Family Dollar Human Resources Organizational Analysis

Based on our survey findings, we were able to assess Family Dollar’s performance in these areas: training and development, pay for performance, performance management, staffing & selection, on-boarding, career advancement, employee involvement, commitment to mission, diversity & inclusion, Human Resource (HR) transactional, HR service, view of organization, and engagement. After reviewing and analyzing the data, we have determined that the company is not correctly aligned with their strategic direction.

The strategic vision does not currently focus on human capital as a driving force “To accelerate revenue growth, expand operating margins and optimize our capital structure. ” The survey shows that there are opportunities identified with the alignment of operations and HR. To increase performance and reduce disconnect from these departments, the pay for performance, staffing, and the internal branding or view of the organization will need further action by the company. The organizational analysis of the survey results identified three weaknesses, which we have built strategic goals to follow and meet the trategic vision’s target points. Each strategic goal is further built and supported by three independent tactical goals. The three drivers of engagement that will support the largest upward movement in the organization are pay for performance, staffing and view of the organization. • Pay for Performance o Establish a better link between pay and performance so that we can improve productivity and profitability • Staffing o Reduce the turnover rate to lower the costs associated with hiring and training, which increases profitability • View of Organization Reestablish the brand image to attract better candidates HISTORY “In 1958, a 21-year-old entrepreneur with an interest in merchandising became intrigued with the idea of operating a low-overhead, self-service retail store. Leon Levine believed he could offer his customers a variety of high-quality, good value merchandise for under $2. Because he had grown up in his family’s retail store, he understood value, quality and customer satisfaction. In November 1959, Leon Levine opened the first Family Dollar store in Charlotte, North Carolina, and was on his way to becoming a retailing legend.

Right from the start, he had a well-developed philosophy of what Family Dollar would be and how it would operate, a philosophy from which he and his management team have never strayed. The concept is a simple one, “the customers are the boss, and you need to keep them happy” (1). Stores were set up through a very simple floor plan that were uniformly stocked and laid out. The manager’s focus was on customer service and delivering a true convenience store atmosphere. To this day with the over 7,500 stores, the plan has the same general concept which is to focus on the customer.

Family Dollar Stores, Inc. is a neighborhood family orientated discount retailer where customers are able to find strong value in the everyday products that they need the most. The company in 2008 was the “top performer on the S&P 500 and in fiscal 2010 the company posted $7. 9 billion in sales with $358 million in earnings” (2). Family Dollar offers great savings on everything from groceries to clothing and even national brands at strong value. Family Dollar’s mission statement is achievable, motivational, and specific to where they want to take their business.

Family Dollar’s vision of this mission statement is to become the top small format convenience and value retailer, which will serve the needs of families in all neighborhoods. BUSINESS STRATEGY MISSION Family Dollar’s mission statement is, “For Our Customers a compelling place to shop…by providing convenience and low prices. For Our Associates a compelling place to work…by providing exceptional opportunities and rewards for achievement. For Our Investors a compelling place to invest… by providing outstanding returns” (2).

Family Dollar focuses on the values of their customers. The focus on the customer base with needs for value and convenience is the primary mission of the company. The compelling place to work suggests that Family Dollar strives to have its employees enjoy working for the company. Family Dollar also views its investors as a part of the family and supports them with strong returns on their investments. Family Dollar’s mission statement is achievable, motivational, and specific to where they want to take their business.

VISION “To be the best small-format convenience and value retailer serving the needs to families in our neighborhoods. ” Family Dollar strives to bring the business to the customer instead of making the customer go to the business. Family Dollar focuses on core and urban market share to deliver products to a wide variety consumer base. The basis of the formula that Family Dollar uses focuses on a customer base of the following: head of household shopper of which is primarily 80% female based.

The target market suggests an average household earnings of $40,000. The shopper base would include the age range of 25-45 years old on average. STRATEGIC DIRECTION “Accelerate revenue growth, expand operating margins and optimize our capital structure. ” Family Dollar is focusing on accelerating their strategic direction in 2013 by introducing a new concepts store, which will focus on a new market. The current focus in on a lower income strategy and the new concept will focus on a higher head of household range with a different model all-together.

This strategic move will encompass an updated product line, new design format, and a different employee pay structure. This new focus will be one of the major strategies employed during the fiscal year. Beyond the changes above, the same strategy of customer service and delivering a great shopping experience will continue to be the main focuses. DEMOGRAPHIC BREAKDOWN |  |American Indian or | | |Alaska Native (Not | | |Hispanic or Latino)| Part-Time Hourly |51. 5% | |Full-Time Hourly |18. 4% | |Salaried Manager |10. 1% | |TOTAL STORE LEVEL |80. 0% | |  |  | |Middle Executive & Home |19. 0% | |Office | | |Upper Executive |1. 0% | The demographic break down shows that the company’s store positions are dominated by a female base with a diverse breakdown amongst ethnicities.

