Checkout Line - Meet Fredrick Taylor... Odds Are You Won't Be Friends....

If you've ever sat looking at a blank screen while developing performance objectives, or reviewed objectives written by a manager that were dripping with subjectivity, odds are you've wished that every role in your organization could be measured with objective metrics.

Be careful what you ask for, because once you get it, it can seemingly strip the passion and humanity out of a job.  Need proof?  As you would expect, retailers are increasing investments in software solutions to methodically measure how productive retail clerks and cashiers are as they assist customers.  The result is a system that puts pressure on the cashiers, eliminates their willingness to be pleasant, and delivers questionable returns to the customer.

Fred Taylor is coming to a checkout near you - even seemingly low end, analog checkouts.  From the Wall Street Journal via the Arkansas Democrat:

"Daniel A. Gunther has good reason to keep his checkout line moving at the Meijer Inc. store north of Detroit. A clock starts ticking the instant he scans a customer’s first item, and it doesn’t shut off until his register spits out a receipt.

To assess his efficiency, the store’s computer takes into account everything from the kinds of merchandise he’s bagging to how his customers are paying. Each week, he gets scored. If he falls below 95 percent of the baseline score too many times, the 185-store megastore chain, based in Walker, Mich., is likely to bounce him to a lower-paying job, or fire him."

The backstory?  As retailers like Meijer come under pressure from the Wal-Marts of the world, they're hell-bent on removing a FTE or two from the system, by being more quantitative with performance:

"American retailers have come under tremendous financial pressure as beleaguered consumers curtail their spending. At least 14 major chains have sought bankruptcy protection over the past 12 months, and many others are struggling. With nearly all of them under the gun to cut costs and improve profit margins, “labor-waste elimination” systems like the one used by Meijer are sweeping the industry.

The brains behind Meijer’s system is a consulting and software company known for decades as H. B. Maynard & Co., which last year became the Operations Workforce Optimization unit of Accenture Ltd. Borrowing from time-motion concepts first developed for U. S. steel mills and factory floors, it breaks down tasks such as working a cash register into quantifiable units and devises standard times to complete them, called “engineered labor standards.” Then it writes software to help clients keep watch over their work forces.

The client list of OWO, as it is now known, has included more than five dozen retail chains, including Gap Inc., TJX Cos., Limited Brands Inc., Office Depot Inc., Nike Inc., and Toys “R” Us Inc. A host of other “work force management” companies also offer to help retailers improve worker productivity."

As you might expect, employees hate it, and rather than looking for ways that they can talk and scan at the same time, they are simply passing along the joys of productivity to the customer:

"Interviews with cashiers at 16 Meijer stores suggest that its system has spurred many to hurry up — and has dialed up stress levels along the way. Gunther, 22, says he recently told a longtime customer that he couldn’t chat with her anymore during checkout because he was being timed.

“I was told to get people in and out,” he said. Other cashiers say they avoid eye contact with shoppers and generally hurry along older or infirm customers who might take longer to unload carts and count money."

And of course, this story wouldn't be complete without sharing the customer's perspective, which accurately identifies that, although the checkout folks are moving quicker, they don't see the benefit because the extra checker has been eliminated due to the need for cost efficiency:

"Customers at several Michigan stores said managers appeared to be opening fewer checkout lines than before, relying on faster-moving cashiers and self-checkout systems to pick up the slack.

“I do notice that the cashiers go a little faster, but it doesn’t necessarily matter because there aren’t that many cashiers,” said Melissa Shoe, 20, a regular shopper at the Lansing store."

What a rundown, eh?  Happy thanksgiving, and please do your shopping during non-peak times.  Of course, our software will have accounted for that by only scheduling one line to be open.  You'll still be 5 deep... 

Comments

[TechSphinx]

I don't have a problem at all with such efficiency measurement in retail operations. Anyone who has spent time in an endlessly grinding queue would agree with me. While I am sympathetic with retail organisations' economic difficulties, the main objective should be to use these workforce optimisation tools to both improve margins AND increase customer satisfaction. If a retailer is simply using this as a means to shave an FTE here or there, but sees no improvement in net service to customers, it's rather short-sighted and limp, unless net customer experience is improved.

In retail, traffic is almost everything. No one likes to go to a store where paying consistently takes forever. Yes, low prices and other factors can offset poor logisitics, but I think it is about total experience in retail.

[Chris - Manager's Sandbox]

Kris, I'd say that the value of this software depends on what behaviors you're looking for from your cashiers. Walmart competes on price, so measuring cashiers on how quickly they can move people through may be all they care about. The shopping experience sucks and everyone knows it.

If you're a Nordstroms, this isn't going to be a smart move for you. They compete on customer service, first and foremost, so they're going to want to measure service indicators, which as you noted, are highly subjective.

@TechSphinx, I'm going to disagree with your assessment that "traffic is almost everything." Some stores compete on service and people don't mind waiting a few minutes longer if it means a pampered shopping experience like no other. Those stores needs to up their FTE count keep lines lower during the busy season, of course, but there's more to retail than just moving people through the doors.

- Chris

[TechSphinx]

Chris, I completely agree with you. I don't think I was appropriately clear with my statement that "traffic is almost everything." I mean that in a very broad context, and certain venues like (I am guessing) Nordstrom or Harrod's (an extreme example) are built driving repeat customers through personalised service or a unique customer experience. So, I mean net traffic in an overall way, not simply as a measure of peak store throughput.

[Candace]

This is somewhat true and awnsers my family's speculation. Meijer's is my hometown chain in Grand Rapids, MI (Walker). The last time I was there my family and I kept talking about how the cashiers service has changed and it felt rude and almost rushed out of the door. I think retail companies that adopt this method in hopes of improving performance may be leading astray from the ultimate goal. In my retail experience, if I have bad service or experience a poor service incident, I tend to look for another venue to make my purchases or share my experience with others. Performance may go up quantatively but sales could go down from customers walking out the door.

[Joyce Maroney]

There's a good article about this topic in a recent edition of Workforce Management: http://www.workforce.com/archive/feature/25/81/98/index.php?ht=. In the interest of full disclosure, I work for Kronos and so have a vested interest in the success of scheduling software. What is often overlooked in the implementation of these systems is the opportunity to incorporate employee engagement and satisfaction returns into goals for these projects. Many of the available technology tools provide a means of accommodating employee preferences. The negative stories you see in the press are generally the consequence of implementations that focus on operating cost reduction at the expense of employee satisfaction and retention. Organizations purchasing these systems have to do the math to determine where short terms gains may be eclipsed by disengaged employees, reduced customer service and higher turnover.

[Michael VanDervort]

Unfortunately, margins in the retail grocery business are razor thin and always under tremendous pressure. Initiatives of this type are necessary in order to remain profitable. The trick is to achieve productivity increases without sacrificing your customer service ethic. far easier said than done!

[Wally Bock]

Congratulations! This post was selected as one of the five best business blog posts of the week in my Three Star Leadership Midweek Review of the Business Blogs.

http://blog.threestarleadership.com/2008/11/26/112608-a-midweek-look-at-the-business-blogs.aspx

Wally Bock