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CE 066 854

Mendez-Vigo, MarisaTraining in the Retail Trade in Spain. Report for theFORCE Programme. Retail Sector.European Centre for the Development or VocationalTraining, Berlin (Germany).ISBN-92-826-7498-39495p.UNIPUB, 4661-F Assembly Drive, Lanham, MD 20706-4391(Catalogue No. HX-80-93-945-EN-C).Reports Research/Technical (143)

MF01/PC04 Plus Postage.Case Studies; *Distributive Education; EducationalPractices; *Educational Trends; Employment Patterns;Employment Practices; Financial Support; ForeignCountries; *Industrial Training; Needs Assessment;Personnel Management; Postsecondary Education;Program Costs; Program Development; *ProgramEffectiveness; *Retailing; *Training Methods;Training ObjecLives*Spain

A study examined training in the retail trade inSpain. Employment, work, and training patterns in Spain's retailsector were researched, and case studies of five retail firms wereconducted. Two retailers were too small to afford their own trainingorganization but had formulated personnel policies providing fortraining. The third case was a firm whose general policy hadtraditionally linked staff training with total quality and thestrategies used to achieve it, and the remaining two cases were largeorganizations that allocate substantial sums to staff training.Training was generally beginning to be regarded as an importantelement in firm restructuring and/or expansion. In all cases,training policies/programs were planned by top management or jointlyby management and personnel department. Only wie firm had conducted asystematic training needs assessment. At all five firms, allcategories of employees involved in selling had access to training.Quality of training varied greatly from firm to firm; however,training quality and funds allocated for training were increasing inall five firms. The two largest firms received direct subsidies, twofirms financed their own training program, and the smallest firm usedan outside organization that received funds. (Contains 52tables/figures.) (MN)

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U.S. DEPARTMENT Of EDUCATIONiMc 04 Educahonal Rosearch and Imotovsment

E ATIONAL RESOURCES INFORMATIONCENTER (ERIC)

Mrs document has teen rfprOduCed SSreceived born the person Of otgemzetronOriginating it

0 Minor changes have men made to imptovrifrsproduCtiOn quality

Point II Of view 0 opinions stated in this doCu.mint 1:10 not neCOSSafily ropreeentOE RI Position or WIC),

FFORMATION CONTINUE EN EUROPEEuropoan Commission

RETAIL SECTOR

"PERMISSION TO REPRODUCE THISMATERIAL HAS BEEN GRANTED BY

TO THE EDUCATIONAL RESOURCESINFORMATION CENTER (ERIC)."

BEST COPY AVAILABLE

4 4000231111900053

RETAIL SECTOR

TRAINING IN THE RETAIL TRADEIN SPAIN

REPORT FOR THE FORCE PROGRAMME

drawn up byMarisa Mendez-Vigo

CIREM(Centre d'Iniciatives i Recerques Europees a la Mediterrgnia).

1992

First edition, Berlin 1994Published by:

CEDEFOP European Centre for the Development of Vocational Training,Jean Monnet House, Bundesallee 22, D-10717 Berlin

Fax 49-30 + 88 41 22 22Tel. 49-30 + 88 41 20 Telex 18 41 63 eucen d

The Centre was established by Regulation (EEC) No 337/75of the Council of the European Communities

3

Cataloguing data car be found at the end of this publication.

Luxembourg: Office for Official Publications of the European Communities, 1994

ISBN 92-826-7498-3

ECSC-EC-EAEC, Brussels Luxembourg, 1994

Articles and texts appearing in this document may be nlroduced freely in whole or in part providing

their source is mentioned.

Printed in Germany 4

FORCE

Formation continue en EuropeCommission of the European Communities

TASK FORCEHuman Resources, Education, Training and Youth

Rue de la Loi, 200; 8-1049 Bruxelles

THE IDEA FORCEThe future economic strength and the potential for social progress of the European Commuciitydepends on a consistent impovenient in the competence and qualifications of its 132.000.000 labourforce. Better continuing vocational training is one of the essential conditions for the success of theSingle Market 1993.The European Commission is determined to support and give fresh impetus to the efforts which compa-nies throughout the Community are making to improve continuing training.FORCE is the European Community's action programme for the development of continuing vocationaltraining. It is focusJed on companies, especially on small and medium-sized companies. It involves train-ers ard training bodies, employer and union reprasentatives - everyone concerned with improving thecompetence of the labour force.

WHAT DOES FORCE OFFER?FORCE promotes working partnerships ,in continuing training between companies, training bodies,public authorities ana social partners.These will include: supporting continuing training innovation through a European transnational net-work, an exchange programme, transnational and transfrontier pilot projects and projects concernedwith the evolution of qualifications; assuring closer policy cip-operation between Member States byevolving a common statistical means of analysing what is being done in terms of continuing training,through regular analysis of relevant contractual policy and collective agreements, and through inquir-ies into sectoral needs; supporting the establishment of regional consortia and yansnational continuingtraining partnerships which specialise in transferring exemplary good practice to economically weakregions.

JOININGYou can take part in the FORCE network and apply for financial assistance to join its innovation andtransfer exchanrs and projects if you are:a large, medium-sized or small company, a training body working with industry orcommerce, an employer or trade union body, a training or human resource expertor manager.Through FORCE you can help improve continuing training in your company, sector or local labourmarket. At the same time you can help make an investment in the improvement and availability of con-tinuing training in effect in the working and producing of the future of the European Community.

3

CEDEFOP

European Centre for the Development of Vocational TrainingJean Monnet House, Bundesallee 22, D-10717 Berlin

Institutional status

CEDEFOP is an autonomous body, independent of the departments of the Commission of the EuropeanCommunities, but its task and activities are closely integrated with those of the Commission, to whichthe Centre contributes its technical and scientific E.xpertise.

Working guidelines for the Centre are laid down by its Management Board, whose members repres-ent the EC Commission (3), trade unions (12) employers' organizations (12) and governments (12).The Management Board decides on the Work Programme, draws up and approves budgets andadopts the Annual Report.

The members of the Management doard are appointed by the organizations they represent andremain in office for two years. The chairmanship of the Board changes each year.

Institutional tasks

Information:In the field of vocational training, information is one of the Centre's vital tasks. Its documentation serviceand a constantly updated bibliographical database receive information from a network of nationalcorrespondents, and the information is then made available to a very wide audience, in part via highlysophisticated computerized channels. Its carefully planned publishing policy also ensures that theCentre's voice is heard on major issues in the field of vocational training. It produces its own regularpublications (»Vocational Training«, »CEDEFOP flash« and »CEDEFOP flash special«) and occasionalpublications such as research reports, monographs and manuals.

Research:CEDEFOP, as a centre for the promotion and coordination of research within the Community, providessupport in the form of information, expertise and encouragement for the planning and implementationof vocational training initiatives in Member States. In so doing it serves as a focus for innovation.

Consultation:CEDEFOP, as an organization supporting the Commission, has the task af promoting a concertedapproach to vocational training problems. It takes every opportunity to promote and encourage train-ing.

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ACKNOWLEDGEMENTS

This study was coaled out in the framework of theEuropean Retail Trade Sector Study, within the ECFORCE programme, and conducted by a CentralTeam made up mainly of member centres of'EURONET Work & Education' under the respon-sibility of the CIREM Foundation in Barcelona.

The Central Team was composed of OlivierBertrand (Cereq, Paris), Oriol Homs (Cirem,Barcelona), Wilfried Kurse (S.F.S. Dortmund),Marisa Mendez-Vigo (Cirem, Barcelona) andHarry van den Tillaart (ITS, Nijmegen), in closecollaboration with Tina Bertzeletou from CEDEFOP(Berlin).

The project team would like to thank thecompanies who gave access for research, andwhose staff provided the information and helpwhich enabled us to write the case studies. Wevery much appreciate the time and effort investedso generously.

We would also like to thank the employers'organizations and trade unions, and their repre-sentatives, who contributed to the research bymaking suggestions for case studies, attendingmeetings and commenting on the draft report.

Those involved were:

Augustin Benavent. Union General de Trabaja-dares (UGT).

Joaquim Deulofeu Aymar. ConfederaciOn deComercio de Cato

Jose Antonio Garcia de Castro. AsociaciOnNacional de Medianas y Grandes Empresas deDistribución (ANGED).Dolores Garcia Dotor. lnstituto Nacional delndustria (IN1).

Jose Luis Marrero. Ministerio de Industria, Turismoy Comercio.

Francisco Martin Carmona. Union Genercl deTrabajadores (UGT).

Fernando Medina GOmez. Comisiones Oberas(CC00).

Javier MillOn Astray. ConfederaciOn Española deComercio.

Javier Sobrino. Conselleria de Comerc, Industria iTurismo. Generalitat de Catalunya.Teresa Udina. ConfederaciOn Española Coopera-tivas de Consumidores.

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INTRODUCTION

The present report is port of the first FORCEProgramme of sectoral surveys initiated andcommissioned by the European Community inorder to gain more knowledge of continuingtraining in the various member countries.

The study is in three parts. The first is a generaldescription of the retail sector, its structure, andemployment and training policies, and is intendedto serve as the framework for the subsequent casestudies the main purpose of this report. Thesecond part comprises the selected case studies,which put the emphasis on training policy andhighlights programmes which could be of interestto other countries. The third part, embodying theconclusions, considers the main aspects of thecontinuing training situation in the retail sector.

The content structure, length and methodologyused are common to the twelve national reportsand were decided upon by the central teamdirecting the project and approved by workers'and employers' organizations at European level.

The first part of the report is based on the existingliterature and statistics for the retail sector in eachcountry, as well as on a number of interviewswhich enabled statistical shortcomings to becompensated by qualitative factors.

The firms selected for case study in the variouscountries were chosen on the basis of proposalsmade at meetings attended by employers' andworkers' representatives, the national coordina-tion units of the FORCE programmes and theresearch teams. A criterion fo, selection was theexistence of a continuing training programme inthe firm for more than one category of employees,and on the programmes' transferability.

While studies were being carried out, frequentmeetings were held at various national andCommunity levels (researchers, central team,develop "monitoring group"), in order to monitoractivities and evolve solutions to problems as theyarose. Once the studies were complete the laststage of finalizing and approving the reports forthe various countries involved a meeting with thenational coordination unit, union representativesand researchers.

The Spanish survey was carried out during theautumn/winter of 1992, after which it,o6s givento representatives and experts in the retail sectorand to the firms selected, so that they could read itand make the necessary comments. The lastmeeting, held on 8 July 1992, was used to gatherthe final comments and data, which have nowlargely been incorporated in the final report.

Marisa Mendez-Vigo

August 1992

9

CONTENTS

PART 1 - SECTORAL CONTEXT1. SCOPE AND DEFINITION OF THE RETAIL SECTOR

2. STRUCTURE AND CHARACTERISTICS OF THE RETAIL

TRADE IN SPAIN

2.1 Historical development

2.2 The current situation

3. SOCIAL AND INSTITUTIONAL CONTEXT

3.1 Legal framework

3.2 Labour legislation and the social partners

4. EMPLOYMENT4.1 General trends and characteristics of employment

4.2 Labour force

4.3 Working hours

4.4 Working conditions

4.5 Recruitment and selection criteria

5. CHANGING CONDITIONS AND THEIR IMPLICATIONS

FOR QUALIFICATIONS AND VOCATIONAL TRAINING

6. TRAINING POLICY

6.1 Government-sponsored training

6.2 Other forms of training

7. CONCLU5IONS

PART 2 - CASE STUDIES8. Gerplex/ConfederaciOn del Comercio de Catalufia

EroskiCemasce

Firm XxFirm A

PART 3 - TRENDS9. Concluding comments

10. Sources of information

11. Methodological note

9

PART 1:

1. Scope and definition of the retailsector

2. Structure and characteristics of theretail trade in Spain

3. Social and institutional context

4. Employment

5. Changing conditions and theirimplications for qualifications andvocational training

6. Training policy

7. Conclusions

10

SECTION 1 - SCOPE AND DEFINITION OFTHE RETAIL SECTOR

The Spanish National Classification of EconomicActivities has the same categories for retail tradeactivity as does the European Community, andal'so includes the sale of cars and vehicles ingeneral and the sale of fuels. The present reportdisregards these latter products and itinerant anddoor-to-door selling.

11

13

SECTION 2 - STRUCTURE AND CHARACTERISTICSOF THE RETAIL TRADE IN SPAIN

The retail trade in Spain is currently in the throes ofchange and rapid expansion which began in themid-eighties and is still under way. During theperiod 1981 -1987 gross added value in theretail sector increased by 130%; in 1990 retailingaccounted for 12% of GDP and in 1991 for 14%of "the total employed population.

This process of change is notable for theappearance of new generalized forms of distribu-tion which are a reaction to the political, social,economic and cultural development of the countryover the past decade and their impact ontraditional forms of retailing, which are seekingto survive in the face of new market conditions.

2.1 Historkal developmentIn the past the Spanish retail trade was typified bya large number of small family-run businesses, alarge percentage of which sold food, while thenumber retailing equipment and services was verysmall. Premises tended to be very restricted in size.This situation was aggravated by the large numberof shops servicing the population, which in 1988was still 18 per thousand.

All these factors reflected the low level of incomesand the underdeveloped consumer society.

During the phase of rapid development in thesixties and seventies, mass migration to the citiesresult-d in a spectacular growth cf retailingcoupled with hesitant, restricted modernization,milestones of which were the opening of the firstdepartment store in 1956, the first supermarket in1960 and the first hypermarket in 1973.

The start of modernization and its subsequentdevelopment was held up on the one hand by theeconomic recession triggered by the oil price, andon the other by the difficulties involved in politicaltransition and industrial restructuring, whichtogether made the economic outlook uncertain.

All this does not mean, however, that there was noevolution in the retail trade, although the datashow the process proceeding at different paces.

Table 1 - Spanish economy 1985-1989

Thus between 1973 and 1983 44 hypermarketswere opened on the Mediterranean coast and inMadrid, only 4 of these being entirely Spanish-owned. Between 1983 and 1992 125 stores withlarge sales floors were opened, both in the majorcities and in their suburbs and in medium-sizedcities throughout the country, with a far largershare being financed with Spanish capital.

We can, therefore, say that it was in the mid-eighties that the modernization of the retail tradereally got under way again. There were severalcontributing factors, among them Spain's entryinto the Common Market, the massive inflow offoreign capital to the retail sector (Spain is thesecond most profitable country in the EC with areturn on sales of 2.1% compared with anaverage of 0.5% for other countries) and thespectacular sur6e in GDP and consumer spendingduring the three years from 1987 to 1989. (Table 1)

There were, in addition, a number of sociologicalchanges that influenced the position of women,made for a higher level of education and pavedthe way for a consumer movement, including anumber of specific factors at urban and metropol-itan level.with an image-enhancing effect beyondtheir immediate territory. These included thedecision to hold the Olympic Games in Barcelonaand the 1992 World Exhibition in Seville, whichresulted in a considerable amount of urbanmodernization, a rise in property prices etc. andhelped to accelerate the changes taking place inthe retail trade.

2.2 The current situationThe retail sector currently has a variety ofstructures with traditional forms of selling, whetheror not modernised, existing side by side with therapidly growing shopping centres and the wellestablished urban supermarkets, and hypermar-kets. The marked segmentation of the market wasone of the prime consequences of changes insociety and in the retail trade.

Hypermarkets have played a fundamental rolein the development of the retail trade; this reflects

1985 1986 1987 1988 1989

Consumer spending 2.2 3.7 5.2 4.9 4.2

Public-sector consumption 4.6 5.1 9.0 4.5 4.0

Overall demand 2.9 6.0 8.1 7.0 5.5

GDP 2.3 3.3 5.2 5.0 4.5

Source: "Distribución Actualidad", February 1991 15

1?

in the number of stores opened in recent years andtheir influence both on traditional.structures and onthe creation of jobs and training activities.Hypermarkets have also been the focal point offoreign investment in the retail sector, and eventoday most stores belong to foreign firms, althoughthe share of Spanish capital is gradually increas-ing.

Table 2 - Forms of retailing

(= thousand million). All kinds of products are soldby independent stores in shopping centres butnon-food products predominate.

However a new strategy on the part of thehypermarkets seeking to avoid conflicts with smallretailers and local authorities is to establishshopping centres which combine hypermarkets

Department store: A retail outlet with different departments selling all kinds of products, including food.Sales floor in excess of 3,000 sq.m. located in urban centres.

Hypermarket: A retail outlet operating on a self-service basis with a minimum of 2,500sq.m. in a free-standing building. Hypermarkets sell all kinds of products, especially food, and are generally located onthe outskirts of cities or in the suburbs with generous parking facilities. The term hypermarket also coverslarge specialist retail outlets that have emerged more recently.

Supermarket: A retail outlet operating on the self-service principle with a sales floor of between 120 and2,500 sq.m., selling food, cleaning products and toiletries. Supermarkets are generally located in towncentres.

Shopping centre: A group of retail outlets in the same building designed, built and run as a unit, the.location, sales area and type of store depending on the area served. Minimum sales floor is 1,000 sq..n.Shopping centres sell all types of articles but mainly non-food products.

Traditional shops: These .nclude specialist shops, which may be independent or operating on afranchise basis or owned by retail chain companies. The sales floor varies. They are located in townsand offer a smaller but very varied range of products. Also included under this heading are traditionalsmall food shops with a sales floor of less than 120 sq.m. Generally speaking traditional stores do notoperate on the self-service system.

Source: Prepared on the basis of data in specialist publications.

Sales floors range from a minimum of 2,500 sq.m.to 12,000 sq.m. and average 8,000 and10,000 sq.m. In 1992 there were around 180hypermarkets in Spain with a total sales floor ofmore than 1.5 million sq.m. The trend towardshypermarkets continues, although there may besome variation in location and size because of theshortage and high price of building land in bigcities. However, there are signs of growth levellingout in the medium term, especially in some regionsand autonomous communities.

When mentioning superstores we must not forgetthe growing number of specialist stores sellingfurn: e, DIY goods, and toys that apply the samephilosophy as the hypermarkets and are generallyforeign-financed. These are not very widespreadand are mainly found on the outskirts of majorcities.

Shopping centres are another important phenom-enon invading the retail sector. 130 shoppingcentres with a sales floor totalling 1.3 millionsq.m. have been opened since 1985 andprospects are of another 100 over the next fewyears, raising the total sales floor to 3 million

16 sq.m. and involving investment of ESP 300 billion

selling food with a range of stores managed bylocal shopkeepers.

In 1990 the percentage of total sales accountedfor by shopping centres was already in the regionof 4.1%. Shopping centres have frequentlyprovided a new alternative to traditional shops.

Despite the success of the shopping centre conceptor even because of it, some investors not familiarwith the retail sector but conscious of its highprofitability as a building investment have beenopening shopping centres of uncertain viability.This explains the comparatively frequent failure ofsome sh.laing centres created in the hope ofshort-terrn profit without a common strategy andwithout any awareness of the shopping facilitiesneeded by the people in the area concerned.

The third major element in the modernization ofthe retail trade has been the urban neighbourhoodsupermarkets with a sales floor_of between 500and 1,500 sq.m. run by Spanish or foreign-owned chain store enterprises; these are expand-ing very rapidly. Over the last three years the paceof takeovers, mergers, expansions, intake offoreign capital etc. have become very common,

I 3

and in 1990 708 stores with a total sales floor of392,179 sq.m. changed hands.

As a result only the first of the top five supermarketcompanies is Spanish-owned. This has 140 scoreswhereas the other four companies have in all1,533 outlets and are mainly foreign-owned.

These five leading firms increased their sales in1990 by a year-on-year 185%, mainly as a resultof the expansion and increase in the number ofsales outlets.

The sales figure of all supermarkets, most of whichare chain stores, rose by around 30% between1990 and 1991.

Recent years have also seen the emergence of the"hard discount" supermarkets owned by a Frenchmultinational company.

Department stores, which with the exception ofSpain's leading company are suffering consider-ably from general developments in the retail tradeand competition from other forms of retailingreflecting in their loss of market share are nowdevising new strategies which in some casesinvolve, specialization and the provision ofservices. The foreign presence here is verysignificant but the most important of the majordepartment store companies and tfie leading retailcompany is Spanish-owned.

Cooperative stores are also in the process of ageneral decline with falling sales. The onlyexception is the successful cooperative activity inthe Basque country, which is due to the longtradition of cooperative stores in that area.

Mail order business, which only began inSpain about 10 years ago, amounted in 1990to ESP 55 billion or 0.4% of total retail sales, withspending per capita far lower than in the rest ofEurope (ESP 1,300 compared with ESP 15,000).Two foreign companies and one Spanish oneaccount for over half this market and the foreignpresence is steadily expanding. Growth in Spainof this type of selling is around 25% a year and itis hoped that this will be maintained for someyears yet.

The number of stores, calculated on the basis offigures for commercial licences given in Table 3and bearing in mind the limitations explained inthe note on methods used, recorded a sharpincrease between 1985 and 1990, with smallshops far from under-represented.

The sector showing lowest growth is food, whichincreased by 6.5% over the past five yearscompared with a 20% increase in the totalnumber of retail licences. This slower growthreflects the emergence of hypermarkets and theexpansion of supermarkets. (Table 3)

Table 3 - Growth in the number of retail licences in the various retail sub-sectors

1980 1985 1990

1. Agricultural produce, food, beverages, tobacco 291,934 311,055

2. Textiles, clothing, footwear 119,584 146,881

3. Wood, cork, paper and graphic arts 58,349 72,918

4. Chemical products, toiletries etc. 58,904 68,177

5. Buildings, land, building materials, glass etc. 23,672 24,947

6. Minerals, metals, metal-working 33,590 42,512

7. Machinery and transport equipment 70,415 96,723

8. Non-classified 87,393 109,277

Total 713,752 753,342 906,777

N.B. The Classification of Economic Activities was modified in 1983. This means that the figures for sub-sectors in 1980 cannot be used because of their lack of comparability with those of subsequent years.

Source: Anuario del Mercado Espanol. Banco Espanol de Creclito, 1991.

'A 14

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Most of the small food shops in Spain presenteduntil recently a typical picture as follows:

Over 50% have been in existence for over 15yearsOver 60% have a sales floor of less than40 sq . m .

Less than 5% use computers as a managementtoolShopkeepers are on average aged 4775% of shopkeepers have only primary school-ing and have learned their business throughexperience

Source: La estructura del comercio catalan. Generalitatde Catalunya, 1989.

All these factors coupled with high productioncosts have made it very difficult for this type ofretailing to survive in the face of competition fromthe new types of store. The result has been,according to the Nielsen Report of 1990, that27% of traditional food shops closed down in theperiod 1980 1990 reducing the number from101,593 to 73,718.

The general trends described can be seen for thefood subsector in the market share of the differenttypes of retailing activity as shown in the followingtable. Supermarkets and hypermarkets showsteady growth to the detriment of traditionalshops. (Table 4)

Another segment recording a similar loss ofmarket share are the traditional open marketswhich mainly sell fresh produce. The 800 marketsstill in existence, some with a tradition going backseveral centuries, are feeling the wind of changebecause of the efforts being made by localauthorities to convert them into modern shoppingcentres offering better facilities for parking, child-minding, banking etc. more convenient openinghours, bargains and discounts, concentration anddiversification of goods on offer etc. so as to help

Table 4 - Markel share - food sector

them match up to the different requirements ofpresent-day consumers.

A way out of the difficulties faced by small retailersin the food sector has been to associate voluntarilyin chains and to establish centralized purchasingorganizations which today link more than 90% ofsmall businesses. The purchasing organizationsand voluntary associations have contributedtowards the restructuring of the retail sector withsuch innovations as cash and carry stores,franchising, own-brand products and manage-ment training from the outset. However, the currentpolicy of these organizations and their tendency tovertical integration by establishing direct retailingchannels of their own in competition with thesupermarkets and hypermarkets (which no longerneed the central purchasing organizations sc.much because of their enhanced negotiatingpower with manufacturers) may bring aboutchanges in the pattern of small retailers' associa-tions.

Non-food retailers, on the other hand, haveexperienced spectacular growth since 1985 fora number of reasons. Apart fram the increase inincomes and consumer spending to which we"have already referred, there is the severe unem-ployment of previous years, which led thoseaffected to use the grants and subsidies availableto them in order to set up small shops. In theclothing and gift sectors for example, manywomen took advantage of the economic boomand the surge in consumer spending for "image"purposes to set up their own businesses.

This growth has gone hand in hand with theemergence of different types of retailing, one ofwhich franchising has been a major factor forchange in the structure of the non-food retailtrade. The period between 1985 and 1990brought an increase of 153% in the number offranchising firms, rising from the 77 existing in thefirst year of the period to 205 by 1991. Although

1987 1988 1989 1990

Traditional shops 53.28 51.88 49.24 48.87

Self-service storesand supermarkets

29.94 30.08 31.40 32.79

Hypermarkets 3.46 4.52 5.78 7.27

Cooperatives 2.03 2.09 1.93 1.41

Others (markets etc.) 11.29 11.43 11.65 9.67

Source: Directorate General for Food Policy. Ministry of Commerce.

4

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52 of these firms cannot be classified as retailers,it is the retail trade which accounts for the greatestnumber of brand names and outlets 153 and19,835 respectively.

Table 5 - Growth in retail associations and franchisingchains

1985

1988

1991

77 chains

155 chains

205 chains

Source: Apuntes de Franchising, 1991

Another important development within the tradi-tional non-food retail sector is taking place withinthe context of urban renewal. Growing activityand investment in the renewal of inner cities,whether or not of historical interest, has encour-aged retailers to make wide-ranging changes totheir stores and these together with urbun reformssuch as the creation of more pedestrian precincts,building renovation, improved services etc. havetransformed decaying areas abandoned by themore dynamic retailers into genuine shoppingcentres again.

Initial successes in this field have resulted in effortsby retailers' associations throughout Spain toencourage renovation of certain areas.