The middle executive and home office positions are aligned with a male to female ratio. The upper executive level has a 4 to 1 male to female ratio. 92. 7% of all positions are either Black or African American or White. BUSINESS GOALS AND OBJECTIVES Chairman and CEO, Howard Levine, has announced that the company expects to open an additional 500 new stores in fiscal 2013 and stated “our financial goals over the next three to five year are to consistently deliver: 5% to 7% net new store growth; mid-single-digit comp sales; growth; operating margin expansion”(3).

To deliver sustainable growth at this level, the company must have a strong supply of internal human capital and a more structured staffing plan. The amount of human capital to successfully run 500 new Family Dollar Stores would be some where in the range of adding 3,700 to 3,800 employees over all of the different levels of the organization. To sustain development of that size over just three years, which would also add another distribution center, the company would have to employ 12,000 to 13,000 additional team members.

The company needs to hire the right team members, train them effectively, and provide incentives to increase retention. The results of the survey and the organizational analysis that was conducted will support sustainable growth at this rate through using our recommendations. SWOT ANALYSIS |Internal | |Strengths |Weaknesses | |Gross profit margin is 2. % higher than channel |Restricted market- No outside U. S. | |Accepts Food Stamps & Link |Lack of ability to drive internal growth | |90% of items are $10. 00 or less |Turnover very high | |Strong balance heet |High level of shrink in urban markets | |7,500 store strong- buying power |Staffing & Hiring Methods | |On-boarding of new team members |Career Path & Advancement | |Training & Development of employees |Have high amount of remodels needed to come up to new concept | |Stock has out-performed channel |Internal branding program | |Large selection per square foot |Low performing locations | |Low overhead |No-online buying | |External | |Opportunities |Threats | |Over 47. million on food stamps |Competition has planned to open more locations to impact market | |Opening stores in higher income areas |share | |Online sales for bulk items |Online shopping is more popular | |Ensuring maximum profitability |Competition in channel is paying higher starting salaries | | |Competition is recruiting current talent through increase in pay | | |and advancement opportunities. | | |Increase in textile goods and fuel costs have impact on pricing | | |with customers essential goods |

II. HR Scorecard – Analysis of Survey Results Training The survey results indicate a 5. 80 rating, indicating a modestly effective view on training within Family Dollar. New team members are put through a formal training program with a training manager for 4-12 weeks depending on the position. The hiring manager follows up with the new team member and training manager to ensure that they both are up to speed with the curriculum. The follow up process ensures that new employees are actively integrated and on-boarded into the organization. Developmental Opportunities In terms of skill development opportunities, the survey reported a 4. 93 rating.

This indicates an average approach to skill building. The implications of developmental opportunities to the Family Dollar are immense. Employees who do not see a viable future for themselves in the company may eventually lose their motivation. According to Motivation in Today’s Workplace: The Link to Performance, “Motivating employees for better performance encompasses this critical factor: employee engagement” (4). Pay for Performance Pay for performance is a Family Dollar driver of engagement, with a survey score of 4. 30 and a correlation score of . 556. This indicates Family Dollar’s pay for performance structure is neither effective nor ineffective.

Employees feel indifferent to this structure because their performance appraisals are not totally based on metrics that they can control. Family Dollar has a bonus structure based on the profit-margin level of all of the stores, a metric which depends on different stores with different circumstances. Performance Management The performance management mean is 5. 05. This indicates Family Dollar’s performance management is marginally effective based on the survey results. This illustrates that the company is on it way to meet its strategic vision of being the best place to work. Necessary improvement is warranted in continuing to break down communication barriers that block enhanced erformance management. If managers and employees have different operational expectations, conflict arises. According to Performance Management: Getting It Right From The Start, “The very best firms in our sample are much more likely to have developed a clear strategic intent and communicated it effectively to employees. ” By effectively communicating to the employees a manager can “Create an expectation of collaboration between the employee and supervisor”(5). Also, employees slightly agree with their performance reviews. During the review, the employee does not feel that they have a direct influence in the determination of the work objectives.

Performance management is formally done once a year and is viewed as marginally effective due to the ongoing informal coaching and training sessions. This should be done more often (quarterly) to engage employees, because constant feedback throughout the year will help increase coordination and performance. This is evident by the survey results, as employees understand their performance goals but are neutral on having constant feedback. Staffing The survey indicates staffing as an area of weakness for the organization (2. 50). The issues with staffing indicate employees’ lack of confidence in HR’s ability to hire the appropriate person for the right job. According to St.

