many

categories of losses for the organization including financial, invested time and

knowledge. (Health field report, 2009), This is not to make the assumption

that all turnover is bad; loss of employees that cause problems of perform

below standard may be beneficial to the organization. By considering the topic

from this perspective, the issue of turnover needs to focus on frequency and

who is leaving. Ivanceivich suggested that there is no ideal method for

retaining the more proficient employees, although this would prove to be

beneficial to the organization. Other thought on this issue are that some

turnovers considered to be a normal amount. There are many be some

benefit to turnover, including loss of troublemakers and replacement of higher

paid personnel for personnel at a lower rate of pay. (Buford, Jr. & Linder

report, 2002). It seems that there is no data to show that these outweigh the

cost that will be incurred in the recruitment, advertising, recruitment, hiring

and training of these personnel.

The theories for retaining employees varied according to the

author of the particular article. In looking at some of the different viewpoints,

one must begin with the money. Many of the other theories will vary according


to the individual personalities of the employees. (Heathfesld report, 2009)

Salary is considered a necessary component, but it is not the only factor that

enables organizations to attract and retain quality employees.(Griffith report,

2006) The pay issue not only will encompass competitiveness of pay, but also

other areas as well. One of these areas includes equity of pay, employees

become frustrated if they feel the pay is not fair within the industry as well as

within the organization. (Employment Retention strategy report). Another area

of concern to employees regarding pay involved structured pay range.

According to Griffeth additional important issues that area also part of the

financial side and are a part of the benefits package include medical

insurance. Post retirement insurance.

Some of the other issues covered were those that had no monetary

value or cost. These included respect and trust. People expect and want to be

treated with respect, and trust is a vital part of the effective and open

communication that is desired by most. (Heathfield report, 2009) . Some

additional ideas/theories presented involve simple rewards and recognition for

employees which can be as effortless as an occasional ―thank you‖. (Griffeth,

Jr., 2006) Most people crave additional responsibilities, this allows the man

opportunity to grow and develop. This does not necessarily require a

promotion but allows growth of the employees within organization and

development of additional skills. (Employment strategies report)

Employee satisfaction is one of the issue regarding high turnover. In

more than one article and textbook the issue of employee satisfaction was

discussed. It seems to have significant influence on the attrition and retention

issues. Issues that cause dissatisfaction within organization are often reasons

employees leave. (Employment Retention strategies report)


Study on Attrition conducted by ASSOCHAM in different sectors :

High Attrition rate continue to plague services: ASSOCHAM Survey

Findings

Unabated level of attrition rate continues to be plaguing India Inc spreading

fast from IT and ITes to other service sectors such as civil aviation, financial

services, retail and engineering, according to an ASSOCHAM Eco Pulse

Study.

While the attrition rate in IT and ITes sector has slowed by 10 per cent to fall

in the range of 25-30 per cent in the year 2007 as compared to 35-40 per cent

rate in previous year but the service sectors at the crucial juncture of their

growth including civil aviation, financial services and retail are facing tough

times in retaining their staff.

Massive expansion in the retail sector is accompanied with rapidly increasing

attrition rate to even to the extent of 50 per cent in few cases. The companies

now prefer to sign bonds for three years as they are imparting them the

necessary training and specialized knowledge of retail functions.

Level of attrition rate in the manufacturing sector has remained almost same

at 20 per cent in 2007 as previous year. The functional areas like those of

production, maintenance and safety controls bear highest attrition problem.

The Study has found that the maximum of attrition is taking place among the

employees who are in age group of 26 to 30 years. It found that the segments

of employees who are most vulnerable to change are with experience range

between 2 to 4 years.

The most stable chunk of employees is found to be in age 39 to 45 years as

they find themselves to be unsettled in their jobs and companies that they

have been associated.


Growth in construction activities in the economy has led to surge in demand

for engineers, resulting into increase in their movement across companies at

rate of 25 per cent. The engineering companies are sorting to pay hikes and

growth assurance, to curtail the attrition level.

Attrition trend also reveals that women employees are less prone to frequent

job changing than their male counterparts. For every 10 males jumping the

fence by changing the job, there was only 2 female’s crossing over.

Reasons for attrition according to ASSOCHAM

Dearth of professionals, technical nature of operations, increasing finance-

KPOs and attractive salary packages have led to rising job hopping at entry

and middle level in the financial services sector.

The immediate gains in salary package was found to be responsible for job

change in almost all the sectors, however the growth potential remains an

important reason prompting employee movement.

Attrition Rate study conducted by NASSCOM in IT Sector

Almost every sector in India is facing high rates of attrition these days. A

recent study revealed that employees leave either because of compensation

reasons or due to better growth opportunities. According to NASSCOM,

Indian IT-ITES industry recorded US$ 39.6 billion in revenues in 2006-07. The

revenue of US$ 49-50 billion has been projected in 2007-08 at a growth rate

of 24-27 per cent. The IT industry's contribution to GDP was 4.8 per cent in

2005-06.


