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APPENDIX

Strategic Staffing at Chern's: A Case Study

CHERN'S COMPANY HISTORY AND ORGANIZATION

Siblings Ryan and Ann Chern founded Chern's, an upscale men' s and women's department store, 20 years ago after they graduated with their MBAs. The pair had planned to launch their own company for years, and refined their business model after each spent a great deal of time learning about the retail industry by working in different retail organizations. The product mix and high-quality products Chern's sells made it rapidly successful, and the company developed a loyal following. The firm quickly expanded its product line and began opening additional loca- tions 15 years ago. Ryan and Ann have turned their basic idea of providing customers with the best service, selection, quality, and value into a thriving business. The two are now co-presidents of Chern's: Ryan serves as the company's chief executive officer; Ann serves as the company's chief operating officer.

Chern's pursues an aggressive growth strategy. Currently the company has 140 stores in 28 states on the East Coast and in the Midwest. Chern' s employs an average of 19,000 full- and part-time employees. Providing superior customer service has been the company' s main business strategy and has successfully differentiated it from its competitors. Although the company's prod- ucts are expensive, the high product quality and excellent customer service have made the company successful. Because customers' tastes can differ from one store to the next, the company tries to be as decentralized as possible. Therefore, it gives its store managers a considerable amount of discre- tion in terms of bow they run their stores. Likewise, each manager runs his or her own department as a small business and is rewarded according to the department' s and the store's overall success.

Because customer service lies at the heart of the company's business strategy, it is a core part of the corporate culture of Chern' s. Ann and Ryan believe that customer service is the essence of selling and that because the firm's sales associates are in direct contact with customers, they are the core drivers of the company's performance. Both department managers and assistant depart- ment managers support the sales associates. Besides giving the sales staff their full support, the department managers at Chern's are, in tum, supported by their store managers, assistant depart- ment managers, buyers, and merchandising managers. Figure A- 1 illustrates these relationships.

Core values are an essential part of the Chern's brand and are the foundation of its culture. The company' s family ownership contributes to its desire to make every employee and customer feel valued and cared for. The firm is known for its strong and unique culture, which it feels is due to its belief that the best approach to business is to hire good people. As such, Chern's tries to iden- tify and select the right people, train them, and give them the tools and autonomy they need to suc- ceed. Successful employees are rewarded with above-market base salaries and generous bonuses.

Store Manager

Assistant Department

Managers

Buyers

Department Managers

Sales Associates

Merchandising Managers

FIGURE A-1 The Sales Support Relationships among Chern's Staff Members 383

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The management philosophy at Chem's is based on empowerment. Chern 's believes that by hiring well it can trust its employees to use their own judgment. Consequently, the firm gives them a considerable amount of freedom in terms of how they do their jobs. By striving to create a fair and positive environment and giving each employee the tools and autonomy he or she needs to succeed, the company feels it has created an environment in which its sales asso- ciates can truly excel. In fact, last year, 42 Chern's sales associates sold at least $1,000,000 in merchandise-a company record.

Because Chern's has a strong reputation for customer service, quality, and selection, it enjoys very positive brand recognition among its targeted customers. It is consistently named one of the top three retailers in regional customer surveys and has been listed among Fortune magazine's top 100 best companies to work for. Last year the company ranked number 72 on Fortune's list, down from 44 the previous year. It was the second-highest retailer on the list, behind Nordstrom's. It also ranked as having the best customer service among retailers for the past three years in customer surveys developed by the National Retail Federation.

In addition to focusing on customer service, selection, quality, and value, Chem's has invested heavily in information-technology tools to improve its inventory management and help its sales associates make efficient transactions with customers. The company recently imple- mented a Perpetual Inventory System to help its buyers react more quickly to the feedback given to them by its sales associates and to track inventory to quickly adjust each store's product mix and clothing sizes available. The technology has helped the company increase its efficiency and lower its costs as well as add value for its customers.

CHERN'S FINANCIAL PERFORMANCE

Chern's has enjoyed a strong financial performance over the last few years. Over the past five years, the company's share price has increased 134 percent and the company's revenues have grown at an annualized rate of 9 percent. Revenues and net income have grown as all of the firm's stores have reported sales increases every year over the past three years. Growing rev- enues and income have provided the company with the financial base and stability it needs for further expansion. The five-year growth strategy at Chern' s is to open 15 new stores a year and to continue to grow at an annual rate of 9 percent. Figure A-2 shows the company's revenue, gross profit, and net income trends for the last three years.