Aubin, “Employees or the specific capabilities required are also a little difficult to determine if you do not look at it through the strategic business planning lens”(6). We will advocate that Family Dollar view staffing in a different lens, as staffing is one of Family Dollar’s drivers of engagement (. 679 correlation). Onboarding Although staffing was reported as ineffective, onboarding was not. With respect to onboarding, the survey results of 5. 70 suggest than once the company hires a person, they train that employee well and integrate them into the organization. However, with the high turnover ratios as previously discussed, there seems to be a large disconnect between staffing and onboarding.

However, the survey as it relates to onboarding does not mirror actual practices at Family Dollar. New hires are slow to gain awareness as to their job requirements, as this uncertainty crystallizes when the performance review comes and the employee and direct report are on different pages. This lack of communication about employee expectations drives resentment and disengagement. Career Advancement The survey indicates career advancement as an area of weakness for the organization (3. 53), which is poor. Employees do not feel there are advancement opportunities at Family Dollar. “Do all that you can to create viable career path alternatives.

Provide reasonable career options that allow people to continue doing what they do best and to grow in ways that are fulfilling to them rather than disengaging” (6). These survey results do not reflect the organizations current Individual Development Programs (IDP). Although the IDP is moderately effective, better results should be seen given the thoroughness of the IDP program. Clearly, we should see a level above 4. 6. Involvement In total, the survey illustrated a mean of 4. 64 as it related to involvement. This indicates employees feel indifferent or neutral as it related to involvement. However, employees feel that they are asked to be involved in decision-making (6. 00).

This is a high impact setting, and contrary to the actual practices at Family Dollar. Employees feel empowered enough to suggest improvements (6. 00). This is a high impact setting. Commitment to Mission According to the survey, Family Dollar’s mission statement has been effectively communicated to staff, as indicated by the high mean in the commitment to mission metric (6. 00). Diversity Family Dollar’s employees view the organization’s diversity practices in a favorable light, as related by the survey. In total, the survey illustrated a mean of 5. 64 as it related to diversity. This indicates that in a broad view, the organization values diversity. The employees believe that diversity exists in the organization.

Moreover, the survey depicted a valued-desired state (6. 40). They believe that diversity and the differences brought upon by it are somewhat valued in the organization (5. 60). Employees stated that the camaraderie among staff is good, and that everyone is treated with respect and integrity (6. 00). This is the valued-desired state. Employees also stated that employee interactions are free from bigoted attitudes (6. 20). This is the valued-desired state. Finally, employees had a neutral (4. 00) attitude when asked about manager’s training in terms of their ability to handle unique situations brought upon by diverse employees working together.

However, the results of our survey and the actual environment at Family Dollar are not congruent. While Family Dollar does have diversity-training programs, that does not translate into the organization being a more diverse place. Family Dollar’s attitude towards diversity and their ability to facilitate a diverse workforce are poor. HR Transactional The survey indicates HR Transactional is borderline consistent (5. 97) to the duties of the traditional HR department. All of the traditional HR metrics including pay, benefits, and timeliness of feedback are all above the 5. 6 rating. Again, this indicates Family Dollar’s HR department is performing its traditional roles appropriately. HR Service

The survey indicates HR Service as a borderline consistent rating (5. 73). This indicates employees feel that the HR department treats them for respect and shows concern for their rights as employees. This metric also indicates that HR department communicates in a straightforward manner. View of Organization The biggest driver of engagement within Family Dollar is the how the employees view the organization (. 791 correlation). Currently, employees feel neutral about their view of the organization (4. 78). Engagement Employees at Family Dollar indicate a level of engagement at 5. 40. This indicates a level in between an unsure level of engagement and a desire state of engagement.

The survey indicates employees put in efforts beyond required. Employees care about the fate of the company (6. 20), the desired state. However, employees are not as likely to inform their friends about their feelings about Family Dollar (4. 80), an unsure level of engagement. Finally, the survey indicates other work opportunities might provide better opportunities. Analysis of Three Drivers of Engagement It is important that Family Dollar strives to have high quality execution of the three drivers of engagement: staffing, view of organization, as well as pay for performance. These drivers have a large impact on the overall financial performance of the organization.

According to Driving Action on Employee Engagement: An HR Focused Approach, “Organizations with engaged employees experience as much as 51 percent lower turnover, 27 percent less absenteeism, 18 percent more productivity, and 12 percent higher profitability”(7). Our goal is to have a staff that is fully engaged. “The percent of fully engaged employees ranges from 21 to 29 percent”(7). With this being said, when fully engaged employees make up only one-third of your staff, analyses of the previously listed engagement drivers and actionable steps towards betterment are a necessity. Family dollar needs to leverage somewhat engaged employees into fully engaged ones, and recruit some disengaged employees into somewhat engaged.