The reaction of traditional shopkeepers, reinforcedby the organized campaigns in favour of neigh-bourhood convenience shops, avjability ofsubsidies for expansion, specialization and mod-ernization of shops or to permit shopkeepers toretire, plus a degree of protective legislation,especially in certain autonomous communitieswith a strong business structure, would seem tobe bearing fruit and safeguarding the position ofsmall retail outlets that are better structured, morespecialized and able to offer a steadily improvingservice. However, these improvements have notbeen achieved without some losses in this segmentof the retail trade, which has recently begun tosuffer from the size and competitiveness of largefirms and which is afraid that turnover will decline.

For the time being, however, the retail sector stillhas a very large number of small firms. This isreflected in the table below which lists the numberof retail stores on the basis of the number ofemployees. Firms with less than 20 employeesaccount for 99.4% of the total figure and those runby a single person for 64%. These figures areextremely important when it comes to consideringthe matter of training in the retail trade and showsthe comparative insignificance for the retail tradeas a whole of training carried out by medium-sizedand large firms. The fact that the figures weregathered in 1988 does not make them any the lessrelevant, since the large number of small firmscontinues to be the major feature of this sector.

Table 6 - Retail firms by number of employees 1990/1991

One person 291,893

2 to 4 persons 136,719

5 to 19 persons 23,738

20 or more persons 2,509

Total 454,858

Source: Survey of Domestic Retail Trade, 1988.National Statistical Institute.

This situation and the tendency it reveals is wellsummed up by the Chairman of one of Spain's fivelargest supermarket chains: "In Spain the tenlargest retail firms only account for 37% of totalsales compared with 75% in the case of the sevenmajor retailers in the United Kingdom or 60% inthe case of the six largest retailers in Holland.Moreover, the sales of this group of Spanishretailers only represent 80% of total sales by theFrench Leclerc group".

Apart from foreign investment, the expansion ofthe retail trade, the tendency of firms to jointogether in order to achieve optimum size, theemergence of new forms of retailing and thechanges that have taken place as retailers havesought to adapt are the fouu major featurestypifying developments in the Spanish retail sector.

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SECTION 3SOCIAL AND INSTITUTIONAL CONTEXT

3.1 Legal frameworkLegislation governing wholesaling and retailingactivity in Spain is still at the preliminary stagebecause of the new political division into autono-mous communities which have acquired responsi-bility for their own business activity.

A corpus of law exists at national level. Thisincludes Decree Law 2/85 of 30 April 1986,

known as the Boyer Decree, which lifted restric-tions on shop opening hours applying in thosecommunities which still do not have their ownlegislation.

Communities such as Valenica, the Basquecountry, Catalonia, Galicia and AragOn have alaw governing retailing while in others such as theCanary Islands, the Balearic Islands and Andalu-sia legislation is still being drafted.

The legislation of the autonomous communitieslays down opening hours and days, requirementsfor the premises and the bodies responsible forgranting licences at local or regional level. Thereare no provisions governing training in the retailsector.

Generally speaking, opening hours in mostcommunities in which legislation already existsor is at the discussion stage must not exceed 60hours a week. Shops must close on Sunday, exceptin the case of Aragon and the Canary Islandswhere there are no restrictions as to workinghours. Exceptions are provided for in all casessubject to the appropriate permits. In areas whereno specific legislation exists, opening hours are,thanks to the Boyer Decree, not subject torestriction and shops may also open on Sundaysand holidays.

The Spanish Government has appealed againstthe laws governing the retail trade in theautonomous communities because it does notregard the regulation of shop opening hours asfalling within their field of competence. Onoccasion and this is the case of the Basquecountry, Valencia, Catalonia and Aragon thelaw governing the retail trade is supplemented bya law governing retail stores which, in order toprotect traditional retailers deals particularly withthe opening of stores with a large sales floor. Thegranting of licences for superstores may be theresponsibility of more than one administrativeauthority.

Municipal councils, which carry considerableweight when it comes to granting superstorelicences, generally require generous financialcontributions from firms wishing to open storeson their territory. This money is used to improve theurban environment and infrastructure and imple-ment measures to encourage small businesses.

Licences for small businesses can be granted bylocal authorities who are also empowered tofreeze the number of licences granted in theinterests of the community at large or the retailsector itself.

As a general rule the laws of the autonomouscommunities tend to favour small businesses byimposing restrictions as to working hours, byspecifying methods for assessing the need forlarge retail centres or by granting subsidies andloans for modernization.

It should also be pointed out, however, thatbecause the autonomous laws have only recentlybeen enforced, not all the above measures haveas yet been fully covered by the regulations and insome cases progress has been halted because ofresistance from other bodies, whether public-sector institutions or employers' organizations.

This transitional situation and the k k of stablelegislation possibly explains why permits for theestablishment of superstores especially tend to bea matter for negotiation between the interestedparties and the competent authorities.

Other legislation exists at national level, such asthe consumer protection law and the law on unfaircompetition, as well as municipal by-laws andregulations governing matters of hygiene, loca-tion, the physical characteristics of stores, pack-aging of goods etc.

3.2 Labour legislation and the socialpartnersLabour legislation specific to the retail trade is tobe found in the retail regulations of 1973 and theregulations governing employees of superstores of1975.

These regulations deal with matters such as theclassification of staff according to seniority,function or qualification, as well as salaries,working hours, holidays, dismissals, internalregulations etc. However, these regulations aresubordinate to the collective agreements.

The collective agreements are negotiated for oneor two years by the employees and employers ortheir representatives and govern industrial rela-tions and working conditions (salaries, jobcategories, training etc.). However, not everysub-sector of the retail trade has a collectiveagreement.

Collective agreements may apply nationwide, atthe level of autonomous communities, to provincesor to individual companies. They may also applyto sub-sectors and branches of the retail trade orspecific types of retail outlets, such as theagreement governing superstores.

-17

21

22

More than 300 collective agreements were signedfor the retail sector in 1990 which gives someidea of the variety of situations to be found thereand of the fragmentation and weakness of theunions and employer organizations. This is due tothe fragmentation of the retail trade, diversity offorms of retailing and size of outlets, and thepredominance of stores run by a small staff.

Table 7 - Collective agreements(wholesale and retail trade)

Year Agreements Employeescovered

1981 244 306,417

1985 351 541,035

1990 388 745,702

Source: Ministry of Labour Statistics, 1991.

The chief trade unions, UGT and CCOO, are notwell established in most of the large outlets, wherethe professional trade unions (Fetico and FASGA)predominate with a membership of over 60%.

18

Most workers belonging to trade unions tend to bethose employed by small businesses who feel theneed for advice. Union membership in the sector isvery low.

Union representatives in retail firms monitor theapplication of collective agreements, whose inter-pretation is frequently subject to dispute with theresult that a substantial number of cases are takento the High Court every year. Sometimes theagreements contain articles relating to training, asin the case of the agreement concerning largestores, which lays down that firms must each yearspend on training an amount higher than theprevious year. However in all the cases studied therole of employee representatives was limited tothat of observer.

At the same time, "'according to our sources .ofinformation, small retailers and shop owners, whostill constitute the majority in the Spanish retailsector, do not consider themselves well repre-sented by the traditional employers' associations.

The above summary shows the variety andcomplexity of requirements and legislation in theretail trade, both by virtue of the geographicalsituation and of the type of retail outlet and thesector or branch to which it belongs.

SECTION 4 - EMPLOYMENT

4.1 General trends and characteristicsof employmentThe first fact to be borne in mind is that this sectorhas been a net creator of jobs since 1985 and thatfurther growth is expected. This has resulted in asubstantial inflow of employees, particularly un-skilled personnel seeking lower-grade jobs, with aconsequent increase in unemployment among themore skilled. However the unemployment figuresmay also reflect the circumstances attached to theincrease in the number of employed use offixed-term contracts and part-time work as wellas the high staff turnover plaguing the retail sectorfor different reasons. (Table 8)

The second important fact is that growth in thenumber of employed has resulted in growth in thenumber of wage-earners, the proportion of whomhad risen to 49% of those employed in 1990compared with 40% in 1985 (see Table 8). Thismeans that in percentage terms the weighting ofindependent retailers hos declined, although inabsolute numbers there was an increase of 8,000between 1985 and 1990.

Important factors that have contributed to thegrowth in the number of people employed in theretail trade are firstly the creation of superstoresand secondly the widespread use of fixed-termcontracts resulting from the government's meas-ures to stimulate employment.

In 1988, 66.6% of contracts in the service sectorresulted from these schemes to encourage employ-

ment and were therefore for a fixed term. This highfigure results from the large number of youngpeople and women with relatively low skills whotend to be the two groups recruited on this basis.

There are no statistics to show the significance offixed-term contracts in any form in the retail sectorbut the figures given in Table 9, which include theretail sector, show that from 1988 to 1990 fixed-term recruitment had risen to 50.6% comparedwith an increase in the wage-earning populationof 15%. From this we can deduce a greaterworkforce instability. Less than 5% of the 218,200new wage-earners in the "retail, catering, hoteland repair" sub-sectors during the three yearperiod mentioned were given contracts for anindefinite term. (Table 9)

Thus whereas in 1988 29.6% of wage earnerswere on a fixed-term contract, by 1990 thepercentage had risen to 38.9%.

No figures are published for the number of.fixed-term contracts in the retail sector alone. Althoughthere is a tendency to employ people on suchcontracts, and indeed it is common practice inlarger firms, part-time contracts in 1989 onlyaccounted for 8.3% of contracts for all sectors.However, such contracts are those most frequentlyused in the service sector, which accounts for87.2% of the total number of such contracts. In theretail trade cashiers, sales assistants and shelf-fillers are the cateories most widely affected bythis type of contract.

Table 8 - Number of employed, unemployed and wage earnersin the retail trade (average figures)

Year

1981

1985

1990

Employed Unemployed Wage-earners

1,179,200

1,131,600

1,380,300

68,300

132,100

188,200

490,200

459,100

681,600

Source: Own calculations based on Ministry of Labour statistics

Table 9 - Breakdown of number of employed by type of employment(retail, catering, hotel and repair sectors)

Employed Wage-earners Short-term

1988

1990

2,588,400

2,805,500

1,387,500

1,605,700

410,300

618,200

Source: EPA National Statistical Institute, fourth quarter.

19

23

24

No figures are available for the job structure in theretail trade. According to a study carried out bythe Ministry of Commerce, hypermarket staffbreaks down as 61.5% cashiers/sales assis-tants, 14.5% management and supervisors,11.5% manual workers and 5.5% office staff.

Given the substantial growth in the number ofwage-earners due to the increase in the number ofsuperstores, we may assume that the greatestgrowth has been in the categories of cashiers/sales assistants and male general assistants.

This occupational pyramid in stores with a largenumber of employees makes for structural difficul-ties impeding internal promotion. Although for thetime being these difficulties are palliated by the&pension of the retail sector generally, it is clearthat this will be a major obstacle to greaterprofessionalism and the acceptance of trairingby employees.

4.2 Labour forceNo data has been published on the age ofemployees in the retail trade but having consultedvarious sources it is safe to say that the averageage of those employed in the retail trade hasdropped significantly because of the advent of alarge number of young people over the last fiveyears.

Another notable feature of workforce developmentis the growing number of female employees -both young women and older women who arereturning to work - who on various estimatescurrently represent about 60% of the retail tradeworkforce. Older women returning to work tend to

seek jobs in the retail and catering trades becauseof their fewer qualifications.

Despite the fact that they have been the maincause of the growth in employment and theimproved level of training in the retail sector,young people on "en formación" training con-tracts and women have in fact had very fewopportunities to acquire retailing skills and havetended to swell the ranks of the lowest-gradeworkers while suffering the consequences of highstaff turnover.

The general educational level of employees in theretail and similar sectors (see Table 10) has risensince 1980, although 50% of men and 45% ofwomen have received at most primary education -that is, have attended school ,for at most 10 years.

The improvement in the general educational levelis linked to the industrial crisis and the high rate ofunemployment among young people, which hasresulted in the retail trade becoming a means ofentry to the labour market for many people withindustrial training or secondary education.

4.3 Working hoursSpcin has a 40-hour working week. Shops mayopen for a maximum of 60 hours a week in theautonomous communities. In those communitieswhich are governed by the Boyer Decree, nationallaw or an autonomous law, shop opening hoursare unrestricted. Shops open 6 days a week fromMonday to Saturday.

However, as we have already pointed out, certainexceptions exist by virtue of geographical location

Table 10 - Educational level in the wholesa!e and retail trade and the repair sector broken down by sex (in per cent)

Male IlliterateNo

educationPrimary Secondary Higher Univ.

1980 0.8 7.1 64.2

1985 0.6 6.1 54.2

1990 0.3 6.3 41.3

23.7 2.0 2.1

35.6 1.7 1.8

47.2 3.0 2.1

Female IlliterateNo

educationPrimary Secondary Higher Univ.

1980 2.8 8.6

1985 1.8 8.2

1990 1.2 6.6

61.1

51.7

37.5

25.5 1.1 1.3

35.4 1.5 1.5

49.2 2.4 3.0

Source: Own calculations based on figures of National Statistical Institute.

(tourist areas, special legislation), the time of year(Christmas, special events such as the OlympiaGames, sales) when shops may open on Sundayin order to provide a better service to consumers.

Although traditionally shops are closed at lunch-time, there is a growing tendency to keep opencootinuously because of the superstores.

The greatest number of hours tends to be workedin traditional family-run shops where an effort ismade to stay open for a maximum number ofhours with few employees in the interests ofgreater profitability and better service. This meansthat working weeks of over 40 hours arefrequently found among small retailers and theiremployees.

The superstores cover opening hours with a varietyof working hours and weeks. In general peopleworking split shifts have one free day a week aswell as Sunday, while those working continuousshifts tend to work the same hours for 6 days aweek.

In most department stores working hours are fixed,but where there is a system of rotation they arelaid down permanently by agreement or must bemade known at least one week in advance.

Difficulties caused by working hours are morenoticeable among employees of small or medium-sized firms who always tend to work split shiftsand often work more than 40 hours a week, whichaffects their leisure time.

4.4 Working conditions (Table 11)As table 11 shows, wages in tke retail sector arein the case of male white collar workers 25%lower than those of all sectors taken together andin the case of blue collar workers (male general

Table 11 - Average earnings per hour worked (in ESP)

assistants in the retail trade) are 16% lower. Thejtuation is even worse in the case of women, whomake up 'the majority of the workforce; theirwages are 22% lower than those of their malecolleagues.

Wages differ considerably with the duration ofcontracts. According to the latest figures avail-able, fixed-term contracts in the service sectorinvolve wage inequalities that can mean lowersalaries in all job categories of cis much asESP 800,000 on annual average, compared withemployees on permanent contracts.

As we have seen employment on fixed-termcontracts and being a woman t!-.e two maincauses of lower wages typify the labour force inthis sector. Because of the stricter adherence toregulations and a greater union presence, dis-advantages do not exist in the superstores.

The conditions of employment explain why youngworkers do not find the retail trade attractive. iheabsence of promotion prospects for structuralreasons, long, split working hours, job insecurityand low salaries are the most serious problemshere from the employees' point of view. Manyregard work in the retail sector as something totide them over while they are waiting for some-thing better to turn up. This is the case particularlyof those with better qualifications who have thepotential necessary to acquire skills and move intosupervisory positions in large or medium-sizedretail outlets.

Employers claim that they have difficulties inachieving a stable labour force. To quote oneemployer: "The turnover of one part of the staff isas rapid as that of goods". Difficulties areencountered particularly with store supervisorystaff.

White collar Blue collar

1989

All sectors

Retailing

1,115.6

864

746

560

711

612

520

409

1990

All sectors

Retailing

1,265

961

809

631

773

679

550

443

Source: Salary survey, National Statistical Institute. 25

26

Faced with the difficulty of finding suitablepersonnel for certain categories of. job, somefirms have adopted a practice with regard toemployment contracts that helps them achievetheir objectives. This is to offer contracts for anindefinite length of time ("permanent contracts") toemployees who have already exceeded the legallimit of three years for temporary staff and whocome up to the firm's requirements. However, forthe time being this practice is not very widespreadand is confined to large and medium-sizedcompanies.

4.5 Recruitment and selection criteriaBecause of the rapid expansion in the retail sectorthe type of jobs offered tend to be two-fold. On theone hand there is a requirement for unskilledlabour (mainly young people and women) and onthe other for people with some training in retailselling, new technologies and management tocope with the sector's modernization.

As we have already pointed out, growth in theretail labour force has been the result of a sharpincrease in the number of fixed-term contracts. Thetypes of contract most frequently used have beenthe following:

a) The "en forrnación" contract, which allowstemporary recruitment for up to a maximum of 3years for young people between the ages of 16and 19 with a non-vocational primary education.In exchange for providing some training inretailing, employers are granted a reduction of90% in social security contributions when theyhave more than 25 employees or 100% if theyhave fewer. On the other hand, trainee workersemployed under these contracts only receive apercentage of salary depending on the hoursworked, 75% per 40 hours.

In the service sector 58.5% of fixed-term contractsare of the type mentioned and 90.4% of recruitsunder the system are workers with only primaryeducation.

b) The "en prácticas" contricts are aimed at thosewho have completed their t econdary or officiallyrecognized higher education. These contracts alsohave a maximum term of 3 years and firms areallowed a reduction in social security contributionsof 75%. Those employed under this kind ofcontract tend to be slightly older and to havevery different qualifications. This type of contracthas also been used in the service sector,particularly in retailing, and as Table 15 shows,it has contributed to the general improvement inthe educational level of employees in the sector.

Recruitment, especially for certain categories ofjob, is becoming a problem for certain firms forthe reasons already mentioned. It is difficult to find

-22

suitable people for posts as supervisors or storemanagers etc. on the labour market, with the resultthat firms are obliged to recruit people leavinguniversity with a degree or diploma in any fieldacquired after a 3-year course, who are thengiven training by the firm itself. In the case of thelower job categories mention has already beenmade of the absence of attractions and thetendency to regard work in the retail trade as atemporary matter, so that employees cannot relyon a suitably qualified workforce.

Traditional small retailers recruit their staff bytraditional methods, ranging from a notice in theirshop to advertisements in local newspapers orword of mouth. Generally speaking they do notmake any demands as to training but put theemphasis more on neat appearance, personalreferences and experience.

The situation is very similar in the case of medium-sized and larger firms, although the latter some-times use the services of personnel selectionconsultants. Again, little stress is placed ontraining, particularly theoretical training gainedin centres such as those previously described,although here much will depend on the prestigeattached to individual centres.

For shop managers or departmental managersprevious experience in the sector is required, as issome form of general education, though there areno specific requirements as to qualification. Thereare other requirements such as personal refer-ences, motivation, morality or maturity. However,as already explained, given the difficulty infinding staff with experience and qualifications inthe sector, employers are ready to recruit uni-versity graduates in any field merely because theyare graduates and are presumed to be able tolearn quickly.

For appointments to management posts or posi-tions in new stores employers do require degreesin economics or business studies.

For jobs such as cashiers, male assistants andsales assistants no specific knowledge, training, oreven more general experience in the retail sectoris required, although this may sometimes be takeninto account. Instead other aspects such as beingkeen to work, organizational talent, personalreferences or a certain age may be taken ascriteria.

Superstores are increasingly making use oftraining schemes provided by the Instituto Nacio-nal de Empleo (National Institute of Employment)in order to select lower-grade employees fromamong the best students on the course. Theseschemes, which are state-subsidised, enable firmsto carry out initial training and selection of staffunder very advantageous conditions.

SECTION 5 - CHANGING CONDITIONS ANDTHEIR IMPLICATIONS FOR QUALIFICATIONS

AND VOCATIONAL TRAINING

One of the factors contributing to change in theretail sector in Spain is the growing presence ofmultinationals which on their own or in associationwith Spanish firms account for over 25% of salesin almost all the various branches, though mostlyin the food branch. The present situation looksunlikely to change in the short term but will bestrengthened by the existence of the Europeansingle market because there is still room for growth

it has already been stated that the profit/salesratio in the Spanish retail sector is the second-largest after Britain.

The multinationals moving into Spain are rapidlyestablishing themselves as leaders in the retailsector. Thanks to their size, better managementtechniques, advanced technology and moreefficient personnel management they are betterequipped to meet the increasing demands ofSpanish consumers.

The first effect of the need to be competitive in amarket of increasing complexity is a restructuringof the retail sector and the modernization ofexisting structures through mergers and takeovers,expansion, specialization etc. This reorganizationand modernization calls for staff with an overallvision of the economy and of business, experts indistributive systems, in marketing, in store man-agement, in team leadership, as well as peoplewit!) special knowledge of the market, the newtechnologies being used in retailing and theproducts concerned.

It is fair to say that the need for competitivenesshas caused a sector of activity which paid littleheed to this subject to reflect on the need fortraining within individual firms and the need tomobilize sectoral institutions. Firms are starting to

Table 13 Edi projects promoted by EAN associations

view training as an instrument for bringing aboutthe necessary changes, hence the interesttraining policy, which though still small, is

increasing because of the lack of trained staffavailable on the labour market.

The objectives and content of training pro-grammes, both on-the-job and off-the-job, high-light the need for well-trained staff in the field ofmanagement, company and store organization,customer service, product knowledge and the useof new technologies for both management andlogistics.

Computer technology, which presents a challengein training terms because of its rapid introduction,has mainly impacted on three areas of organiza-tion store management, links with suppliers andlogistics and the training activities of firms andretail organizations over the past few years havebeen seeking especially to meet the demand here.

Table 12 Annual increase in retail outlets equipped withscanners

1983 1985 1990

29 94 2,974

In 1990, stores had an average of 4.4 scannerseach.

Tables 12 and 13 only show the increase in thenumber of scanners and computer programs up to1990, but the increase in the use of such systems ismaking rapid advances and current figures wouldbe much higher.

Users

Country Project Started 1990 1991

Belgium ICOM 1986 65 90

France Allegro 1989 210 430

Germany SEDAS 1985 510 710

italy EANCOM 1986 20 100

UK Tradacoms 1982 3000 6000

Spain AECOM 1988 15 100

Source: Spanish Association of Business Classifications, 1991.

. 23

27

SECTION 6 - TRAINING POLICY

6.1 Government-sponsored trainingUp to 1990 vocational training could be obtainedin Spain in three different ways, namely throughthe educational system which offered vocationaltraining at two levels following on compulsoryprimary education, through the National Plan forVocational Training and Occupational Integration(FIP), which was the responsibility of the Ministryof labour and was available to those both in andout of work, and through on-the-job training.

In the retail trade vocational training wasinvariably gained by learning through doing,since neither government-sponsored training norFIP vocational training had any programmes forthe distributive trades.

1990 brought the promulgation of a new law onthe educational system which has wrought con-siderable changes in the system as it existed andparticularly in vocational training.

As this law is implemented and vocational trainingcourses are planned, the authorities are taking intoaccount the needs and evolution of the labourmarket, as well as the socio-economic areas inwhich training centres are located, so as to ensurethe best possible match between the educationaland productive systems. The fact that a number ofthe autonomous communities are authorized toset up their own training courses is a furtherguorantee of better quality training. .

Vocational training at its three levels will in futurebe organized in the form of modules whichtogether will provide a corpus of knowledge,abilities and skills required for practising a givenoccupation or profession.

These training modules may be regarded as abridge linking the world of education with that ofwork with "the dual purpose of absorbing youngpeople into the labour market and enabling thosealready in work to keep abreast of new develop-ments. As the following chart shows, access to thethree levels may be either via the educationalsystem or via the labour market.

Most of the modules take the form of trainingcycles lasting a year and with a minimum durationof 950 or 1,100 hours, at least 200 of which mustbe practical work in firms.

The theoretical and practical content of thesecourses is adapted to the qualification levelsspecified by the EC.The new education law also aims to ensure aformal consistency, as well as one of content,between vocational courses offered under the neweducational system and other continuing trainingprogrammes organized by firms, as well asprogrammes aimed at integrating or rehabili-tating workers organized under at presentFIP vocational training schemes.

Although it will take years before the law is fullyimplemented, training modules relating to theretail trade are already under way in a numberof government training centres at levels 2 and 3(auxiliary and technical). One example of aprogramme designed by the autonomous govern-ment of the Generalitat de Catalunya is givenbelow.

The auxiliary level, involving 750 hours oftheoretical and practical instruction and at least200 hours of practical experience, enablesstudents completing the course to perform suchtasks as the use of computerized equipment forpurposes of calculation and management, custom-er service, dealing with suppliers personally andby telephone, stock control, reception duties,handling and delivering goods and dealing withthe relevant documentation, packaging and pack-ing etc.

The technical level, which is somewhat longer inlength (a minimum of 1000 hours), trains studentsin the organization and implementation of salespolicy, in conducting market surveys and writingreports, the application of commercial, fiscal andfinancial regulations, and in the theory andpractice of purchasing, selling, transport, storageetc.

Courses at both levels involve compulsory prac-tical training in firms a novelty in the Spanisheducational system where the concept of colla-boration between the educational and businessworld is very new.

6.2 Other forms of trainingThe non-existence to date of vocational trainingfor the retail trade has given rise over the past fewyears to a proliferation of schemes to meet thegrowing demand for better trained staff becausethe expansion and modernization of the retailsector did noteasily permit training on the job.

During the seventies, while the retail trade wassetting out on the path of modernization, theInstitute for Reform of Commercial Structures(IRESCO), a body responsible to the Ministry ofCommerce, played an important role by providinga programme of technical assistance whichincluded training for owners of businesses,managers, and employees in commercial firms.During 1974 and 1975 the first two years of thisprogramme, 1,179 such courses were organizedthrough Chambers of Commerce, companies andvarious organizations throughout the country.

Subsequently, during the eighties, local andregional authorities as well as private bodiesestablished training centres, and training pro-grammes were run by the Chambers of Com-merce, employers' organizations, the unions, craftguilds, universities, etc.