Attrition Rate study conducted by BES and Data Quest in IT Sector

Though the IT/ITES sector is booming, it is constantly facing high attrition

rates of 25% - 30%. Even the big brands are also facing the same problem.

Below are the details of attrition rates of various players in IT sector.

According to the survey conducted by BES and Data Quest, Sierra Atlantic

recorded highest attrition rate (29%) followed by Kanbay with 25% and Accel

Frontline with 20 percent.

Source: BES Survey 2006 : DQ-IDC

Source: Retention Strategy Report 200


Employee Attrition – Low now but expected to worsen by KPMG and

FICCI report

Globally retailing is a high personnel turnover industry. Even large

retailers face attrition of 40 to 60% annually. Indian attrition rate levels are

currently low compared to global level. However it is expected to worsen

given the rapid expansion being witnessed and the existing shortage facing

the industry. To make matters worse, retail has to compete other high growth

industry like telecom, insurance and more specifically ITeS/BPO firms which

look for similar skills sets like customer orientation, selling skills,

communication skills etc. Respondents in this survey cited Ites as the other

sector to which most in store personnel migrate to from retailing.

Attrition in Retail Attrition in ITes

Source: KPMG in Indian retail survey 2005 Source: NASSCOM survey

14%

14%

43%

29%

% Respndents

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr0%

10%

20%

30%

40%

50%

2003 2004 2005


Attrition rate analysis conducted by ASSOCHAM in BPO sector by April

2011

The BPO industry is facing serious challenges vis-í -vis shortage of

skilled and educated workers as the attrition rate in India’s BPO sector has

risen phenomenally at the rate of 55 per cent with a significant visible

movement in mid and senior management levels, according to an industry

specific analysis of the Associated Chamber of Commerce and Industry of

India (ASSOCHAM). Although, the BPO sector in India has been very popular

since the beginning, as it has opened up plenty of job opportunities and has

totted up huge revenue, but the awfully high attrition rate coupled with talent

crisis has plagued the sector since the very beginning, said ASSOCHAM

Secretary General, D.S. Rawat.

As per the ASSOCHAM analysis BPO-ITes sector has emerged

at the top with highest attrition rate of 65 per cent during the course of last two

years, giving a serious jolt to India prospects which was till recently the most

sought after BPO destination. Services offered by the IT/ITes and BPO in the

domains of pharma and BFSI (Banking, Financial Services and Insurance)

have registered an attrition rate of around 60 per cent. In the domains of retail

and IT sector an attrition rate of around 55 per cent has been recorded. Auto,

FMCG, Manufacturing and infrastructure sectors have registered an attrition

rate ranging between 45 to 50 per cent. Amongst all the relevant sectors the

services offered by the IT/ITes and BPO in the domain of energy sector has

recorded an attrition rate of 45 percent.

The literature research and review for this project produced a vast

amount of information concerning the employees’ attrition and retention. The

literature review revealed many variables in the process of retention of

employees in the private sector and many of which could be adopted by the

public sector. The literature review articles covered topics such as: Salaries,

benefits, job satisfaction and recognition. These topics revealed significant

number of areas that organizations can improve upon, which could lead to

reduce high attrition rate.


4.2 Background Of The Study

―Most organizations don’t have a problem with headcount; they have a

problem with brain count.‖

- Allan Leighton (ex- president and CEO of Wal-mart Europe)

According to KPMG report(2006), Globally Retailing is a high

people turnover industry with even the larger retailers facing attrition between

40 to 60% annually. As organized retailing is at a nascent stage in India,

Attrition is not yet an issue at least at the middle and the senior management

level. However, with rapid growth in retailing, the demand for managers with

good retailing experience set to increase, hence attrition level are expected to

worsen. Indian attrition levels are currently low compare to global standards.

Retaining talented employees from getting poached along with reducing

turnover cost are the key areas that need to be given some serious thought.

Huge amount are being spent on hiring and training the recruits and hence

the cost of employee turnover adds a lot of money to a company's expenses.

Employees who leave the organizations take along with them valuable

information regarding the company, its customers, current projects and other

confidential data. Employees build relationship with customers and clients and

helps the business to grow but once they leave, such relationships are served

and can cause potential customer loss. The unspoken negativity can cause

more turnover. Time is crucial factor for a business to succeed and huge

amount of it goes in hiring and training new employees, also involved large

amount of money which is direct loss to the company, if employee leaves the

organization.


4.3 Problem Statement And Importance Of Study

Problem statement

Having Human Resource Management as our specialisation and

having Retailing as our sectorial subject in the MBA curriculum, we found that

the most challenging issue faced by corporate is to retain their employees as

today's global workforce is more mobile than ever before. Further, recent

studies on Retail sector shows that currently Retail Industry is facing 55% (

assocham studySource:2011 attrition rate. Thus, high turnover is of

considerable concern for manager because it disrupts normal operations and

necessitates the costly selection and training of replacements to regain the

lost customers and suppliers contacts.