There are key contributors that incentivize employees to leave the company. Most employees, whether line level or management, leave Family Dollar because there is no ongoing training and very few opportunities for advancement exist within the company. This aligns perfectly with The Truth About Retention Now, which states, “The number-one reason employees leave voluntarily, according to survey respondents, was for career opportunities, cited by 67. 8 percent. ‘Personal reasons’ was the second most cited explanation for voluntary turnover… ”(8). In order to lower turnover and increase employee engagement, Family Dollar needs to focus on impacting employee engagement through the drivers suggested above.

When looking at the three drivers of engagement within the organization, one needs to examine the relationship between them and overall engagement of the organization. Family Dollar is viewed by the organization as hiring the wrong employees and insufficiently staffing to the needs of the business as represented by the negative survey results. This feeling of insufficient engagement is also brought down by high performers working harder to support under- funded areas of the business and then not being paid properly for the increase in workload. The company should “Take seriously any credible data that are segments of the workforce working unreasonable hours to make up for staffing shortages, especially over long periods of time.

Organizations that let this happen run the risk of sending the message to their most talented employees that we expect you do more with less, and it will only get worse” (6). One needs to address the overworked, under compensated nature of this action. Family Dollar’s culture is aggressive in nature. On top of the aggressive culture, Family Dollar also has improper staffing at many locations. The procrastination and lack of initiative by employees waiting for direction creates an even larger issue. An increase in pay could support the increase in engagement when feeling under staffed due to payroll constraints and hiring the wrong people. These two areas of engagement drive the total view of the organization well below where it needs to be to support a highly engaged team.

In terms of pay for performance, a Family Dollar driver of engagement, employees working at one store lack control of the performance at another store. Team member reviews are based on company results as well as their individual results. This structure supports under-performing individuals when the company is doing well. On the other hand, if the company is doing poorly then high performing individuals feel that they are not being compensated properly for their effort. “When the link between one’s pay and performance is viewed as ineffective, our results indicate that there is a negative impact on the employee engagement levels”(7). Employees at Family Dollar feel that there is no link between how well they do their job and receiving a merit increase.

This is likely caused by the lack of communication to employees explaining what their specific responsibilities are and lack of communication on how their specific performance is rewarded. These facts serve as evidence for the indifference levels cited by the survey. According to Talk Me Through It…The Next Level of Performance Management “A performer must see the logical connection between (his or) her own behaviors, the performance outcomes from these behaviors, and the positive or negative consequences (pay-for- performance) that (he or) she receives”(9). Family Dollar needs to link pay-for-performance metrics to successful employee operational behaviors. This will be addressed in our recommendations.

In terms of view of organization, a family dollar driver of engagement, employees feel that the company does not really care about them, nor do they recognize the work that they are doing. “Employees who perceive their organization aligns with their own values, provides meaningful work, and treats its members with respect and fairness will stay longer and work harder to contribute” (6). Therefore, Family Dollar’s employees having a neutral view of the organization is negatively impacting engagement and turnover. Analysis of Diversity Practice Family Dollar’s diversity and involvement practices are good at face value. However, the potential of diversity during advancement lessens the higher a person climbs in Family Dollar’s corporate ladder.

The inversed cone shape with little diversity on top and large diversity at the bottom levels needs to be adjusted. This adjustment should turn the cone shape into a funnel, which is parallel on both sides from the bottom entry-level to the C-level executives. The root causes seem to be lack of training of its managers available to help them handle unique situations that arise in a diverse workplace. “The leadership must understand that a diverse workforce will embody different perspectives and approaches to work, and must truly value variety of opinion and insight” (10). This must be a collaborative effort across all functions of the company.

The lack of high impact involvement practices in Family Dollar lies with its struggle to reach the desired state in only two categories in the survey. Along with the lack of impact from diversity training, supervisors and colleagues are not involved in new employee selection. “When organizations successfully enhance the quality of employee involvement, there is a commensurate enhancement of group connection, inclusion, and access to the interests and natural curiosity of the workforce” (6). Having said that, involvement and input should build a stronger team environment and increase empowerment at Family Dollar. III. Strategic HR Plan Pay for Performance

In order for Family Dollar to drive its company initiatives of accelerating revenue growth and optimizing capital structure, they need to deliver a world-class customer and employee experience by communicating the specific behaviors that will lead each employee to success and allow their pay to be directly tied to performance. To accomplish this, the organization must start by clearly defining each role throughout the organization. As stated by Jeffrey and Linda Russell in Talk Me Through It…The Next Level of Performance Management, “Because the position description is the keystone for defining everything that is expected of a performer, the great performance outcome expectations must be spelled out in that document.