The company's good financial performance has translated into strong operating cash flow, giving it the option of reinvesting in its business, buying back shares, or passing some of its earn- ings to investors in the form of dividends. Figure A-3 shows the operating cash flow trend at Chern's over the past three years.

Net Income Gross Profit Total Revenue

o3 Years Ago

•2 Years Ago

Dlast Year

FIGURE A-2 Three-Year Revenue, Gross Profit, and Net Income Trends for Chern's

Three Years Ago Two Years Ago Last Year

FIGURE A-3 Three-Year Cash Flow Trend for Chern's

Chern's has funded its expansion using its earnings rather than by taking on debt. The company believes that its conservative debt policies and strong cash flow help create shareholder value by enabling it to expand into new markets.

CHERN'S HUMAN RESOURCES

Chern 's averages 1 store manager, 8 department managers, 8 assistant department managers, and approximately 100 full-time and 25 part-time sales associates per store. Full-time employees receive a generous benefits package, two weeks paid vacation, and are eligible for bonuses. Part- time employees are considered members of the core workforce and receive prorated benefits and bonuses. Because it feels that they would not reinforce its culture, Chern's does not currently utilize temporary or contingent workers of any kind. Turnover among its full-time sales associ- ates has been relatively stable, averaging 20 percent over the past three years. Turnover among the company's part-time sales associates has also been relatively low compared to similar retail operations, averaging 15 percent over the past three years. The part-time sales associates are used to increase the number of sales associates on the floor during peak periods.

The human resources department at Chern's generally does a good job supporting the company's business strategy. The company's compensation, performance management, and training are all designed to get sales associates up to speed and selling quickly. The base pay they earn is 20 percent above the market average, and Chern's matches in their 401 (k) plans up to 10 percent of their base pay. Twenty percent of a sales associate's bonus is tied to the person's customer service performance as rated by his or her department manager, 40 percent is based on individual sales performance in relation to that person's sales target, and 40 percent is based on overall store sales. New employees have a reduced sales target for their first year. Sales associ- ates can earn up to 150 percent of their base pay in bonuses based on both sales and customer satisfaction ratings. Top performers at Chern's earn well above the market average in pay.

Semiannual performance evaluations assess sales associates' initiative, customer service behaviors, coworker support behaviors, and leadership. Raises to an associate's base salary include a cost-of-living adjustment based on inflation, and from 0 to 10 percent based on the department manager's perception of the sales associate's performance, adherence to company values, and leadership contributions. Sales associates are also given 10 personal days, includ- ing sick days, and generous health and dental benefits. If a sales associate refers a candidate to Chern's, and the person is hired, the company gives the employee a $ 1,000 referral bonus after the new hire passes the six-month mark with strong performance.

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Chern's largely focuses its training and development activities on its new hires. New hires undergo a two-day orientation. Each then receives on-the-job training from his or her department manager and shadows another sales associate for one week. Employees receive additional train- ing only if they fail to reach their sales quotas two months in a row. Sales associates who fail to reach their quotas four months in a row are given a warning. Those who fail to meet their quotas five months in a row are terminated.

Sales associates can use the store's technology to identify how they are performing relative to their quotas. Chern's expects its employees to be relatively "tech savvy" and be willing and able to quickly learn its systems. Customer information, including information about their previ- ous purchases and fashion preferences, is stored in the company's computer for fast retrieval. Chern's also uses technology to give its buyers feedback about its customers' preferences and purchasing trends. The company's sales associates are also required to record information about customers' inquiries and unfilled requests for particular types of clothing. This is critical because it helps each department better track its inventory and quickly adjust its product mix and sizes to meet the changing demands of its customers. Sales associates can also use the store's computers to check inventory at other Chern's locations to better assist clients in locating desired products.

THE COMPETITION CHERN'S FACES

Chern's primary competitors include Nordstrom, Dillard' s, Barney's, Nieman Marcus, and Saks Fifth Avenue. Table A- 1 shows the previous and current year's sales, net income, and employee headcount for Chern's relative to its competitors.

At Chern's, sales associates execute the company's customer service strategy by building long-term relationships with their clientele. Sales associates feel empowered, and their business freedom is strongly supported by the corporation as long as the employees work hard and do their best. Chern's tries to hire sales associates with an entrepreneurial spirit, a drive to be suc- cessful, and a desire to make money. The sales force's accountability for results and Chern' s high expectations of them means that Chern's wants to hire only elite sales associates.

