access_timeJanuary 13, 2022

I wrote a lot of comments on your team assignment to illustrate the types of questions that would likely be asked by Executives (who I perceive as often being risk adverse, concerned about short-term costs, and skeptical about the positive impact of HR/management practices). Please look carefully at my comments as they will help you prepare for this same type of essay (individual basis) that you will have on Exam 1 (2-page maximum answer).

 

Let me know if you have any questions on this,

 

John

 

Group 5: Alex Taylor, Nicole Johnson, Joshua Acevedo, Sylvia Steinkamp, Tom Acker

I: Problem/Opportunity Statement and Implement the Practice

The problem we will address is the high consumer turnover rate due to a lack of product knowledge currently possessed by employees of the Home Depot (HD).

The goal of the program is to utilize a cognitive ability test to achieve an increased cognitive/reasoning capacity for employees. The program will focus on high-demand products in each department, allowing for a more in depth understanding of HD products. These practices will be implemented for current staff and can be used as a work sample test for future employees, creating a highly trained workforce. Excellent

I (2): Implement the Practice (Complete the Table Below):

Aspects Describe the aspects of your proposed HR Idea in Implementation (Actual Practice)
1. Research Accounting Managers (AM) will research what broad product lines are in demand per departments and inform retail Department Heads (DH) for structured training. Good
2.Training Structure DH’s will use AM data of the highest demand products, structuring a training program that details specific attributes of those products/brands to retail employees. Good
3.Timing/ Eval DH’s provide on-the-job training to employees during their scheduled shift, focusing on cognitive and reasoning skills. DH’s will use high performing employees to cross-train in other retail departments increasing their cognitive skills for new trainees. How do cognitive/reasoning skills relate to product knowledge? Are you saying that cognitive/reasoning skills will help employees explain better to customers the attributes of these high demand products?
4.Skills Test An online cognitive abilities test will be implemented at the end of each training iteration, focusing on verbal comprehension, quantitative and reasoning ability, scored by DH’s. Good. Ideally you should describe a bit more what would be involved in this online cognitive abilities test as I would think that Executives would want to know what it involves so that they have a better idea of whether it will work well or not

Excellent section 2.75/3

II. Sell Your Idea: Support Organization’s Strategy & Cost-Benefit Assessment: Cognitive/reasoning test will be utilized in conjunction with on the job training. The scores from the training curriculum will be compiled to assess the validity of the program after one year through criterion-related performance measures. The employees’ scores on the cognitive/reasoning test will be correlated with what specific performance measure – e.g. their product knowledge or what? The scores will be Mmeasured against consumer retention rates and an employee’s knowledge. Do you mean comparing these 20 employees’ scores on the cognitive reasoning test to the store’s overall consumer retention rate or by a department’s retention rate? The low cost ($4 MIL), low risk training program will net returns close to $5MIL in a two-year span.

Cost Item Assumptions Show Calculations Projected Costs
Hourly training cost / staff time lost Good Using max hourly wage.

Cost per store

1hr max training.

20 floor employees per store

* *Avg $14.57/hour(10.53- 18.62/hour) #floor employees

=$14.57/hr * 1hr * 20

**2,285 (# of stores in 2019)

$291.40 per store

$665,849.00 all HD stores

Curriculum development/material Good. What about the costs for someone to actually deliver/conduct the training for employees and to assess the relationship between employees’ training results to their performance measure? ****efront will be outsourced for year 1. ? Not sure what you mean here **** $2,500 per month, billed annually. 2,500*12=

How did you arrive at this cost of $2500? It seems low for all HD stores

****$30,000.00 per year.
Refresher training Good Quarterly training for Year 1 after initial training (starting in Qtr 1) Bi-annual refresher training Year 2 Year 1: 665,849*3

Year 2: 665,849*2

$1,997,547.00

$1,331,698.00

Total costs Based on 2 years of development, training, and implementation. 2,693,396 (year 1) + 1,361,698 (year 2) $4,055,094.00
Benefit Assumptions Calculations Benefits
Increased customer retention rate Good. I would think the CEO would want to know a bit more why this cognitive/reasoning test will lead to this level of sales increase Trained employees retain customers, increasing retention to previous rates that were 58% **

Currently 47.66%*** retention rate. Training will create a 6% customer retention rate annually

6%*67.3M*** (Avg sales of customers 2019)

6%*(67.3M***+4,038,000)

 

Year 1 = $4,038,000.00

 