If a performer is to be held accountable for achieving great performance, then the position description must reflect these outcome expectations”(9). How can we expect to achieve our goals if our employees do not understand how their performance will be measured and how it is linked to their compensation? The current job descriptions and accountabilities should be reevaluated and updated at every level of Family Dollar to ensure that they are all aligned to the strategic direction of the company. The current human resources team should create the core job accountabilities and pay ranges for each position throughout the company. The information and documents should be complete and ready to use in 90 days. The accountability documents themselves will serve as evidence of implementation.

Once the job descriptions are finalized, they need to be communicated to all employees through formal, in-person conversations that will end with the employee signing off on their new accountabilities. The conversations should focus on explaining how their daily activities and behaviors affect their pay. Once the discussions are complete, recognition for meeting and exceeding the new criteria must exist throughout the organization to establish the strong connection Family Dollar needs between pay and performance. The Russell’s agree and go on to say, “By helping the performer imagine what great performance outcomes actually looks like, the performer is more likely to create these significantly positive results” (9). Recognition needs to be balanced out with accountability when employees are not displaying the desired behaviors.

Another benefit of embedding recognition in a company’s culture is that, “in tough economic times, when there’s limited cash to reward and improve employees’ performance, managers’ praise becomes an acutely valuable corporate resource. ”(10). Turnover traditionally increases during a recession, but we can limit losing our top performers by letting them know we appreciate their performance, even if it is not monetary. This will save us money in multiple ways, including turnover, hiring, and lag costs. Each employee’s direct superior should complete the accountabilities conversations in 30 days. The signed accountability document will serve as evidence of implementation.

To ensure that employees are aware of how they are performing against their goals, we also suggest that financial and productivity results are communicated to employees on a weekly and quarterly basis. To inspect this, district managers will ask line level employees where their productivity is at during visits. Employee awareness around productivity should be ready for inspection in 30 days. With very specific, clearly communicated job accountabilities, and a balanced accountability and recognition program in place, employees will see the link between their pay and performance, be more productive, and deliver a great customer experience in Family Dollar stores.

Productivity, customer experience scores, and revenue comp should be measured to see if the changes are impacting the correct metrics. Staffing Hiring the right person for a position is difficult and expensive, but losing an employee after investing thousands of dollars into training is even more costly. Reducing the turnover rate at Family Dollar will lead to minimizing recruiting, hiring, and training costs, maximizing operating margin, and a better trained, experienced workforce that will accelerate revenue growth. First, Family Dollar needs to establish interview guides and rules for the interview process to assist in hiring the right people.

The guides should be created by the human resource department and contain the 10-12 questions that will be asked in every interview. The questions should aim to find out if the candidate is a good fit for the position they applied for and the company culture. These guides will be filled out by the interviewer and submitted to the HR department for inspection to ensure that the process is implemented properly. The guides and rules should be completed and implemented in 90 days. Having fun at work and receiving recognition are always ranked as being critical metrics on employee satisfaction surveys. Employees will work harder and longer if they feel that their work is noticed, appreciated, and important.

Family Dollar will create an environment that will make employees feel this way by creating an employee of the month program. To become the employee of the month, the employee must meet a certain set of criteria that will align with the company’s strategic goals. An e-learning will be created to explain the metrics of the program and why what they do on a daily basis is important to the communities they serve. The employee of the month should receive a plaque and monetary bonus for their exceptional work. This program will be ran and monitored by the human resources department and should be running in 90 days. One of the most common complaints about employee satisfaction surveys is that companies do not take action on any of the results of the survey.

The other complaint is that changes are made for a few months after the survey and then things return to their previous state. Family Dollar will maximize the impact of the changes they make after every survey by conducting monthly meetings to address employee satisfaction. The meetings should be held at each location on a day that they choose the previous month to ensure that it will not conflict with anyone’s schedule. The notes from these meetings will be sent up to the district manager so that the stores can be inspected for changes based on the employees’ feedback, and upper management can address company wide concerns if parallels appear in multiple districts.

The monthly meetings should begin after the other new initiatives are rolled out so that the employees can see that changes are being made to make Family Dollar a better place to work. This feeling will encourage employees to give their actual opinion because they will know that concerns will be addressed. To measure the success of these three tactical goals Family Dollar will monitor turnover, employee satisfaction, and revenue comps. View of Organization Transforming Family Dollar’s brand image into one that attracts and retains high performing employees without having to put many resources into recruiting will help them achieve their goal of optimizing capital structure and increasing margins. The ideal situation can be described as Google. According to St.