Problem statement is to study major attributes which plays major role in

high attrition rate and its impact on organisation as a whole.

On the basis of analysis, we will suggest different innovative strategies

which help retail industry employer to reduce attrition level to greater extent.

Importance of Study

Study will act as secondary source for management students for conducting

further research which leads to their career growth.

For researchers, it will work as authentic source to support their research

paper.

Study will also helpful to HR academicians to make their students aware

about attrition problem.

Despite increase globalization and fluctuating economic conditions, most

employers are now struggling hard to keep good employees. So this research

provides assistance to employers -

- To identify the most common reasons about why people leave their jobs

in retail sector.

- To develop various retention strategies to retain knowledgeable

employees.


Study will also identify kind of HR practices different retail industries are

following in their retail store.

Research on causes and consequences of attrition in retail industry helps

retailer to improve their employee turnover rate and retain their key staff.

Study will make aware employees about their role and contribution in

organization's success and their engagement level with organization.

4.4 Objectives Of Study

To study the common reasons of employee voluntarily leaving or staying in

organization.

To suggest the strategies and steps for reducing turnover and improving

retention.

To study efforts made by organization to retain employee.

To study various career development programs offered by the organization.

To study the impact of induction & training programs on retention of

employees.

To determine the organizational climate.


RESEARCH

METHODOLOGY


5 RESEARCH METHODOLOGY

5.1 Research Design

The exploratory research design is adopted for this project.

5.2 Sources Of Data

Primary Source: Primary data required for the study was been collected

through interview of sales manager and questionnaire method.

Secondary Source: It was collected through published books (like personnel

today, Hr review), journals, Company records, newspapers and internet. The

data collected by the researcher are tabulated and analyzed in such a way to

make interpretations.

5.3 Data Collection Method

For the purpose of the study the necessary data has been collected

from Primary and Secondary methods.

5.4 Population

The data are collected through survey and books, reports,

newspapers and internet. We have randomly chosen sales employees from

different retail stores such as D-mart, More, Mangal Bazaar, Health care MR.

The study sample constitutes 50 respondents in research area.


Sr.No Retail Store Population No of

Respondents

1 More(FMCG) 32 17

2 D-mart(Apparel) 15 3

3 Mangal Bazaar 5 5

4 Pharma-Health

care(MR)

25 25

5.5 Sampling Method

Non probability Convenience Random Sampling.

5.6 Data Collection Instrument

We have used a structured questionnaire as a research instrument

tool which consists of close ended questions, multiple choice and questions

based on Likert’s scale in order to get data. All the questions in the

questionnaire are organized in such a way that elicits all the relevant

information that is needed for the study.


6.DATA ANALYSIS AND INTERPRETATION

Sr. No Age group Female Male

15-25 9 8

26-35 17 9

36-45 3 4

Total - 29 21

15-25

26-35

35-45

0

2

4

6

8

10

12

14

16

18

Female

Male

15-25

26-35

35-45


1. I served for ________________ years/months in this store.

0 – 3 Yrs 4 – 8 Yrs

Employee 44 6

(%) 88% 12%

Interpretation – 1

From the analysis we come know that majority of the respondents (88%) are

working in retail organizations for 3years or less than that. It shows that

majority of the employees did not continued with the same organization for

more than 3 years. Loyalty factor is missing here.

0

20

40

60

80

100

0 - 3 yrs 4 - 8 yrs

frequency of employees

Employee


2. Previously engaged in any job? YES / NO

Yes No

Employee 42 8

(%) 84% 6%

Interpretatopm – 2

84% of respondents are previously engaged in job and 16% of respondents

are not previously engaged in any job but they are the fresher for

organization.

0

5

10

15

20

25

30

35

40

45

Yes No


Employees


3. If YES, then put tick mark on the sector type of your previous organization

in the given option below.

Retail Insurance Health

care

Manufacturing Others

(Education)

Not

Applicable

Employee 26 10 4 1 1 8

(%) 52% 20% 8% 2% 2% 16%


Majority of respondents were earlier engaged in Retail sector and some of

were engaged in Insurance, Healthcare, Manufacturing and Educcation. So

we can idntify that retal sales employee most probably go the same retail

sales job after leaving one retail sales job.

0

5

10

15

20

25

30


Employees


4. Reasons for leaving earlier job.

Retail Insurance Healthcare Manufacturing Others

(Education)

Not

applicable

Monotonous

work

1

Long and Odd

working Hours

3 2

No growth

opportunities

2 2 2

Lack of

promotion

9 1

Higher salary 18 3 1

Higher education

No personal life 1

Problem with

peers

1

Lack of job

security

Others (location)

Not applicable 8



Majority retail employees leave their jobs for higher salary and lack of

promotion. Some of employees leave their jobs due to other problems like

monotonous work, long and odd working hours, no growth opportunities, no

personal life and problems with peers and boss.

