Case study: People management in retail

Striking balance between people and system is delicate job for managers

This case study follows one from the same author about crisis management of the same retail company on the outbreak of SARS in China. The article was published on March 21 and can be found on the Korea Times Web site. The author requested the name of the company not to be identified. — ED.

By Cassian Cheung

Late on a Friday afternoon in October 2003, Nicholas Wong was reflecting on a hectic six months. As the president and CEO of one of the largest international retailers operating in China he had overseen a difficult period during the SARS epidemic earlier in the year. One employee had been infected by the virus, with complete transparency and swift action needed to ensure the chain emerged unscathed. Business had since returned to normal, with sales figures rising above expectations in the last two months. Now Wong was feeling a sense of professional satisfaction.

Challenge

He did not have long to reflect. The afternoon’s mail brought with it a letter sent through the internal system. Written by an 18-year-old girl called Zhang Shuo, it told the story of a dismissal from the shoe department in one of the company’s Shenzhen stores. Zhang Shou had been employed for three weeks as a temporary staff member until being summarily fired two days earlier. She felt that she had been treated unfairly by her supervisor and was pleading to have the decision overturned.

Zhang Shuo had been hired as an assistant to tidy up the sales area by removing unwanted shoeboxes and returning them to the correct shelves in the storeroom. On Wednesday while she was clearing up boxes, she had been approached by a customer who demanded that a pair of previously bought shoes be replaced because they had defects.

Not having been trained in sales, Zhang Shuo was unsure of what to do. After a moment’s hesitation she told the customer to look for a salesperson. The customer immediately started yelling at her and saying how she had been looking around for help in vain and how rude and unhelpful Zhang Shuo had been.

The shouting aroused the attention of the departmental supervisor, who ran over to pacify the customer. When the commotion died down with the customer’s departure, the supervisor asked Zhang Shuo to see her after work.

During the meeting she told Zhang Shuo that her performance had been unsatisfactory and her services were no longer required. The company would nonetheless pay the girl’s wages for the time she had been employed.

In her letter, Zhang Shuo mentioned that she had come a long way from Sichuan to look for work, and had felt extremely lucky to work for the company. She had given her best in a modest job and asked Wong for a second chance.

Open corporate culture

Zhang Shuo’s letter was only possible because the company’s internal culture emphasizes openness in communication. All employees are known as associates, stressing their mutual dependence. There is also an open door policy, whereby associates can seek help from one rank higher than their line managers. This ensures that issues are dealt with by management without fear of backlash from an associate’s immediate supervisor.

Another of the company’s mantras is servant leadership, with the CEO serving all associates. Hence, Zhang Shuo’s seemingly bold approach.

Problem addressed

Wong rang the human resources department to verify the facts of the incident, and found that Zhang Shuo’s story was very much truthful and agreed closely with those given in her supervisor’s report. The human resources department insisted that everything was in order and in keeping with the company’s policy, which stresses service to the customer as one of its core values.

It did not take Wong long to assess the situation. Zhang Shuo’s inability to carry out a duty that was not hers did not warrant a summary dismissal. From a human resource perspective, the fact that she had not been prepared for an unexpected task revealed a loophole in the company’s training and supervisory procedures. If the company was to abide by its open door policy and attitude that people come first, it had to demonstrate the high value it placed on even the most junior associate.

Zhang Shou was reinstated.

Lesson learned

Every manager has to strike a balance between people and the system. In cases of poor performance, does dismissal enhance or hamper the prevalent company culture? Associates on probation can easily be dismissed without violating contractual terms or labor laws, but pacifying an irate customer should not always involve such drastic action.

A “lowly” sales assistant will not be missed by any department, but Zhang Shou’s dismissal was a clear breach of effective people management. By taking his role seriously as a servant leader, Wong understood that the system rather than the person had failed.

When Wong moved on from the company in late 2005, the human resources director was interviewed about her impression of him as a CEO. She recalled Zhang Shou’s case and used it to explain that he was a manager who cared for individuals first.