24

29

Table 14 - Chart - The new educational system (currently being introduced)

24

23

22

21

20

19

18

18

17

16

16

15

14

13

12

10

9

8

7

6

5

4

3

2

1

0

University thirdcycle

University secondcycle

University firstcycle Vocational training

higher level

Post-compulsorysecondary education

Vocational trainingmedium level

Compulsory secondaryeducation

Primary school

Nursery school

A80

A

N.B.: The auxiliary technician and higher technicianqualifications can be obtained by passing anexamination (Article 53.4)

: Entrance exam

Source: Diagram of the Spanish educational system ley ordenacion general systema educativo (logse)(Constitutional Law 1/1990 of October 3rd)

Some bodies, such as the craft guilds in a numberof autonomous communities, have a longertradition of training their members. Thus the guild

30 of confectioners and pork butchers have their ownschools which provide both basic training and

. 4 25

retraining. Similarily, the Confederación de Co-mercio de Cato laic), a retail employers' associa-tion in the autonomous community of Catalonia,has designed a wide-ranging training programmefor its members and their employees.

The Chambers of Commerce have also helped topioneer training in the retail sector by organizingshort courses and seminars for both small shop-keepers and their sales staff.

Conscious of the importance of the retail trade inthe life and economy of big cities and thecompetition from superstores on the outskirts oftowns, a number of municipal authorities havebeen putting considerable effort into trainingactivities with a view to revitalizing the retailtrade in town centres.

Similarly the universities, which traditionally hadno contact with the retail trade, are starting toappreciate its importance and offer coursesleading to a master's degree in retailing.

However, the content of courses run by thesevarious organizations, as well as their duration,teaching staff, continuity, methods and teachingaids, vary considerably, making it difficult toassess their real impact. Moreover, because theretail trade is so fragmented it is difficult to gain anoverview and determine the qualification andtraining requirements that would permit stores tocope with the current situation.

Those taking part in training courses are generallypeople employed in the retail trade, though alsopeople out of work or young people looking fortheir first job. The educational level required toqualify for such training courses also varies but ingeneral is not very high, except in the case of themaster's qualification. Primary school education orwork experience are sufficient.

Virtually all the organizations are funded by publicinstitutions, particularly where courses ore open tothe unemployed. The firms or the traineesthemselves are required to make a contributiontowards expenses, depending on whether coursesare officially subsidised or not and to what extent.

Of the variety of courses on offer, the broadestspectrum is aimed at middle management andexecutives; firms are increasingly training theirunskilled workers through in-house courses, eventhough courses are also officially provided forthem.

The training schemes described are in the mainutilised by small and medium-sized enterprises;larger firms also use the universities and moreprestigious cent:es, particularly for the training oftheir executive staff.

The value employers put on training activitiesoffered by the various institutions differs greatlyand depends on how close a relationship theseinstitutions have with the sector (guilds, retailers'associations, Chambers of Commerce) or theirstanding in the educational world (private institu-tions or universities). Generally speaking, since

most of these institutions have not existed for verylong and there is no official syllabus to ensure thattraining meets the qualification requirements, onlysome centres which maintain close links with theretail trade are recognized as efficient.

1n-house trainingTraining provided by the firms themselves tends tobe confined to large or medium-sized firms, whichaccount for only a small percentage of the sectoroverall (some 0.5% of firms have more than 20employees). In recent years a growing number offirms have displayed interest in training and havegradually been introducing their own trainingactivities on an experimental basis.

Training in the large and medium-sized firmswhich do run their own courses is currentlyexperiencing radical changes similar to those ofthe retail sector itself. New strategies conceived tocope with the need to modernize and expand andto combat growing competition in some casesinclude training activity as an element fundamen-tal for their future development. Firms are begin-ning to view training as one means for realisingtheir corporate objectives and are thereforeconsidering and planning their training require-ments for the medium to longer term, aredesigning programmes and extending training toall categories of employees.

However, even in the few companies whichorganize training courses, the lack of experiencein the field and of human resobrce management ingeneral, plus the serious lack of qualified trainers,makes for inevitable shortcomings.

Firms' objectives in organizing training activitiesrange from a simple desire to increase productivityin the short term and to ensure a supply ofnecessary supervisory staff to the wish to encour-age the development of their staff generally, whichwill in time generate a corporate culture.

Some big firms have set up their own trainingschools open to all. Those attending courses fromoutside are usually unemployed people under 25.The training such firms give is largely subsidizedby the lnstituto Nacional de Empleo (NationalInstitute of Employment) and the firms select theirnew recruits from among the trainees.

In some regions of Spain smaller firms, whichdraw up training policies but do not have theresources to create the necessary facilities, rely onthe employers' organizations and guilds to traintheir employees. Among the smaller foc.1 retailersthe guilds play an important role in imparting andupdating the relevant skills.

No reliable data is available concerning howmuch companies invest in training.

6

31

32

The above description cannot be applied withoutreservation to the entire retail sector and even lessto Spain as a whole, which considered generallyis taking its first steps in the training field.

Moreover, in the retail trade the conviction thatyou learn to sell by selling and that this is only

, 2

possible on the job and face to face with a'customer persists. The idea of selling as a skill isthe concept most widespread among employeesin the retail sector and that underlying the trainingmost often given to those working in stores. On theother hand, product training, with a few laudableexceptions, is virtually non-existent.

SECTION 7 - CONCLUSIONS

It is still too early to talk of continuing training asan establis:,ed practice in the Spanish retail trade.The structure of the retail sector, which is stilldominated by small firms, a lack of a tradition oftraining and the virtual absence of intermediatebodies enjoying sufficient recognition and offeringspecialized training suited to firms' needs, aresome of the factors contributing to this situation.

- Only a very small group of firms have beencarrying out training courses for any length oftime, but the radical changes that the sector hasundergone over the last ten year's marked by keencompetition, expansion and the ingress of employ-ees with no relevant qualifications is obliging theretail trade to alter this situation.

As a consequence, some large and medium-sizedfirms are beginning to implement policies in whichtraining is a key element. Others regard trainingvery positively - an opinion which reflectsparticularly in efforts being made to train middlemanagement and executives - and generallyspeaking, firms are displaying a growing interestin training matters.

However it must not be forgotten that the largemajority of retail firms are one-man operations forwhom training at present is out of the questioneven if they were interested. The need for trainingadapted to work:rig hours in the retail sector andemployees' educational levels is one of thepriorities here.

In addition to firms' own training courses thereare a multitude of training courses available onthe market but varying considerably in terms ofcontent, quality and recognition. Some of themare used by large and medium-sized enterprisesin order to train their executive staff and by smallerfirms to enable them to implement a generaltraining policy.

Different attitudes to training have been notedamong employees depending on its objectives,the expectations created and the employees'personal situation. Staff in jobs requiring fewerskills do not appreciate training particularly unlessit goes hand in hand with prospects of improvedworking conditions - promotion, higher wagesetc. - whether inside or outside the firm.

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PART 2:

P4

8. Gerplex/Confederación delComercio de Cata !alio

Eroski

Cemasce

Firm Xx

Firm A

29

SECTION 8GERPLEX

CONFEDERACION DEL COMERCIO DE CATALURA

1. Description of GerplexGerplex is a limited company (sociedad anOnima)with a capital of ECU 113,281.25.

This is a retail chain specializing in householdgoods, gifts, toys at Christmas and camping andbeach equipment in summer.

It is located in Barcelona and in the major cities ofCatalonia.

Most of its customers are young, middle-classwomen.

Reformed in 1981.

1.1 The firmGera lex was formed in 1955 as part of a group of4 general department stores and a centralpurchasing .Init. It was legally constituted as afirm in its own right.

The late seventies and early eighties bought amajor economic crisis which forced many popularstores to go bankrupt or to suspend payments.Oeiplex was affected.

The firm had 75 employees. At this time the son ofthe founder, who was 22 years old and had aqualification from a business school of highstanding, bought a majority shareholding anddecided to carry on with the business.

Over a period of 4 or 5 years he devoted himselfto restructuring the firm. The first step, in 1982,was to suspend payments. He combined the5 firms in a single firm, taking the legal formof a limited company (sociedad anónima) andtransformed the general store into a storespecializing in household goods (domestic appli-ances, all types of household equipment, linen,small items of furniture etc.) and gifts, with specialpromotions at various times of the year. He alsocarried out considerable restructuring of staffwhich involved persuading a majority of employ-ees who were not strictly sales assistants to acceptvoluntary redundancy. He asked those who wereleft, mainly sales staff, for their understanding inthe process of restructuring and for the wagefreeze.

After this period of restructuring and once adegree of financial stability has been achieved,new objectives were formulated for the firm. Theseinvolved a repositioning in terms of image andtype of consumer, expansion, obtaining betterterms from suppliers, improving competitiveness,rationalization of the staffing structure and invest-ing in new technology.

The corporate image was rethought and storesredesigned in order to attract a younger clientele

than the housewives who had been the firm'straditional customers. Efforts were also made toimprove customer service, introduce higher qualitygoods and ensure that stocks were frequentlyrenewed.

Growing competition from superstores offering thesame range of articles and the small profit marginswilich this permitted obliged Gerplex to expandand utilize the advantages of specialization andcustomer proximity in its strategy. It has thereforeopened 9 new stores over the past 6 years,bringing the current total to 13.

The company's new policy required a rethinkingof the human resources required and Gerplexbegan to invest in young people with manage-ment training while recruiting more workers tomeet the need for expansion. Between 1986 and1991 the number of staff rose by 30%, chiefly inthe categories of general assistants and salesassistants/cashiers. Because of the situation in theretail sector and of the firm itself at the time, thenew staff taken on was very young and mainlyfemale with no specific training in the retailtrade.

The reason for employing personnel of this kinddespite the firm's actual needs was that theconditions of employment made for greater profit-ability.

At the same time, a switch to new types of sellingwith the large-scale introduction of self-serviceand consequent reduction in staff such as window-dressers, obliged store personnel to diversify theiractivities.

Investment in technology was another of the firm'smajor objectives, the aim being to improveadministrative, financial purchasing and manage-ment in order to ensure that a maximum ofinformation could be made available in aminimum of time, while helping with the problemof personnel restructuring. A computer smem isnow being installed that will link all stores andscanners. Investment for purposes of managementand stock control to date is in the region of ESP 35million.

The firm is, currently experiencing a markedchange for the better with improved financialfigures. Between 1986/87 and 1990/91 salesrose by 160% whereas personnel costs rose byonly 123%.

The firm has 13 stores and a warehouse. Five ofthe stores are situated in the city of Barcelona andthe other 8 in major towns of Catalonia. Theadministration and management are located inseparate buildings.

Stores are always located in the centre of townsin the case of Barcelona one is in the centre and

:3 0

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the other 4 in densely populated areas of the city.Sales floors range between 400 and 1,000 sq.m.Customers remain basically middle-class andfemale with a certain tendency for the number ofyounger, women customers to increase because ofthe new electronic products and gift articles onoffer.

Stores operate on a self-service basis, except inthe case of small domestic appliances whichcontinue to be sold by traditional methods forreasons of safety and better customer service.

The firm has the legal form of a limited companywith a managing director who represents theshareholders and is himself the major shareholder.The organizational structure is as follows:

Managing director7Financial director

Administration

Sales director/coordinator

Personnel manager

Branch managers

assistants

1.2 Human resources

1.2.1 Personnel structureThe workforce has increased in absolute termssince 1986. However, since over the same periodthe number of stores has risen from 5 to 13, theaverage number of employees per store fell from13 to 7 between 1986 and 1991.

Table 1 Number of employees

YearsTotal

FiguresMale Female

1981 75

1986 65 19 46

1987 77 21 56

1991 98 29 69

Throughout the period 1981 to 1988, Gerplexwas experimenting with a change in personnelstructure because some staff were lost when anumber of men of over 25 and with someexperience, qualifications and ambition left thefirm at a time when its future was rather uncertainand could not meet their requirements in terms ofsalary. While the departure of this group helpedto trim the workforce, it also had the effect ofreducing the general level of qualifications.

Sales assistantsCashiers Table 2 Age breakdown of staff

General assistants

Communication between branches and centralmanagement takes the form of a weekly meetingof all store managers with the managers at headoffice. At these meetings decisions are reachedjointly on matters concerning the purchasing ofnew product lines, there is an exchange ofinformation about the progress of business, newrequirements, products etc. Some of these meet-ings are attended by suppliers who present newproducts in a form of training concerning productsand future trends.

These meetings serve as a channel of communica-tion between the management and the variousbranches and vice-versa, and make for a betterunderstanding between the various managementlevels. There is also a store coordinator who visitsthe stores periodically.

Years 25 25-50 +50 Total

1986 32 28 5 65

1987 43 29 5 77

1991 59 33 6 98

The reduction in the number of staff in relativeterms went hand in hand with a steady lowering ofthe average age, which continued from 1981for which we have no figures but which is veryclear from 1986 onwards. Whereas in 198649% of staff was under 25, by 1991 thepercentage had reached 60%. This trend wasalso paralleled by an increase in the proportion ofwomen which began in the period 1981 1986,since when the figure has remained at around70%.

Table 3 Occupational structure

Job Category 1991 1986

Management 4 2

Office staff 9 4

Branch andstore managers

14 8

Assistantmanagers

13 7

Sales assistants 28 23

Cashiers 14 6

Generalassistants

16 1 1

Total 98 65

Table 3 shows that the number of office andmanagerial staff substantially increased froom1986 onwards while the ndmber of salesassistants decreased, cauiing the latter's weight-ing in the total workforce to drop from 35% to28% due to the restructuring that was put in hand.On the other hand, there is a greater functionalspecialization and cashiers now account for alarger share of the total workforce.

1.2.2 Working conditionsShop opening hours are from 9.30 to 15.30 andfrom 16.30 to 20.00 hours on weekdays,including Saturday. Stores are not open onMonday morning, when the time is used fortraining and other activities. Staff work a 40-hourweek with one and a half days off. The holidayentitlement laid down by law is 30 days.

The wages of most employees are governed bycollective agreement and monthly take-home pay(15 payments) in a typical store ranges fromESP 61,000 for a male general assistant toESP 85,000 for an assistant store manager after20 years with the firm. There is a seniorityallowance which is only paid to employees onpermanent contract and which amounts to 5% ofbasic salary every four years. A flat-rate travellingallowance is paid to each employee. In 1991 thiswas ESP 5,390 a month. There is no commissionon sales.

In recent years the firm has been taking on staff forcertain posts at salaries above those fixed by thecollective agreement and all posts of responsibility

from store manager upwards carry salaries higherthan the negotiated rate.

In 1991 the firm introduced a bonus scheme forstore managers linked to the rise in sales at eachstore.

Generally speaking overtime is not worked exceptperhaps by branch managers, but overtime iscalled for during peak periods and especiallyduring the run-up to Christmas. This is remuner-ated at overtime rates.

The regulations governing working hours andcontracts of employment are those found inemployment legislation and in the collectiveagreement for the retail sector as well as in theretail trade regulations which comprise the variouslaws and decrees passed for the retail sector overthe past 20 years, including amendments intro-duced by the Labour Statute of 1980. Theseregulations apply to the whole of Spanish territoryexcept for the autonomous communities whichhave their own laws governing the retail trade asdoes Catalonia.

There are specific regulations governing salariesand job categories in the subsector to which thefirm belongs. These are found in the collectiveagreement applying in the autonomous commu-nity. However retail trade employees do notregard this collective agreement as very benefi-cial.

Although no figures are available for staff turn-over, a management representative commentedthat staff turnover keeps pace with productturnover.

1.2.3 Qualification and recruitmentOf the firm's 98 current employees, 26 havepermanent contracts while the other 72 havefixed-term contracts for periods of between3 months and a year, the majority being for 6months. A third of the total workforce, who areunder 19, are employed on the basis of "enformación" contracts while 10% are employed onthe basis of "en prácticas" contracts.

Employment on a fixed-term contract basis canonly be for a maximum of 3 years. Previously oncean employee had reached this term the firm didnot renew his contract but took on a new person inorder to benefit from the advantages of "enformación" and "en prácticas" contracts. How-ever, the firm is now considering giving permanentcontracts to a number of employees why_ havepassed the three-year limit but whom theyconsider worth keeping because of their abilitiesand qualifications in order to form a fixed nucleusat each store. This is a consequence of the firm'srealization that it was watching its best sales

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assistants leave after the training period becauseof its efforts to keep expenses down.

The "en formaciem" contracts for young peopleunder 19 have been widely used in the Spanishretail sector because of the enormous advantagesto the firm, first by virtue of the considerablereduction in social security contributions andsecondly because very young people came intothe lowest job categories and their wages werevery low. Gerplex has 33% of employees on suchcontracts. We shall comment later on the traininggiven.

In other job categories use has been made of the"en prácticas" contracts (young people withsecondary or recognized higher education quali-fications, who are therefore older) because theseagain permit substantial exemptions from socialsecurity contributions. 10% of employees have thistype of contract.

While considerable use is made of fixed-termcontracts, the company has only two femaleemployees working part-time, one of thembecause she has recently had a child. The

company does not favour part-time working.

The various forms of employment have meont,particularly in the first gi-oup, a selection practicethat tended to disregard qualifications and lookedinstead for interest in the job, a neat appearanceand good personal references.

Generally speaking store personnel (sales assis-tants, cashiers and general assistants) have amedium or low educational level, having at best12 years of schooling and very little if anycommercial training at the time they are em-ployed, although some have received training inother sectors.

Branch managers have a medium or low educa-tional level but tend to have experience in theretail trade, which is more appreciated. Theoret-ical training does not exist in this sector but even ifsomeone has had theoretical training it is notconsidered important given the type of trainingavailable. Factors such as a sense of responsi-bility, maturity, honesty, the ability to organize etc.are considered more important than any theoret-ical knowledge or experience in stores having adifferent culture from Gerplex.

However, theoretical training is regarded as theprincipal factor for other activities and jobcategories (management and office work).

Career possibilities in the retail trade, particularlyfor the great majority who are women, are rapidlyexhausted because of the few job categoriesavailable to them. According to the firm "womencan hardly guarantee to be completely dedicatedto their job in positions of responsibility, particu-

larly if they are married, and this impedes theiraccess to promotion".

In the firm under study a man starting as a low-grade general assistant may rise to the position ofstore manager after a period as assistant man-ager, and indeed this has been known. Yet awoman starting as a sales assistant cannot beassured of the same career. While 70% ofemployees are women only 3% have positionsof responsibility at branch manager level andcompany policy would seem to be against anyimprovement here.

In recent years the company has tended to turn tothe labour market in order to recruit staff in middleor higher job categories (store manager, coordi,nator etc.). This practice, which is now beingreviewed, was the cause of considerable frustra-tion and disappointment for employees who hadbeen with the firm for many years and felt that theyhad made a considerable contribution to restruc-turing the firm but that the firm showed noconfidence in them, while giving more recentrecruits better salaries and employment conditionsthan their own.

This situation, combined with the low level ofsalaries and the very slight differences betweenthe various job categories plus the lack of variationin job tasks, means that promotion is not inprospect for the new generations of employees.

1.2.4 CommentsThe various factors outlined above show that theproblems raised by both the firm and its employ-ees in their industrial relations do not basicallydiffer from those of the retail trade as a whole buthave here been aggravated by the process ofrestructuring.

The need for the firm to restructure, its practice ofrecruiting staff on fixed-term contracts, the use itmakes of "en formación" contracts plus theobstacles in the way of promotion, the low wagespayable in the sector, long working hours and splitworking hours, the youth of the majority of tilt, staffand their lack of qualifications ensure that thisfirm, like most others in the retail trade, has a lowlevel of vocational skills and a high staff turnoverwhich makes it difficult for training to yield areturn.

2. Training policy

2.1 Training strategyOnce the process of restructuring and putting thefirm back on its feet had been completed in thesecond half of the eighties, the Gerplex manage-ment, conscious of the process of modernizationtaking place in the retail trade and in order tomake itself more competitive, began to plan andprovide training for its employees.

The first training courses, which were developedprior to 1990, consisted basically of certainemployees attending courses on specific activities(merchandising, window dressing, human re-sources, financial management etc.) organizedby government authorities or private bodiesconnected to the retail trade, and of basic trainingcourses for employees on "en formación" con-tracts. The latter courses were given by aninstructor from outside the firm and were of amore general content mathematics, history etc.

Basic vocational training for new recruits was andstill is carried out on the job by store managersand colleagues. Although such on-the-job traininghas no formal framework, everyone assumes thatit takes place and that the sales assistant andcashier learn by doing. About 40% of the presentworkforce have received their retail training withinthe firm.

A basic change took place in 1990 whenprovision of training was extended to the majorityof staff, the exception being those stores for whichit has not yet been possible to organize trainingbecause of their location. At the same time, thefirm itself began to plan its own training pro-gramme in collaboration with business organiza-tions such as the Confederation of Commerce withthe financial means to carry plans out.

If training is extended to all categories of employ-ees and a training programme is drawn up withthe intention of adopting training as a permanentpolicy, courses organized through an associationcan be a viable alternative for most small andmedium-sized retail firms in Spain.

The reasons for the firm's change in training policywere basically its aim to expand coupled with itsrecruitment policy, which called for more know-how and wider abilities on the part of itsemployees.

The firm currently has three training programmes.One of these covers the various specific jobactivities and is run by different bodies fordifferent categories of employees. This pro-gramme began in the eighties.

The second course, which was started in 1990/91 was designed for all 13 branch managers. Itcovered sales and management techniques.

The third experiment, started in 1991, is designedfor cashiers, female sales assistants and malegeneral assistants who take part in groups of 15.Subjects dealt with are sales techniques andhuman relations.

In both cases the choice of people to attend thecourses is made by the personnel department,although proposals may be made as to whoshould attend and who needs such training. There

are various criteria for selection, such as employ-ees' particular needs, length of service with thefirm, workload at a given time etc.

Attendance of courses is not compulsory, but so farthere have been no cases of anyone refusing to doso.

The training courses are held during workinghours in the case of cashiers, sales assistants andgeneral assistants but not in the case of branchmanager, The latter are required to devoteMonday mornings, which is their weekly freehalf-day, to training and meetings with themanagement. These hours are paid as overtime.

Employees, who are unused to this type of trainingin an area where the emphasis is very much onlearning by doing, describe their aims andaspirations as far as training is concerned in verydifferent ways: To earn extra money to supplementa low wage (branch managers), to get into theemployer's good books, to acquire a certainprestige within their immediate environment, togain knowledge that they can make use of, toopen up possibilities of other jobs. However, onlyin very few cases do they think that training giventhem by their firm could positively influence theircareer within that firm.

Up to now, therefore, employees have not seenany direct link between training and salaries orinternal promotion. For the time being the firm hasno system for formally recognizing continuingtraining by promotion or an increase in salary,although it thinks it important to be aware ofemployees' attendance at training courses and theuse they make of what they have learned with aneye to future promotion.

As already mentioned, the firm intends to pursueits different programmes for the various categoriesof employees including those working outside themetropolitan area o' Barcelona. Training pro-grammes will be designed with the firm's objec-tives in mind. Once the Christmas period thebusiest time of the year is over the firm will beginto think about training activities for 1992/1993.

2.2 Training structureIn the past responsibility for training was theresponsibility of the managing director. Howeverin 1989 the company recruited a personnelmanager who began by organizing his owndepartment.

Once this was done, he began systematically toplan training activities in line with company policy.

Training courses available are prepared solely bythe company itself in collaboration of the Con-federación de Comercio with no involvement ofeither the employees or their representatives.There are no legal or collective agreements

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relating to training in their sector of the retail tradeand the introduction of continuing training herewas entirely the initiative of the firm itself whichdecides on needs and objectives in consultationwith its managers.

Data available shows the cost to the firm oftraining activities in recent years to have been asfollows:In the financial years 1988-89 (the financial yearin the retail sector run from 1 March to the end ofFebruary of the following year), spending ontraining amounted to ESP 1,400,000, the mainbeneficiaries being managerial staff and salesassistants on "en formación" contracts.

Of this sum, 55% was required to pay the newsales assistants recruited for the hours spent ontraining courses within the firm. The remainderwas spent on seminars organized by businessschools of repute, attended by the management.

The amount spent on training in 1989 90 wasESP 655,000, most of this being used for seminarsand courses organized by outside bodies andattended by the managing director, the head ofpersonnel and the administrative director.

In both years the subjects dealt with in theseminars ranged from the introduction of newsystems and technology, industrial relations,budgetary control and management and mattersspecific to the retail trade (merchandising, pro-curement and supplies, tagging goods, buy-outsetc.).

ESP 1.5 million was spent on training in 199091. Those attending courses were the companymanagement, administrative staff and store man-agers.

A similar amount will be spent in 1991-92.

It should not be forgotten that training organizedthrough the ConfederaciOn de Comercio hencecourses attended by store managers and cash-iers/sales assistants are heavily subsidised,sometimes to the tune of 90%.

A third of this amount was used for the storemanagers' training programme not, bearing inmind the subsidy, for training in the true sense ofthe term, but to cover the cost of overtime devotedto training. The remainder was spent on coursesand seminars.

2.2.1 External structure

ConfederaciOn del Comerciode CataluñaThis is the retail trade organization in Catalunaand is part of the Fomento del Trabajo Nacional,the Catalan branch of CEOE which is the largestemployers' organization in Spain.

In 1983 the autonomous government of Catalunacreated a number of associations at provinciallevel in order to provide businesses in the fourprovinces of Catalonia with services and experts.One of the responsibilities of these associationsknown by the name of Gabinetes TécnicoComerciales "Gatec" was to provide trainingto the retail trade. These organizations were non-profit-making and in the first year of operationwere 100% government-subsidised. They werestaffed by retail trade experts.

In 1985 Gatec, as the expert agency and Consellde Gremis de Cataluna established the Confed-eración de Comercio de Cataluna.

Subsequently only the Gatec of the province ofBarcelona continued in operation because oforganizational problems encountered in the otherthree provinces.

Gatec Barcelona continued providing trainingcourses, mainly for members of the Confedera-ción del Comercio under an agreement concludedwith the latter, and became a self-financingorganization in 1987. At the same time itadministers the subsidies which the Confedera-ción receives by virtue of its training activities fromcentral government bodies (NEM), regionalgovernment agencies (Conselleria de Treball i

Comerc), and municipal authorities.

Gatec Asociación is made up of a trainingdirector, 2 clerical staff, 1 course promoter whois also an instructor, and 3 permanent instructors.When necessary they employ additional trainerson contract.

Two types of training are provided, the first being,planned by the Associación itself and the othercustomized to meet the needs of specific organi-zations or firms.