TABLE A-1

Previous year's sales ($ millions)

Current year's sales Growth(%)

Previous year's net income($ millions)

Current year's income growth(%)

Previous year's headcount (full and part time)

Current year's headcount growth(%)

On~~Ye~r Performance of Ch~rn's Relative to Its Comf'letitors

Nieman Saks Fifth Chern's Nordstrom Dillard's Barney's Marcus Avenue

3,800 8,11 1 8,525 326 4,390 2,249

9.7 9.9 (.9) 2.3 6.9 8.2

193.4 672 .5 242.2 24.2 247 .8 164.2

9.0 6.9 .8 (.6) 6.0 6.4

19,000 56,500 54,300 1,400 17,900 11 ,750

9 2.9 (1.2) .9 4.1 3.9

The levels of customer service excellence and sales skills required by Chern's employees are not the same for most other retail ftrms. High-end retailers, such as Neiman Marcus and Nordstrom, tend to compete more directly with Chern's for hires than do competitors such as Dillard's and Federated Department Stores, which focus less on customer service. The quality of Chern's sales force has enabled it to offer employees considerable upward mobility within the company, which is unusual for a retailer. Chern' s ftlls 75 percent of its department manager and assistant department manager positions internally, whereas most of its competitors fill their man- agement positions externally; 80 percent of the current store managers at Chern's once worked as sales associates for the ftrm. Promotion from within is important to the company. Both Ryan and Ann strongly believe that internal hires reinforce the company's strong culture.

In order to provide the highest-quality customer service and capture market share, Chern's knows it needs to hire the right sales associates. Although the company's strong culture and high quality initially attracted a sufficient number of talented sales associates who shared the ftrm's values, the competition for talented sales associates has been heating up. As a result, Chern's is finding it harder to staff and retain the level of sales talent it needs. The sales associates at Chern's are usually the top performers in the retail industry, so they are never easy to find. Because of the importance of hiring the right salespeople, and their expectation that staffing this important position will become more difficult in the future, Ann and Ryan have decided to launch a strategic analysis of how Chern' s staffs its sales associate positions and have asked for your help.

STRATEGIC STAFFING AT CHERNrS: CHAPTER-BY-CHAPTER CASE ASSIGNMENTS

At the end of each of the chapters in this book, you will have an assignment for the case study that applies concepts from that particular chapter. The entire list of assignments can be found at the end of this appendix, just before the candidate resumes are presented. The assignments put you in the role of an external staffing consultant hired by Chern's. Your job is to conduct a strategic analysis of how it staffs its sales associate positions. Your final product will require you to combine each of the assigrunents into a cohesive report, including a table of contents and any necessary appendices. Format your report as a professional product that you would give to the organization. Chern's is decentralized, which means that your report will be distributed to many store managers, many of whom are unfamiliar with staffmg terminology and jargon. Write your report so that they understand and adopt your recommendations and are committed to implementing the changes you've suggested. You might want to keep a copy of the final report to show potential employers the type of strategic staffmg work you are capable of performing.

Chapter 1: Strategic Staffing In this chapter, you learned that the strategic staffing process is guided by hiring goals that are clearly linked to an organization's strategies and objectives. The goal of strategic staffing is to enable the organization to better execute its business strategy. There are two types of staffing goals: process goals and outcome goals. Process goals relate to the hiring process itself, and outcome goals apply to the product of the hiring effort. Table 1- 2 gives examples of both types of staffing goals, and Table 1-3 gives you some questions to consider in setting appropriate staffing goals.

Your consulting assignment for Chapter I is to identify realistic process and outcome goals for staffing of sales associate positions at Chern 's. Be sure to relate yom goals to the firm' s business strategy and explain why each is important and should be adopted by the company.

Chapter 2: Business and Staffing Strategies In this chapter, you learned about how a firm's business strategy and talent philosophy shape its HR strategy, which then influences the firm's staffing strategy. After Ryan and Ann learned about this process, they felt that the company needed to develop a more formal talent philosophy of its own to shape its HR and stafftng strategy. They have asked you for your recommendations.