Aubin, “Great organizations create such a strong brand that it draws the talent to them rather than having to spend significant time and money on selling the organization to the talent market” (6). Family Dollar’s brand image will be hard to change given how potential employees view the organization from the outside, but the image will change. Family Dollar will achieve this goal by first interviewing the company’s top performers to find out what the culture is really like and why they enjoy working for Family Dollar. To ensure the data is being presented in an unbiased fashion an outside company will be selected to conduct the research. The company should be selected and the research completed in 90 days. One of the most important factors job seekers use in determining where to apply is how much potential there is for upward movement.

Succession planning in an organization helps to create a culture that fosters promotion from within and can help improve the company’s current brand image. Family Dollar will implement succession planning at all levels of the organization by first defining the specific skills, talents, experiences, and performance necessary to be considered a “next level” talent. These qualifications should align employees’ efforts with the strategic direction of Family Dollar and be effectively communicated throughout the entire organization. This will help create transparency through the company and allow all employees to feel that there are opportunities for advancement.

If employees within the organization feel that there are advancement opportunities, then that will be the image that Family Dollar has in the eyes of an external candidate. After “next level” talent is identified, employees will follow the current IDP that Family Dollar utilizes, but it will be more effective because of better defined accountabilities and qualifications, and more frequent succession discussions. Human resource leaders should be able to identify and create a qualifications document in 30 days. The new qualifications and information will be communicated throughout the organization in the next 60 days. Family Dollar should measure employee satisfaction, turnover, and change in promotions from within.

Once the research from the current top performing employees is obtained and the new succession plan is created, the human resources department needs to communicate this information to potential applicants through multiple digital media sources. Websites such as LinkedIn, Facebook, and Twitter should be used to show why people should want to work for Family Dollar. This type of creative recruiting will also help change how some of the current employees view the organization. This is important because “your employees are your best ambassadors” and “those who are proud of their workplace will spread that pride, creating a strong statement about your employment brand that both attracts and retains talent”(11).

The human resources department should have these digital recruiting pages active within 30 days of receiving the researchers findings. An employee who is trained and skilled in the usage of digital media for marketing purposes may need to be hired or borrowed from another department to ensure success. Family Dollar should conduct an external survey after 6 months to see if people’s opinions have changed about the company. They should also measure how many more applicants have better qualifications or experience in 6 months versus the current group. Diversity Our goal is to and positively impact Family Dollar’s profitability by creating a diverse, inclusive company culture, attracting all top talent, and empowering employees to make unique contributions.

This strategic goal will consequently improve employee and customer satisfaction, decrease turnover, and reduce operating costs. In order to create this type of environment though, senior leadership needs to think differently. As David A. Thomas and Robin J. Ely put it, “The desired transformation requires a fundamental change in the attitudes and behaviors of an organization’s leadership”(11). There are many different definitions and interpretations of diversity, but most modern explanations agree that it is about embracing everyone’s unique perspectives and ideas. Senior leadership needs to believe that diversity is not just about hiring a certain number of people from different cultures and that valuing real diversity will eventually create a competitive advantage.

To help gain support from senior leadership, Family Dollar will send key leaders to a diversity conference so that they can see examples of how diversity can create sustained profitability. Identified leaders will attend the diversity training in the next 90 days. Once this has occurred, Family Dollar should then have these leaders create a diversity task force that will champion the diversity efforts and continuously assess the diversity in the organization. This task force should develop strategies, metrics, and timelines that will guide Family Dollar to creating an environment that celebrates the differences of all people and where employees can grow to their fullest potential. (6).

The members of the new task force and the date for their first meeting should be established in the 30 days following the key leaders’ diversity training. Over the next 60 days, the task force should set up strategies and timelines for their diversity goals. Diversity and employee empowerment go hand-in-hand because employees will never feel empowered to share their ideas if they cannot be themselves at work. According to St. Aubin, “When organizations successfully enhance the quality of employee involvement, there is a commensurate enhancement of group connection, inclusion, and access to the interests and natural curiosity of the workforce. ” (6).

To help increase the amount of employee involvement, the new diversity task force at Family Dollar needs to create a special projects team that will allow employees to have more variety in their work. Special projects teams are made up of team members who volunteer to work in a group to help solve current district, territory, or company-wide problems. These types of teams should be attractive to employees not just because it is something different, but because they actually have an impact on company results. The diversity task force should be ready to receive applications for the special projects team by the end of the 60 days following their creation. Again, Family Dollar needs to first ensure that key leaders believe and participate in these programs.

Their support will make it important for employees to check out what these new initiatives are all about. Once the diversity and empowerment programs are in place, they should be assessed to see if they are having the right impact on Family Dollar’s business. According to St. Aubin, “Programs designed to involve employees have a positive impact on general workforce engagement levels, and, depending on the type and visibility of involvement programs, on the attraction and retention of talent as well. ” (6). Therefore, the first indicators of success to look for are increased employee engagement, decreased turnover, and increased diversity and quality in new applicants.