1

322 2 2

9

1

18

3

11 1

8

Retail Insurance Health Care Manufacuring Others (Education) Not Applicable

Chart Title

Monotonous work Long & Odd working hours No growth opportunities

Lack of Promotion Higer Salary Higher Education

No personal life Problem with peers Lack of job security

Others(Location) Not Applicable


5. How does the present company hire an employee?

Internal

recruitme

nt

Adver-

tisement

Employ-

ment

exchange

Employ-

ment

agencies

Educational

Institutions

Recomm-

endations/

referrals

Any

other

Employee 2 27 - 2 - 19 -

(%) 4% 54% - 4% - 38% -


Retail Organizations generally hire their sales employees through

advertisement and recommendations/referrals. While some of them also do

internal recruitment for higher and middle level employees and some of them

make a use of employment agency.

0

5

10

15

20

25

30


Employee


6. Does company perform any of the tasks given below for employee retention

in the organization?

Tasks performed by the company Employee

Pay for performance 39

Recognition for outstanding performance 18

Encourage upward direction of communication 4

Open door policy 3

On the job training & development programmes 16

Promote employee growth 3

Provide challenging opportunity 12

Any other ( taking written exam for promotion purpose) 6


Interpretation: 6

From the analysis, we can interpret that retail organizations are providing

financial as well as nonfinancial rewards to their employee in terms of pay for

performance and recognition for performance. Some organizations are also

conducting qualitative training and challenging opportunity. Many

organizations are performing more than one task. In other tasks they are also

conducting written exams for promotion purpose.i.e More

frequency of employees0

10

20

30

40



RATE YOUR AGREEMENT OR DISAGREEMENT WITH THE NEXT

STATEMENTS BY PUTTING TICK MARK CLOSEST TO YOUR OPINION.

7. I find my job satisfying.

Totally

agree

Somewhat

agree

No

opinion

Somewhat

Disagree

Totally

Disagree

Employee 10 20 5 13 2

(%) 20% 40% 10% 26% 4%


Majority employees are satisfied with their job and 40% of employees are not

happy with their job.

Totally agree, 10

Somewhat agree, 20No opinion, 5

Somewhat disagree, 13

Totally disagree, 2


8. I find the department has a ―fearless culture‖ (Being able to speak up and

speak against the status quo without fear of retribution.‖)

Totally

agree

Somewhat

agree

No

opinion

Somewhat

Disagree

Totally

Disagree

Employee 12 24 8 4 2

(%) 24% 48% 16% 8% 4%


Majority employees believe that their retail organizations are having fearless

culture and they feel free to speak out problems regarding sales, customers

as well as products.

Totally agree, 12

Somewhat agree, 24

No opinion, 8


Totally disagree, 2


9. I am provided opportunities for personal growth within the job environment

(Job sharing, task forces, conferences and expanded responsibilities.)

Totally

agree

Somewhat

agree

No

opinion

Somewhat

Disagree

Totally

Disagree


(%) 22% 54% 12% 8% 4%


From the analysis we can say that all retail organizations are providing career

and growth opportunities to their employees.

Totally agree, 11

Somewhat agree, 27

No opinion, 6


Totally disagree, 2


10. I am consistently aware of the department’s organizational direction

(Knowing the mission, vision, strategies and goals.)

Totally

agree

Somewhat

agree

No

opinion

Somewhat

Disagree

Totally

Disagree


(%) 48% 48% 2% 0% 2%


All employees are generally aware about organization's mission, vision,

strategies and goals and management is providing them all guidance

regarding company policies and procedures on continuous basis.

Totally agree, 24

Somewhat agree, 24

No opinion, 1


Totally disagree, 2


11. The department recognizes my work-life balance needs (Seeks to

consider the demands of work with the need to deal with personal and family

issues.)

Totally

agree

Somewhat

agree

No

opinion

Somewhat

Disagree

Totally

Disagree


(%) 6% 36% 14% 40% 4%


Due to long working hours, life of retail employees becomes stressful. On the

other side they are willing to work in the retail industry they do necessary

adjustments related to their working hours.

Totally agree, 3

Somewhat agree, 18

No opinion, 7


Totally disagree, 2


12. Pay for the job for employees adequate.

Totally

agree

Somewhat

agree

No

opinion

Somewhat

Disagree

Totally

Disagree


(%) 30% 52% 10% 6% 2%


Employees are paid for their performance and their pay is adequate in retail

sector.

Totally agree, 15

Somewhat agree, 26

No opinion,

5


Totally disagree, 2


13. I am satisfied with training provided by company through probation period.

Totally

agree

Somewhat

agree

No

opinion

Somewhat

Disagree

Totally

Disagree


(%) 34% 40% 8% 8% 10%


Majority of the employees are satisfied with the training provided to them by

their retail organizations.