Chapter 2 and Tables 2-4 and 2- 5 should help you identify key components of an appro- priate talent philosophy, human resource strategy, and staffing philosophy for Chern's. Be sure

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to consider the company's business strategy and competitive advantage, life stage, and the com- pany's values and culture when making your recommendations. You should also clarify how putting the right talent in the company's sales associate positions can create a competitive advan- tage for Chern's.

In addition to developing a formal talent philosophy, HR strategy, and specific staffing strategy, you also need to explain how Chern's should address each of the nine strategic staff- ing decisions listed in Table 2-6 for the sales associate position, and justify your reasoning. For example, the first decision is whether Chern's should establish a core or flexible sales associate workforce. Describe in your report if Chern's should focus on a core or t1exible workforce and to what degree. Be sure to explain why they should follow your recommendations. Do this for the other eight strategic staffing decisions as well, taking into account the chapter material as well as the information provided about Chern's in the beginning of the appendix.

Chapter 3: The Legal Context Although Ann and Ryan have always known that it is important to comply with equal employ- ment opportunity legislation and other relevant employment laws, it has been eight years since they conducted any sott of discrimination analyses at their company. They ask you to evaluate the sales- associate position for any evidence of discrimination based on gender or ethnicity. The first level of disparate impact analyses are typically done at the establishment level, which for Chern's is a single store. Chern's asks you to focus on its flagship store- its largest- which has 140 full-time and 50 part-time sales associates. Chern's gives all department and store managers bias and diversity training, and has never been sued for disparate treatment. Because it knows that adverse impact is still a risk, the company asks you to analyze its full-time sales associate hiring data for evidence of adverse impact.

Tables A- 2, A- 3, and A-4 summarize the data you will need to use in your analyses. The data for the sales associate flow statistics are based on the previous five years of staffing at Chern's flagship store. Evaluate the stock and concentration statistics and use the four-fifths rule to analyze the flow statistics. In addition to your disparate impact analyses, be sure to recom- mend strategies that Chern's can use to alleviate any discrimination you may find.

Females

Males

Whites

Blacks

Asians

Hispanics

Sa1es Associate Statistics Compared ts the Relevant Population

Job Category: Sales Associates

Current Sales Associates(%)

55

45

20

20

32

28

Availability of Sales Associates in Relevant Population (%)

60

40

25

25

25

25

Sales Associate Flow Statistics

Men

Women

Whites

Blacks

Asians

Hispanics

# Applicants #Hired

1,000 80

1,400 160

600 55

600 48

600 67

600 50

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"' "'J

Sales Associates (% ) Department M anagers (%) Store M anagers (%)

Female

Male

White

Black

Asian

Hispanic

55

45

20

20

32

28

30

70

20

15

30

35

Chapter 4: St rategic Job Analysis and Competency Modeling

40

60

24

40

16

20

Referring to the information presented in the chapter and case, by researching the "retail sales- person" position on O*Net (http://online.onetcenter.org), and by interviewing a sales associate in a simi lar company if possible (an associate at Saks Fifth A venue, Nieman Marcus, Nordstrom, and so fm1h), create a job requirements matrix for the sales associate position at Chern ' s. Be sure to consider the company's business strategy and corporate culture in creating job duties and identifying competencies or KSAOs. For each competency or KSAO, decide if Chern's should hire people who already possess the characteristic or if the firm should train them to develop it. Also, estimate to the best of your ability how important each characteristic is relative to the others as well as the relative time associates spend on each job duty. You may have to use some judgment to come up with the answers to these questions. You will use this information later to determine how to weight the assessment information obtained on each job candidate.

Given the information contained in the Chern 's case description and your own knowledge of this type of position, create a job rewards matrix for the sales associate position. If possible, interview a sales associate in a similar company to obtain additional job rewards information.

Chapt er 5: Forecasting and Planning Chern's has never examined its internal labor market. The company asks you to perform a transi- tion analysis for full-time sales associates. It asks you to conduct relevant analyses to describe the internal labor market for its flagship store.

Summarize the flagship store's internal labor market and highlight any trends or forecasted gaps based on the transition probability matrix in Table A-5. The probabilities are based on annual rates that are averaged over a span of three years. In other words, they are the average rate per year. If Chern's wants to keep its flagship store staffed with 140 fu ll-time sales associates, how many full-time sales associates should it expect to have to hire from outside the company annually?