Family Dollar should also measure if there is an increase in best practice sharing among stores and districts. IV. Business Case Pay for Performance Understanding your job duties and the pay you receive for them sometimes gets clouded. When there are poor job descriptions or none at all, an employee can feel overworked, underpaid, or underappreciated. At Family Dollar job descriptions are unclear along with the performance appraisal system. With the help of the diversity special project teams, it is imperative that HR re-writes each job description to define a clearer description of what that position is required to complete. To complement the new job descriptions a new performance appraisal process will also need to be implemented.

This appraisal system will include self-evaluation, 360-degree evaluations, and SMART goals. The estimated cost of this project is $150,000. $25,000 is allocated for creating and implementing the new descriptions and performance appraisal systems. The remaining $125,000 is allocated to spend in training managers how to write effective reviews, and 15 min spent with each employee to go over the new description and appraisal process. With this implementation, we expect a two-fold return on investment (ROI), an increase in sales of 2%, and decrease in labor costs 2%. In dollars that would be an increase of $186 million in sales and a decrease of $27. 8 million in labor. It is important to align pay with job description and performance.

Zeynep Ton of MIT’s Sloan School of Management argues that seeing keeping wages low as the way to achieve low prices and high profits is badly mistaken: ‘The problem with this very common view is that it assumes that an employee working at a low-cost retailer can’t be any more productive than he or she currently is. It’s mindless work so it doesn’t matter who does it. If that were true, then it really wouldn’t make any sense to pay retail workers any more than the least you can get away with’”(13). Staffing “A staffing plan can be defined as predicting and preparing for changes in the organization’s workforce. This includes retirements, changes in job responsibilities and required skill sets. A strategic staffing plan is built to meet organizational goals.

This process attempts to ensure that the demand for talent, which can change at any particulate time in the planning horizon, will be met with the appropriate resources. ” (6) Staffing is an integral part to Family Dollar’s organizational mission. This needs to be strong enough in order to reduce turnover and retain top talent. Focus needs to be placed at the beginning of the hiring process. Establishing a standardized hiring process outside of just the computer application will go a long way. Interview training should be conducted for anyone in the hiring role. A special projects team will be created to develop an in-house interview workshop. The cost of creating this workshop will be roughly $25,000 in salary from the special projects team.

Then the training costs for the 3 hour work shop will be approximately $425,000, to train all store managers in the almost 7,500 locations. The next step of the process would be creating strict guidelines and an auditing process for HR paperwork at the store level. Auditors will be picked in each district and trained accordingly. Then audits will be conducted semi-annual. The cost of this program would be roughly $425,000 to create, implement and execute for one year. Finally, a new store employee of the month program will be introduced to help reduce turnover. The rules will be recorded and each employee will be required to watch the 15 minute video. At the end of the year all “employee of the months,” will be entered into a drawing that will award several prizes.

The grand prize will be a trip for two to Hawaii (if approved by the company lawyers). The estimated total cost of this program will be $125,000 with creation, implementation, execution and prizes. The above steps should help reduce turnover, the goal will be to reduce turnover by 5%. The table below represents an estimation of potential turnover costs and return on investment (ROI), if turnover goal would be reached. Staffing ROI could be $16. 6 million- $1 million (cost of new programs) = $15. 6 million in the next year. Position | Head Count |Estimated Turnover Percentage |Estimated Turnover Count |Average Yearly Salary |Turnover Reduction Goal % |Estimated Annual T/O Cost* |Reduced T/O ROI | |P/T Hourly 20 hrs/wk) |15000 |113% |16950 |$8,900 |5% |$75,427,500 |$3,771,375 | |F/T Hourly |7500 |68% |5100 |$27,000 |5% |$68,850,000 |$3,422,500 | |Salaried Store Managers |7500 |49% |3675 |$41,600 |5% |$152,880,000 |$7,644,000 | |Mid-Level and Above |3000 |20% |600 |$65,000 |5% |$36,000,000 |$1,800,000 | |Total | | |26,325 | |5% |$333,157,500 |$16,637,875 | |*Estimated Turnover Cost = 150% of salary. (14). View of Organization How an employee views their organization goes along way with internal branding. If your employees do not feel proud to work for the company, then how does one expect customers to enjoy purchasing products from your organization? Investing time in internal branding will help with engagement.

