Store24 (A) - Managing Employee Retention
by
chkishore2007 (student)
Problem Statement
President and CEO of Store24 Bob Gordon along with its CFO Paul Doucette and COO Tom Hart were worried and hence discussing about strategies for increasing store level employees retention. The extent to which the profitability of the stores was related to “people factors” was considered to be an important element. This could be found out by estimating of the actual financial impact based on the tenure of the manager and the crew at a store. The site-location factors such as population, number of competitors, pedestrian access, visibility, location and timings were also to be considered as key drivers of profitability. However, a huge amount of variation existed with manager and crew tenure. Also the stores in the sample appeared to be widely disbursed, complicating site-location factors. An opinion was to be formed as to whether increasing wages, implementing a bonus program, instituting new training programs, or developing a career development program would be the best course of action. We need to determine whether employee energies performance and how well his/her tenure impacts financial sheets compared to site location factors.
Data Analysis
Data given in the case seemed to be insufficient and inappropriate for the purpose of analysis using regression model. Hence, we downloaded the Data Desk file from author’s blog and used it for in-depth analysis. Based on the data we got of all 84 stores, we tried to do multi-regression model with the expected profit as depend variable on Y-axis and all other factors (like MTenure, CTenure, Comp, Pop, Visible, PedCount, 24 hour open or not, and located in residential or industrial area) as independent variables. The findings are summarized below:
Regression of Profitability with Manager & Crew Tenure
Inferences: After the regression modeling in the excel sheet, we got R-square statistic as 0.63 which implies that less than half the points fit on the regression line. The p-statistic value corresponding to the MTenure is 0.049 which is within a significance level of 0.05 so the null hypothesis can be accepted and the result is significant. However, CTenure’s p-value 0.809 does not lie within significance of 0.05 so the alternate hypothesis holds and hence the regression result is insignificant. Hence, we can conclude that a strong relationship exists only between profits and MTenure.