Totally agree, 17

Somewhat agree, 20

No opinion, 4


Totally disagree, 5


14. Company providing flexi time working.

Totally

agree

Somewhat

agree

No

opinion

Somewhat

Disagree

Totally

Disagree


(%) 0% 16% 14% 50% 20%


Retail organizations do not provide flexi time hours to their employees.

Totally agree, 0

Somewhat agree, 8

No opinion, 7


Totally disagree, 10


15. Management considers the other aspect like secure career, benefits,

perks & communication.

Totally

agree

Somewhat

agree

No

opinion

Somewhat

Disagree

Totally

Disagree

Employee 2 17 10 17 4

(%) 4% 34% 20% 34% 8%

Interpretation – 15 & 16

Some retail organizations consider other aspects like secure career, benefits,

perks & communication while some are not following those aspects. But few

organizations like More, Westside are not providing the bonuses to their

employees during festivals like diwali, kite flying etc.

Totally agree, 2

Somewhat agree, 17

No opinion, 10


Totally disagree, 4


17. Company considers human resource as an asset rather than liability.

Totally

agree

Somewhat

agree

No

opinion

Somewhat

Disagree

Totally

Disagree


(%) 46% 34% 8% 6% 0%

Interpretation- 17

Retail organizations consider all employees as an asset rather than liability.

Totally agree, 23

Somewhat agree, 17

No opinion,

4


Totally disagree, 0


18. Company arranging regular informal meetings to give the opportunity to

employees to feel that they belong to the company and the company belongs

to them.

Totally

agree

Somewhat

agree

No

opinion

Somewhat

Disagree

Totally

Disagree


(%) 32% 56% 4% 4% 4%


Retail organizations are arranging regular informal meetings to give the

opportunity to employees to feel that they belong to the company and the

company belongs to them on regular basis.

Totally agree, 16

Somewhat agree, 28

No opinion, 2


Totally disagree, 2


19. Management of the company informs to employees about the decisions &

actions taken in concerning employee’s interests & problems.

Totally

agree

Somewhat

agree

No

opinion

Somewhat

Disagree

Totally

Disagree


(%) 52% 42% 4% 2% 0%

Interpretation: 19

From the analysis we can say that generally all the employees in retail

organizations are well informed about the decisions and actions concerning

their interests and problems taken by the top management.

Totally agree, 26Somewhat agree, 21

No opinion, 2Somewhat disagree, 1

Totally disagree, 0


20. In organization authorities and responsibilities are properly decentralized

to increase effectiveness of performance.

Totally

agree

Somewhat

agree

No

opinion

Somewhat

Disagree

Totally

Disagree


(%) 30% 44% 16% 10% 0%

Interpretation: 20

In most of retail organizations authorities and responsibilities are

decentralized.

Totally agree, 15

Somewhat agree, 22

No opinion, 8

Somewhat disagree, 5 Totally disagree, 0


RESULTS AND FINDINGS

What makes employees leave?

On the basis of research on causes of high turnover rate in retail

sector, we found some of the very common reasons which play major role,

are

Lack of promotional and career growth opportunities such as

Perceived opportunity for advancement

Presence and/or clarity of development plan.

Problem with superior or peers,

Compensation: Better compensation packages being offered by other

companies may attract employees .

Lack of recognition -If the work is not appreciated by the supervisor, the

Employee feels de-motivated and loses interest in job

Stress from overwork and work life imbalance: Job stress can lead to work

life imbalance which ultimately leads to employee leaving the organization

New job offer: An attractive job offer which an employee thinks is good for

him with respect to job responsibility, compensation, growth and learning etc.

can lead an employee to leave the organization.

For some employers, the denial of a full involvement in the overall

functions leads him to face difficulty in identifying himself with the organization

and its goals, resulting further in his inability to take pride even in being a part

of the organization. Also, some of the employees feel that the good work

turned out by them goes unappreciated. A circumstance, quoted as painful in


many of the exit interviews is the unfortunate necessity of working with a boss

who has no value of equity, and who practices prejudice and nepotism in the

treatment of employees.

The major causes of employee turnover fall into four categories.

1) Pull Type

When an employee is attracted by an offer provided by any other organization

and he/she quits the organization, it is referred to a pull type. In this type, the

employee may find a better option in terms of career advancement, high

salary, more benefit packages, opportunity to work overseas, etc.

2) Push Type

The major reason for this type of resignation is when the employees

negatively perceive the organization and/or may be dissatisfied with the

existing situations. Factors such as uncongenial organizational culture,

problems with superiors or colleagues, job boredom, perception of unfairness

on issues like pay and promotion (distributive justice) causes a great deal of

satisfaction, which triggers the intention of quitting.

3) Unavoidable Turnover

Uncontrollable factors that are outside the purview of an organization are the

major reasons for this type of turnover. The reason for resignation is the area

unrelated to work in any direct sense. The most common is retirement and

some of the other reasons are illness, relocation—primarily to join with spouse

and family, to pursue higher education, responsibilities to care for their aged

parents, proximity to their residence, child care, maternity reasons, etc.