Year 2 = $4,280,280.00

New customer walk-in Good. How is this different from what you proposed above on increased customer retention rate .5% retention rate of customer walk-ins per year (*****conservative estimate based on 43.7%-foot traffic). Year 1: .005*67.3M***

Year 2: .005*(67.3M***+4,038,000)

Year 1: $336,500.00

Year 2: $356,690.00

Total benefits Customer Retention Rate increase of 13% Year 1 and 2: (6%+.5%+6%+.5) $9,011,470.00
Compare Total Costs versus Total Benefits Year 1: + 1,681,104; Year 2: +3,275,272.00

Overall Very Good section 5.25/6

III. Organization Development/Change

Who Part D: Determine Consequences Part E: Effectively Communicate
Department Managers HR manager-Perceived over working. Retail Managers-unwillingness to change current training practices. Accounting management- unwillingness to inflate training budget by cutting or raising costs. Good. Managers will also likely be concerned about pulling employees off the floor to do a training (short-term sales decrease) While the new training program might seem like it adds to everyday duties, it will increase employee knowledge to better assist customers, reducing workload on DM’s in the long run. Good. If retained customers do increase how would this then personally benefit managers?
Department Employees Retail employees- Lack of motivation for increased knowledge. Retaining highly trained employees is key, if high turnover exists, the cost per trainee may increase. Good Customer Service- not willing to confer with peers in specific departments. I am not sure what you mean here by confer with peers – how does this relate to the cognitive/reasoning tests? Express how training will create experts on high traffic items. This will increase confidence, and increase productivity, while creating a ‘same page’ environment to confer on high-demand products increasing the customer return rate back to 58% or greater. Good How do employees personally benefit (what is in it for them) if sales do increase? Training will only be conducted during normal work hours. Good
Others Impacted Customers- feeling pressure to buy certain products and frustration because of the lack of knowledge of lesser known brands/products by employees in retail departments. ? This is not clear to me. Wouldn’t this training program enable employees to better explain to customers why they should purchase certain products?

Customers could be negatively impacted in the short-run when employees are in training (e.g. less staff available).

Allow employees to educate customers and make suggestions based on their education of products and customer’s need. Allows for more informed consumers, increasing satisfaction and DIY project confidence. Good

Excellent section 2.75/3

IV. Feedback/Evaluation

4A Employee/Organization metrics that will occur due to of your HR Practice 4B Show specifically why your proposed HR practice is the sole Reason/Source for why there was a positive Change in the Metric(s)
Baseline customer satisfaction surveys. Improved customer satisfaction scores from baseline to post-training as a result of improved customer service experience. This first sentence should be part of your 4A answer. The increased scores would be based on employee knowledge and customer satisfaction. Good, but how would you know if any improvement in customer satisfaction or customer retention (referenced below) was due specifically to employees’ knowledge/reasoning skills given that HD may undertake other practices in a given year’s time to improve customers’ satisfaction (i.e. product display, different offerings of products, marketing, etc.) or other new HR/management practices which were designed to enhance the ability of employees to perform their jobs?
Customer retention surveys pre-training and post-training program. Improved customer retention scores from baseline to post-training as a result of customer’s perception that HD employees are knowledgeable and can assist consumers with their product and/or project. See my comment above here as well. . How would you specifically measure customers’ perceptions of HD employees’ knowledge and assess this versus other possible reasons why they returned and purchased more products from HD?
Employee survey, pre- and post-training Explain more specifically what you mean here by employee surveys (what are 1-2 examples of questions you would ask?). Improved knowledge from baseline to post-training shows an increase in employee’s cognitive and reasoning skills. Increased skills relate to higher job satisfaction resulting in a 13% increase in customer retention, creating $5MIL in profits over 2 years. See my comments above. In Part 4B you need to seek to isolate any positive impact on sales/retention specifically to your proposed practice (versus other possible reasons for a sales increase).

** https://ycharts.com/companies/HD/retention_ratio

*** https://www.statista.com/statistics/240861/average-amount-spent-by-consumers-at-the-home-depot-and-lowes/

**** https://www.efrontlearning.com/pricing

***** https://www.forbes.com/sites/pamdanziger/2020/02/26/home-depots-transformation-to-a-fully-interconnected-retailer-shows-record-breaking-results/#7b3de8ad7330

Overall Excellent section 2.75/3

Overall 13.5/15 90% Excellent, especially for the first time doing this type of essay.

 

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