Cotton Strategic reward assessment 1 PDF

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Executive summary This business report constructed based on the analyses of Cotton On Group and an evaluation on the current challenges at Cotton On Group

Introduction 1.1 Cotton on Background

On the 13th of April, 2017 two interviews were undertaken with Cotton on HR Manager and Cotton On Group employee the questions focused on Talent retention/Development and strategic reward management. The manager and employees both responded that there are issues with the current organisations structure in regards employee satisfaction and reward system. According to Cotton On Group their business strategy consist of diverse and talent teams of individuals who purses attitudes such as optimistic, passionate, innovative and experts in their fields. Cotton On Group corporate business plan is about creating meaningful and long term careers for their employees, Cotton On Group vision is focused on their ability to attract and retain a strong and diverse workforce across many disciplines including design, marketing, ecommerce, supply chain, visual merchandising, retail operations, store development, technology, innovation and management. Cotton On Group vision is about committing to create meaningful and long term careers for our people.The main focus of this report is to identify how Cotton on can use Talent retention/Development and strategic reward management to maintain an effective and functional organization. This report will emphasis on the current business challenges at Cotton on, will highlight the role of HRM in executing Cotton On Group business strategy. Theories on goal setting are proposed and a model for addressing wages and limited are suggested. This business report will provide recommendations on Talent retention/Development and strategic reward management for Cotton on. The instructions in this report will explain how implementing Talent retention/Development and Strategic reward management could benefit Cotton on business in the long term.

Reference http://cottonongroup.com.au/about_us/our-organisation (Sun et al., 2012). (Han & Chuang, 2011). (Lin et al., 2010). (Steers et al., 2004). (Stajkovic & Luthans, 2001).

The Role of HRM in Executing Cotton on Group Business Strategy Cotton on Group stores are busy working environments, they undertake numerous of activities sales, ordering new fashion trends and mentoring new staffs. Subsequently, human resource managers will play a major role in organising Cotton on workers to ensure employees effectively deliver on these activities (Fay et al., 2015). In the same way, the role of HRM at Cotton on Group is to recruit successful applicants and deliver on coordination in regards to employee rewards and employees training and development strategies Fay et al. (2015). As a result, HRM will contribute to advising upper management about the issues across their isolated stores and how he/she can assist in addressing these challenges. For this reason, HRM’s role at Cotton on Group would suggest strategies/approaches for improving the worker commitment to Cotton on Group this is line with Mitchell et al (2013) analysis. Similarly Sheenah et al (2014) elaborates on the above statement and suggests that, HRM can be utilised as a method for recruitment to match staff with different skills according to their talent. HR managers will challenge young talents at Cotton on Group in order to increase commitment and reaching potential. Alfes et al (2013), makes arrangements on Sheenah et al (2014) analyses urging that the role of HRM would add value to Cotton On Group in regarding’s to reducing external recruitment and use exiting young talents. On the other hand, human resource managers would be useful during external changes in the fashion industry (Brewster et al., 2015).

HRM experts within Cotton on would be able to have solutions for these changes in the recruitment strategy plan. Thus, places the role of HRM central in Cotton on Business strategy because Cotton on may expand into a new market or they may acquire a new technology that requires new type of skill, some employees may also leave or promoted, opens up a gap that may need to be filled (Mitchell et al., 2013). Hence, HRM would advise upper management and create an effective and flexible work environment for Cotton On Group.