4) Involuntary

This type of turnover is the departure of employees, which are involuntary and

are initiated by the organization itself. Examples are layoffs, employee's


termination due to problems, ending of contract, etc. The first two types of the

turnover, the push and pull can be avoided if the organization reacts properly

to the turnover symptoms of their employees.

Consequences of Employee Turnover

Decreased productivity; work backlog, increased workloads.

Increased investment in recruitment, training and maintenance of employees.

Decreased commitment and morale among the employees, leading to poor

team dynamics.

Knowledge transfer to the competitors: When an employee quits, he carries

the knowledge that he has acquired in the present organization.


OBSERVATIONS

By visiting various retail stores/malls it is observed that majority of employees

are female and majority of them are between the age group of 23-27. It seems

that fresher employees are more mobile and dynamic, and are willing to move

from one job to other job to fulfill their expectations.

In More Mega Store, there is a system of taking written exams for the purpose

of promotion and they have black board system to acknowledge employees

regarding any changes in their working system and retail products. It implies

that good HR practices are followed at organization.

In pantaloons during the festive seasons to fulfill the gap of excess manpower,

they recruit manpower from some NGOs.

As analysis on attrition reveals that employees quit their job in majority of the

cases for higher pay and promotion.


LIMITATIONS OF THE STUDY

Although all attempts were made to make this an objective study, biases on

the part of respondents might have resulted in some subjectivity.

Though, no effort was spared to make the study most accurate and useful, the

―sample Size‖ selected for the same may not be the true representative of the

Company, resulting in biased results.

This being the maiden experience of the researcher of conducting study such

as this, the possibility of better results, using deeper statistical techniques in

analyzing and interpreting data may not be ruled out.

One constraint has been regarding the cost, as study involves the collection of

primary and secondary data. Therefore, the cost incurred was much more.

Normally employees hesitate to disclose the information and they are always

busy in their work. We may not have given clear answer.

The study is to taken up for the academic purpose only.

The study was on 50 selected employees from different retail stores, so their

need not be the universal opinion.

Managers were reluctant to disclose the database and lack of practical issues of attrition

because companies are requuired to maintain confidentiality.

Due to time constraints all the aspects of the attrition couldn’t be studied and

elaborated.


CONCLUSION

Retention Determinants

Following are the components that affect employee retention.

Career opportunities

1. Training Continuity.&

2. Development Rewards

1. Competitive pay & benefits.

2. Performance reward

Differentiation.

3. Recognition.

4. Special benefit & perks.

Job design & work

1. Job responsibility & autonomy.

2. Work flexibility.

3. Working conditions.

4. Work/Life balancing

Employee Relationship

1. Fair/nondiscriminatory

Treatment.

2. Supervisory/management

Organizational

Components

Values and Culture.

Strategies & Opportunities.

Well managed &

Results oriented.

Job continuity & security.


Benefits Of Attrition

Attrition is not bad always if it happens in a controlled manner. Some attrition

is always desirable and necessary for organizational growth and

development. The only concern is how organizations differentiate ―good

attrition‖ from ―bad attrition‖. The term ―healthy attrition‖ or ―good attrition‖

signifies the importance of less productive employees voluntarily leaving the

organization. This means if the ones who have left fall in the category of low

performers, the attrition in considered being healthy.

Attrition rates are considered to be beneficial in some ways:

1. If all employees stay in the same organization for a very long

time, most of them wil be at the top of their pay scale which will

result in excessive manpower costs.

2. When certain employees leave, whose continuation of service

would have negatively Impacted productivity and profitability of

the company, the company is benefited.

3. New employees bring new ideas, approaches, abilities &

attitudes which can keepthe organization from becoming

stagnant.

4. There are also some people in the organization who have a

negative an demoralizing influence on the work culture and team

spirit. This, in the long-term, is detrimental to organizational

health.

5. Desirable attrition also includes termination of employees with

whom the organization does not want to continue a relationship.

It benefits the organization in the following ways:

· It removes bottleneck in the progress of the company

· It creates space for the entry of new talents

· It assists in evolving high performance teams


6. There are people who are not able to balance their performance as per

expectations, lack potential for future or need disciplinary action. Furthermore,

as the rewards are limited, business pressures do not allow the management

to over-reward the performers, but when undesirable employees leave the

company, the good employees can be given the share that they deserve.

Some companies believe attrition in any form is bad for an organization

for it means that a wrong choice was made at the beginning while recruiting.

Even good attrition indicates loss as recruitment is a time consuming and

costly affair. The only positive point is that the realization has initiated action

that will lead to cutting loss.


SUGGESTIONS

RETENTION STRATEGIES

1) Exit Interview: Need for a Novel Approach

Exit interview is the process of identifying the reasons for which an

employee quits an organization. It is an interview scheduled between the

human resource professional and the employees who have planned to quit at

the time of leaving the organization to collate the reasons for the departure.