Course planning is carried out by the Gatec teamcomposed of the training director and instructorsand is based on their own information or theneeds identified by the ConfederaciOn del Corner-cio.

Courses are aimed at apprentices or unemployedpeople who would like to work in the sector, atowners of businesses and shop assistants.

The courses vary in length depending on theircomplexity, the range of subjects covered and thetime available to trainees. Courses range from6 hours a day for one week, 4 hours a day for amonth, or 4 hours a week for 2 months. There is nofixed pattern.

Courses are held in different places, sometimes onthe premises of Asociación Gatec and sometimeon those of the firm.

The list of subjects dealt with in 1991 is shown inthe annex.

In 1990, 73 courses were organized, all of themsubsidised. They were attended by 1,027 train-ees, 35% of whom were men and 65% women.The average age was 36 and the average numberof people attending each course was 14.

29 guilds or employers' associations from all overCatalonia were involved in these training coursesin 1990 and sent members:

Gatec also provides training for firms in the retailtrade, even if they are not affiliated to theConfederación del Comercio.

While the ConfederaciOn was organizing its

training, 22 trade associations and other mem-bers, including Gatec itself created a limitedcompany whose purpose is to offer computer-related services to retail firms, to sell hardwareand software and to provide the relevant training.This company is called SINAC. SINAC got intofinancial difficulties and whilst seeking a solutionto these plus the problem of the retail trade's needfor services of the kind it offered, it requestedGatec to take over its management, as SINACitself had only a minimum operating structure.

Gatec has provided the necessary back-up forSINAC's operations, and training in computer andother technologies is now carried out by SINACusing Gatec's facilities.

The work done by the ConfederaciOn, largelythrough Gatec, is very praiseworthy bearing inmind the situation in a sector little disposed toappreciate and encourage training.

One of the greatest problems it faces is thatfrequently the training programmes approved byfirms do not accord with the management policy.This generates frustration among trainees attend-ing courses, who consequently lose interest.

The ConfederaciOn del Comercio also providesproduct training for the textile and furnituresectors. The lack of specialized product trainingis, generally speaking, a major shortcomingwhich the Confederación is seeking to remedybecause of the growing demand for productinformation on the part of consumers.

In the case under study Gatec has prepared thetraining programmes for store managers and forsales assistants/cashiers/general assistants.

2.2.2 Impact on training of newtechnologies and consumer, health andother legislationThree main factors have affected the tiainingpolicy of the firm under study, all three beingdirectly linked to the process of modernization and

specialization that began in the Spanish retailtrade some years ago and is still under way.

The first factor is the need to formulate a newpolicy given the growing number, of multinationalstargeting the same customers with the sameproducts. The internationalization of the economyin general and the retail trade in particular is a keypoint when considering the matter of training.

The second factor is the emergence of newtechnologies for use both for purposes of manage-ment and at retail outlets. Reducing personnel'sshare of total costs, providing immediate informa-tion on sales and consumer trends, and improvingthe efficiency of administrative procedures bymeans of computer systems calls for well-trainedpersonnel to ensure that investment in newtechnology pays off rapidly.

The third factor we would mention although infact the first in chronological terms is the changethat has taken place in the concept of selling fromthe time of the first general stores to the coming ofthe specializt shop, involving the introduction of amixed system of self-service in combination withpersonalized customer service for products requir-ing a greater degree of information.

There is, in fact, a fourth factor which is linked togeneral developments in Spain; this is theemergence of consumer awareness, leading to agreater demand for information and personalattention in certain areas.

These four factors have not merely influenced thefirm's training policy but have actually lent itimpetus.

2.2.3 Involvement of the socialpartners in training policyIn accordance with the Spanish law on unionrepresentation and because of the number ofemployees in the firm under study and the numberof places of work, the firm has 4 staff representa-tives, 2 of whom are employed in Barcelona and 2elsewhere.

Only one of the four staff representatives belongsto a union, namely the Union General deTrabajadores (UGT). The others have no unionconnection and have been selected in some casesbecause of their position of influence in the firm.

As far as we are aware, employees are notaffiliated to any trade union, with the exception ofthe UGT representative.

During the period of restructuring and until 1989there was some industrial conflict within the firm asemployees attempted to ensure the application ofan agreement regulating the salaries and workingconditions of all employees.

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41

42

The firm's previous collective agreement had beenrejected by employees in 1984, at which point thefirm "in the absence of a relevant basic agreementpaid its employees on the basis of an agreementwith each employee individually".

The agreement finally arrived at after negotiationswith the social partners was the collective labouragreement applying within the autonomous com-munity of Catalonia for the glass, earthenware,pottery and similar trades. This agreement wasreached in 1989 and its application subsequentlyled to legal action by employees who disagreedwith the job categories used within the firm; thejudgment was in their favour.

Application of the agreement created a situationof some ambiguity, since while there was now aframe of reference for all employees, some lostcertain advantages in terms of salaries that theyhad previously enjoyed because the effect ofvarious agreements was to level the wage ratesof all employees.

This factor, linked to the modality of the agreementwhich the staff considered unfavourable, createda certain unrest which is still noticeable today.

At present the employees' representatives are notvery active. Only the UGT member enforces hisrights as regards the amount of working time hemay use for union activities, which mainly involvesattending meetings, but the other three largelyrestrict themselves to requesting and receivinginformation that concerns them.

The fact that employees are scattered over 15different buildings (head office, warehouse and13 stores) in 8 different towns and that theaverage number of employees per store is low,renders activity more difficult.

Among employees there is a persistent convictionthat the retail sector is not a healthy one in whichto work, that it is impossible to do anything toimprove working conditions and salaries and thatthe best policy is to keep quiet and watch out forthemselves.

On the other hand, they regret that the presentUGT representative has on occasion put forwardcertain claims that have created a degree oftension.

The firm's management is of the opinion that attimes when there is no dispute, union representa-tives have no clear function and that there areother more appropriate channels of communica-tion.

Generally speaking it is fair to say that relationswith the firm are formally correct but that employ-ees feel that they are less appreciated when theycompare themselves with recent employees taken

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on on better terms. This is combined with a feelingof impotence and, in the case of the youngerpeople, a lack of interest and resignation in theface of a situation they consider unchangeable.

Relationships between employees at the variousstores are good and there is no obvious hierarchy.However there is a natural tendency for olderemployees or younger sales assistants andcashiers on fixed-term contracts to stick togetherand they do not easily mix.

Training in retailing is not regarded as relevant orin the interests of employees or their representa-tives. If an employee shows interest in training it isbecause he is interested in something that can gethim out of the retail sector.

2.3 Description of principal trainingprogrammesWe shall look here at the two training programmessince 1990 91 aimed at different employeecategories.

The course designed for store managers ran for 5months with a training session of between 2 and 3hours every week.

An instructor from Gatec, the organization usedby the Confederación del Comercio, held theclasses on the firm's own premises. The objectiveswere to improve sales figures by achieving greateremployee involvement and making them feel moreresponsible.

The most interesting point of the course was thatweekly courses were followed, on the same day,by the meeting between store managets and thecompany management. These meetings; whichwere introduced in a bid to improve communica-tion and industrial relations, were also used toplan particular sales campaigns (3 times a year),to contact suppliers and receive information aboutnew products, to decide which kinds of productwere appropriate for individual stores etc. Themeetings were intended to involve store managersmore directly in the running of the firm.

The course programme was made up of four parts:Sales techniques, Human relations, Merchandis-ing, and Fundamentals of Management of aCommercial Firm.

The programme targeting cashiers and salesassistants lasts for two and a half months with 4hours of classes a week. In this case classes areheld on Gatec's premises. Here again, the aim isto boost sales by a better knowledge of customersand a more forthcoming attitude on the part ofsales staff. The course dealt with sales techniquesand human relations, subjects also dealt with inthe course for store managers.

The contents of the four course modules were asfollows:

Fundamentals of management of acommercial firm

Distribution: channels, structures and systemsManagement and general runningFinancial managementOperating accountsTrading marginStock turnoverEconomic turnoverCash flowStock profitabilityProfit and loss accountCalculating costsInventories

MerchandisingDefinition of merchandisingPurpose of merchandisingThe storePoints of convergenceInstrument of productionRange of goodsGeneral aspectsConditioning factorsProduct selectionStore layoutAnalysis of present store layoutLineor layout: Positioning products andfurnitureCold spots and hot spotsCustomers route within the store andfactors which influence it

Human relationsThe importance of motivation ip humanrelationsTheory of motivationMotivation and performanceThe process of communicationCommunicatingElements of communicationForms of communicationBarriers and breakdowns in communicationThe basic principles of a groupThe notion of a groupSources of attractionInterpersonal re.lationsPrejudice and stereotypesRoles and functionsLeadershipConciliatory and transactional analysisThe parentsThe childThe adultPhysical and verbal keys to establishingmoodsRules of communication in transactionalanalysis

Sales techniquesPersonalityGetting to know oneselfHow the customer must see thesalespersonThe mustsCharacteristicsKnowledge, abilities and attitudesThe importance of the salesperson's roleAdopting the right attitudeConvincing the customer of the product's valueTest

The five stages of sellingWinning the customer's confidenceDetermining the customer's wishesand needsOvercoming a customer's doubtsCcnvincing the customer of a product's valueMaking a saleThe customerCustomer typologyArgumentsDefinitionDifferent types of argumentsHow to use themJudgementGeneral rulesThere are all types of custcmersDifficult situationsCustomers in a hurryCustomers waiting their turnSelling in a groupComplaintsWhy regular customers are importantDifferent types of purchasesSelf-assessment

3. Analysis of a particular store

3.1 General informationThe store described here is located in the centre ofBarcelona on the Paseo de Gracia, the city's mostprestigious shopping area. It is located on twoflcors and has a total area of some 500 sq.m.

The range of products sold is basically the same asin the company's other stores: household goods,small domestic appliances, and audiovisual equip-ment, gifts and toys.

The clientele is mainly made up of the employeesof the various financial institutions Ind servicefirms which abound in this area and, because ofits location, of customers coming from otherdistricts, other parts of Catalonia and tourists.The customers of the Paseo de Gracia store tend tobe of a higher social and economic level thanthose of other stores.

3.2 Personnel and trainingIn 1988 the store had 12 employees and currentlyhas 8 6 women and 2 men.

38

43

Table 4

Job Category Age Contract Education

Store manager 39 Permanent Secondary

Assistant store manager 59 Permanent Ncne

First sales assistant 28 Permanent (part-time) Prir\oary

Sales assistant -3 ,'en practicas" Secondary

Sales assistant 23 Fixed-term Secondary

Sales assistant 24 "en prácticas" Secondary

Cashier 24 ,'en prácticas" Secondary

General assistant 20 "en prácticas" Secondary

The 5 employees on a fixed-term contract havebeen with the firm for a year and a half, except forthe general assistant who has been there for6 months.

The most striking feature of this store is therelatively high level of education of its employ-ees. Although none of them have specific retailtraining they do have training in various fieldssuch electronics, office work, care of children,

concerned, although theprat. ..)le under 25 is the same as forthe firm _ this firm has no-one under theage of 20, which is quite common elsewhere.

These facts show that the firm has been morestringent in its recruiting requirements herebecause of the store's locaton and the type ofcustomers using it.

As a result of rights acquired prior to the collectiveagreement now in force, employees at this storehave different working hours to other stores (9.30to 16.00 and 4.30 to 20.00), as well as two freedays a week (Sunday and another day whichdiffers each week) instead of the one and a halfdays in other stores.

Because of the hierarchical structure .of the firmand the way it operates the store has no autonomyin matters of management. As with other storesowned by the company, any decision concerningthe store is always taken at management level,although any suggestions made by the storemanager are taken into acccunt.

As a result both the policy and structure of training44 is decided solely by the personnel department and

t P:4)0

follows the lines set out in the section discussingthe firm's training policy.

Three of the store's employees have already beengiven or are currently receiving training under thetwo programmes described above the storemanager and two sales assistants. The remainderof the staff will be attending courses in the next fewmonths. The .decision as to which two salesassistants should attend the course was thedecision of the personnel management based onthe criteria already explained.

4. Assessment

By the firmThis firm, which is convinced of the need fortraining employees and its usefulness in order toimprove the company's performance and theworking climate, considers it still too early todetermine whether its objectives have beenachieved on the financial side, although as faras the working climate is concerned there havecertainly been improvements, particularly in thecase of store managers with whom communicationis now better and who have become moreinvolved in the progress of business.

The need for training arose mainly from the lowlevel of qualification of cashiers and salesassistants and the high rate of staff turnover atthis level, from the cost Of a well-trained staff andthe need for better-trained technical and manage-rial staff in order to cope with the demands ofexpansion, market repositioning, different custom-ers etc., the only way to be competitive given thegrowing modernization of the retail trade.

Nevertheless, the firm is aware that the presentsituation is only a first step and that the contentof training programmes is very basic. It hasexpressed interest in deepening and broadeningthe scope of courses as the firm develops and withit its objectives.

The firm has stated its intention to implement adifferent policy with regard to recruitment byoffering more permanent contracts and the

possibility of internal promotion. Training will beconceived with this in mind.

By the employees or theirrepresentativesAs far as the employees in general are concerned,training relating to the retail trade is somewhatunusual. Traditionally peop!e have learnt by doingand they are not very clear as to what use trainingwill be, particularly when they do not knowwhether it wi.l influence their position in the firm.

They regar.1 it as another requirement imposed onthem by t:)eir job and as something from whichthey car benefit for their career with other firmsshould they decide to move, but not in their presentfirm. They find it pleasant to change the dailyroutine and do something different and also tohave the opportunity to get to know theircolleagues, but they see no prospects of a changein their situation.

When questioned as to the use of the training,people responded in different ways: "It helps meto get to know myself" (a comment on thepsychological subjects dealt with in "Sales techni-ques"), "To meet our colleagues", "To deal withpeople better", "To be able to communicate with adeaf and dumb person" etc. Some sales assistantsbelieve that their sales have increased because oftheir better relationship with customers andbecause they have overcome a certain shyness.

The response to questions regarding the specific

programmes currently being organized was gen-erally "They are well done", "They are interest-ing", but any attempt to discuss the content morein detail elicited little response.

Training raises expectations, especially in the caseof employees who for various reasons see their

future as with the firm. However, they also giverise to frustration, on the one hand because the

content of some courses assumes a certain ability

to take the initiative and act on one's ownresponsibility in managing stores, for which thereis no scope in practice, so that this theoreticaltraining is not regarded as relevant. It is felt thatthe firm should at least try to give clear informationto its employees with a certain level of responsi-bility about how the business is progressing so that

they can see in practice what they are learning intheory.

At the same time, while they are uncertain as tothe firm's plans regarding promotion, they arefrustrated when they see people recruited fromoutside to occupy posts which they feel could befilled by internal candidates who have demon-strated their loyalty and cost-effectiveness to thefirm.

-Some staff, who have been trained on the job, donot consider formal training very useful. They thinkthat basic training is what counts, that this is nottaught as such because it just takes place on thejob, and that the fact that this is done by moresenior employees gives them extra work.

In summary it may be said that the attitude ofemployees to training and to the courses we havedescribed depends on how they view their futurewith the firm, their age and the training they havereceived, which is almost always ambiguous. Thisattitude is also influenced by the fact that it is newand that so far it has no consequences as far as thejob is concerned.

By the authorThe relationship between training and personnelpolicies in the firm under study is clear. Thedevelopment of the firm, its initial restructuring andreorganization and subsequently its expansionwas achieved inter alio with a clear personnelpolicy which initially involved doing without well-trained employees - who were, or threatened tobecome, expensive - and later involved recruitingyounger and cheaper staff.

The training programmes designed for cashiersand sales assistants has systematically respondedto the shortcomings that were observed. Thechange of image, the employment of newtechnologies, the targeting of a more varied anddemanding clientele called for staff with higherprofessional qualifications and the ability to

identify with the firm's objectives. The externalorganization used to provide this training is for themoment sufficient for the firm's requirements.

However, as the firm makes progress andconsolidates its position there could be a need tochange the structure of training and create aninternal system to meet its future requirements.

The training programme designed for store

managers, whose purpose is on the one hand toimprove the firm's financial performance andsecondly to improve communication and makethem feel more involved in the company'sprogress, could have the effect of raising hopesof greater repsonsibility and hence of improvedconditions of employment, which will result in

frustration if they are not fulfilled.

Basically the success of training will be influencedin both cases by the results it brings in terms ofpromotion and higher wages Otherwise it will

0*!41 4

45

46

only be regarded as another imposition of littleinterest to employees.

This last factor seems to be a key element formodifying and stimulating employees' attitudes totraining and hence the use they make of it.

5. TransferabilityThe interest of this model lies in the fact that itoffers small and medium-sized enterprises thealternative of using external structures put in placeby the retail sector itself in order to train itsemployees. It is not financially worthwhile for firmsof this size to create their own training schemes,which would probably not be utilized for much ofthe time.

6. People interviewedManaging directorPersonnel managerManager of the store describedStaff representative at the store describedThree sales assistants

4 1

EROSKI COOPERATIVE SOCIETY

1. General Description of the FirmEroski is a cooperative society with a capital ofECU 35 million on 31 January 1991.

It has 129 stores of its own, which are eithersupermarkets, hypermarkets or shops specializingin domestic appliances and textiles, and travelagencies, as well as 197 stores operating onfranch ise.

The stores are situated in the Basque country andNavarre. 1991 saw the opening of the first storeoutside these provinces in Ciudad Real.

The company was formed in 1969 as the result ofthe merger of nine cooperative societies. It

currently has 2,914 working members and almost140,000 customer members.

1.1 The firmEroski is the largest cooperative socieiy in Spain. Itbelongs to the Mondrag6n group which is one ofthe most successful enterprises in this field.

It began its activity in 1969 as a result of studiescarried out in a bid to make cooperative societiesmore viable, and to provide them with theprofessionalism that was lacking because of thevoluntary nature of the work of those involved increating and maintaining them.

Initially the company was only a cooperativesociety with employees on contract. However from1983 the employees became working members.Eroski, therefore, is now a consumer and workingcooperative.

From the time it was first established Eroskiembarked on a process of expansion throughoutthe Basque country; this has accelerated in recentyears and has gone hand in hand with adiversification of activities and of type of store.The philosophy of the firm, which views consump-tion as a global reality, has led it to diversify inthe interests of consumers with the emphasis oncustomer training and information.

In the eighties a change in policy resulted in atransition from the small stores with which it hadstarted to stores with large sales floors.

Although initially it restricted its operations to theBasque country and Navarre, the past two yearshave seen Eroski establishing itself by a variety ofmeans in the Spanish retail sector, where it hasprospects of strong expansion. This new policyhas derived from the need to expand in order tocompete in a sector undergoing considerablechange and where the multinationals top theleague.

Eroski's development since 1980 is shown by thefollowing figures:

Table 1

1980 1985 1990

Turnover 8 23 57(ECU m)

Workingmembers

858 1,379 2,482

Outlets 55 120

By 1991 Eroski already had 129 stores, classifiedas follows:

6 Hypermarkets10 "Maxi" stores178 Suoermarkets11 Specialist stores (textiles and domestic

appliances)22 Travel agencies

2 Cash and Carry stores (wholesale)

Three distribution centres and one productionbase supply the various stores, as well as the197 franchisees.

The hypermarkets, maxi stores, supermarkets andcash and carry stores operate on a self-servicebasis with perishable fresh products and non-foodsections with customer service.

Other stores have customer service.

Stores, depending on the type, are located eitherwithin urban boundaries or on the outskirts. Theyserve a very varied public.

A number of factors apart from its particularcommercial form have contributed to Eroski'sgrowth and success with its varied range ofcustomers. These have been the consumer activ-ities which take place through committees or-ganized under the store's aegis, and activitiesorganized by a Governing Council to which thecooperative society devotes 10% of its net annualsurplus, the special attention paid to environmen-tal issues and the fact that the cooperativemovement has a long tradition and enjoysconsiderable prestige in the Basque country.

Management of stores and departments is basedon commonly defined objectives. To make thispossible the stores receive a daily bulletin ofeconomic and financial information, while a

1 A store with a sales floor of between 2000 and 4000 sq.m. located on the periphery of an urban conglomerationwith ample parking facilities, services etc. and with operations similar to those of the hypermarket, but larger andserving a population of between 25,000 and 30,000.

4 2

47

2.

48

special publication "Dossier" informs all themembers of the organization's progress monthby month.

1.1.1 Internal organizationThe following brief account of Eroski's operationand organization as a cooperative v.ill help tounderstand its organizational structure, its policyin the matter of human resources and the way inwhich its members are represented.

As already mentioned, Eroski began life as aconsumer cooperative and later made the transi-tion to also becoming a workers' cooperative. Thisis essential if one is to .inderstand the importantrole played by customer members in the manage-ment of the firm.

The members' highest representative body is theGeneral Assembly, which is made up of amaximum of 500 members, half of whom areworking members and half customer members.

The working members attending the GeneralAssembly are selected by the stores or depart-ments and then elected at a Preparatory Meetingattended by all the working members.

The customer representatives are proposed bylocal Customer Committees and elected by therelative Preparatory Meetings attended in thiscase by all the customer members.

There is, therefore, one Preparatory Meeting forthe working members and one for the customermembers.

The tasks of the General Assembly, which is

required to take place at least or.ce a ',car,include:

Nominating the members of the GoverningCouncil and making appointments to otherpositions laid down in the statutes.Supervising the management, approving theaccounts and deciding the appropriation of thenet annual surplus.Amending the social statutes.Arranging the merger, division or winding upof the cooperative.Establishing the cooperative's general policy.

The members of the General Assembly areappointed every three years.

The Governing Council, nominated by the Gen-eral Assembly, is the body responsible formanaging the cooperative and representing it. It

is empowered among other things toAppoint and dismiss the managing director,and at the proposal of the managing director,to appoint and dismiss department directors, aswell as to determine their powers, duties andremuneration.

4 3

- Organize, direct and supervise the functioningof the cooperative.

The Governing Council has 12 members, 6 ofwhom are customer members and 6 workingmembers. They are elected for a period of 4 yearsand may be re-elected, with 6 new membersbeing appointed each time. The offices ofPresident, Vice President and Secretary are filledby election from among the 12 members for aperiod of 2 years.

In addition to the bodies already mentioned thereis a special committee for the working members toensure that they can contribute to the propermanagement of the cooperative in all mattersconcerning them and their position as employees.This body is known as the Social Council.

The Social Council has 16 members representingthe working members who are also elected by thePreparatory Meeting on proposals put forward bythe various districts after a voting procedure. Eachdistrict has two representatives on the SocialCouncil.

The Social Council is a consultative body ableconsiderably to influence the decisions of theGoverning Council. Its opinions and decisions inmatters such as employment conditions, salaries,the annual increase in salaries, amendments to thestatutes etc. are considered very seriously. Toensure that the Social Council achieves its

objectives as effectively as possible it is advisedby the Delegate Commissions.

The Delegate Committees of the Social Councilare composed of working members' representa-tives elected at store or department level. Thereare 8 Delegate Committees, one for each districtof the cooperative. The meetings of the DelegateCommittees are attended by the representatives onthe Social Council for the district concerned.

Each Delegate Committee for a particular district,composed of representatives of all the stores anddepartments in this area, meet once a month andthe eight meet together in the so-called Plenarytwice a year.

The task of these Delegate Committees is to adviseand inform the Social Council and their ownstores. The tasks of the Plenary, as well as itspowers, have been increased so that it plays animportant role in dealings with other bodies inmatters such as amendments to the statutes.

At a lower level the employees at each store,department or section meet once a month withtheir delegate to discuss issues related to thecooperative's performance or working conditions.

Just as the working members have their SocialCouncil, so the customer members hove a

Table 2 Organizational structure

Preparatory meeting(customers) (4)

250 representatives

Preparatory meeting(workers) (1)

250 representatives

GENERAL ASSEMBLY

Appeals Committee Auditing Unit

CUSTOMER COUNCIL GOVERNING COUNCIL <-------- SOCIAL COUNCIL

1

Consumer Committees

Departments:General management

Delegate Committees

Gen. Admin. Marketing Development Social Consump. IT

Accounts Branch Sales Warehouse Staff Quality Developm.

Admin. Non.branchsales

Distrib. Stafftraining

lab. *Centralunits

Finance Purchasing Logistics Recruitselect.

Consumertraining

*Stóresoperations

Legal Studies New stores Staffadmin.

Consum.info.

Budgetcontrol

Advertising Works Generalservices

Socialrelations

Customer Council which is a consultative andadvisory body for the Governing Council inmatters of consumer interest. Similarly, there arelocal customer committees to defend the interestsof the customer members and of consumers ineach area where the cooperative is to be found.

Two bodies exist in addition to those alreadydescribed, namely the Auditing Unit made up ofthree members, one a working member and twocustomer members. These are appointed by theGeneral Assembly. The Auditing Unit exercises asupervisory function. There is also an AppealsCommittee, whose function it is to deal withappeals submitted against the decisions of theGoverning Council. The Appeals Committee iscomposed of five members, two working membersand three customer members who are also electedby the General Assembly.

The organization's various communicotions arecirculated to all the bodies described and includedocumentary information, including the monthly

"Dossier" publication referred to which reports onthe cooperative's financial progress.

The worker members are provided with a constantand generous supply of financial information.

1.2 Human resourcesThe cooperative's statutes fix a maximum of 10%for non-member employees, who are recruited onopen market terms. In 1990 there were 6 non-member employees on permanent contract. In thefollowing paragraphs the word "members" shouldalways be understood to mean working members.

1.2.1 Personnel structureThe pace at which the cooperative has expandedover the past 10 years is shown clearly in theabove table, as is the fact that as is typical forthe retail sector the majority of the workforce arewomen. They have a weighting of 72.5% whichhas varied little since 1980. There would,however, seem to be some difference compared

I.4 4

BEST COPY AVAILABLE

49

with other similar retail firms in that 75% of themembers are over 26.