Traditionally, 25 percent of the store's job applicants for sales associate positions become job candidates, and 20 percent of the job candidates receive job offers, 75 percent of which are accepted. Chern's asks you how many applicants it will need to generate each year to acquire the number of new hires you forecasted.

The Tra nsition Probability Matrix for Chern's Flagship Store

Transition Pro babilities Based on t he Past Three Years

Job FTSA PTSA DEP BUY MER Exit Current # of Job Cat egory Level (%) (%) (%) (% ) (%) (% ) Employees

Full-time sales associat es (FTSA) 50 15 5 5 5 20 140

Part-time sales associat es (PTSA) 30 50 0 5 0 15 30

Department manager (DEP) 2 6 0 75 6 12 20 16

Buyers (BUY) 2 0 0 0 65 7 30 15

Merchandising managers (MER) 2 12 0 0 0 80 20 8

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Chern' s asks you to research the external labor market for sales associates because the company is concerned about their availability in the future. Using O*Net, choose a state in the United States and research the expected demand for sales associates in that state over the next 10 years. To do this

1. Visit www.online.onetcenter.org. 2. Search for job 41-2031.00-Retail Salespersons. 3. Scroll to the bottom and find "Wages and Employment Trends." 4. Select a state from the "State and National" drop-down menu and hit "go." 5. Compare the forecasted employment trends in your chosen state with those of the entire

United States for the retail salesperson position. 6. Print out the results of your state search and include it with your report. 7. There is also a "Career Video" available on the state results page of your search that you

can view for additional information about the work sales associates do.

Now research the employment trends of retail sales workers using the U.S. Department of Labor Bureau of Labor Statistics Web site at www.bls.gov and other resources you identify. Consider this information when forecasting future gaps or surpluses. You might also consider targeted skill sets or demographics and determine if you can obtain information about skill or demographic trends in your targeted area.

If you forecast a gap between the anticipated supply of qualified sales associates and Chern's anticipated demand for them, determine whether the gap is temporary or permanent. Then, make some recommendations about how Chern's can best address the gap. Be sure to reread the relevant section of Chapter 5 before you do so.

Chapter 6: Sourcing: Identifying Recruits Chern's currently uses six different sources for sales associate applicants: colleges, employee refer- rals, Cherns.com, a search firm, walk-ins, and local newspaper ads. The company just fmished analyzing the effectiveness of each of these sources, and the results are summarized in Table A-6.

Chern's asks you to prioritize its recruiting sources to maximize the effectiveness of the company's future hiring initiatives. Based on what you have read in this case, prioritize the staffing outcomes and rank order the recruiting sources based on their ability to maximize the company's staffing goals for the sales associate position.

Ryan and Ann have heard a lot lately about using the Internet to source passive job candi- dates. The two are wondering how well this technique would work for its sales associate positions. Referring to the Develop Your Skills feature in Chapter 6, choose an area of the country. First, pro- vide some suggestions on how the Internet might be more effectively used to source and recruit applicants. Second, conduct a Boolean search to source two promising sales associate applicants using the Internet. You may need to try different search engines and different syntax, as highlighted in the chapter. You can also try x-raying and flipping. For example, on Y ahoo.com you could try "linkdomain:ffany.org shoes blog" to pull up blogs linked to the Fashion Footwear Association of New York with the word "shoes" in the blog. You should experiment with searches based on your own ideas. Include the various search engines and search terms you used for your fmal search and provide information about your two leads in an appendix to your final report. Justify each recommendation.

:~TABLE X~6> , ~ t t • -~ • r

·~~!>J: . '~ '"'"~!ot".._,·>

College hiring

The Effectiveness of the Sources Used to Recruit Chern's Sales Associates

Average First Hiring Speed Cost per Year Financial

(months) Hire($) Culture Fit Return($)

5 4,000 Good 30,000

Employee referrals 2 2,600 Very good 38,000

Cherns.com 2 1,500 Good 38,000

Search firm 3 5,200 Average 20,000

Walk-ins 1 1,500 Poor 5,000

Newspaper ads 2 2,000 Poor 4,000

First Year Turnover Rate(%)

20

10

20

15

30

25

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To best serve its diverse clientele and to establish the most positive employer image pos- sible, Chern's wants to hire diverse sales associates. The company also asks you how it can improve the diversity of its applicant pool.

