Retail Culture Best Practice

November 2nd, 2010 – Michael Tonkin

The best retailers in the world are masters at it. All the other retailers either don’t do it or don’t get the real value from it. By “it” I’m talking about measuring retail culture through employee research, largely through the now familiar term, ‘employee engagement’.

For the record, I have a bias on this story as our organisation conducts our own Retail Culture Index [RCI], which we have used for the past four years to measure retail culture and help retailers benchmark their retail culture across the industry. Enough of the sell for now.

Whether you currently run your own culture research [or outsource it] or don’t do any culture research for now but are thinking of it, here are some handy tips for getting value from the research, like the world-class retailers mentioned before.

1. Don’t think of culture research as an activity to guage whether people like working in your organisation. If all you want to know is if they’re happy, look at your people metrics; this will tell you. Or better still, ask them. Comprehensive culture research measures behaviours that help retailers become more successful. It’s not just about job satisfaction – it’s about the discretionary effort that differentiates high performing staff. In good times, employee engagement is the difference between being good and being great and, in bad times, it’s the difference between surviving and not. In good times and bad, low engagement reduces performance and profit.
2. The notion of employee engagement in the retail industry is unique. The retail industry itself is unique. What other industry has so many employees dealing face-to-face with customers, working unsociable hours on average pay with minimal contact with their managers and peers? Whatever tool you use needs to reflect these nuances of the retail industry.
3. The ownership of employee engagement is everyone’s responsibility, not the Human Resources department. It starts at the very top of the organisation, with the collective senior team making employee engagement a strategic priority. Each year, the senior management team should together assess their performance on the organisations engagement score.
4. Honesty in your business culture is critical to the success of the engagement process. Measuring culture through employee engagement requires a deep level of sincerity at every level.
5. When it comes to the specific questions in the survey instrument, consider asking team members not only the performance rating for the question, but also the level of importance as well. The major benefit of this approach is it will help you identify the major priorities coming out of the results – your #1 priority are all those questions that rated low on performance and high on importance. You might be surprised to see that pay, using this approach, doesn’t sit as priority #1.
6. Include open-ended questions in the survey instrument, not just quantitative ratings. By all means include questions like, “What would make you more motivated at work?” but questions only like this don’t pack enough punch in terms of real business change. Because you often have very few opportunities to get feedback and ideas from your entire organisation, try other questions, like, “If you were CEO for a day, what’s the #1 thing you would do improve sales?” This way, you drive innovation rather than just hearing what gets up people’s noses.
7. Put together an engagement ‘taskforce’ that is responsible for working on the organisational-wide opportunities. Get representation from different levels of the business and get some quick wins on the board. There’s nothing more demoralising or counter-productive to the whole exercise when it takes an organisation 9-months before any positive action is taken.
8. Train managers on how to improve employee engagement. There’s no point measuring it and not giving managers the tools to improve their ‘leadership for employee engagement’ skills.
9. Hold every manager accountable for the engagement level of their team. If a manager leads in away that inspires their team and the engagement results show through, incentivise accordingly. Equally, come down hard on managers with low engagement scores. Also, every manager must have an ongoing employee engagement action plan that is put in place after they learn about the engagement scores of their team.
10. Try to make the connection between employee engagement and other retail metrics like store sales. Research shows that two similar sized stores from the same organisation, with similar locations, can perform very differently based on the engagement levels of the store. A ten percent gain in sales is the widely held figure, comparing a store with above average engagement levels to a store with average engagement levels. Attaching hard metrics to employee engagement scores makes everyone stand up and take notice.