Fay, D, Shipton, H, West, MA, & Patterson, M 2015, 'Teamwork and Organizational Innovation: The Moderating Role of the HRM Context', Creativity & Innovation Management, Vol. 24, No. 2, Pp. 261-277. Mitchell, R, Obeidat, S, & Bray, M 2013, 'The Effect of Strategic Human Resource Management on Organizational Performance: The Mediating Role of High-Performance Human Resource Practices', Human Resource Management, vol. 52, no. 6, pp. 899-921. Sheehan, Cathy, Helen De Cieri, Michelle Greenwood, and Harry J. Van Buren. 2014. "HR Professional Role Tensions: Perceptions and Responses of the Top Management Team." Human Resource Management, Vol. 53, No. 1, Pp.115-130. Brewster, C, Brookes, M, & Gollan, P 2015, 'The Institutional Antecedents of the Assignment of HRM Responsibilities to Line Managers', Human Resource Management, Vol. 54, No. 4, Pp. 577-597. Alfes, K, Truss, C, Soane, E, Rees, C, & Gatenby, M 2013, 'the Relationship between Line Manager Behaviour, Perceived HRM Practices, and Individual Performance: Examining the Mediating Role of Engagement', Human Resource Management, Vol. 52, No. 6, Pp. 839-859. 2.1 Main Issues at Cotton on 2.2 Goal Setting It’s worth noting that Cotton on offers employees rewards such as 50% clothes discounts, Café and gym however, there are gaps in these rewards employees experience inconsistencies with their actual performance and their desired values. Despite this, Cotton on goal setting for employees are not realistic, unattainable and unreasonable. This shows that goals are set too

high for employees to achieve Loock et al. (2013), supports this statement. In the same way, Taylor (2013), states that goal setting in the sales industry may encourage optimistic psychological empowerment for Cotton on workers. Literature shows, the link between employees self-set goals and effort in regards to people in the sales industry. Sales employees have a limit to their effort levels, however selling levels may decrease as goals level increase. Therefore, Cotton On Group must understand that self-set goals are aligned with selling effort. For example, the U-shaped theory r el at i onshi pbet weensel f setgoal sandeffor t .Speci fi c al l y ,s al es peopl ee x pendmor eeffor tasgoall ev el s i nc r easeupt oac er t ai npoi nt .Bey ondt hi st hr es hol d,s el l i ngeffor tdec r eas esasgoall ev el si ncr eas e.Thes t udy al s oi ndi c at est hats el f setgoal sf ul l ymedi at et her el at i ons hi pbet weenass i gnedgoal sands el l i ngeffor t .Fi nal l y , t hel ongi t udi nalda t ai ndi ca t et hatc ompany as s i gnedgoal s,sel f s etgoal s ,ands el l i ngeffor tal lpos i t i vel yi nfl uence f ut ur ene wpr oduc tsal es.I nt er es t i ngl y ,t her es ul t soft hes t udyf ai lt oconfi r m ani nv er t ed,Us hapedr el at i ons hi p bet weenas si gnedgoal sandeffor twhi c hopensupf ur t herques t i onsf orf ut ur er esear c h

Fu, F, Richards, K, & Jones, E 2009, 'THE MOTIVATION HUB: EFFECTS OF GOAL SETTING AND SELF-EFFICACY ON EFFORT AND NEW PRODUCT SALES', Journal Of Personal Selling & Sales Management, Vol. 29, No. 3, Pp. 277-292. 2.4 Rewards and Wages On the other hand, wages and limited shifts were the two factors of job dissatisfaction at Cotton on employees perceive work hours are not congruent with the number of hours they deserve. This illustration is in line with Lee et al. (2015), they discovered that employees who desire more hours linked to positive job satisfaction and may reduce work absence (Lee et al., 2015). Cotton on, commitment to wages and work shifts can be interpreted as employees are not working the hours they prefer, the challenges shows that working few hours may impact job stress and life fulfillment. Another important point, employees who work too many hours may affect their work-family life Sturman and Walsh (2014), support this testimonial (Sturman & Walsh, 2014).

2.5 Management style Although, management styles are central in organizations success not in the case of Cotton on, the organizations relax leadership style indicated obvious disadvantages. For example, the company lacks commitment to organizational goals. The drawbacks of Cotton on

management style is sharing, organizational goals between the store members. With this in mind eventually, conflicts may take place between store managers, employees and individuals may pursue the own goals. Jiang et al. (2014), supports this analyses however, Qadir et al. (2016), suggests that poor management styles may lead Cotton on employees to have pretended positive emotions and feelings to interrelate with customers and colleagues (Qadir et al., 2016).