The human resource professionals may conduct the interview in a brief formal

session or even in a structured interview session.

1. Exit interviews provide an opportunity to 'make peace' with disgruntled

employees, who might otherwise leave with vengeful intentions.

2. Exit interviews are seen by existing employees as a sign of positive culture.

They are regarded as caring and compassionate - a sign that the organization

is big enough to expose itself to criticism.

3. Exit interviews accelerate participating managers' understanding and

experience of managing people and organizations. Hearing and handling

feedback is a powerful development process.

4. Exit interviews help to support an organization's proper HR practices. They

are seen as positive and necessary for quality and effective people-

management by most professional institutes and accrediting bodies

concerned with quality management of people, organizations and service.

5. The results and analysis of exit interviews provide relevant and useful data

directly into training needs analysis and training planning processes.

6. Exit interviews provide valuable information as to how to improve recruitment

and induction of new employees. Exit interviews provide direct indications as

to how to improve staff retention.

7. Sometimes an exit interview provides the chance to retain a valuable

employee who would otherwise have left (organizations often accept

resignations far too readily without discussion or testing the firmness of feeling

- the exit interview provides a final safety net).


2) Reward strategies

The strategies of employee retention, briefly lists the main conveniences and

benefits that may be extended to keep employees hooked. It reads:

Above award remuneration and bonuses

Career development

Flexible work hours

Job sharing

Telecommuting

Gym membership

Share options

Opportunities for international travel

For, additional facilities like transport, accommodation, medical benefits,

`loyalty points' that bear weight age in the career advancement, would also

from part of the main package of employment conditions.

All this does come with substantial costs. A loyal workforce, however,

has a much greater worth than what these package facilities could cost. In

addition to these monetary benefits, a shrewd employer always plays upon

the psychology of the workforce by instilling in them a sense of participation in

the functions of the employing organization. A sense of ownership is also

infused through schemes like "Employee Stock Option Plan" /"Employee

Share Ownership Plan" (ESOP) or through sharing a part of the revenue

earned in the business. An effective leadership assumed by the top

management would be a very important feature that keeps the workforce

intact and loyal. In fact, the approach to the task of formulation of strategies

for employee retention should be comprehensive and the honest intention of

the employer to implement every stipulation in the package of appointment

should be evident.


3) ―I‖ METHODOLOGY - ―The New Age Training Tool‖

―I‖ Methodology is movie/film based training method.

―I‖ stands for Innovative, Interesting, I feeling- i.e self empowerment.

According to this method, employees are shown clipping or videos

to improve sales, marketing, team spirit, stress management level,

interpersonal skill, communication skill, behavioral and motivational aspects

such as movie like Rocketsingh, Chakde India, Corporate, Iqbal, Goal etc.

And co-relate these aspects with real and practical day to day operations at

workplace.

Pros of ―I‖ Methodology

It helps to create stress free and relaxed environment

Retention of Learning- This movie based training helps employees to

remember for a longer time.

It Creates feeling of self empowerment and self motivation within the

employees.

Cons of ―I‖ Methodology

Trainees may not take it seriously.

They may be diverted.

It has limited applicability.

4) A BUDDY APPROACH

―Tell me and I will forget, Show me and I may remember, involve me I will

understand.‖

Buddy Approach make employees to feel that they are the dear

ones of organization and it also creates feeling of involvement. The major

aspect of Buddy Approach is peer learning.


Benefits of Peer Learning

Positive Interdependence.

Team building Spirit

Supportive relationship

Develop leadership qualities

Acquire conflict management skill

Clarity of Concepts

Enhance Productivity

Peer learning Strategies

There are mainly two methods in Buddy approach.

1) Buzz Groups

Here employees are given case studies based on real market situations and

they are encouraged to come up with different solutions.

Affinity Group

2) Teach-write-Discuss

Here employees are taught about various job related aspects and querries

and then motivated to participate if they have any doubt and those doubts are

discussed by particular mentor.

The formation of an effective retention management program

In general, then, the management of turnover will have the greatest

organizational benefit when it is targeted at encouraging the retention of

valued employees and facilitates the replacement of less effective employees

with more effective staff. (9) Although each organization needs to assess the

patterns of turnover for its own particular circumstances, there are some

general policies to consider that have been shown to improve satisfaction

and, in return, reduce the level of turnover that should be part of any formal

employee-retention program:


1. Establish and maintain both the practice and the impression of fair treatment

of all employees, so as to help foster a positive, consistent and reassuring

work environment.

2. Ensure that senior management and immediate supervisors demonstrate their

own sense of commitment to the organization.

3. Emphasize the need for a close match between the personality/work style of

prospective employees with the organization’s culture as well as providing

prospective employees with realistic job previews – there is evidence to

suggest that newcomers to an organization who leave within the first few

years may have a different commitment propensity at the time they join the

organization than do those employees who stay. (10) A more thorough

assessment of an employees’ past experience and reasons for leaving their

last job may help identify employees who are more likely to feel a stronger

sense of organizational commitment in the long run.