Table 3 - Breakdown of employees by sex

Year Male Female Total

1985 241 617 858

1989 413 966 1379

1990 683 1799 2482

This fact can perhapi be explained by the fact thatthe organization is a cooperative one and that allthe employees are members, a position which theyacquire after a period of 6 to 18 months,depending on their job category. As a result,factors such as tax reductions or subsidies forfixed-term contracts for young people have noimpact here. Moreover, the fact that a person joinsthe cooperative and assumes certain responsibil-ities and duties calls for a certain maturity.

On the other hand, the fact that there is a

promotion policy and job security coupled withadequate salaries for lower-grade jobs makes thisan attractive career for young adults.

Table 4 - Bleakdown of employees by age

Year 18-25 26-35 36-50 +50

1980 213 451 172 22

1985 247 759 331 42

1990 638 1304 481 59

There are, obviously, no different types of contractas all employees are members and therefore havepermanent jobs. However, employees do havedifferent working hours.

1.2.2 Working conditions (Table 5)The cooperative's expansion and the opening upof superstores led to a sharp increase in thenumber of people working part-time. In 1990these accounted for 17% of the total workforcecompared with 19% in 1985. It is interesting tosee that there are no male employees workingshorter working weeks while there is a gradualrise in the number of women doing so mainlysales assistants and cashiers. The people working28 or 20 hours a week are used for strengtheningthe staff at weekends, starting on Thursday. Thiskind of contract allows for considerable flexibility,with employees working more or fewer hours as

50 they wish and according to their job status.

11'

Part-time workers are also employed as replace-ments, to increase the staff for special campaignsetc. Such employees accounted for d total of462 days ;n 1991 compared with only 26 in1980.

Level I: Cashiers, sales assistants, office staff,storemen. Possibly some section man-agers.

Level 2: Employees with a specific responsibilityor who supervise others, and skilledworkers.

Level 3: Senior technical staff with no specificauthority, supermarket managers, sectionmanagers in some hypermarkets andother stores.

Level 4: Senior technical staff, maxi store man-agers, departmental managers, sectionmanagers in large hypermarkets.

Level 5: General managers and hypermarketmanagers.

The occupational structure reveals a pyramidcharacteristic of stores with large sales floors inthat it has a very wide base. The evolution overtime parallels the expansion of the cooperativeand the opening of hypermarkets and maxi storeswhich called for a substantial increase in thenumber of lower-grade personnel, whereas thepercentage increase at management level wasinsignificant.

However, the above table does not entirely reflectthe occupational structure since the same functionscan be found at various levels, albeit in stores ofdifferent size and complexity.

Table 6 also shows the salary levels in thecooperative. Inherent in the cooperative philoso-phy is the principle of solidarity, which does notpermit the existence of salary differences thatmight be considered unjust. All salaries thereforefall within a range of 1 to 3 in other words, thehighest salary is only three times the lowest.

The five salary levels shown in the table fall withinthis range. At each level there are subdivisionscorresponding to the different functions or jobcategories.

45

At level 1, for example, salaries in 1991 rangedfrom ESP 92,000 to 115,000 a month, net.

At level 2 they ranged from ESP 117,000 to143,000.

At level 3 they ranged from ESP 145,000 to170,000.

At level 4 from ESP 172,000 to 194,000.

Table 5 Breakdown and evolution of working hours, by sex

Full-time 28 hours 20 hours

Year

1980 241

1985 413

1990 682

512

783

1378

62

106

194 1

43

77

227

Table 6 - Occupational structure/salaries

1980 1985 1990

M F M F

Level 1 70

Level 2 119

Level 3 26

Level it 17

Level 5 9

559

29

20

9

0

124

207

41

28

13

893

28

29

15

1

241

268

93

64

17

1649

61

64

23

2

Total 241 617 413 966 683 1799

At level 5 from ESP 196,000 to 241,000.

The fact of being a member of a cooperativesociety also implies a shareholding in thecooperative's capital and in the profits it makes.

When new working members join the cooperativethey contribute a sum of money which will varyaccording to the cooperative's needs. In 1991 thesum involved was about ESP 750,000. When awould-be member does not have this amountavailable, the cooperative will deduct it from hismonthly pay until the total amount has been paid.

A share of this contribution plus a share of theannual profit based on the salary index andincreased over the year by interest earned,belongs to each member. A member may if hewishes take payment of the interest annually butthe capital remains in the hands of the cooperativeand only becomes available to the member whenhe retires or leaves the cooperative for otherreasons.

Based as it is on a philsophy of solidarity, thesalary structure is very favourable to the lowercategories of employees, whose salaries are

higher than in the rest of the retail sector. However'for middle-level, and senior posts this may raisedifficulties when'they have to compete with marketsalaries. At present the cooperative is in theprocess of reviewing its salary scales. This willbe done by the representative bodies such as thePlenary meeting of Delegate Committees and theGeneral Assembly. So far the problems as regardsmiddle-level and senior positions have not beengreat because of the loyalty of the members,especially those who have been with the coopera-tive for many years, and because of the deeply-rooted cooperative philosophy which leads someto sacrifice possible financial gain. However, asmore young people are less familiar with theprinciples of the cooperative movement and otherfactors join the firm, the level of salaries for middlemanagement and senior positions could have adetrimental effect unless appropriate measures aretaken.

Staff turnover is very low and almost non-existentat lower-grade levels.

Working houis vary considerably, depending onthe type of store and a person's job. The workingday is one hour shorter than in the retail trade

r 46

51

52

generally; the arrangement of working hours hasalready been discussed.

Employees have one month's holiday a year.

The members decide on and provide the fundsnecessary for the various fringe benefits, whichrange from low-interest loans to grants for training.

1.2.3 Qualifications and recruitmentThe educational level of the cooperative's employ-ees is higher than in the rest of the Spanish retailtrade. Various factors contribute to this, amongthem the fact that the general level of education inthe Basque country is somewhat higher than inother areas of Spain and it is quite usual for lower-grade employees to have had a secondaryeducation. Another factor could well be the ageof employees, since the great majority arebetween 25 and 35 and tend thus to be moremature and better trained.

As already mentioned new recruits have a periodof probation after which they become members ofthe cooperative.

The criteria for selection of lower-grade personnelare the attitude of the applicants, willingness tolearn, versatility etc., plus a point which is typicalthough undoubtedly unique in the retail trade,which is that applicants should have roots in thearea in which they are to work, especially when itcomes to supervisory and managerial positions inthe sales outlets.

No specific educational qualifications are re-

quired though primary schooling is a minimum;experience of the retail trade is not generallyconsidered important. When sales staff andcashiers are being prepared for the opening of anew store, their progress and results in the initialtraining course are very important for theirinclusion in the team.

Preference is given to applicants of between 20and 30 years of age.

When it comes to appointments to supervisorypositions in the stores secondary education orvocational training is required. In this case ageplays a secondary role, although learning abilityis also taken into account when the firm has to lookoutside to obtain the necessary staff, for higherpositions, a diploma or degree is asked for.However, the practice is to promote existingemployees whenever possible.

Recent years have seen the store seeking morefrequently to fill posts on the labour market since itsexpansion has created a considerable need formore supervisory and managerial staff. Those

recruited outside have subsequently to be giventheoretical and practical training within the firm tobring them into line with Eroski's requirements.

47

A number of posts do require specific qualifica-tions, such as biologists for the laboratory ororganization specialists.

Although selection criteria have not changed verygreatly in recent years, the "roots" criteria whichwas so important in the past is becoming less so aslarger stores are opened and the relationshipbetween customers and sales staff becomes lesspersonal. Similarly, aspects such as friendlinessand a good appearance have become moreimportant, as has professionalism. Personal rela-tionships have given way to a more professionalrelationship which involves communicating acertain image of the organization.

Promotion from within the firm is a basic conceptat Eroski and although there is no individualcareer planning nor very objective methods fordoing so, all the employees interviewed areconvinced of the fact that internal promotionstake place, as is borne out day by day. The urgentneed for supervisory and managerial staff to keeppace with the firm's rapid expansion, and theadoption of and adjustment to a cooperativistphilosophy with all its rights and duties rendersinternal promotion an essential element forachieving the company's socia: and corporateobjectives.

All staff at levels 4 and 5 (see Table 5) havereached their positions through internal promo-tion, as have the majority of staff at level 3.

Promotion is based on the reports of directsuperiors and heads of personnel, of whom thereis one for each district. When they are inagreement they are taken into account by themanagement and the person concerned is trainedfor promotion. Because a great many employeesknow each other through the many activitiesconcerned with employment conditions and socialwelfare, they are also aware of people's workingabilities and behaviour at the workplace; thisapparently provides a sound basis for the selec-tion of people for promotion. Whatever the case,there have been no complaints from employees onthis count.

The large number of women joining the coopera-tive over the past 10 years, particularly between1985 and 1990, does not, as Table 5 shows,reflect in a similar increase in the percentage ofwomen in higher-grade posts, despite the generalassumption within the cooperative that femaleemployees are rapidly promoted to posts ofgreater responsibility and that there has been afall in the percentage of male employees in termsboth of total staff and of those in managerial posts.

Thus whereas in 1985 women accounted for 70%of employees, those in posts higher than level 1

only constituted 5.1% of the total figure, whereaswhile men accounted for 30% of the total

workforce, those in posts from level 2 upwardsaccounted for 21%.

By 1990 women accounted for 72.5% of the totalworkforce but those higher than level 1 for only5.5%. Men represented 27.5% of the totalworkforce and those in posts higher than level 1

accounted for 17.7%.

It is important to stress that employees believe thatwomen are gaining more higher positions and topoint out that women are beginning to occupy animportant share of managerial and middlemanagement posts in the central departments.

The cooperative's policy on trainii.g and internalpromotion will considerably boost the number ofwomen in managerial positions over the next fewyears unless cor..:iderations other than profes-sional ability play a role.

The difficulties encountered in finding enoughemployees trained to meet the demands ofexpansion have already been mentioned. Theneed for trained staff, which sometimes could noteven be met by recruiting outside the firm, .hasresulted in excessive internal mobility and, un-doubtedly, in a weakness at the highest levels ofthe staff pyramid as shown in Table 5.

Eroski will be needing some 600 supervisory andmanagerial staff in the near future, most of whomwill come from within the firm.

Horizontal mobility is a characteristic of promotionwithin the cooperative and at the higher levelspeople's careers have taken them to positions onthe various committees or to social, administrativeand commercial positions, enabling them to gaina sound overview of the cooperative's activities.

1.2.4 CommentsThe above description of the situation of thecooperative's employees shows that there areonly three points that could raise problems. Themembers are aware of these and are workingtowards their solution.

The three problems emerge from the description.Firstly there is the question of the need toencourage the careers of fema:e employees,which involves an additional effort on the trainingside in order to maximize the female staff'sprofessional abilities. This is especially importantin the retail sector where the majority of employ-ees are women and where - as we have seen isthe case at Eroski - there are difficulties in findingpeople with the necessary abilities and qualifica-tions for positions of responsibility. The secondproblem is the level of salary for supervisory andmanagerial staff. This is a difficult question if theprinciple of solidarity is not to be violated andcalls for maturity and awareness on the part ofstaff. Finally there is the problem resulting from the

intake in recent years of a large number ofemployees who have not grown up with thecooperative concept so familiar to and valued byearlier generations. Despite the training which thenew employees receive both as employees andmembers of the cooperative and despite thesystems for representation, commtinication andinvolvement in the running of the business, therapidity of change and the rapid growth of theorganization could well impede the process ofcohesion and identification with the organization'saims, without which it would be seriously weak-ened.

2. Training policy

2.1 Training strategyAt Eroski, as in cooperatives generally, employeetraining is a basic instrument of personal develop-ment and a means of improving productivity andattaining the company's objectives. In contrast tothe situation in most retail firms, therefore, trainingat Eroski has a long-standing tradition.

Article 16 of Eroski's statutes describes "Involve-ment in training activities" as a duty of employees.

Disregarding the quality and frequency of trainingactivities for the customer members, the wholehistory of the cooperative shows there to havebeen a steady increase in both the quality andquantity of training given.

Even as far back as 1985 whorl the firm had only1,379 employees, 49,702 hours were devoted totraining - equivalent to 35.8 hours per person peryear.

There are training programmes designed for alljob categories. These fall under three mainheadings - management, business administra-tion, product training and adapting to technologi-cal change.

The first type of training is a general businesstraining, the object of which is to extend thetrainees' abilities beyond the mere performance oftheir daily work and to teach them to think in termsof the business, cooperate better with otherdepartments, become more versatile in the inter-ests of internal mobility and hence become morefitted for promotion.

A variant of this aspect of training is the trainingwhich all new working members receive in orderto familiarize them with the cooperative's cultureand cause them to identify more closely with thefirm.

A second form of training is designed to enablepeople to adjust to their specific job. This includesbasic training and training qualifying people forpromotion, product training and training given asa result of specific needs.

41".

53

54

The third form of training is the continuing trainingof people in their various posts or functions inorder to improve their job skills.

These three types of training have existed since1985 with certain variations resulting from thefirm's development and from experience acquiredof training in practice. As a result specific trainingfor all types of jobs in hypermarkets and toprepare people for supervisory and managerialpositions have been more frequent in recent years.

One change due to the sharp rise in the number ofworking members has been the decrease in thenumber of training hours per employee, whichbetween 1985 and 1991 fell horn 35.8 to 10.73.

It is generally agreed that the third type ofvocational training continuing vocational train-ing needs to be altered and improved in order toincorporate knowhow gained. As a result thistraining is now being reviewed.

Moreover, the firm intends to modify its generalstrategy in the matter of training in two ways.Firstly it plans to improve the quality of traininggiven, even though this will involve a decrease inthe amount of training per employee. At the sametime, the plan is to ensure that training courseskeep pace with the structural and organizationalchanges taking place within the firm, and indeedpaves the way for them. From this point of view thefirm believes that training will make possible andeven provoke changes on the part of employees,not merely in the sense of increasing theirknowledge and skills but also in matters of attitudeand behaviour.

This does not imply a reduction in training activity,which as the management states should actuallyincrease, but does call for a change in quality anda better adaptation to productivity requirements.

In the past it was permissible for trainingobjectives to be less explicit and business-relatedand it was sometimes seen as a response to aseries of needs not deriving strictly from the firm'sown activities. The factors which have contributed.to the change of strategy are the firm's expansionand the increase in the workforce, customers'demands for higher quality and the need to becompetitive.

Training courses vary in length from a maximum of420 hours to a minimum of 8 hours per person, themost usual duration being between 16 and 30hours. It is conducted entirely in working hourswith the exception of one specific programmewhich will be discussed later.

Although courses are not compulsory, there havebeen no cases of people refusing to take part.Only those courses carried out entirely outsideworking hours are entirely optional.

49

Training courses are held on the firm's premises inclassrooms especially designed for the purpose, atthe firm's central offices and, on occasion in orderto achieve a greater cohesion or where someisolation from the usual working atmosphere isdesirable, in outside training centres on aresidential basis.

Training activities are designed by the firm itself,although the firm does use outside bodies, trainingcentres or universities for general training.

The various types of training designed to assist jobadjustment, as well as continuing training, in-volves a great deal of practical work, whether atthe workplace for which a trainee is destined orelsewhere, and with tutors who in some cases arepeople who have been given time off specificallyto devote themselves to the training function.

Assessment of the impact of training is made bymeans of questionnaires which trainees have tocomplete or examinations they are required to sit.

The expectations of employees receiving trainingare two-fold. Firstly they hope to learn to do theirjob better and secondly to qualify for promotion.Although there is no formal link between promo-tion and training, the knowledge that promotion ispossible encourages trainees to make best use ofthe courses. Younger employees, especially, ap-preciate the opportunity to increase their job skills.

The principal training programmes organized in1991 were:

Continuing training programmes

Master in business administrationBusiness trainingIntroduction to business managementTraining for sales managersManagement functionsManagement techniquesPreventive maintenanceScannersChanges in supermarket cultureTraining (Textiles)Training (Non-food departments)Training (Fish department)Training (Butchery department)Training (Cold meats)Cooperative-related training

Social CouncilDelegates

Training for new worker members:Cooperative-related training

Duration

420 hours80 hours

2 years61 hours16 hours24 hours28 hours

8 hours20 hours24 hours24 hours24 hours24 hours16 hours

24 hours16 hours

16 hours

Training for unemployed: On average500 hours/course

CashiersSales assistants (perishable produce)Butcher's assistants

Non-food sales assistantsStore managersCooked meats assistants

Around 1,000 people took part in the abovecontinuing training programmes with about 700people taking part in the courses for new workingmembers and 910 in the courses for theunemployed 700 of the latter later joining thecooperative as new worker members.

2.2 Training structureThe training department is part of the welfaredepartment, which in turn is part of the humanresources department, the person in charge beingthe same. He is assisted by two training instruc-tors, one of whom specializes in initial training,and a female clerk.

Training is occasionally carried out by outsideinstructors but generally speaking the instructorsare employees who are being prepared to instructin specific areas.

Experience with outside instructors has rtot been aspositive as had been hoped and the intention is toincrease the amount of training carried out by thefirm itself. This decision was influenced by the lackof competent professionals to give instruction onmatters connected with retailing and by thespecific nature of the cooperative organization.The trend also means that the personnel as awhole will be directly involved, which should helpto .ensure an atmosphere favourable to trainingand a sense of responsibility.

The present staff structure is sufficient for the workof planning, coordination, controlling the budgetand making assessments, but is not sufficient toimplement the new training strategy in order toincrease the quality and number of programmesprovided and to improve the assessment system.

Training programmes are prepared during meet-ings with the managers of stores and departmentswith responsibility for groups of employees. Thisgives an initial idea of the areas and the jobs forwhich training is necessary. Subsequently thetraining department develops this outline intospecific training programmes.

The human resources department may put forwardsuggestions which are then discussed and agreedwith the departments involved.

In addition to the programme of training coursesdrawn up at the beginning of each year, there is achapter in the budget reserved for contingencieswhose funds may be used when problems arisethat can be improved by training.

The only change in the training structure since1985 has been the recruitment of a specializt.

The importance of training reflects in the increasein the amount spent from ESP 1,800,000 in 1980to ESP 110 million in 1991, the latter sumbreaking down as ESP 18 million for membersplus ESP 30 million spent on training for theunemployed who subsequently joined the coop-erative.

The budget for 1992 is ESP 109 million, ESP 18.5million of which is intended for training theunemployed and ESP 90.5 million for trainingemployees.

2.2.1 Impact on training of newtechnologies, legislation, internation-alization and changes in sales andtraining policyAs in the case of most large retail firms, theautomation of certain processes, the introductionof scanning techniques and computerized man-agement systems have called for considerableefforts on the training side in recent years.

Another factor affecting Eroski's training pro-gramme is undoubtedly the pressure from cus-tomer members, who are very active, well organ-ized, have equal representation on the coopera-tive's various bodies and call for a standard ofproducts and service that reflects in the trainingprogrammes.

Obviously the growing number of different typesand size of stores resulting from the advent of maxistores and hypermarkets has resulted in the needfor training at all levels, ranging from basictraining for the massive intake of new lower-grade staff to training for supervisory andmanagerial posts in the stores.

The firm is currently considering a further changein its retailing policy. This involves convertingsmaller supermarkets into neighbourhood orconvenience stores which put the emphasis onfresh produce, especially in areas where they cancompete with other Eroski stores such as maxistores and hypermarkets. This change alsopresupposes a change of emphasis of training inthis direction with a special stress on the manage-ment of perishable produce.

At the same time, the creation of the Europeansingle market in 1993 has generated a need forspecific training for management and senior staff.

2.2.2 Involvement of the socialpartners in training policyThe social partners, the Social Council, theGeneral Assembly and the Plenary Meeting OfDelegate Committees are in no way involved indefining training needs or designing courses,although they are empowered to do so. This isbecause of the confidence they have in thoseresponsible for training rather than a lack ofinterest. Indeed, those representatives of the 55

56

various bodies who were interviewed greatlyappreciate the training given and consider it animportcnt means of personal advancement.

All cooperative members receive details of thetraining programme once it has been finalized.

Because the firm is a cooperative, it is notunionized, all the working members being in-volved at every level through the various bodiesalready described.

Any issues and conflicts which arise are dealt withat the meetings with the delegates from eachworkplace, who in turn meet in the DelegateCommittees for each district, after which thematter is taken to the Social Council which meetsat monthly intervals.

2.3 Description of a trainingprogramme

Introduction to business managementThe introduction to business management pro-gramme is a distance training course set up byEroski in 1990 and aimed at level 1 employees(sales assistants, cashiers etc.).

The programme aims to offer such employees avoluntary means of acquiring training in retailing,to enrich them personally and professionally andto ensure the firm of a supply of staff qualified forfuture promotion.

The course lasts for two years. The programme isdivided into four units each of 10 modules. Tenmodules are dealt with in a 6-month period.

Every month, except in July and August, employ-ees receive 2 modules to study together with someasssessment questionnaires which they have to .fillin and return to the tutor responsible. He correctsthe questionnaires and returns them.

Every 6 months employees have to write an essayconnected with the subjects studied during theperiod. They also meet together in groups of 15for a day for group work and discussions, to settledoubtful points etc.

Throughout the course those responsible for thetrainees at their workplaces are ready and willingto help them with any difficulties or questions theymay have.

At the end of 2 years those completing the coursesatisfactorily are awarded a diploma.

Trainees are supplied with course materials andhand in tt eir assignments at the workplace. Theyare expected to study their modules outsideworking hours.

5 1,

The scope and complexity of modules and theirpresentation are designed to ensure that the studytime required is not excessive.The first course was organized in 1990 with some215 students.

In 1991 190 students went on to the secondcourse and 238 new trainees started the pro-gramme.

Programme:

Course A. First Semester. General concepts.Retailing and consumption. Retail structures.Forms of retailing. General principles of self-service.Store atmosphere. Maintenance of the storeand its installations. Visual selling. Linear shelfdisplay.Product layout. Product strategy. Price display,posters.Shelf-filling. Introduction to food departments.The sales assistants and the customer. The salesassistant. The customer. Types of customer.Contact with the customer in a sales context.Relationships with the customer when selling.Sales arguments.Sales personnel and their functions. Salesmanagement and sales figures. How to orderproducts.Stocks and stock rotation. Stock control.Inventories. Inventory deficits and thieving.How to avoid thieving. Losses. Unnoticedlosses.General health regulations.

Course B. Second Semester. Departments. Productknowledge.

Fruit and vegetables.Cooked meats.Dairy products.Butchery.Fish and frozen products.Self-service: Food.Non-food products.Textiles.Domestic appliances.Cash desks.

For all the above departments: Product knowl-edge, handling and preservation, workingmethods, display, control, management, merchan-dising, customer service, guarantees, healthregulations.

Course C. Third Semester. Store management.The product mix.Advertising, posters, decoration, promotions,informing the customer, market segment tar-geted.Promotions. Prices.Range of goods (depth and scope), productfamilies.

Merchandising.Sales techniques.Managing profit margins.Planning (forecasting, objectives). Businessplan.Management aids. Profit and loss account.Documentation dealt with by the store manager.Monitoring and tracking competitors.

Course D. Fourth Semester. Management tools.Maintenance of store and its fittings. Construc-tion work, improvements etc.Working regulations for clerical and sales staff.Productivity ratios in each department. Organ-izing physical and human resources to copewith different tasks.Managing a team- Variables affecting behaviour- Management stylesResponsibility for formation and training. Train-ing course follow-up.Information. Store meetings.Motivation, assessment. Involvement of the teamin store management.Time management.Balance sheets.Management functions. Store manager's agen-da.

3. Description of a particular store

3.1 General informationThe store chosen is a hypermarket located inthe metropolitan area of Bilbao. It was openedin 1990 on an area of 109,000 sq.m.,75,000 sq.m. of which constitutes the shoppingcentre proper and 11,000 sq.m. of this thehypermarket. The shopping centre accommodatesa large number of retail outlets and services. Thiscentre and hypermarket serves a population ofapproximately 1 million.

It has 45,000 products, and 60 double check-outsequipped with scanners. The store can serve45,000 customers a day.

Products stocked are typical of a hypermarket(food, toiletries and cosmetics, clothing, domesticappliances, household equipment etc.) with aparticular accent on fresh produce. The store isrun on a self-service basis except for the case offresh foodstuffs and certain non-food and clothingitems and domestic appliances, for which salesassistance is available.

3.2 Human resources

3.2.1 Personnel structureIn January 1991 the store had 270 workingmembers breaking down as follows:

Table 7

Age Male Female Total

18-25 7 134 141

26 -35 19 96 115

36-50 4 8 12

Over 50 2 2

Total 32 238 270

The breakdown of employees for this store differsin some ways from that generally applying to thefirm as a whole and is the result of the type of storeinvolved. The fact that the percentage of employ-ees under 25 is greater than for Ihe cooperative asa whole is explained by the fact that it was openedrecently with new staff. The percentage of femaleemployees is at 88% again higher than that forthe organization as a whole and is typical ofsuperstores.

Another difference reflected in Tables 7 and 8(occupational structure and salary levels) is morein accordance with members' belief that thenumber of women in positions of responsibility isgrowing, since of 18 supervisory and managerialpositions in the store, 14 are held by women.Similarly, a number of women have posts at thislevel on the administrative side.

Table 8 - Breakdown of workforce by sex

Men Women

Manager

Department managers

1

3

Floor managers 2

Section managers 1 9

Sales assistants/cashiers 6 205

Clerical staff(all levels)

2 15

Warehouse staff(all levels)

8 1

Maintenance/technical staff

6

Store detectives/security 6 3

5 2

57

58

The peak of the pyramid is very sharp, showingthat the possibilities for promotion are few. Thisis because a number of tasks have beencentralized at head office so that there is not thesame need for middle management as in moreautonomous stores.

However, if we compare the occupational struc-ture of this hypermarket with that described by theMinistry of Commerce in its study "Shoppingcentres and retail markets" important differencesare noticeable. Thus whereas in the Ministry'sstudy the occupational structure of a superstore isdeemed to be 61.5% cashiers/sales assistantsand 14.5% supervisors/managerial staff, disre-garding clerical staff and other job categories, inthe store under study the percentage of super-visory and managerial staff is only 7.0% whilecashiers/sales assistants account for 78%.

