Human Resource Management
Establishing the niche for ELLE also means developing lifestyle concept stores rather than just clothing outlets. This enables all the values of the ELLE brand to be clearly portrayed to the public. The stores would offer all of the ELLE licensed products and have trading areas for bags, shoes, childrenswear, gifts and homeware as well as the full ELLE clothing range. The non-clothing products would be bought in from other ELLE licensees. To complement the concept, a juice/coffee bar is also being considered, such as in Topshop, Oxford Street, London which offers an indoor restaurant. The Company is also considering a number of lifestyle connections with health and beauty, food and travel links.
The Company also intends to operate three factory outlets in the UK to control the distribution of excess and slow moving stocks which are a result of the wholesale and retail operations. The Company also has the right to establish its own web site under the DB Actif name, as a distribution channel for ELLE clothing products, though this would be subject to the approval of Hachette. The potential for increasing sales through e-commerce is still uncertain. At present only 14 of the UK’s top 100 retailers transact business through their websites. However, a survey conducted in January revealed that 85% of respondents would consider buying products or services through the Internet. Therefore, www.elleshop.com has been established to increase sales through the Internet.
ELLE has also been successful in meeting their objectives and establishing the brand, in that the new store opening programme commenced with 3 flagship stores that have been opened recently in 2003 in Birmingham and Glasgow. The figures show sales growth, improved margins and reduced costs which result in profitability following the disappointing loss last year in 2001/02. Debt has been reduced, providing a stronger basis from which to expand the business in the forthcoming financial year.
Within ELLE retail, total sales increases by 6.3% to 15 million. Excluding the Joe Boxer business, which was discontinued in 2001, retail sales increased by 21.1 %. The growth in retail sales partly reflects a full period of trading from the stores and concessions opened in the first half of last year, but the main factors behind this growth are improved operating standards in the stores, improved fashionability of the product offer and improved stock availability. Retail gross margins are significantly better than the comparative period at 57% (2001: 53.4%). 2001 margins were impacted by the need to clear stocks from the Joe Boxer concession.
ELLE has traded well and in line with expectations. Overall, the retail selling space has increased by 2,5000 square feet to 49, 000 square feet. Having achieved profitability and focusing on the business, ELLE intends to continue building its platform of a profitable business and to seek opportunities to expand the distribution of the ELLE brand, primarily through opening new stores in major shopping centres within the UK.
According to the John Storey investigation, the type of human resource managers in ELLE perform more of an “Adviser” role. They leave most of the decision -making and human relations at work to the store managers but would be prepared to give advice if needed.
Responsibility for recruiting new employees is carried out by the store managers who work on an ongoing basis with employees rather than by a specialist within Head Office. When a position is vacant a board is displayed and the shopping centre or outlet where ELLE is situated is notified so that potential employees can apply easily. A CV can be given or a questionnaire is supplied so that the information needed from the employee is more relevant. The selection process is carried out relating to how well a potential employee matches the job description. Attributes such as experience and qualifications increases the chance of being employed in the right circumstances. For example, more experience in the fashion retail sector would suit the position of a sales advisor in ELLE better.
Candidates for a position will be selected for assessment against the set criteria for the job. Their competence, skill and experience will be taken into account. Interviews are organised and the most suitable candidates are given feedback and recruited. When recruited, an induction day is carried out so that the employee can familiarise themselves with how the business works and what their role in the company is. Induction days are useful to introduce a new recruit to the rest of the team he/she will be working with and training is also introduced at that stage.
ELLE have established appraisal systems in order to focus upon the continuing progress and development of staff and their abilities. Their employees are seen to be individuals with potential improvement and to overcome problems of difficulties. A Performance Review takes place after the employee has been working in ELLE after 3 months and an Action Planning form is also kept up to date for discussion. The employee grades his/herself on performance in certain situations and areas of skill, then the appraiser will evaluate and discuss achievements and/or improvements. Using this method allows ELLE to train employees effectively in order to meet the aims of the business. For example, increasing add-on sales and providing excellent customer service tapered to the needs of a customer.
Promotion is possible when the manager decides whether he/she is capable of handling more responsibility. A promotion entitles an employee to a higher job status, therefore more respect and a higher wage. To become promoted, more training may be needed and ELLE provides that through qualifications such as NVQ’s. Employment contracts within ELLE can be terminated if the manager feels an employee is not successfully carrying out his/her role and does not attempt to improve. They are usually given 3 warnings on their performance before the termination is carried out.
Health & Safety Laws are made aware to all employees through the use of posters and on the contract given. The Health & Safety Laws are displayed on notice boards and it is emphasised that an employee must familiarise themselves with all the guidelines and procedures relevant to the line of work. Another policy-making role in HRM aims to ensure an employee will act in a professional manner at all times: the Disciplinary Policy. It is designed to provide a fair and consistent method of dealing with disciplinary problems and to provide an opportunity for improvement in behaviour/ or performance.