This can be done by interviewing top performers, communicating culture to potential applicants, and creating an employee of the month program. Once the top talent is identified, hiring a consultant firm to conduct the interviews will cost roughly $50,000 for the year. Also, a new position of Public Relations or Media Relations should be created. This position will in charge of internet and social media cover to help rebrand the brand image externally. However this position would also on internal branding, creating exciting internal promo’s, newsletters and other internal branding. This position could be an entry level position with a starting salary of $43,000. Finally, a strong succession planning program that ties in interviewing, appraisals, and promotions will be built.

Succession planning goes a long way to increase the employee’s view of an organization. The succession planning will be implemented in a top down fashion. The cost of hiring our HR services would be $47,000 to set-up fully integrated succession planning system on each level. The total cost of working on the view of the organization would be $150,000 and help to recruit top talent and reduce turnover and increase sales. The reduced turnover is included in the above table. The increase in sales could be 2% from increasing the view of the organization or $186,000 per year. Diversity Diversity programs are important as a company can see increased sales through an effectively diverse workforce.

A diverse workforce complements each other by having different cultural, educational, and skill set backgrounds. A diverse workforce can help a company be efficient and innovative. This could potentially differentiate themselves from their competition as the place to work. Diversity should be seen a long-term strategic goal to ensure competitive advantage. “Eric Peterson, manager of diversity and inclusion initiatives at the HR organization, said that employers looking to cut costs in lean times may eliminate diversity efforts as a short-term fix because such efforts can offer quick savings. But ultimately, Peterson said companies that ignore diversity likely will be at a competitive disadvantage.

Indeed, the study found 84 percent of the companies that have maintained diversity programs said their efforts are at least “somewhat’’ effective, citing benefits such as a better public image, lower employee turnover, and improved profitability” (15). To help increase diversity at Family Dollar, and make it the best place to work, shop, and invest, a diversity task force and special project teams will be created. In order to start the process key business leaders will be sent to a diversity conference held annually. A group of fifteen people will attend this year’s conference. The cost of the conference for those individuals would total $30,000(16).

Instead of hiring a consultant a diversity manager position will be created at the annual salary of $90,000. This person will be the lead on creating a task force and special project teams to help increase the efficiency and sales at Family Dollar. The cost of the task force and special project teams will be roughly $100,000 annually. With an investment of diversity and approximately $230,000 annually, Family Dollar could see an increase in sales of 5% or $466 million annually. Total Cost-Benefit Analysis Family Dollar wants to be the best place to Work, Shop and Invest. By implementing the above, Family Dollar will invest an estimated $1. 53 million in the new programs. The investment could have a financial cost savings $42. million and an increase in sales of approximately 9% or $838 million. Finally, the engagement chart below represents the financial impact of Family Dollar by increasing their employee’s engagement. If engagement can be slightly increased, this would make Family Dollar, the best place to Shop, Work, and Invest. This chart is based on making modest changes that do not take more than six months to implement (17). [pic] V. References 1. http://corporate. familydollar. com/pages/history. aspx. 5/11/13 2. Familydollar. com, Fact Sheet. 5/11/13 3. http://www. greysteel. com/? q=spotlight-family-dollar. 5/11/13 4. Motivation in Today’s Workplace: The Link to Performance. HR Magazine. July 2010 5.

Performance Management: Getting It Right From the Start. HRMagazine. Mar2004 6. St. Aubin, D. and Carlsen, B. J. (2008). Attract, Engage and Retain Top Talent: 50 Plus One Strategies Used by the Best. 7. Driving Action on Employee Engagement: An HR Focused Approach. M. Gavino and B. Carlsen, 2009. 8. The Truth About Turnover and Retention Now. HR Focus; Sep2009, Vol. 86 Issue 9, p1-15, 9. Talk Me Through It: The Next Level of Performance Management. T+D. Apr2010, 64; 42-48. 10. Firms Willing to Pay Dearly for Talent. Harvard Business Review, Mar2009, 87 Issue 3, p26-26. 11. Making Differences Matter. Harvard Business Review; Sep/Oct96, 74, 79-90. 12.

What Does Your Hiring Process Say About You? T&D. May 2007, 61; 66-70. 13. Florida, Richard. Paying Retail Workers a Little Better Can Make a Huge Difference. 2012. Retrieved from http://www. theatlanticcities. com. 5/15/13. 14. www. insala. com/roi. asp. 5/15/13. 15. Carrns, Ann. Training in Trouble, Companies Question Programs’ Value. 2010. Retrieved http//www. boston. com/jobs/news/articles/2010/12/05/companies_question_value_of_diversity_training/ 16. www. diversitycouncilconference. com. 5/15/13 17. http://myvirtualpartner. net/roicalculator/ROI%20Calculator%202. htm. 5/15/13 ———————– 08 Fall Organizational Analysis/Strategic HR Plan: Family Dollar

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