3.2.2 Working conditions

Table 9 Wage structure

Job level Men Women Total

1 21 226 247

2 5 5 10

3 2 4 6

4 3 3 6

5 1 - 1

Total 32 238 270

The various levels were explained in the generaldescription of the firm.

It can be seen that the .salary structure does notaccord exactly with the job structure because thereare only 12 women in jobs above level 1 whereasthe jobs with more responsible tasks which theyoccupy are more.

It should be borne in mind that many of thepositions of responsibility occupied by women areat level 1 and therefore remunerated at the lowestwage rates. The proportion of women in jobsabove level 1 in this hypermarket is 4.4%compared with 4.0% in the case of men.However if we take into account the fact thatfemale employees account for 88% of the totalworkforce this 4.4% is very low, representing only5% of all women employees. On the other hand34% of men - who only account for 12% of theworkforce are on higher salaries.

Store opening hours are from 9.00 to 21.00 fromMonday to Saturday.

Sales assistants have morning and afternoon shiftsthat can alternate at weekly intervals. Cashiershave very flexible rotating shifts and staggeredstarting hours while those responsible for sectionsor departments work split shifts.

Overtime does not qualify for extra pay, except onSaturdays. Other overtime can be accumulatedand days taken off in lieu.

Selection and recruitment is carried out at thecentral offices.

The educational level of employees of this storeparallels that of the firm as a whole.

The fact that Eroski's hypermarkets are betterorganized means that employees enjoy workingthere more than in the cooperative's smaller storeswhere tasks and responsibilities are less welldefined.

3.2.3 TrainingThe store's training policy accords with thegeneral interests of the firm and is aimed atimproving the skills of hypermarket employeeswho have recently joined the firm or who have lessexperience in the organization and running ofsuch retail outlets.

Training is carried out by the central departmentswho consult the hypermarket managers as to whattype of training is needed, the suitable timing ofcourses and which staff should attend.

The store may request specific courses or othertraining activities relevant to its particular needs.

The store itself plays an important role wherepractical training is concerned. Supervisory staffunderstand clearly that r't of their function is staffmanagement and train,. some trainees, be-cause they are being promted or have recentlyjoined the firm, will be transfer, ed to other storeswhile other people will come to the hypermorketafter working elsewhere. Although practical train-ing is not systematically organized in the sense ofa stipulated number of hours, there is a fixedperiod during which an employee is expected tobe learning and his direct superior to be teaching.On occasion the tutor may be a person whoseentire time is devoted to training. As wasmentioned previously, the periods of practicaltraining are essential to each training programmeand constitute a substantial part of it, so that thishypermarket will always have a number of staffundergoing practical training.

On the other hand, because of the firm's need forstaff able to take on supervisory functions, there isan urgent need for training such people. Thehypermarket is clearly making every effort toachieve overstaffing so as to be able to cope

when its own employees are promoted orswitched to another store.

The involvement of the members in the coopera-tive's management through the various bodiesalready described does not extend to training.

In 1991 training activity in this hypermarket wastargeted at section managers, who followed thecourses already described, and at lower-gradepersonnel who attended the "Introduction tobusiness management" course on a voluntarybasis.

In 1990 the course was attended by 96 people,most of them women; 91 people attended in1991.

Of those who began the training course in 1990,10 were given better jobs in other stores andanother 10 remained at the hypermarket wherethey act as "floaters", working in all the depart-ments and sections. This enables them to gain anin-depth practical experience of the store as awhole prior to promotion.

In 1991 37 people began the course, whichmeans that allowing for those who have alreadystarted, 50% of sales assistants, cashiers etc. arefollowing the course.

Since the course is voluntary and held outsideworking hours, this high percentage reflects thehigh degree of acceptance of training by employ-ees who realize the chance to improve job skillsbeing offered and the opportunities for promotionopened up to them.

3.2.4 CommentsThe comments made for the firm as a wholegenerally apply to this particular store.

4. Assessment

By the firmAssessment of Eroski's training programmes hastwo aspects. On the one hand the firm is aware ofthe suitability of courses of a more general andbusiness nature and does not plan any substantialchanges in them. The same applies to pro-grammes designed to help people adapt to theirjob, including initial training courses for theunemployed.

However, when it comes to continuing training,,grammes and retraining programmes for

enhancing skills, the firm does not feel it hasbeen equally successful and is carrying out areview in order to ensure that actual needs aremet. As we have previously explained, this reviewaims to ensure that training produces perceptibleresults in terms of different behaviour andcommercial practices that accord with the firm's

objedives and strategies at all times, so thattraining helps the firm to achieve its objectives.

According to those in the firm responsible fortraining, there is a need to devise some form ofassessment and monitoring of training, not in thesense simply of checking what knowledge hasbeen acquired, but of the practical consequencesat the workplace and the qualitative and quanti-tative results in the stores and departmentsconcerned.

By the employees or theirrepresentativesThe assessment of training by those employeeswho have received it basically accords with thatof the management. Thus while the basic andgeneral training is very highly thought of, theretraining programme is felt to be of little usebecause of the difficulties caused by the lack ofprofessional instructors and of programmes de-signed to match the practical needs of daily work.The assessment of the "Introduction to businessmanagement" course is very positive.

By the authorIn common with other retail firms, Eroski is

undergoing a process of change influenced byfactors already discussed such as the internation-alization of the retail trade, competition, greaterdemands on the part of consumers, the introduc-tion of new technologies, changes in commercialpolicies etc.

Moreover, at the same time Eroski is in the processof rapid expansion, which makes its adaptation tothe new demands even more complex.

All these changes demand a great effort in thefield of training which is visible in the firm'straining courses and the amount it spends on them.

What the author sees, however, is that the firm'sestablished training policy and structure is beingovercome by the strong external and inter-nal forces and that spending on training has risenwith the number of employees and the number ofstores in order to cope urgently with immediateneeds.

There is not a great deal of planning activity nor,for the moment, any formalized process forreflection and study in the medium term on thenew objectives, the needs created by the variouschanges that are occurring, the kind of qualifica-tions necessary to adapt to these changes so as topermit, at a later stage, a rethinking of strategiesand training programmes to adjust them to thecooperative's new situation. In other words,(Jespite the importance attached to training, it is

now beginning to become part of the firm'sstrategic policy and until recently the firm seemedto be more concerned with coping with needs asthey arose.

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2.

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Issues such as the need for supervisory andmanagerial staff or the small proportion of womenin higher-grade jobs despite the fact that womenconstitute most of the labour force, may be asymptom of this failure to identify needs and of acertain slowness of training to respond.

It is possible that the current training structure hasnot been sufficiently well financed to permit suchactivities and to forecast future needs or to be ableto react to this situation with the appropriatetraining schemes in the medium and longer term.

This in no way implies criticism of the trainingbeing given, since many of the courses wouldappear to be very appropriate, as the firm itselfstates. The "Introduction to business management"course, particularly, is doing a great deal to helplower-grade employees, as its acceptance and itsresults show.

5. TransferabilityThe "Introduction to business management" coursewas selected because it was adaptable tocommercial firms similar to those of Eroski withmany outlets of different size scattered over aspecific area.

5 5

The programme enables staff easily and withoutobligation to acquire training in the retail trade bya simple, controlled system which covers allaspects of modern retailing thoroughly enough toenable a person subsequently to pursue a moregeneral or a more specialized career.

People interviewedInterviews were carried out at Eroski's centraloffices in Elorrio (Vizcaya) and at the Bilbondohypermarket in Basauri (Vizcaya) in late January1992.

The present welfare director of the cooperativeThe welfare director up to the end of 1991The manoger of the human resources andtraining departmentThe chairman of the Social Council, who is alsothe (female) manager of a supermarketA hypermarket managerA hypermarket section managerA hypermarket cashierA hypermarket sales assistant

CEMASCE S.A.

'I. General description of CemasceA limited company with a capital of ECU6,200,000.

Comprises 2 Cash & Carry Stores and 7 super-markets, both with large non-food departments(accounting for 20% of sales).

The Cash & Carry markets are located inMontcada i Reixac (metropolitan area of Barcelo-na) and Gerona; the supermarkets are in the cityof Barcelona and other towns in Catalonia.

Cash & Carry customers are 75% cateringestablishments, food retailers and collectives, theremainder being other licensed businesses.Supermarket customers: Urban middle class.

Founded in 1973.

1.1 The firmGEMASCE began its activities in 1974 with theaim of filling a gap in the market in the field ofwholesaling to food retailers. Its first outlet, theCash & Carry at Montcada i Reixac, was at thetime one of the largest in Europe.

Later on, towards the end of the seventies, the firmadopted a policy of diversification and movedtowards the retail sector, opening a number ofsupermarkets. Partly because of the economicsituation and because of the way in which theseoutlets were managed, the experiment proved afailure and left the firm in a difficult financialsituation, causing it to suspend payments in 1982.The supermarkets were disposed of and after acomposition with creditors the firm continued tobuild up its wholesaling activities, which sincethen have steadily expanded with rising sales andprofits. This has enabled the firm to settle its debtsas arranged.

The firm's recovery and subsequent growth wasattributable to two factors. The first was a changein shareholders since a large number of thecompany's creditors were food manufacturerswho acquired share holdings. The second was achange of direction which led the firm to adjust itspolicy and structure to the needs of the marketParticularly worth mentioning among the variou.,measures taken was the large-scale introductionof modern technology both at the level ofmanagement and logistics and at points of sale,together with a number of more up-to-datemanagement practices in line with trends of theretail sector worldwide.

In 1991 the firm took owl the Ces company,which had its own chain of supermarkets andfranchise food stores, relying on the success ofmedium-sized urban supermarkets with a salesfloor of around 1,000 sq.m. and able to competein quality of service which the firm believes is thecoming trend in the food retail sector.

By 1991 the company had two Cash & Carrymarkets, the one in Montcada i Reixac with a salesfloor of 18,000 sq.m. and a staff of 233 (annualaverage) and another in Gerona with a sales floorof 4,000 sq.m. and 11 employees. It now has 7supermarkets with a total staff of 84, includingthose employed in the warehouse which suppliesthe supermarkets and the franchised retailers.

All these stores are run on a self-service basis withcustomer service in the fresh produce departmentand in a number of non-food departments.

The company is in the form of a limited companywith 450 shareholders, many of whom, as wehave said, are involved in the food industry.

The firm's organizational chart shows the centraloffices located in Montcada i Reixac, divided intothree sectors, the commercial sector with purchas-ing, sales and marketing departments, the admin-istrative sector dealing with general administra-tion, acceptance of goods, accounting and stockcontrol and the infrastructure sector with thecomputer, technical services, logistics and person-nel departments.

There are also three operational areas, namely theCash & Carry division, the supermarket divisionand the direct sales division. The latter sells largeamounts of Christmas gifts one of the first inSpain to do so and has a new mail order projectfor selling food to caterers and food retailers.

The firm's management is decentralized withautonomous departments reporting to centraloffice.

There are three channels of communicationbetween the various departments and stores ayearly schedule of meetings, made up of weeklyand monthly meetings with working groups andmanagement, electronic mail via the computernetwork, and in-house circulars.

1.2 Human resources

1.2.1 Personnel structure

Table 1 - Breakdown of staff by sex(annual average*)

Year Male Female Total

1986 170 22 192

1991 223 105 328

* Averages are calculated using the total number ofemployees, including any with temporary contracts forpeak periods or holiday replacements over the year

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Table 2 Organizational structure

Chairman

Managing director

Commercial division Administrative division Service division

Cash and carry

Table 3 - Breakdown of staff by age

Distribution Direct sales

16-20 21-25 26-35 36-55 Over 55

1991 22 63

6.7 19.2

132

40.2

99

30.1

12

3.6

Since 1986 the staff has grown considerably inabsolute terms. The increase was particularlymarked in 1990/91 because of the need toabsorb staff from the firm taken over.

One characteristic of this firm is the predominanceof male employees in all types of job except thoseof cashier and clerk. This is due to the way inwhich goods are displayed and the form ofselling, which is largely wholesale, so that heavyweights have to be carried a task for which malestaff are more suitable.

26% of the staff is below the age of 25. This agegroup includes most of the people on fixed-termcontracts, whether in permanent posts or tempo-rary positions, where staff turnover is the highest.

Table 4 - Occupational structure 1991

Management 15

Clerical staff 53Section and store managers 41

Supervisors 5

Craftsmen 50Sales assistants 33General assistants 58Cashiers 54Warehouse staff 8

Craft apprentices 1

Telephonists 3

Security men 2

Cleaning staff 5

Total 328

As the list shows, in 1991 18% of employees werein supervisory or managerial positions, 16% were

62 skilled workers (cooked meats, butchery, green

5 7,

grocery, etc.) and 40% were non-skilled salesstaff.

It should be remembered that these figures includethe average number of temporary employees overthe year, working as cashiers, sales assistants andthe like, whose proportion in permanent posts willbe lower. This job structure reflects a situation notinfrequently found in superstores and supermar-kets, since sales assistants and cashiers accountfor a smaller percentage than in other, similarfirms. The present structure makes for higherpromotion prospects to positions with a degreeof responsibility.

1.2.2 Working conditionsThe opening hours of the firm's Cash & Carrystores in Montcada and Gerona are different fromthose of the supermarkets. Cash & Carry stores areopen continuously from 6.00 to 21.00 while thesupermarkets are open from 9.00 to 14.00 andfrom 17.00 to 20 00. Both types of store are openon Saturdays.

In the case of the Cash & Carry stores, the

opening hours and the heavy customer traffic atcertain times and on certain days of the week orperiods of the year makes it necessary to staggeremployees' working hours,, depending on theirposition.

Male general assistants and sales assistants worka 40-hour week between Monday and Saturdaywith a shift of 7 1/2 hours with a half-hour breakin either the morning or afternoon. These shifts arechanged periodically.

Assistant section managers and section anddepartment managers work split shifts from10.00 to 14.00 and 16.00 to 21.30. Lunch is

paid for by the firm and they have a half-hourbreak. They work from Monday to Saturday. Theheavier demands made on them obviously reflectin higher wages.

Cashiers work a variety of working hours withstaggered starting times, continuous shifts, splitshifts and part-time work. Their shifts are changedweekly.

Cashiers who only work on Saturday work a splitshift from 10.25 to 15.00 and 16.30 to 21.25with two unpaid half hourly breaks.

At present employees are only p rmitted by law towork a maximum of 80 hours overtime a year. Thishas only very recently been the case; previouslyemployees worked far longer hours and werepaid an additional sum over and above theirmonthly pay. Discrepancies in the sharing out ofovertime caused the Staff Council to accuse thefirm of not obeying the law, since when it has beenobserved to the letter. At the same time, thenumber of part-time contracts particularly forcashiers and for temporary staff is increasing.

The firm's employees consider the salaries it paysto be very low, though better than those paid in theretail trade generally. According to store person-nel, salaries are generally about 10 to 15% abovethose laid down in the relevant collective agree-ment.

To give some idea, the following are a few netsalaries for a given job category and degree ofseniority:

An assistant section manager on a "en formacian"contract who has worked 6 years with the firm anddoes a 54-hour working week earns approxi-mately ESP 1 20,000 a month.

A sales assistant in the fresh produce segment with14 years' service with the firm, works a 40-hourweek and takes home approximately ESP 94,000a month.

A skilled male assistant in the cold meat depart-ment with 13 years' service with the firm does a40-hour working week and takes home approxi-mately ESP 94,000 a month.

A second-category sales assistant in the electron-ics department with two years' service with thefirm, works a 40-hour working week and takeshome approximately ESP 84,000.

A cashier with one year's experience with the firm,does a 40-hour working week and takes homeapproximately ESP 92,000 a month.

Annual salaries are composed of 12 monthlypayments plus three extra payments, the latterbeing as a general rule basic salary plus a

seniority allowance, which makes the paymentslower than the normal monthly pay.

A system of profit-related bonuses exists for allstaff categories from assistant section managerupwards.

All the employees interviewed, who had anaverage of 11 years' service with the firm,expressed themselves very positively on threepoints concerning industrial relations and workingconditions. The first was the attitude adopted bythe firm in fighting to secure employees' wagesand jobs when ii was obliged to suspendpayments. Secondly there is the good relationshipthat exists between managers and employees withvery few exceptions, which is one of respect butalso of friendliness and kindness. Thirdly there isthe freedom allowed employees in carrying outtheir daily tasks: "They are not chasing you allday", "They leave you free to do your work aslong as you do it well", "We do things our ownway", were words frequently heard from employ-ees interviewed.

The chief regulations governing working condi-tions are found in the specific regulations govern-ing the retail trade, which bring together all thenational legislation governing the sector, the lawgoverning the retail trade of the autonomouscommunity of Catalonia, which is where the firmis located, and, finally, the collective agreementfor the relevant sub-sector plus the firm's owninternal regulations.

1.2.3 Qualifications and recruitmentOlder employees generally have a lower educa-tional level whereas some of the young peopletaken on during the eighties have completed theirsecondary education or vocational training inother fields such as metallurgy, clerical work, etc.

On the other hand, the firm makes few demandsas to the training of new recruits, particularly whenit comes to unskilled workers by which is meantmale general assistants, sales assistants andcashiers because of the low salaries they arepaid and the type of work they do, filling shelves,serving customers, working at check-outs and thelike.

As is usual in a great many retail stores, employ-ees, with the exception of those in clericalpositions, have gained their vocational trainingon the job and through a period of apprenticeshipwhich until very recently did not include anytheory.

Because of the changes that have taken placewithin the company, in recent years in-housetraining has become a desirable means offacilitating employees' promotion because of thedifficulty of finding suitable personnel for middlemanagement positions in particular. Training is

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also seen as a means of improving the company'sperformance and achieving a more dynamicpersonnel management.

The criteria governing recruitment of unskilledpersonnel are based mainly on candidates'potential, since the firm assumes that this kind ofjob can be done by anybody. Potential meansambition, interest in the job, initiative, and thewillingness to be trained and to make a careerwith the firm. The company looks for people of atleast 21 years of age with a minimum of acompleted primary education and if possiblepersonal references.

In recent years the firm looked outside to recruitmiddle management for its stores. For this type ofjob, experience in the retail trade is essential,combined with a certain amount of theoreticaltraining which makes it easier for the people to dotheir job or to learn it. Experience alone is nolonger enough, particularly in the case of an olderperson, because of the responsibility those in

charge of departments now have for managementand financial results.

However, when it comes to the larger storesparticularly, the firm is not happy about thepresent practice of recruiting young people witha university degree to work as heads of section ordepartment. In their experience the results are notsatisfactory and staff turnover is high. This is

mainly due to the lack of experience and in-depthtraining in retailing as well as to a lack of maturity.

The interest the firm is currently displaying in aproper selection of staff and continuing training istypical of its new human resources policy, whichseeks to avoid situations such as occurred in thepast, particularly in the matter of promotion. Theabsence of an appropriate policy tended to leadto methods of selection and promotion that werenot based on professional criteria, resulting in acertain demotivation and restlessness amongemployees.

For the time being, employees joining the store arealready taken on as general or sales assistantsand the system recently introduced to encourage

promotion to supervisory or managerial positionsis based on the creation of an "assistant sectionmanager in training" position to which thoseemployees who show ability are appointed.While they are in this position, which may be fora period of between 6 to 18 months, theemployees selected are trained by their superiorsin the relevant tasks, while at the same timeattending monthly training sessions dealing withmanagement subjects. Subsequently their perform-ance is assessed to decide whether they shouldbecome an assistant section manager and be seton the path to further promotion.

According to the firm, it.meets its requirements forpermanent staff by giving people who havealready reached the legal limit of three yearsfor fixed-term contracts a permanent one. Staffneeded for special sales campaigns, holidayperiods etc. are taken on as temporary workers.

However, as table 4 shows, the number of staff onpermanent contracts rose from 138 to 140whereas the number of fixed-term and temporarycontracts (whether full-time or part-time) almostdoubled from 54 to 109. 1990 saw the introduc-tion of part-time working contracts, whichalthough they do not represent a large proportionof the total workfoice, do account for 10% ofemployees in the Cash & Carry stores. The staffgiven this type of contract tend to be cashiers andshelf-fillers.

Table 5 - Type of contract and employment (annual averages)

Year

Recruitment practices for the Cash & Carry storesseem to have changed in 1991, when there wasa significant rise in the number of permanentcontracts but a fall in the number of fixed-termones. Part-time contracts held steady while thenumber of people working Saturdays increasedonly slightly. This situation may be due to greaterjob rationalization and is also in line with themanagement's express policy of giving permanentcontracts to those people hitherto on fixed-termcontracts who can be offered permanent posi-tions.

While waiting for the results of the firm's newpolicy on temporary employees to becomeknown, it is clear from the general situation in

Full-timePerm.con.

Part-timePerm.con.

Part-timeTemp.con.

SaturdayTemp.con. Total

1986

1990

1991

138

140

143 (+15)*

40

86

74 (+69)*

8

8

14

15

19

192

249

244 (+84)

The figures in brackets relate to staff of supermarkets recently acquired.

1991 as shown in the following table that thenumber of fixed-term contracts given to people inpermanent jobs was still very high around 48%of the total.

Table 6 Breakdown of types of contract in 1991

Staff turnover in this firm is almost entirely limitedto temporary staff and to staff who work Saturdaysor are part-time, where the figure is fairly high.

Permanentjobs

Permanentcontracts

Fixed-termcontracts

Annual averagetemp. staff

Total

302 158 144 26 328

Some of the fixea term contracts for permanentjobs are given, to people working only part-timeSaturdays or half-days and the greater propor-tion relates to personnel in supermarkets recentlytaken over. The remainder, which represent about18% of the total figure, are fixed-term contractsfor full-time workers.

Table 7 Breakdown of permanent staff by sex

Year Male Female

1986 119 20

1991 119 +15 24

The predominance of male staff becomes notice-able when scrutinizing the type of contractsawarded. Female staff only account for 15% ofpermanent contracts. The same is true in the caseof promotion: there is only one woman in asupervisory or managerial position.

Absorbing supermarket personnel has increasedthe number of women in permanent positrons, allof whom are on fixed-term contracts. If, as the firmclaims, its policy is to award permanent contractsfor these positions, the next few months shouldbring an increase in the percentage of womenholding this type of contract, as well as animprovement in their promotion prospects if the firmcomplies with its assurances of providing training.

Temporary contracts for very short periods of timeare used for replacing staff on holiday, sick leaveetc. or to provide extra staff at peak periods,particularly in the months of December, January,February and the three summer months. As thetable shows, the average number of temporarycontracts per month is 26 with a maximum of 84 inJanuary and 8 in March.

Temporary staff generally do the jobs of cashiersor male assistants and the firm uses them as asource of recruitment where a permanent vacancyoccurs, since it is standard practice for sectionheads to write reports on such employees.

The rate of staff turnover among people on fixed-term contracts in permanent positions is lower.

1.2.4 CommentsThe firm under study shares a number of pointswith the retail sector as a whole as regardsworking conditions and employees, especiallywhen it comes to the practice of granting fixed-term contracts and the lack of retail training, andto the process of modernization that is under way.

These points show up a frequent and paradoxicalproblem, namely the demand for people able totake up supervisory or management posts and forwell-trained lower-grade staff, and the difficultiesinvolved in the promotion of female employees.

This paradoxical situation exists because of theneed for greater professionalism and knowhowresulting from developments in the retail sectorand growing competition. Yet employees do notpossess this professionalism and knowhow be-cause of the lack of official training for the retailtrade and the absence, until very recently, oftraining provision within the firm.

This situation can become very worrying, particu-larly for the supermarkets with their strategy ofhigh-quality goods and customer service. Here thestaff, often women without training and withpoorer working conditions than in the Cash &Carry stores, would seem to need a differentpersonnel and training policy than that existingprior to the merger.

2. Training policy

2.1 Training strategyAs is generally the case of retail firms in Spain, thisfirm's training policy is of very recent date.

Previously no programme of basic or continuingtraining existed and people learnt their job bydoing it.

Changes in the management with the expressobjective of offering a better service have madetraining an important issue and in recent yearssome training has been offered employees in

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various job categories, although not in a system-atic manner.

In 1989 and 1990 some 80 employees skilledand unskilled on the sales and clerical side weregiven training.

The most important courses were as follows:

Excel training courseTwo weeksManagers, secretaries and clerical staff20 participants

Management course dealing with subjects suchas zero stock, distribution of goods, warehouseautomation, and setting objectivesMiddle management and their assistants25 participants

Invoicing courseFour daysNon-food sales assistants

Invoicing courseFive daysMiddle management10 participants

Invoicing courseThree daysMale assistants in non-food department!.13 participants

Training course for sales assistantsOne month16 participants

WordPerfect training course(word processing)Five daysSecretaries

Similarly, in 1990 the present management askedits human resources department to draw up a planof training for all employees. Because the firm stillowed money to its creditors after the suspension ofpayments, it sought financial support from theregional government. This was given to it in lateOctober on condition that it carried out a trainingprogramme before the end of the year. This thefirm was unable to do, as the last months of thecalendar year are the busiest.

In 1991 the firm re-submitted its training pro-gramme in order to obtain a grant, but theauthorities rejected it.

However the firm is continuing its activities in

certain areas, the most important being:

Cashier functionsOne month20 cashier auxiliaries

6 1

This course is held in November of each year inorder to prepare temporary cashiers for theChristmas run-up

Commercial refrigeration and electrical appli-ancesFour monthsMaintenance department officer

Procurement negotiation courseOne dayPurchasing and section managers25 participants

Approximately ESP 1 million was spent on trainingin 1991. Some of the courses were partly orentirely subsidised by various official agencies.

Faced with the cost to the firm of a training schemeembracing the entire staff, the management ismaking an effort to create a system whichcombines low cost with maximum participationand cost-effectiveness. This has led it to seize uponan idea used in a number of French retail firmswhich involved designing a game in collaborationwith a product development firm with two variants,one for lower-grade employees and one formanagerial staff. The aim of the game is to solvemany of the problems arising in traditionaltraining courses.

This training-through-playing programme will bediscussed in more detail later.