4. Properly incorporate new employees into the organization and manage their

expectations and initial experiences with the organization – in fact, a large

financial services firm found that it could effectively reduce turnover among

new hires by deliberately improving the process of socializing new employees

into the corporate culture, particularly through the use of mentoring.

5. Communicate realistic and attainable expectations of performance to all

employees, so as to avoid the potential for ―shock‖ and the development of

dissatisfaction.

6. Give positive and constructive feedback on a regular basis, including through

both formal job performance reviews and informal channels of communication

with employees, as well as ensuring that viable reward and recognition

programs are used to motivate all employees.

7. Offer clear-cut opportunities for job enhancement, advancement and career

development.


BIBLIOGRAPHY

(A) BOOKS AND MAGAZINES

Retailscape2020 by Prof. N. Chandrasekhar, Sanjay Duttgupta,

Deepika bhagat Page 253 and 258

Employee Engagement in Retail by Jyotinder Kaur Chaddah

Rabiya Jidda, R K Srivastava. Page 545 – 553

Attraction to attrition, Case 21 from cases in retail management by

Prof. Srini.R.Srinivasan, Dr. R.K.Srivastava

Engagement and Rewards. Page 127 – 134, 3rd edition Armstrong’s

Handbook of Reward management practice by Michael Armstrong

Employee benefits. Page 382 - 387

Personnel Today

HR review by ICFAI

(B) LINKS

http://www.imap.com/imap/media/resources/IMAPretailrepot8-

23CB9AA9C6EBB.pdf

http://www.docstoc.com/docs/10265461/FICCI-Retail-Report-2007

http://www.NASSCOM.in

http://www.ASSOCHAM.org/arb/aep/attrition-rates.doc

(C) WEBSITES

www.citehr.com

www.iupindia.in

http://www.imap.com/imap/media/resources/IMAPretailrepot8-23CB9AA9C6EBB.pdf

http://www.imap.com/imap/media/resources/IMAPretailrepot8-23CB9AA9C6EBB.pdf

http://www.docstoc.com/docs/10265461/FICCI-Retail-Report-2007

http://www.nasscom.in/

http://www.assocham.org/arb/aep/attrition-rates.doc

http://www.citehr.com/

http://www.iupindia.in/


ANNEXURE

Appendix-B Questionnaire for employees

Gender: Male Female Age; 15-25 26-35 36-45

1. I served for ________________ years/months in this store.

2. Previously engaged in any job? YES NO

3. If YES, then put on the sector type of your previous organization in

the given option below.

Retail

Insurance

Health care

Manufacturing

Others ( please specify )

4. Reasons for leaving earlier job. Put tick mark in the given option

below.

Monotonous work (repetitive nature of work)

Physical strains because of long and odd working hours

No growth opportunity

lack of promotion

For higher Salary

For higher education

No personal life

Problems with peers and managers

No permanent job

Others (please specify)


5. How does the present company hire an employee .Tick an option

Internal recruitment

Advertisement

Employment exchanges

Employment agencies

Educational institutions

Recommendations / referrals

Any other (please specify)

6. Does company perform any of the tasks given below for employee

retention in the organization?

Pay for performance

Recognition for outstanding performance

Encourage upward direction of communication

Open door policy

On the job training & development programmes

Promote employee growth

Provide challenging opportunities

any other (please specify)

RATE YOUR AGREEMENT OR DISAGREEMENT WITH THE NEXT

STATEMENTS BY PUTTING TICK MARK CLOSEST TO YOUR OPINION.

7. I find my job satisfying.

Totally agree somewhat agree No opinion

Somewhat disagree Totally disagree

8.I find the department has a ―fearless culture‖ (Being able to speak up

and speak against the status quo without fear of retribution.‖)

Totally agree Somewhat agree No opinion



9. I am provided opportunities for personal growth within the job

environment (Job sharing, task forces, conferences and expanded

responsibilities.)



10. I am consistently aware of the department’s organizational direction

(Knowing the mission, vision, strategies and goals.)



11. The department recognizes my work-life balance needs (Seeks to

consider the demands of work with the need to deal with personal and

family issues.)



12. Pay for the job for employees adequate.



13. I am satisfied with training provided by company through probation

period?



14. Company providing flexi time working?




15. Management considers the other aspect like secure career, benefits,

perks & communication?



16. If agree, then please specify one or two concerns with respect to

above question.

______________________________________________________________

17. Company considers human resource as an asset rather than liability.



18. Company arranging regular informal meetings to give the

opportunity to employees to feel that they belong to the company and

the company belongs to them.



19. Management of the company informs to employees about the

decisions & actions taken in concerning employee’s interests &

problems.



20. In organization authorities and responsibilities are properly

decentralized to increase effectiveness of performance.



important and valuable resource that every

Documents