Talent Retention and Development.

Literature Review Retaining talented employees is very challenging to organisations. In strategic human resource management, talent development is critical to retaining them and the success of the firm. Mehdiabadi and Li (2016) argued that talent development is an ambiguous term and the boundaries and scope is not clear. However, Garavan et al ( 2012) in their definition on “talent development focuses on the planning, selection and implementation of development strategies for the entire talent pool to ensure that the organisation has both the current and future supply talent to meet strategic objectives and that development activities are aligned with organisational talent management process” (p 6). Current and future supply of talent of skills employee is very important for the organisations competitive advantage. Hatum (2010), stress the need of aligning talent management strategies with the corporate strategy (cited in Van et al 2017) because of the shift in traditional human resource management. Human resource managers plays a significant role in aligning the corporate objectives into the HR strategy. The strategic human resource management requires human resource managers to build organisations Human Resource plans and policies from the HR strategic plan that is aligned with the strategic business plan. HR plan and policy in here is the learning, education, and development strategies and process which leads to specific practice of induction and orientation, training programs developing and learning and an evaluation of HRD. All this is aligned to at the overall goal of organisational success. Induction programs expose new employees to their organisations goals and how their performance will contribute to the organisations objectives. Nankervis et al (2014) identify increased employee retention as one of the reason why organisations need a good induction program. The induction program should include regular follow up through other training and evaluation. The continuous follow up and evaluation is aimed keeping employees update with the changes that is taking place. Thus, development strategies should blend with the identified talent development needs supported by an effective HR system and a continuous assessment and evaluation. Developing a framework capturing the key competency requirement and then design training that employees can built those competency will considerably increase organisation

performance. Cotton on Group prides its success on its people. The culture and values at Cotton on Group is delivered to its new recruits during the induction process. Cotton on Training and Development. Learning and development is a priority in Cotton On group. The company has a Learning and development function that concentrates on its development program. Training program in Cotton on provides a wide range of programs to ensure all team members from the shop floor, factory floor or senior executives have the opportunity to learn and develop both personally and professionally. As part of Cotton On’s development strategy, the investment of AU $30 million education platform known as Cotton On Uni in partnership within Deakin University and other specialist educators globally was launched in 2014. Cotton On groups investment in Cotton On Uni aims to help Cotton On Group attract, induct, optimise, inspire and retain local and global staff. It also aims to deliver a role specific technical training that will promote culture change. Further, the initiative will help introduce and master new online sales and distribution technology. Also the initiative aims to create a higher educational pathways for its future leaders at Cotton On. (http://deakinprime.com/clients/case-studies/cotton-on-group). The program is open to both full time and part time employees to participate. The programs from the initiative includes; global induction academy and that is a face to face sessions for head office and country office hub. The second program is the global retail academy. This program is a customised induction program for all retail team members and is designed to specifically equip retail employees on new technical skills in the retail cycle. The third is the learning and development and that is a nine module program delivered through online and in the classroom. The fourth and final program is the leadership award which is a leadership program for the senior management. Learning and development at Cotton On aims to develop its employees to drive its business globally. Talent retention and development is a Human resource process that aims at recruiting developing and keep in the organisation so that their performance will lead to organisations attaining its organisation goal. Realising the importance of its employees Cotton On embark on the investment on its employees. Training and development aims to retain its employees by creating a career part for them. However, the rate of turnover cannot be overlooked in any retail industry. High turnover in retail industry is from the entry level positions because of low wages and also a sense of job insecurity and the perception that advancement potential is limited (Heath, 2003). Devins and Gold (2014) points out inequalities in development opportunities where the high skilled paid jobs are those that have access to training and development while those low skilled low paid positions have rare opportunity for training and development (cited in Mehdiabadi and Li 2016). Cotton On has faced with such issues with a high turnover at their entry level and the issue of low minimum wage and job insecurity are the factors leading to high turnover. Retention is difficult since most of the employees are looking for better pay and this may be attributed to the economy of the country. Most of the employees at that entry level are generation X and Y and they are more interested in training, development and career advancement. Minimising Turnover at Cotton On.