Training may be voluntary or compulsory, depend-ing on the employees targeted, and is carried outin working hours on the firm's own premises or onthe premises of the training organization.

At the same time, the firm encourages employeesto take advantage of any training which may berelevant to their jobs available to them outsideworking hours. To this end it reduces workinghours or makes them more flexible on request.

Generally speaking, employees view the firm'straining efforts positively, although many complainabout the delay in putting the training activitiesinto effect and feel that they are now too old, thatthe training will not help them, that if they havedone the job without training for so long they cango on doing so etc. However such comments arerestricted to a minority. By and large the feeling isthat training is genuinely useful as a means oflearning how to work, and something of whichthey can take advantage for their present job butalso if they want a change. Above all, they hopethat the introduction of systematic training willresult in more direct procedures for promotion thanthose existing hitherto.

2.2 Training structureThe personnel department is directly responsiblefor training and works in close collaboration with

the general management which has been thedriving force behind the new policy.

The personnel department, which was set up in1989, has a head of department and two clericalstaff.

The firm has premises allocated for trainingpurposes.

Because of the specific nature of the trainingcourses and because much of it is computer-related, it would seem necessary to expand thedepartment or to create a unit specificallyresponsible for supervising the training coursesand ensuring that they are run correctly.

2.2.1 Impact on training of newtechnologies, changes in sales policy,legislation etc.Technical innovation has been one of the mainchallenges to this firm.

A distributed computer system exists for manage-ment control. This is based on a local areanetwork made up of over 140 microcomputers(0.7 per permanent employee). This has alteredmanagement control and has been installed atprofit centres.

In addition, the firm has pioneered the installationof optical scanning devices and the use of barcodes where available, as well as the introductionof the EDI system, a common language for theelectronic interchange of data between the firmand its suppliers.

All this has meant a considerable effort on thetraining side to instruct those employees using thenew equipment.

The technical innovations introduced in the pastfew years, which have mainly affected manage-ment of the firm, must be seen as a factorconsiderably influencing training. In future theobjective of better customer service will be thedriving force behind a sustained training policy.

2.2.2 The role of the social partners intrainingThroughout the firm's history, personnel manage-ment has tended to be paternalist. According toemployees, most of whom have been with the firmfor more than ten years, "We were like a largefamily". This was evidenced by the concern thefirm displayed when it was obliged to suspendpayments when there were no redundanciesand no financial problems as far as employeeswere concerned because "There was never amonth when we were not paid" as well as by thesupport given by the staff in helping the firm toovercome the crisis.

However, inevitably there has been the occasionalconflict between the social partners arising fromthe very fact that personnel management is basedon goodwill and from the non-existence of formalchannels of communication between employerand employees.

Soon after the present management was ap-pointed in 1988, the problem of industrialrelations became acute, obliging it to rethink andformulate a new personnel policy which was putinto effect in 1989 when the personnel depart-ment was created. A personnel manager was

'appointed in early 1990.

After initial suspicion this led to a period of calmcharacterized by dialogue and cooperation ratherthan confrontation.

The company has a staff council made up of 9members, 3 of whom are members of the UGT, 3of CCOO and 3 who are not unionized. Theunion members were basically elected by theunskilled staff while the non-union members werechosen by the clerical and skilled staff.

Some of the conflict between the firm and itsemployees was due, the firm claims, to thepersonality and activities of two union representa-tives who, as a number of employees confirm,"prefer to fight rather than talk". At that timecomplaints and threats of strike were the mostfrequent method of achieving aims.

The agreement that these two union representa-tives should step down changed the compositionof the staff council as far as individuals wereconcerned, but not the union representation.

The result has been a new climate in industrialrelations. However, there is some feeling that sincethese two representatives left a lot of talking is

done without much being achieved, particularlywhen it comes to wage increases

Currently the staff council meets regularly with thehead of personnel and with the managingdirector. The most important subjects of discussiontend to be small improvements at the workplace.

The attitude of the members of the staff council asregards the company's training policy is favour-able. They admit that they trust the firm to a certaindegree io show that its intentions are not mererhetoric, but a step forward in the interests of itsstaff.

2.3 Description of a trainingprogrammeThe most important programme, which waslaunched expeiimentally in 1991 and started inearnest in 1992, is targeted at employees in allcategories. In principle it is meant only for

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68

employees on permanent contracts and those onfixed-term contracts in permanent positions.

This programme originated because of the firm'sneed to introduce effective training at low cost.

Conventional training is not attractive to adultemployees who are semi-skilled, because they areafraid of being asked to study and because of thelack of motivation, complexes, lack of confidenceand inability to concentrate.

This realization led the management to evolve anew product based on game play, which can beused to train all kinds of employees.

The game, which has been patented under thename Triforvial can in principle be used by anykind of firm. It was produced by an outside firmwith the commercial subject-matter supplied by thefirm under study. This is therefore a productcreated and developed jointly by Impuls S.A.and Cemasce.

As the name of the game indicates, it is notunrelated to "Trivial Pursuit" but also to "Ludo" or"Snakes & Ladders".

There are two versions, one designed for middleand senior management and another for super-visory staff and sales assistants, general assistantsand cashiers. The programme used for manage-rial staff uses teaching cards covering the follow-ing subjects:

Bookkeeping and general office workSales and marketingPurchasing, stocks and logisticsComputer and communication systemsHuman resources and labour relationsKnowledge of food productsThe firm and its environment

The programme aimed at supervisors and un-skilled personnel covers the following subjects:

The marketThe storeThe sectionsFood productsAdministrative and computerized managementCommercial management and procurementPersonnel managementThe customer

The "food products" subject-matter is divided upinto specialized areas such as meat, cookedmeats, fish, dairy products, food and vegetablesand non-food products.

Both versions of the game have a generalknowledge element but there are no cards to bestudied. The person's own education and the massmedia are regarded as the sources of generalknowledge.

t i3

The physical aids to the games in both versions arethe same, namely information cards and a boardwith markers. However the knowledge requiredby the sets of cards varies between the twoversions.

The cards carry a symbol identifying the subject-matter, which is the same as that on the board. Thegame is played in the following way:

Every week an employee is given a certainnumber of cards which are the same size asplaying cards to read and study. The cardscover different subjects in considerable detail.Which cards an employee is given will depend onthe logical process of learning.

Thus one week an employee may be given cardscovering the following subjects:

The market, subordinate subject: retailing, thehypermarket.The store, subordinate subject: use of existingspace, cold spots, hot spots.The different sections, subordinate subject:beverages, aperitifs, spirits and liqueurs.

And so on with all the cards for that week.

This process continues for a month or two, afterwhich the trainee is considered to have acquired acertain amount of knowledge.

It is then the game begins. For a certain period inworking hour- two or three hours a week, theplayers of various job categories and positions ateach level of the game play the game on theboard and make use of their luck and theirknowledge.

The game shows different paths leading to a goal.The paths involve certain obstacles, such as theneed to miss a turn or to go back. Each player hasfour markers which he has to take to the goal. Adice is thrown and the square reached contains asymbol relating to one of the subjects or subsidiarysubjects studied. Depending on how the playerreplies to the question, progress is either sloweddown or frozen etc.

This is a knock-out game with several gamesdetermining the winner and the runners up. Thereare substantial prizes in cash and kind to be won.

Then the cycle begins again.

While the game is taking place players are notgiven any more cards, even if they have beeneliminated.

Players may repeat the whole training process if itis felt that they have not learnt enough the first timeround.

Participation in the game is in principle voluntary.

3. Description of a particular store

3.1 General informationThis store was chosen because of the large numberof its staff who have received some form oftraining.

The store concerned is the Cash & Carry store inMontcada i Reixac; it is the company's flagshipstore.

Montcada i Reixac is located in the metropolitanarea of Barcelona. The store is accessed fromthree motorways which encircle the city and wasopened in 1974.

The store has a sales floor of 18,000 sq.m. on twostoreys and stocks 52,000 items including food,non-food and household equipment. The house-hold equipment section is considered to offer themost extensive range of goods to the cateringindustry in Spain today.

The store operates on a self-service basis, althoughthere is customer service in the fresh produce andin the electronics and similar departments.

About 75% of customers are from the catering orfood retail trade or from institutions such asschools, prisons etc, the other 25% being fromother forms of business. Entry to the store is

restricted to those carrying an identification cardissued to anyone having an official businesslicence.

3.2 Human resources

3.2.1 Personnel structureSince the Cash & Carry store is in the samebuilding as the firm's head offices, the figuresprovided include c" staff, sales and administra-tive.

Table 8 - Total number of employees(annual average)

Male Female Total

1986

1991

159

180

21

53

180

233

Table 9 - Breakdown by age

16-20 21-25

1986

1991 5% 16.9%

This store is the first one the company opened andit is also that with the largest workforce, whichaccounts for 70% of the total figure. There are anumber of striking characteristics, such as thehigher proportion of workers over 36 and under20 and the smaller proportion of women than inthe overall figure. Moreover, the women here arenot merely employed on the sales floor; most ofthem are in the central administrative departmentwhich is in the same building.

Table 10 - Occupational structure

Chairman 1

General manager 1

Managers 5Section managers 34Clerical staff 38Craftsmen 23Sales assistants 33Cashiers 43Male assistants 44Telephonists 3Security men 2Craft apprentices 1

Cleaning staff 5

Total 233

The above figures are not representative of thestore as described because of the significantweighting of the central departments in themanagerial and clerical categories. On the otherhand, the figures do include on average about 17lower-grade workers who are recruited every yearfor temporary work.

Bearing this in mind and disregarding most of theclerical staff, the proportion of lower-grade salesstaff in this store is higher than for the firm as awhole, which is a more accurate reflection of theusual situation in superstores.

This explains the discouragement some employeesof this store feel as regards promotion prospects.Since the functional pyramid is broader, a largenumber of lower-grade employees view theircareer prospects as restricted. This also explainsa certain distrust regarding training expressed byemployees who have been with the firm a long

26-35 36-55 Over 55

average age 34

39.1% 34% 5%

.4't 6 4

69

time and do not see the purpose of training unlessit increases the likelihood of promotion, whichthey do not believe.

3.2.2 Working conditionsThe working conditions in this store are subject tothe general conditions laid down by the firm in thematter of salaries, working hours etc., which havealready been described.

Because this was the company's first store,relations between employees ter.d to be differentfrom elsewhere because there are more of themand also because most of them have been with thefirm a long time and gone through a lot together.

The general atmosphere is harmonious. Staff havetheir own canteen and facilities for training andunion meetings.

3.2.3 Recruitment and qualificationsThe situation as regards type of contract andworking hours is also remarkable. Firstly the storehas a large number of permanent contracts andsecondly it has all the part-time staff in the firm.

3.2.4 TrainingThe training structure is the same in all stores andin this particular store the presence of the centraldepartment and the personnel department has adirect impact on training activity.

At present 61 employees from the store are takingpart in the game play, 51 being sales assistantsand 10 supervisors. Although, as we have said,the game is open to staff in all job categories, inthe first year, because of organizational difficul-ties, it is being played only by staff directlyconcerned with sales, but not by cashiers, clericalstaff, warehouse staff or maintenance staff.

Table 11

4. Assessment

By the firmThe firm considers the effort made to set up the"Triforvial" game programme very significant andits results chiefly measured by its popularity withemployees as very encouraging.

By the workers or their representativesThe employees, especially those in less skilledjobs, consider the game a better method oflearning than conventional training methods, withwhich they get bored and lose interest. Theycomment that they learn not only when reading thecards but also when playing, br cause of thereplies given by their colleagues or because theyremember their own mistakes more easily in arelaxed, game-playing atmosphere. While thenumber of cards they are given each week is notexcessive (between 8 and 12), they find it difficultto afford the time to study them, although all ofthem read them.

By the authorThis first experiment would seem to offer a solutionto problems of learning and training for employ-ees not accustomed to intellectual work. On theother hand, it helps to encourage a sense ofcompanionship and also of competition in a

game-playing atmosphere which makes interper-sonal relations and training easier.

The game has only recently been created andintroduced and as it is further developed, thesystem will improve.

5. TransferabilityThe interest of the programme chosen is under-scored by its pedagogical features, which make itparticularly worthwhile for an adult staff with little

Full-timePerm.con.

Fixed-termcon.*

Part-time* Sat.* Total

1986 .

1991

136 30

138 69

- Includes temporary employees

Table 12 - Type of contract and employment 1991

Permanentpositions

21670

8

Perman Fixed-termcontracts contracts

138 78

65

14 180

18 233

Temporarycontracts

Total

17 233

general and commercial education. It combines acompetitive game with training.

Once the necessary changes have been made toadapt the game to the realities of retailing in eachcountry, this programme could easily be adaptedand make training entertaining and effective.

People interviewedManaging director of the firmPersonnel and training managerChairman of the Staff Council, who is a memberof the CCOO union and a specializt assistant inthe cooked meats sectionUnion representative belonging to UGT and aspecializt assistant in the wine and spiritssectionAssistant section manager in the non-foodsectionSales assistant in the fruit and vegetable section

6671

FIRM XX S.A.

1. General description of Firm XxFormed in 1846Capital in 1991: ESP 900 million17 stores in the main Spanish citiesLuxury stores selling leather and fashion goods formen and womenCustomers in the urban middle and upper classes

1.1 The firmThe firm X, S.A. was established in Madrid in1846 as a workshop producing leather goods. In1890 the first shop was opened to the public.When the Civil War in Spain ended in 1939, thefirm began to expand rapidly, opening shops invarious cities of Spain. In 1969 it opened its firstshop outside Spain, in London. This was followedby others in various countries.

In 1969 the firm introduced fashion and acces-sories sections for men and women and latercreated its own luxury ready-made collections, allproduced in its own workshops. In 1972 it beganto produce perfumes.

The firm, which is family-owned, expandedrapidly both in terms of sales and structure, whichcalled for a substantial increase in capital. In

1980 a Spanish group took the firm over.

In 1983 Firm X, together with the other firmsbelonging to the group into which it had beenabsorbed, was expropriated by the SpanishGovernment and nationalized.

In 1984 Firm X was reprivatized and sold to agroup of Spanish shareholders headed by aFrench investor who provided a new manage-ment structure, strengthened the original productlines, and introduced a number of differentcorporate strategies designed to expand thefirm's market in line with the evolution of Spanishsociety and business.

At the same time the various activities of theoriginal firm were hived off into independentbranches so that Xx, one of these branches andthe subject of our case study, is responsible forrunning the retail outlets in Spain.

From the very beginning there have always beenmembers of the founder's family who have heldshares in the firm and been involved in production.

The last ten years have been worrying foremployees, who saw a firm with a long traditionand culture, whose labour relations bore the markof the founding family, and whose name was abyword in Spain for high quality work goingthrough a difficult period which on occasionaffected some of the very popular senior man-agers. However, in recent years there has been anew air of stability and calm, thanks to thecompetence of the new management which hasrestored the staff's pride and confidence.

This favourable trend in the company's fortunes isreflected in an increase of 133% in gross salesbetween 1985 and 1991.

The retail stores in Spain are located in thefollowing cities:

4 in Madrid4 in Barcelona2 in Valencia2 in Seville1 in Granada1 in Las Palmas1 in Bilbao1 in San Sebastian1 in Palma de Mallorca

Stores tend to be situated in high-class residentialor shopping areas, and in cities with a brisk touristtrade.

The range of products, which breaks down intoleather goods and prêt a porter, is very varied,covering travel goods, fashion accessories formen and women (handbags, purses, shoes, belts,scarves, jewellery, gloves, umbrellas etc.), giftarticles, perfume and other items of clothing.

Certain stores specialize in men's fashions.

The size of the stores varies, the largest having asales floor of 1,200 sq.m. and the smallest, inhotels, between 60 and 30 sq.m.

All are manned by personnel with the necessaryskills to serve the store's kind of customer.

'The clientele, which was very limited and loyal inthe firm's early days, has in recent years widenedconsiderably and embraced a younger femalepublic with a high purchasing power who look forquality goods, a high standard of service andfashionable and comfortable clothing. Tourists,especially those from Japan and North America,make up an important group of customers.

The firm has managed to extend its customer baseby introducing a number of less classical lines intoits fashion collections.

This has had some impact on the selection andrecruitment of staff, a subject which will bediscussed later.

Communication within the firm operates at twolevels. Firstly there are two meetings a yearbetween senior and middle managers which lasta day and during which general issues concerningthe firm's operations, new policies, objectives, theintroduction of training programmes etc. are dealtwith.

The second level of communication is through theusual hierarchical charnels.

E

73

Table 1 - Organizational structure

1

Window- Sales PR

dressing

Training Specialevents

Board directors

Purchasing

Warehouse Buying

Personnel

Works andmaintenance

1.2 Human resources

1.2.1 Personnel structureThe firm's staff has increased noticeably since1985, mainly due to the increase from 14 to 17 inthe number of shops.

Table 2

Men Women Total

1985 121 136 257

1991 165 200 365

The proportion of women in the staff as a wholerose by 1.5 points over the past year.

Table 3 - Breakdown by age, 1991

25 years 26-40 41-55 55+

60 150 108 47

Although no information is available regardingthe age breakdown in 1985, it is known that theaverage age of employees in that year was 40.2,whereas by 1991 it had dropped to 38.6. Thisrejuvenation of the workforce has been encour-aged, as we shall see, by a certain type ofcontract. At present employees under 25 represent16% of total staff.

The breakdown of staff by job category in 1991was as follows: (Table 2a)Contrary to the general trend in the retail trade thisfirm has its own employees for all types of internalservices such as window-dressing, tradesmensuch as electricians, carpenters etc, a largefashion workshop, a large cleaning staff etc.

The present job structure also reveals that the storeand the firm are concerned with maintainingcontrol over all aspects of its activity, ensuringthat the level of quality that is the firm's trademarkis guaranteed throughout. The breakdown of jobs

74 by sex shows that for a long time this firm has been

68

particularly outstanding as regards careers forwomen.

1.2.2 Working conditionsWorking hours at central office are from 9.00 to18.00 on Monday to Friday with an hour's breakfor lunch. In the stores, working hours may be splitor continuous depending on the type of store (thusin hotels working hours are continuous) and onlocal custom. Staff work a 40-hour week, whichas will be seen when we come to the description ofa specific store, may be spread over the year in amanner more convenient both for the firm and forthe staff.

Staff have 30 days' holiday a year.

Total salaries in 1991 were something over 20%of total gross sales and worked out at an averageper employee of 4.5 million p.a., including socialsecurity contributions. In 1985 total salaries werealso running at 20% of gross sales and theaverage salary per employee wasESP 2.5 million. Although this average figure isnot very significant in itself, it does allow us to seethe increase that has taken place since 1985,which in some job categories such as cashier andsales assistant has been as much as 73%.

The gross annual salaries to these two categorieshave been as follows: (Table 3)

The main change in salary structure has been inthe amount of commission on sales, which hasfallen in recent years. This implies an improvementin terms of pension contributions or unemploymentbenefit over the previous period, when commis-sions could on average run as high as 30% ofannual salary even though this could mean alower overall income.

The salaries for these categories are higher in thisfirm than in the rest of the retail trade, as is justifiedby the social and educational level demanded ofsales assistants in the stores.

The firm offers a series of fringe benefits in theform of health insurance, scholarships for employ-ees' children, subsidized holiday accommodationetc.

Table 3a Breakdown by category

Male Female Total

Chairman 1 1

Managing director 1 1

Managers

Technical director

5 4 9

1 1

Purchasing manager 2 1 3

Buyer 1 1

Warehouse manager 4 4

Store manager 2 5 7

Store supervisors 7 7

Group manager 1 1

Section manager 5 12 17

Sales assistants over 80% women 91

Administ. manager 4 4

Administ. section manager 19

Clerical ma' 90

Service section manager 3 2 5

Designers

Window dressers

4

10

Foreman 2

Craftsmen 18

Specialist assistants

Soles assistants

Telephonists

Cashiers

Security men

Attendants

Cleaning staff

Driver

Workshop manager

Other

10

30

3

2

3

4

8

5

1

475

Table 4 Gross Annual Salaries

Sales Assistant Cashier

Fixed Salary Commission Fixed Salary Commission

1985 995,000 424,000 1,119,000 230,000

1991 1,820,000 635,000 1,928,000 408,000

Part-time work is not very frequent. Only 1.5% oftotal staff, thus 5 people, work part-time.

1.2.3 Qualifications and recruitmentThe general educational level of employees in thisfirm is high by comparison with most of the retailsector. The requirements imposed for employmentas a sales assistant are more stringent. The

comment of one of the owners at the time whenthe clientele was still very restricted and elitistexpresses this: "our shop assistants have to talk thesame language as our customers".

Educational level and social relations as aguarantee of the same language were, therefore,important criteria for staff selection.

These criteria have changed and given way to amore professional selection which takes accountof general education, language, and degrees inarts subjects for sales assistants and other storestaff, as will be seen when we come to thedescription of a specific store.

When it comes to filling supervisory and manage-rial posts at store level, importance is alsoattached to experience in the retail trade whileon the technical or company management side thefirm looks for appropriate university training.

A general requirement is "An aesthetic sense andappreciation of things well done", as well as certainhuman qualities which make for easier integrationinto a firm with a marked unwritten culture.

The age preferred for sales personnel used to bebetween 28 and 30 but the firm is now employingyounger people in order to lower the average ageof its staff.

As we have already pointed out, selection ofrecruits s now far more demanding and aspecializt in this field has recently joined thefirm. He is responsible for selecting the temporaryemployees who each year will follow a basictraining course and later will be appointed topermanent sales post and other supervisorypositions.

Every year the firm recruits about 25 people on76 3-month contractg for the run-up to Christmas, as

7 ()

well as students and similar people to cope withwork at peak periods.

The re,:ruitment policy follows the general regula-tion-, for the retail sector. Since the relevantlecislation took effect, the firm has ceased employ-ing people on permanent contracts and fixed-termcontracts have become standard practice. This hashad its effects in terms of turnover of sales staff,which is virtually non-existent among permanentemployees who have been with the firm longerand are almost all of them in supervisory positions

but is high among more recent recruits. In someyears turnover is as high as 50%.

Recruitment 1991

Permanent contractsFixed-term contracts"en practicas"Under 26Job creation schemesOther

241

169

7722

This gradual replacement of permanent contractsby fixed-term and other forms of temporarycontract such as "en practicas" contracts andthose available for employees of less than 26 yearsof age, has been one of the factors making fora younger workforce. However it has also hadthe effect of creating a degree of uncertaintyamong the more recent recruits, which may welllie at the heart of the high staff turnover and thetendency of trained sales staff to leave and go torival firms.

Firm Xx tends to put those who have served themaximum three years on a temporary contract onto a permanent contract. It does not wait for theperiod to elapse before terminating a contractwhen it sees that a person is not suitable. Clearly,therefore, part of the staff turnover is also due tothe firm's high standards.

Internal promotion has been a fundamentalelement of the firm's human resource policy andhas met the need for store managers at a timewhen it was difficult to find suitable people on thelabour market. Of 18 store managers, 10 areinternal promotees and practically all departmentheads began as salesmen.

The firm feels that it is in the stores themselyes thatthere will be more opportunities for professionalcareers and it is providing the training facilities tomake this possible.

The high number of women 54% of total staffalso reflects in the firm's job structure and inpromotions. The managing director of the firm is awoman and women occupy half the seniormanagement positions in general departments,while there are 14 women store managers.Women also hold a substantial number of middlemanagement positions on the administrative andsales sides.

1.2.4 CommentsThe situation in this firm could be described asunique as far as the traditional Spanish retail tradeis concerned. Despite the difficulties encounteredover a period of years the firm hos maintained itscharacter and its policy of offering maximumquality in its segment of the market.

Its personnel policy is consistent with this. As aresult key issues in the retail trade such as workingconditions (workin, hours, promotion and espe-cially promotion of women, salaries etc), haveproceeded in harmony with the firm's generalstrategy, thereby creating a corporate culturewhich pervades the attitudes of its employees.

2. Training policy

2.1 Training strategyThe firm has been organizing training coursessince the sixties and may be regarded as one ofthe pioneers in this field in Spain.

Its purpose in giving training is basically toimprove its own performance by el ,uring theright level of customer service. This objective hasnot changed with the advent of a new manage-ment but indeed has been underscored by thecreation of a training department and by theplanning and systematizing of courses, especiallyin the field of continuing training.

This strengthening of continuing training pro-grammes has been the result of both internal andexternal factors. The latter include an expansion ofthe firm's traditional segment of the market andgrowing foreign competition. Internal factors havebeen related to certain types of behaviour on thepart of staff, who worked well in the past andrequired retraining in order to adapt to the needsand demands of the new customer profile, thuscustomers who were younger and had a higherpurchasing power but no longer came from thefirm's traditional catchment area.

As a result, and marking the most important breakwith the past, the firm in 1991 launched a newcourse concerned with customer service entitled"Xx, different manners" which aims to train all

employees, sales assistants and others, in custom-er relations, dealing in depth with a subject thathas always been fundamental.

The changing trend of retailing in Spain and thegrowing penetration of foreign firms selling luxurygoods who were unknown in the past leaving Xxwithout rival in its own market segment are otherimportant factors that have contributed to thecreation of new training programmes. The firm isincreasingly aware that only a different mannerwill mark it out from its competitors in a firm wherequality and elegance are taken for granted.

On the other hand, the firm's own standards ofelegance make customers particularly demandingand lead them to expect all the information andservice they consider they are paying for.

The content of the firm's basic and continuingtraining programmes is now, as in the past, basedon two essential points, namely manners andcustomer service, and product knowledge. Twoprogrammes are organized every year, the basictraining course and courses on fashion trendswhile others are run every two or three years andare specifically devoted to leather and perfumeryproducts.

Special courses have also been organized to copewith the introduction of computers in all stores andin the central departments.

Up to 1991 the basic training course was alsoused for retraining personnel. Since the introduc-tion of the new training structure and courses, thefirm has seen the advantages of separating thesetwo types of training and has been designingspecific programmes for retraining which it will goon expanding.

Another type of training course with a specializtcontent and far-reaching impact is that forwindow-dressers. This shows the importance thatwindow displays which have also been alandmark in the history of retailing in Spainhave had for the firm for 30 years. This course,again, is held annually.

