Academic journal article Indian Journal of Industrial Relations

Indian Retail Sector- HR Challenges & Measures for Improvement

Academic journal article Indian Journal of Industrial Relations

Indian Retail Sector- HR Challenges & Measures for Improvement

Article excerpt


"Take away my factories, but leave my people, and soon we will have a new and better factory." Andrew Carnegie, the American steel billionaire

With growing consumerism, unprecedented awareness, and a youth-hefty customer base, India is perceived as 'Most Promising Land' for the Global and domestic retailers. According to AT Kearney's 2007 Global Retail Development Index (GRDI), for the third consecutive year, India remains the top retail investment destination among the 30 emerging markets across the world. As per the report of McKinsey Global Institute (2007), India is becoming the world's 12th Trillion dollar economy, and further it predicts that India is well on its way to become the world's fifth-largest consumer market by 2025. Currently, India is ranked as the 12th largest consumer market in the world. The Indian retail market is professed as potential goldmine and is attracting a large number of giant international and domestic players in anticipation of explosive growth. The organised retail sector is likely to increase its share from the current 4% to over 20% by 2010, as the overall retail sector grows from $328 billion to $430 billion, as per report by FICCI (2007) on the retail sector.

The boom in the retail sector in India and its corresponding spike in demand for talent has under scored the need for effective HR systems. The function of human resources has special significance in retail as the employees operate in a unique environment. In any retail organisation, the people who deal with the customers at a one to one level are considered to be the face of the organisation. According to a recent study conducted by Wharton (2007) at a Canadian consulting firm on retail customer dissatisfaction, it was found that disinterested, ill-prepared and unwelcoming salespeople lead to more lost business and word-of-mouth than any other management challenge in B.D. Singh and Sita Mishra are Sr. Professor and Asst. Professor respectively in the Institute of Management Technology, Ghaziabad, 201001 retailing. Thus, there is utmost need for effective HR systems to encourage and develop employees, manage performance, reward recognition which helps to increase the opportunity for employee advancement and to retain engaged employees.

Literature Review

The impact of human resource management (HRM) policies and practices on firm performance is an important topic in the field of human resource management, industrial relations, and industrial and organisational psychology (Boudreau 1991, Jones & Wright 1992, Kleiner 1990). A number of texts have appeared in recent years promoting the advantages of using high involvement human resource practices (Arthur 1994, Kochan & Osterman, 1994, Levine 1995, Pfeffer 1998, Guthurie 2001) as well as on the use of High Performance Work Practices, which can improve the knowledge, skills, and abilities of a firm's current and potential employees, increase their motivation, reduce shirking, and enhance retention of quality employees (Jones & Wright 1992). In the existing literature, focus on the issue that human resource management practices is developing rapidly as it helps to create a source of sustained competitive advantage, especially when they are aligned with a firm's competitive strategy (Cappelli & Singh 1992, Jackson & Schuler 1995, Wright & McMahan 1992).

In India, the rapid development in this sunrise sector accelerates the need for the right kind of employees who can take care of retail operations. The success of any player in this lucrative sector depends not only on understanding target market and implementing marketing mix strategies but also on how effectively a retailer develops systems of high performance work practices including comprehensive employee recruitment and selection procedures, incentive compensation and performance management systems, and extensive employee involvement and training. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.