Cotton On Group is a successful company and it’s still expanding its operation globally. The growth level may suggest that investment in learning and development is contributing to the success of the organisation. However, the high turnover at the entry level at most of its retail outlets locally needs to be adjusted to minimise the rate of turnover. The focus at cotton will be at the entry level positions to identify the right talent and put through the development program and this are young employees at the age of 18-25. A regular follow up and evaluation be set up at the retail level with both online evaluation and face to face follow up maintaining constant communication. On the job training should be more fun through job rotation locally and overseas for the purpose of building competencies. Nankervis et al (2014 also notes that providing employees with opportunities in different environment settings. Generation X and Y employees should be given the opportunity on experiential learning and provide mentoring and coaching. Their personal development is essential to retain them and therefore a customised career development part in consultation with them. Nankervis et at (2014) reiterated that most young employees start work without the expectation of not staying at the same job and thus Cotton On should provide an experience of rotating them to other setups overseas or locally. Heath (2003) recommends a Career Ladder approach in retail industry to retain its talent and minimise turnover rate. He argued that effective career ladder has been successful in retail industry in the US since workers “view lows skill low wage jobs not as dead ends but as opportunities to increase their skill levels and advance their careers” (p3). Thus developing highly transferable skills like sales and customer service provides employees with job security. Strategic reward management to Cotton on business strategy There are various tangible rewards that are non-monetary incentives that may have monetary insignificances on Cotton on employees, such as holiday trips, debit cards, gift cards or employee certificates, and merchandises. On the other hand, there are few types of employee recognition that Cotton on can use that have (small) financial value including thank-you letters to staffs, plagues, or token gifts. Cotton on should be mindful that tangible rewards consider short term in their role of effectiveness. However, in an industry such as the fashion world tangible rewards are virtual to from new employee’s members to senior managers. Delivering a reward system at Cotton on requires the corporation of line managers in isolated stores who are always in direct involvement with HR (Thite, 2012). Tangible rewards should be used to maintain a collaborative culture at Cotton on and utilised to encourage performance (Dekker et al., 2016). Therefore, by implementing a strategic reward system will lead to increase in customer satisfaction and employee loyalty, and increases economic gains (Abdolvand et al., 2015).

Recommendation for Cotton on Based on the above findings it is recommended that Cotton On designed a framework specific for the entry level positions with regular feedback and communications. The framework should capture rotation of employees in jobs and environment as part of their induction, mentoring, experience and career development. The framework will then be used to develop a career partway for each employee and allow the employee to identify their own career part. In addition the HR department should conduct regular follow up on employees who have undergone training and seek feedback and evaluation. Firstly, it is recommended that Cotton on could implement points systems where employees are provided with points as the reward, from there the points can be cashed in for tangible rewards.

as a strategic process to present an advantage for the organization, which creates leaders and qualified workers (Widen et al., 2010). In support of Talent retention/Development, incentives are necessary methods for employee management this is in support of Shark and Brooks (2009). In the same way, flexible work will plays a major role in employee retention, changes in work schedules more hours for causal workers (Starks & Brooks, 2009). As a suggestion for Cotton on that, University students pursue job positions that are challenging and congruent with their study field. Therefore, elements of mentor programs will offers employees the chance to work with the experienced managers in the organisation (Starks & Brooks, 2009). It would be appropriate to implement fast-track promotions programs that allows employees to advance in their career pathways and promotional opportunities. In the same manner, Cotton on can use recruitment Websites to cannot only attract candidates but also competent applicants. Cotton on can benefit from recruitment sites they provide applicants with endless information’s Cotton organizational culture, and the benefits available to workers and training opportunities. As a result, the website will reduce employee doubts about their organizational structure which could increase attraction to the organization (Williamson et al., 2010). For example, encouraging employees using performance based wages rewards may attract current new
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