Chapter 7: Recruiting Develop an outline for a recruiting guide for the sales associate position based on the mate- rial you read in this case and what you learned in Chapter 7. The outline should include the company's policies and procedures, budgets, activities, timelines, responsible staff, legal issues, and steps to be taken in recruiting for the position. You do not have time to write an entire recruiting guide. However, Chern's has asked for your help in identifying what it should include in one. Chern's also asks you to make recommendations about what the company can do to increase applicants' fairness perceptions of the process and reduce any negative spillover effects related to it.

Chern's would also like to reinforce its employer brand among potential applicants. Ryan and Ann would like to create a stronger employer brand, and ask you for advice on what the company's employer brand should be and bow to effectively and consistently market and rein- force it throughout the staffing process. Make some recommendations and explain why your approach would be effective for Chern's.

Chapter 8: Measurement Chapter 9: Assessing External Candidates Remember to write your repott so that the various measurements you learned about in these chapters will be understandable to the firm's store managers and department managers. These employees do not have a staffing or statistics background. Consequently, many of the concepts you discuss in the report will be unfamiliar to them. Be sure you thoroughly explain the concepts and their importance. This will be particularly important when completing the next part of the assignment, which spans Chapters 8 through 11.

Chern's is in the middle of hiring two sales associates for its flagship store and has reduced the initial applicant pool to eight candidates. Because it is the company's flagship store, it is important that all sales associates who work at the store excel at customer service and embody the company's values, and they need the new people to get up to speed quickly. Although Chern's often invests in the training and development of new employees, in this case they would like the two new hires to arrive with the knowledge, skills, abilities, competencies, and other characteristics required to be immediately successful. They also would like the newly hired sales associates to be strong candidates for future management positions.

Ryan and Ann ask you to become involved in the assessment and hiring process. Nearly 80 percent of Chern's sales associates are considered successful. However, Chern's would like the percentage to be at least 85 percent. Ryan and Ann feel that improving the company's assess- ment and selection system will help it accomplish this goal. Use this opportunity to help Chern's develop a new sales associate assessment and selection system. This is a pilot project to deter- mine how well you are able to improve Chern's staffing process.

All eight candidates are already scheduled to participate in one structured and one unstruc- tured interview that you are asked to view and score (you may or may not choose to score and use the unstructured interviews). After deducting the costs of the initial applicant screening and the two scheduled interviews for each candidate from the initial budget, the store has $4,000 left to apply to this staffing initiative. It's up to you to decide how to spend the money. What other assessment methods should you use? (The costs of the two interviews are not to be included in your $4,000 budget.)

The a<;signment for Chapter 8 is to read the case assignment spanning Chapters 8 through 11 and review the eight candidates' resumes at the end of the appendix. You then need to develop an assessment plan that does not exceed your $4,000 budget.

Your goals in developing your sales associate assessment system are threefold:

1. Maximize the return on investment of your assessment system. 2. Maximize the job success of the new sales associates hired (in terms of their sales, turn-

over, and levels of customer service). 3. Maximize the fit of the new sales associates hired (including their customer service orien-

tation and leadership skills) with the company's culture.

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TABLE A-7 Potential Assessment Methods and Their Costs

Assessment Method

Cognitive ability test (measures a candidate's ability to learn, process, and apply information rapidly; verbal, spatial, and mathematical abilities)

Conscientiousness (measures a candidate's persistence, dutifulness, order, attention to detail, and achievement motivation)

Openness (measures a candidate's openness to new ideas and situations and intellectual curiosity)

Sales interest (measures a candidate's interest in sales as a career; vocational interest inventory)

Scale of Assessment Cost

Typical scores range from 85 to $70 per candidate 130 (mean and standard deviation for this sample are 112.5 and 8.02, respectively).

Possible scores range from 1 to 6 $100 per candidate (mean = 4.38, std. dev. = 1.06).

Possible scores range from 0 to 60 $30 per candidate (meal")= 42.50, std. dev. = 7.07).

Possible scores range from 1 to 5 $50 pe r candidate (mean = 3.63, std. dev. = .92).

