Reference no: EM132784261

SALES GROWTH TRENDS AT LIVING HEALTHY INC. IN POOR HEALTH

Ray Stevens was having a bad day. As the head of Living Healthy Inc. (LHI), a Vancouver-based retailer of outdoor recreational gear and sporting goods, Ray had overseen expansion of LHI from three West Coast stores to 30 locations in major cities across Canada. After several years of strong growth he just learned that same-store sales at LHI were down for the third quarter in a row. He knew that

a turnaround in sales was crucial to the willingness of private investors to fund further expansion. There was some good news. Recently conducted market research revealed that LHI had high name recognition. Marie Squires, Len's chief operations officer, had been able to renegotiate down the leasing costs at 12 locations as the contracts came up for renewal. Website sales also continued to grow. Still, Ray was frustrated. He had been confident that the recent expansion of men's and women's clothing, including yoga gear and eco-conscious offerings, would have especially boosted sales. In considering the current state of affairs, Marie commented, "we haven't thought much about it, but since you used your industry connections to place managers at most store locations, more than half of them have left. " Ray replied. "But haven't we been moving our best salespeople into those management positions as they open up?" "We have," countered Marie, "but Glen in Human Resources has always warned that the best salespeople don't necessarily make the best managers." Marie continued, "We also can't seem to keep our front-line staff; many of them leave within three months. As soon as we get them trained, they're gone!" "Well, let's get Glen in here," interjected Ray. The next day, in a meeting with Ray and Marie, Glen commented, "It's no surprise to me we have a high turnover rate-it's very common in the retail industry. But, there is a major opportunity here for HR to contribute to the business beyond the record keeping and benefits administration we've been taking care of." Ray said, "Well, I've never cared much for the touchy-feely aspects of people management; I think you count on the judgment of the store managers to bring in good people, and they either sink or swim in a sales environment." "But we can do a much better job of screening the people the company hires into sales without a lot of added cost," countered Glen. "We ought to be using the same screening process across all of our locations-not only to increase efficiency and effectiveness, but also to keep us out of legal difficulties. " Glen continued, "We use our website as another venue to boost sales, but could also use it to receive applications and résumés, paired with software to scan and identify candidates who are a good fit based on background experience, interests, education, and store location.

The most promising applicants can then be called into the local store for a screening interview, though we might be able to conduct online screening interviews and save the face-to-face behaviorally focused selection interviews for on-site." Marie said, "Glen, you have been wary about promoting our best salespeople into store manager positions as they open up. Why is that a problem?" "Sales positions and management positions are fundamentally different," Glen responded. "Screening is more of a science than an art, requiring procedures designed specifically with each position in mind. I'm sure I can develop a cost-effective proposal on this, including expected performance outcomes and financial returns. I'll have this to you within a week. "

Question: With respect to the vignette that opens this chapter, Glen, the HR director, recommended several interventions concerning recruitment, screening, selection, and retention. Drawing on your reading of the current chapter, recommend specific procedures/tools likely to be effective in these areas and argue your case. In forming your recommendations, be sure to consider the different jobs involved (i.e., store manager versus salespeople), the implications of LHI's growth, and the degree to which various decisions should be made at the store level and at the company level.