Grand Union was a grocery store chain that traditionally focused on low prices and large store formats. However, increasing competition prompted a strategic change to focus on customer service and a differentiated shopping experience. The HR department played a key role in this change by developing a new philosophy that valued employees and provided training to improve customer-focused behaviors. Store employees were trained to greet and assist customers rather than ignore them. This case demonstrates how HR practices must align with and support a company's new strategic direction.
Grand Union was a grocery store chain that traditionally focused on low prices and large store formats. However, increasing competition prompted a strategic change to focus on customer service and a differentiated shopping experience. The HR department played a key role in this change by developing a new philosophy that valued employees and provided training to improve customer-focused behaviors. Store employees were trained to greet and assist customers rather than ignore them. This case demonstrates how HR practices must align with and support a company's new strategic direction.
Grand Union was a grocery store chain that traditionally focused on low prices and large store formats. However, increasing competition prompted a strategic change to focus on customer service and a differentiated shopping experience. The HR department played a key role in this change by developing a new philosophy that valued employees and provided training to improve customer-focused behaviors. Store employees were trained to greet and assist customers rather than ignore them. This case demonstrates how HR practices must align with and support a company's new strategic direction.
Grand Union was a grocery store chain that traditionally focused on low prices and large store formats. However, increasing competition prompted a strategic change to focus on customer service and a differentiated shopping experience. The HR department played a key role in this change by developing a new philosophy that valued employees and provided training to improve customer-focused behaviors. Store employees were trained to greet and assist customers rather than ignore them. This case demonstrates how HR practices must align with and support a company's new strategic direction.
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PUTTING IT ALL TOGETHER:
THE CASE OF GRAND UNION
The Grand Union is a large retail grocery operation with the majority of stores located in well-established neighborhoods. The Grand Union had always defined itself as a grocery store—a traditional high-volume, low-margin, limited-selection, discount driven, 40,000 square foot grocery store.
New Strategic Business Needs
Taking into account both competitive pressures and new customer habits and preferences, the team, saw the need for a basic change in direction from a commodity, undifferentiated business to a high-quality, customer-driven business.
The culture of the firm changed to emphasize listening to and serving customers. Store managers and top management started to provide the leadership John Kotter talks about, i.e., articulating and providing excitement,showing confidence in the firm's ability to successfully change in the new, more uncertain environment, and setting objectives that would relate to the new way of doing business.
Linking HR with the Strategic Business Needs
Under the guidance of Senior Vice President of Human Resources Bill Reffett, the firm developed an HR philosophy that said the employee was a valuable, long-term source of competitive advantage, and that all efforts would be made to provide exciting jobs, promotion opportunities, and retraining as needed.
ORGANIZATIONAL CHARACTERISTICS OF A CUSTOMER-DRIVEN SERVICE ORGANIZATION
• Just-in-time working • Egalitariardsm • Rewards for small commitment • Distributed leadership improvements/suggestions • Team-oriented • Responsibility for • Supplier and customer • Multi-skilled—^technical, customers involvement process, interpersonal • Standard operating • Site visits, comparisons, • Flexibility procedures benchmarks • Trust, harmonious • Continuous improvement • Customer knowledge employee relations • No-fault policies
The "before" analysis produced in the following list:
• We do not know customer desires margins, high turnover rates • We make limited use of customers • We feel no ownership of service • We are space-driven, not customerdriven • We lack management skills • We have traditional departments, low
In contrast, the employees felt that the new direction would require management to initiate new practices: • Holding focus groups with customers • Having stores coordinate efforts; exchanging • Being customer-driven best practices • Including service as part of the product • Expanding management skills • Adding high-margin departments CUSTOMER-DRIVEN EMPLOYEE BEHAVIORS AT GRAND UNION
Employees Behaviors Before the Change Behaviors After the Change
BAG PACKERS Ignore customers Greet customers Greet customers Lack of packing standards Lack of packing standards Respond to customers Ask for customers' preference CASHIERS Ignore customers Greet customers Lack of eye contact Respond to customers Assist customers Speak clearly Call customers by name SHELF STOCKERS Ignore customers Respond to customers Don't know store Help customers with correct production/location information Knowledgeable about product location DEPARTMENT WORKERS Ignore customers Respond to customers Limited Knowledge Know products Know store DEPARTMENT MANAGERS Ignore customers Respond to customers Ignore workers Reward employees for responding to customers STORE MANAGERS Ignore customers Respond to customers Stay in booth Reward employees for service Appraise employees on customer service
ROLE OF THE DEPARTMENT
As the Grand Union example suggests, the HR department is in an ideal position to take charge of the 5-P's of strategic human resources management. In general it can:
• Assist in the formulation of the firm's must change in response to strategic
strategic direction and needs needs, the HR department can play a critical • Identify the HR philosophies or culture role as change agent. In this process, the |HR consistent with the business needs department can establish an HR initiative, li.e., • Develop and implement HR policies, a specific HR program to serve as catalyst! for programs, and practices consistent with the change. The initiative can involve: HR culture • Establishing a senior HR council ^nd • Ensure that the HR process is conisistent executive operating committee with the other HR activities •Mounting major activities to rally! dll If, as in the case of the Grand Uniott or employees to the change the Forest Products Company, the organkation HUMAN RESOURCES MANAGEMENT PRACTICES AFFECTED BY THE CHANGE AT GRAND UNION
• Human Resource Planning Customer service training
Longer term focus • Performance Appraisal Tie to the needs of the business Customer service measures • Staffing Feedback More socialization • Compensation More opportunities Relate to performance appraisal • Training and Development Awards and celebration More skll training
Within the HR department there can be further division of roles and responsibilities. This can be done by distinguishing between the corporate HR department and the business unit or division HR departments. Taking a very proactive stance, the corporate HR department can: • Assist senior managers in formulating • Serve as clearing house change • Serve as trainer for other HR personnel • Become a model of change • Do benchmark analysis • Develop and guide divisional HR • Develop HRIS capability • Change organizational structure • Audit competencies
IMPLICATIONS AND SUMMARY
The concept presented here proposes that the framework of strategic human resources management is made up of all activities affecting the behavior of individuals in their efforts to formulate and implement the strategic needs of the business. This rather broad concept carries several significant implications.
1. successful efforts at strategic HR management begin with the identification of strategic business needs. 2. because all employees are affected by strategic human resources management, participatory processes may help cement the link between strategy and HR practices. 3. strategic human resources management depends upon a systematic and analytical mindset. 4. A final implication releites to the formal study of strategic human resources management. As practitioners do their work, HR academics have a significant opportunity to observe organizations in transition, a real-life laboratory for learning.