Desire to avoid failure (measures Possible scores range from 1 to 4 $30 per candidate a candidate's need to avoid failure (mean = 2.88, std. dev. = .83). and desire to avoid taking risk)

Technology skills test (measures a candidate's abil ity to become proficient with the company's various technology tools)

Job knowledge test (measures a candidate's knowledge of sales techniques, understanding of effective customer service practices, and awareness of related issues in the retail industry)

Simulation (measures a candidate's leadership, sales, judgment, and customer service skills using a work simulation)

Integrity test (measures a candidate's trustworthiness, integrity, and honesty)

Fashion knowledge test (measures a candidate's knowledge of fashion trends, styles, and fabrics as they apply to a variety of customers)

Handwriting analysis (measu res a candidate's trustworthiness, personal drive, dependabil ity, sociability, and desire to achieve)

Possible scores for this test range from 0 to 80 (mean = 58.13, std. dev. = 7.99).

Possible scores for this test range from 0 to 50 (mean = 36.88, std. dev. = 7.04).

Possible scores for the simulation range from 0 to 70 (mean= 43.75, std. dev. = 10.61).

Possible scores for this test range from 1 to 5 (mean = 3.50, std. dev. = 0.93).

Possible scores for this test range from 0 to 60 (mean= 38.75, std. dev. = 8.76).

Possible scores for this ana lysis range from 0 to 10 (mean = 5.38, std . dev. = 3.38).

$70 per candidate

$150 per candidate

$250 per candidate

$70 per cand idate

$50 per candidate

$150 per candidate

Table A-7 summarizes the possible assessment methods you can use and their costs. Next is an overview of the steps you will need to take in completing the next parts of the

assignment and the chapter in which each part is assigned. The work will be spread out over the next few chapters.

1. Develop a sales associate assessment and selection plan that does not exceed the remaining $4,000 budget. In your report, justify your proposed selection system using the determi- nants of the effectiveness of an assessment method identified in Chapter 8. These determi- nants include the following: a. Validity- how well the assessment method predicts relevant components of a person's

job performance. Table 9-3 describes typical validities for various assessment tools across many different occupations. You can look at Table 9-3 and consider the results of your job analysis/competency model to determine which assessment is most likely to predict job performance at Chern's.

b. Return on investment-the extent to which the assessment method generates a frnan- cial return that exceeds the cost associated with using it.

c. Applicant reactions- the extent to which applicants perceive the assessment methods to be job related and fair.

d. Selection ratio- the extent to which the selection ratio is low. A low ratio means hiring only a few applicants, which allows an assessment method to have maximal impact in terms of improving the performance of the people hired.

e. Usability-the extent to which people in the organization are willing and able to use the method consistently and correctly.

f. Adverse impact- the extent to which an assessment method predicts job performance and other important hiring outcomes without discriminating against members of a pro- tected class.

2. Before viewing the interviews for the next part of the selection process, develop a scoring key for each structured interview question and create a formula to combine the three scores into an overall structured interview score (Chapter 8). The three structured interview ques- tions are as follows: a. A disgruntled customer is returning a damaged suit jacket he bought the previous week

that he needed for an event that night. He is extremely upset. What do you do? b. A person walks into your store and mentions that she has just moved into the area and

that this is the first time she has visited your store. What would you do to make her a customer now and a loyal customer in the future?

c. You' re working alone because two people called in sick. Suddenly, five customers walk into your department at once. What do you do?

If you plan to use the unstructured interviews to assess candidates (optional), create a scoring key for the unstructured interview based on your expected determinants of suc- cess at Chern's. The scoring keys for both types of interviews should reflect the KSAOs or competencies assessed by the questions or interview, not the answers to the questions themselves. Then view the eight structured and eight unstructured interviews available on the book's Web site or if your instructor prefers, view them as a part of the class (Chapter 9).

3. Before or during your next class, submit your assessment plan to your instructor. Your instructor will then give you the candidates' scores on the assessments you choose to uti- lize (Chapter 9). If your instructor agrees, you can use a multiple hurdles, compensatory, or combined approach for your assessment plan.

4. Using your interview score results, candidate resumes, and scores on the assessment meth- ods you included in your assessment plan, determine which two candidates should receive an offer and submit this information along with the rationale for your choice to your instructor. Write a job offer letter to your top chosen candidate, who is currently consider- ing two other job offers from competitors (Chapter 11).

At the end of the case, your instructor will give you feedback on the job success of your two new hires.

For now you will work on step 1. Submit your assessment score request to the instructor by the deadline the instructor gives you to receive candidates' scores on the assessments you choose to utilize. Your instructor needs to know which scores you would like and which candidates you would like to assess. You can assess candidates in one round before making a hiring decision or in multiple rounds, depending on your assessment plan.