Training is targeted at all the company's employ-ees with a range of course contents to suit all joblevels. It is always conducted in working hours andattendance is obligatory. Some 100 employeesattended training courses in 1991.

Training programmes

BasicFashion trends (twice a year)Men's fashions (twice a year)PerfumesLeatherVisual image promotion"Xx, different manners"

Duration

80 hours16 hours16 hours16 hours32 hours32 hours72 hours 77

78

Training courses involve trainee participation withaudiovisual aids and "hands-on" experience withproducts whether fashionwear or other goods.Employees also visit the factories making thearticles concerned in order to become acquaintedwith 'the manufacturing processes. Instruction textsand most material used is very well prepared bythe firm itself.

Instructors are generally employees of the firm andpeople with responsibilities in the area concerned.

Those attending basic training courses subse-quently have a period of practical training in thestores in which they are to work. During this timethey are not employed on the sales side but areinvolved in" activities designed to give them abetter knowledge of the store's operations, salestechniques etc. This period of practical experienceis supervised by the store manager.

Training courses are held in Madrid and employ-ees from other cities are transferred to Madrid toattend them. Mention has already been made of theimportance of internal promotion in this firm andalthough there is no direct link between promotionand training, employees know that good trainingin combination with other personal abilitiesenhances their chances of being promoted. Onthe other hand, they are very proud of theirproduct knowledge and of the style they acquirewhile working for the firm, which enables them,where no promotion is forthcoming for structuralreasons, to move to rival firms in middle andsenior management posts. This has occurred onseveral occasions.

The firm intends to include four new trainingcourses in its programme in the near future:

Course on textile productsCourse on packaging techniquesCourse on stress control techniquesCourse on dealing with telephone calls

These courses are designed to plug certain gapsor meet certain needs, for example of employeeswho though not employed on the sales side dotransmit the firm's image to customers, or toprovide a greater knowledge of textile productswhich the firm has not been dealing with for solong.

2.2 Training structureThe training department was set up in late 1987when Xx became an independent branch; it

depends on the sales department. However theparent company already had a small training unitwhich had organized certain courses, such as theone mentioned in this study.

Up to the end of 1990 the training departmentwas responsible to the managing director, who

saw that courses planned and decided on wereactually carried out.

The training department has only the one personresponsible for training, who began his work byconducting a study of existing training needs. Onthe basis of this he drew up a plan with the newcourses which are gradually being introduced,some of which are adaptations of retail coursesgiven in America.

Needs were identified by consulting store man-agers, clerical staff and other employees. The staffrepresentatives were not involved in any way.

Spending on training in 1985 was 1.6% of thetotal salary bill whereas in 1991 the percentagehad risen to 3.3% a figure that was unusuallyhigh and due to the creation of training aids andautomated systems in stores. It will not be repeatedin future years.

2.2.1 Impact on training of new tech-nologies, consumer and labour legisla-tion, changes in sales concepts, inter-nationalization of the retail trade etc.Two factors to which reference has already beenmade have considerably influenced training as itis now given and as it will be given in the future.These are the internationalization of the retailtrade, which means growing competition fromforeign firms, and the need to extend the customerbase in order to maintain the firm's leadingposition in Spain's luxury retail trade.

Similarly, the introduction of computers in 1991called for substantial training in this field for storeemployees and those in central administration.

2.2.2 Involvement of the socialpartners in trainingCurrent legislation in the matter of trade unionrepresentation obliges a company to have unionrepresentatives in stores with a low number ofemployees and staff councils in those which haveover 25. The firm under study has both kinds ofrepresentation.

However, union activity is not highly developedand is an isuse about which the staff in general arenot particularly enthusiastic.

Various factors contribute to this attitude. The firstis the family atmosphere of the firm and its

paternalistic attitude to the employees, plus thetype of employees who were recruited in the past,which have made relations more than the normalemployer/employee relationship. Any differenceswere always settled personally.

This was possible because conflicts were few andfar between. As has already been mentioned inthe relevant section, working conditions are morethan acceptable and excellent when compared

with the retail sector in general. Salaries at alllevels are good, there is scope for promotion,particuarly for women, and working hoursaccording to the staff are very good with a greatdeal of flexibility possible to meet personal needs.In addition there are fringe benefits. This meansthat there are no group conflicts needing to besettled by union intervention.

Although recent years have seen an intake of newand younger staff, especially at the sales assistantlevel, the situation has changed little because ofthe influence of older employees who are proudto transmit the corporate culture, while workingconditions make changes unnecessary. Storemanagers, who are free to organize their workas they wish and who also act as personnelmanagers, are the most suitable channel forsolving problems.

All this does not prevent the staff council for theMadrid stores, which acts as the representative ofall employees, meeting once a month to discusscertain points which could mean additionalimprovements in the employees' situation, suchas obtaining substantial payments on retirement atthe appropriate age, etc. But when it comes tonegotiating financial matters such as salaryincreases, the staff council's role is very limited;this gives rise to some complaints.

The union representatives are not involved intraining in any way.

2.3 Description of a trainingprogrammeThe course chosen is that concerned with "Trendsin women's fashions and accessories".

The aim of the course is to acquaint storepersonnel with the main fashion trends and topresent the firm's own collection, showing how itcan be suitably matched with coordinates andaccessories and giving technical training asregards the fabrics and materials of which suchaccessories are made, and their characteristicsand their use.

This cou:se has been run since 1985 and is aimedat all staff concerned with women's fashions andaccessories. It is attended by all staff ranging frommanagement to sales assistants as well as dress-makers, cashiers, window-dressers etc.

The course is held twice a year when the firmpresents its two collections. On ea' i occasionthere are 5 courses, each attended by between 15and 20 people. In all about 100 people attend thecourse each season.

The course is held on the firm's premises and takestwo full days. Staff from other cities come for thispurpose to Madrid where their board and lodgingin a good hotel is paid for by the firm.

The course is given by the firm's purchasingmanager.

The first day is used to give a video showing ofinternational and national fashion trends for theseason, after which the firm's own collection ispresented.

Sales assistants become acquainted with thefabrics, designs and manufacture of goods andthe possibility of alterations, as well as which typeof customer the item is designed for and theaccessories it can be combined with.

All this is done with a great deal of traineeinvolvement. Staff try on the models and try out thevarious combinations with accessories, in this wayrealizinig which type of figure or build a certaingarment suits.

On the second day there is a presentation ofcollections of accessories: jewellery, shoes,gloves, belts, umbrellas, glasses, scarves, hand-bags and travel accessories.

As on the first day, participants become ac-quainted with details of design and manufacture,the type of material used and how to care forthem, how they can be combined, sales argumentsand the like. All articles can be closely examinedand tried on.

Finally there is a review of the basic collection, thefirm's classic items, which does not change greatlywith fashion.

The course makes use of audiovisual aids, textsproduced by the firm and items from the collec-tions. Some of this audiovisual material is handedout to participants.

3. Descripfion of a particular store

3.1 General informationThe store concerned is situated in a high-classresidential and shopping area of Madrid.

It was opened in 1959 and is the firm's fifth store.It was a milestone in the sad shopping landscapeof the time because of its attractively dressedwindows and the quality of its products. It is atpresent the store with the highest sales figure; in1991 it recorded gross sales of ESP 2,000 million.

The store has a sales floor of some 1,000 sq.m.and has departments for women's fashions,accessories and leather goods.

The clientele is that customary in this type ofestablishment, with a large number of regularcustomers but is also popular with the wealthierclass of tourist.

1

7r4

79

Organizational structure

General manager

Personnel manager Office manager

Section managers:Men 1 Boutique 2 Leather 2 Acessories 2Reception 2

Display assistants: 2Senior and junior sales assistants: 14 (not at-tached to a specific section)

2 cashiei s

The general manager is also responsible for thefollowing employees:4 dressmakersWarehouse staff: manager, assistant managerand general assistantAdministration staff: 2 clerical staff and atelephonistDelivery staff: head, 4 assistants and a driverCleaning staff and security personnel

The store has a total of 47 employees.

3.2 Human Resources

3.2.1 Personnel structure

Table 5 - Breakdown by sex

Men Women Total

1985

1991

15

14

33

33

48

47

Table 6 - Breakdown by age

25 35 50+

1985

1991

27

23

13

14

8

10

The above two tables show the stability of the staffof this store in terms of percentage men/women; italso shows that the stc..`f is ageing.

The latter is due to the recruitment policy pursuedin the past when employees were put onpermanent contract, to the low rate of staffturnover among older employees - it is quitenormal to find sales assistants who have been withthe firm for more than 20 years - and therecruitment policy, in which age was not a

80 determining factor.

It is interesting to note that two employees of thisstore are well.above the age of retirement and stillworking.

Younger staff fall into the categories of cashier,clerical worker, warehouse assistant and delivery-man. Most of the sales assistants are between 30and 35.

The table showing the occupational structure givenbelow also reflects a very stable situation, withonly one change since 1985 due to the reductionin the number of staff responsible for the men'sdepartment.

At the same time, it reflects the policy of promotionamong female employees which is in line withtheir weighting in terms of total staff. Of the 12supervisory and managerial posts in the store onlyone was held by a man in 1991.1n the warehouseand delivery sections the heads are men who haverecently joined the firm.

Moreover, 8 out of 10 positions of responsibility inthe store were reached by internal promotion.

3.2.2 Working conditionsThe store is open from 9.30 to 14.00 and 16.00to 20.30 on Monday to Saturday. Employeeswork a 40-hour week

Sales assistants work a morning, afternoon andsplit shift of 6 hours a day on a rotational basisfrom Monday to Saturday for 36 weeks. Theremaining 16 weeks, which comprise the pre-Christmas period, clearance sales and the pre-sentation of collections, is worked in split shifts ofeight and half hours a day from Monday toSaturday.

The morning shift is from 9.00 to 15.00, theafternoon shift from 15.00 to 21.00 and the splitshift from 11.00 to 14.00 and 17.00 to 20.00.

74

This arrangement of working hours is very popularwith female staff as it allows them to work shorterhours during most of the year without forfeitingany of th,tir salary and to make it up by a longerday during the 16 weeks referred to. The fact thatthey do not have a free day during the week apartfrom Sunday is balanced out by the fact that theyhave all the afternoons or mornings free for muchof the y. ar.

The manager, assistant managers and departmentmanagers, as welt as the administration, ware-house and delivery staff, work a split shift of8 hours for 5 days a week.

Employees have 31 days holiday a year plus 2"bridges" between bank holidays and weekends.

Salaries are made up of a fixed component and avariable sales-related one. Initially the latter

Table 7 Occupational structure

1985 1991

Male Female Male Female

Manager (female)

Assistant managers

Department managers

Display assistants

3

1

2

7

2

2

1.

2

7

2

Sales assistants 1 4 14

Cashiers 2 2

Dressmakers 4 4

Warehouse(all categories)

3 3

Administration 2 1 2 1

Delivery 6 6

Security 1 1

Cleaning staff 1 1

Total 15 33 14 33

component is calculated on the basis of the salesfigure for an average sales assistant and can rise ifa person's performance outstrips this. On averagea sales assistant with 2 years' service with the firmcan achieve a net monthly salary of ESP 150,000.In line with this figure salaries in all job categoriesare far higher than those in the retail trade ingeneral, although no information is available as tosalaries paid by similar firms targeting a veryelitist sector of the market.

The working atmosphere reflects the good work-ing conditions and the friendly relationshipbetween management and staff.

3.2.3 Qualifications and recruitmentThe general level of education of employees in thisstore is very high. The team of sales assistantsincludes six women with university arts degrees.Many of them speak one or two languages apartfrom Spanish.

This, coupled on occasion with professionalqualifications entirely unrelated to retailing, doesnot mean that they consider their present job astemporary while they are waiting for somethingbetter to turn up. Most of the sales staff would be

very pleased to continue their career with the firm;the only problem they see is the job structure, withlittle scope for promotion to supervisory ormanagerial posts.

Everyone has received in-house training.

In the case of other jobs, such as technical ones, ifinternal promotion does not operate which is notthe case in this store selection is made at headoffice on the basis of the criteria alreadydescribed.

The firm determines its own recruitment policy. Forthe time being it is using fixed-term contracts asallowed by law. Almost all those recruited over thepast few years have been given this kind ofcontract.

As already mentioned, turnover among thepermanent staff is practically non-existent. How-ever the same was not true of sales assistants anddepartment heads in the late eighties, when asubstantial number left. The store's explanation isthat a number of similar stores were opening atthat time in Madrid "and our store was the besttraining school". It certainly seems true that many

7n

81

82

former employees now hold good positions in rivalfirms.

3.2.4 CommentsThe comments made for the firm also apply here.

3.2.5 TrainingThe store's training strategy is in line with thecompany's general strategy. All training activitiesare decided at head office level and the store'srole is limited to initial practical training to whichthe manager attaches special importance and towhich she herself gives time in order to ensure thatstaff adapt to the job and also so 'hat she canassess the suLcess of training received, so as toprovide for follow-up if the person is taken onpermanently.

Similarly, the manager considers the store's rolevital for transmitting the corporate culture and thestyle of customer service proverbial at Xx.

In 1991, 37 menbers of the staff of this storeattended the "Fashion trends and accessories"courSe.

4. Assessment

By the firmThe firm's assessment of the general training itprovides is very positive and because of its longtradition, especially in the matter of producttraining, it is considered among the best types oftraining in its category given in Spain.

The point causing most difficulty - and which stepshave been taken to remedy - is the matter '-ofdealing with customers. This does not mean thatemployees are not suitable from this point of view,but that the changes in company strategy havemade this a prime objective in order to achieve alevel of excellence in customer service.

By the employees or theirrepresentativesThe first impression gained by new recruits aboutthe company's training activities is one of surprisebecause of its high standard and the amount theylearn. The fact that twice a year staff attend theFashion Trends course means that over a period oftime they become more aware of such trends andalso receive a considerable amount of trainingand information on subjects such as products,design, materials, and manufacturing processes.They thus gradually acquire a sound basic knowl-edge useful for their work in this type of store.

The same applies to basic training, which employ-ees regard as an excellent theoretical training thatis subsequently complemented by practical experi-ence at the store.

By the authorThe firm's training policy is entrusted to the sales/marketing department, reflecting the fact thattraining is an integral part of the firm's newcommercial strategy. This strategy, based onquality and service, has recently been given moreemphasis, while training is being stepped up inorder to adapt to the demands of a changingmarket.

Another factor marking the firm's training policy ishelping staff to identify with its strong corporateculture. This together with a firm management ofhuman resources aims to enhance the status ofprofessional sales staff - an attitude whichcontrasts with what is happening in the retailtrade generally.

Training, therefore, is accepted and appreciatedby employees, because it enables them toprogress in their professional career and becauseof the possibilites it opens up for promotion,linking them more closely with an organizationwith a prestigious reputation for quality.

5. TransferabilityA training programme such as the one used by thisfirm can be carried out using a wide variety ofmeans - as is the case here - or with more modestfacilities. The result will not differ fundamentally.What does seem important - and this is what istransferable - is the method chosen involvingtrainee participation and hands-on experiencewith products in small groups. This and thecontinuity of training ensure that employeesgradually accumulate a core of useful knowledgewhich they can extend while on the job.

People interviewed- General manager of Xx- Personnel manager- Person responsible for training- Manager of the store described- Junior sales assistant in the store- Senior sales assistant and staff representative

76

FIRM "A" S.A.

1. General description of firm "A" S.A.Firm A is a limited company of Spanish originwhich is currently foreign-ownedit operates large stores specializing in fashionwearIts 29 stores are situated in the main cities of SpainCustomers: Urban middle classFounded in 1934

1.1 The firmFirm A was founded in Madrid in 1934 with a staffof 11 and a sales floor of 300 sq.m. It is thesecond largest department store in Spain with 29outlets and some 8,000 employees.

During the fifties the firm embarked on a majorexpansion programme which led to the opening oflarge department stores in many cities around thecountry. This expansion continued until the mid-seventies, when the general economic crisis hitmost popular department stores.

At the end of the seventies the firm saw its salesdown and costs rising. It was heavily indebted andwas taken over by its main creditor bank.

The situation showed no improvement and threeyears later a major Spanish group took over thecompany. Financial and tax irregularities on thepart of the group resulted in the expropiation of allits assets in 1982, among them firm A.

The Spanish government ran the firm until 1985,when it was again privatized and sold to aVenezuelan-owned company.

Throughout the period this company's substantialreal estate holdings were a strong attraction for anumber of firms outside the retail sector and someof these were disposed of. Subsequently a Britishfirm outside the retail sector took over firm A in1987.

This British group was plunged into serious crisis inBritain, ,Ind most of its capital was acquired byinvestors and retail companies in the USA.

Since 1991 firm A has had a management teamthat is mainly American and is well versed in retailmatters. This team is working to turn the firmaround and restore the stores to their formerelegance by using new strategies to assure theircompetitiveness.

This involves converting the large stores intocentres specializing in fashions, household goods

Table 1 - Orgaruzahonal structure

and items of personal use, with special emphasison the urban middle class segment of the market,its target group is the fashion-conscious under-45s.

The strategy involves eliminating product linestypical of large department stores such asfurniture, electrical appliances, hardware, com-puters etc. and a repositioning of the storesconsistent with the firm's objectives. This meansoverhauling buildings, changing the firm's liveryand packaging materials, adopting a new style ofadvertising etc.

At the same time, the emphasis is once more beingput on the traditional principle of customer service,which had tended to become neglected underpressure of events.

All this has led to the firm's defining a new policyfor human resources and training to underpin thechanges in its commercial policy, while at thesame time contributing to greater productivity. Itsstores, of which there are at present 29, aresituated in established or newly created shoppingcentres and have sales floors ranging from16,000 sq.m. to a mere 170 sq.m. in the case ofthe smallest store, the average being11,000 sq.m. All stores have additional room forstorage, offices, parking facilities etc.

Gross sales in the 1990/91 financial year wereESP 100 billion.

The management system currently being devel-oped is based on management by objectives, withstores and their departments involved in fixingthem.

Communication within the firm followed tradi-tional strictly hierarchial channels which did nothelp employer/employee relations when timeswere difficult. Frequent changes at managementlevel, the formulation of new policies and theirsubsequent cancellation ail subjects of greatinterest to staff which raised hopes and fearsalternately were learnt of on occasion via the massmedia in a partial and distorted form. In mostcases the information provided by the variousteams was restricted and full of promises. This didmuch to unsettle the staff and make it anxious.Aware of this problem the new management hasused various internal and external means torecreate a credible form of communication whichcannot fail to help it achieve its objactives.

Managing director

Purchasing Sales Marketing Strategicplanning

-1-

IT and logistics

1

Finance

1

Publicrelations

77

83

84

1.2 Human resources

1.2.1 Personnel structureThe figi.nr:s for the firm's labour force in the period1985 to 1991 show that in six years there was afall from 9,083 to 7,827, equivalent to 14%. Thesharpest fall was in 1985 when efforts were madeto run the workforce dawn by means of redun-dancies and financial incentives for early retire-ment.

This action coupled with the subsequent recruit-ment of younger personnel has reduced theaverage age of the workforce:

Table 2 Breakdown by age and sex, 1991

Men Women

Less than 25 150 667

25 40 822 2,470

41-55 1,778 1,306

55 + 461 173

Total 3,211 4,616

Total

817

3,292

3,084

634

7,827

Although no figures are available for the ratio ofmen to women in the past, the above age and sexbreakdown would seem to indicate that morewomen have joined the firm in recent years,raising their share of the total workforce to 60%.

The occupational structure in 1991 was asfollows:

Senior managers

Commercial managers:Store managersAssistant store managersDepartment managersSection managersOtherTotal commercial managers

Sales assistantsService and warehouse staffDisplay staff and window-dressersOffice and computer staff

128

311955

328616

1,0494,456

838124

1,232

The biggest change since 1985 has been anincrease in the percentage of the total workforcerepresented by sales assistants compared withemployees on the service side, whose proportionhas been falling as a consequence of mechaniza-tion and automation in their areas.

I.

Age is a major factor in the occupational structureaffecting commercial managers, most of whomhave been with the firm for many years.

Although no detailed figures are available for thejob breakdown by sex, three-quarters of sales staffare women, who are also well represented on theoffice and computer side. Very few women are tobe found at senior management or store manage-ment level although there are signs that the firm isaware of this and is taking steps to alter the

situation.

1.2.2 Working conditionsThe wages paid by this firm ore governed by thecollective agreement for department stores, whichlays down the basic salaries for all job categoriesexcept senior positions, together with additionalallowances for long service and responsibility,annual increases etc.

The salaries cf employees in the stores themselvesare composed of a fixed portion laid down by thecollective agreement referred to plus a variableportion dependent on sales. The fixed portionvaries considerably from one section of the storeand person to another, as well as according to thetime of year etc. but generally speaking representsabout 25% of the total wage figure.

In 1991 basic salaries for the various jobcategories were as follows:

Gro.up I: ESP 1,192,365 gross p.a.(manual, sales, warehouse and service staff)Total: 5,294 employees

Group II: ESP 1,263,908 gross p.a.(window-dressers and display staff)Total: 124 employees

Group III: ESP 1,339,752 gross p.a.(office and computer staff)

Group IV: ESP 1,420,132 gross p.a.(supervisory office and computer staff)

Group V: ESP 1,505,342 gross p.a.(office and computer department managers)Total office and computer staff: 1,232

There is a Group VI comprising general andcommercial managers whose salaries are notregulated by the collective agreement but left tothe firm's discretion, although extra payments andannual increases are governed by the agreement.

The full working week is 40 hours; part-timerswork either 30 or 20 hour., Part-time working isrestricted almost exclusively to staff working in thestores.

Central office staff work from 9.00 to 18.00 fromMonday to Friday. Store working hours depend on

the location, although generally speaking staffwork a 10-hour day without a break.

How the working hours are distributed is detailedin the description of a specific store. Oneimportant change in working .conditions whichcame into effect in 1985 was the introduction ofpart-time working, especially in the departmentstores and mainly for sales staff, most of whom arewomer.

In 1991 approximately 20% of employees wereon part-time contracts, most of them beingwomen. Prior to 1985 part-time contracts werepractically non-existent.

The firm's policy in this matter is to try and arrangepart-time working by mutual agreement and someemployees, especially women, accept the workinghours involved. Where an employee wishes toswitch to full-time, every effort is made to find thebest arrangement for both sides.

Some employees work on Saturdays. These aremainly students.

About 1,200 people are recruited to work instores during the summer sales and the pre-Christmas period. The contracts are for a max-imum of 3 months. These employees are given abasic training course and form a pool which thefirm can subsequently draw on for permanentposts when necessary.

A point that should be borne in mind is thatbecause the number of part-time contracts andpercentage of part-time contracts has increased,wages, which are generally low in the retail trade,are very low for some lower-grade staff as regardsboth the basic wage and commission.

Staff have 31 days' holiday a year or 35 days ifthey have been with the firm for more than 25years.

1.2.3 Qualification and recruitmentThe general educational level of employees istypical of that found in this type of firm with a lowgeneral educational level, which improves as theage of employees decreases, and vocationaltraining acquired on the job or, more recently,through in-house training courses.

No specific training is required of lower-gradestaff who are judged for recruitment on the basis ofvarious attitudes and personal qualities such as anextrovert personality, physical presence, ability tocommunicate and the like. When there is aquestion of a permanent contract, the person'sperformance during the period of temporaryemployment is a determining factor.

For supervisory and managerial staff at store level,who are difficult to recruit externally, the firm looks

for certain qualities rather than specific training.Aspects such as personality, ability, and knowl-edge of the job and of the firm are a few of thecriteria applied when selecting internal candi-dates for promotion to such posts.

The whole process of selecting and recruitingexternal and internal staff is carried out with theassistance of the Selection and RecruitmentDepartment, which is part of the Human Re-sources Department. The firm's recruitment prac-tice has changed along with the rest of the retailsector. In 1991, 13% of the permanent workforcewere on fixed-term contracts, compared with1.6% in 1985 when almost the entire staff wereon permanent contracts.

However, the proportion of the total figureaccounted for by fixed-term contracts continuesto be lower than that of many similar retail firmsthat have come into being or established them-selves in Spain more recently.

As a general rule, if an employee has been on aseries of fixed-term contracts for 3 years, he endsup by being given a permanent contract.

Internal promotion at store level has been thefirm's usual practice as far as the male staff areconcerned. Criteria for promotion were never verywell defined, but one of them is that the personshould be a good salesman. This fact has led toconsiderable shortcomings at supervisory ormanagement level as regards both the qualityand the number of staff, which the firm has soughtto solve through its personal development planan ambitious plan for training lower-grade stafffor promotion.

This fairly recent measure, which we shall discussmore in detail below, will also foster morepromotions of women and thus reduce the degreeof discrimination that existed in the past.

1.2.4 CommentsThe firm's personnel structure and policy is in linewith the particular situation resulting from itsdevelopment and its aim of greater efficiencyand competitiveness.

In the seventies firm A was an important companywith a paternalist personnel policy concerned forthe security and well-being of its employees.Permanent contracts and low staff turnover weresymptomatic of this attitude.

When the firm began to encounter difficulties andvarious attempts were made to get it back on itsfeet, the staff structure became a focal point ofattention. The workforce structure was ageing,employees had little training and were onpermanent contracts. The firm sought means ofcutting down the workforce arid adapting it to thenew situation.

79

2.

85

86

This led it to create incentives for voluntaryredundancy and early retirement for full-timeemployees on fixed contracts, many of whomwere in the older age groups. As a result the firmwas able to adopt a new recruitment policy typicalof the whole retail sector generally in order toreduce the average age of the workforce andincrease its flexibility by the use of more fixed-termcontracts and part-time working.

As a result, by 1991 10% of the firm's workforcewere under 25 and 13% were on fixed-termcontracts, while about 20% were working part-time.

The firm's present policy is to evolve into aspecializt fashion retailer with special emphasison customer service, and at the same time toregain the team spirit and corporate culture thatwas lost. This it seeks to do through a consistentpolicy of training and communication. However, itwould appear that this two-fold recruitmentstrategy, which is that used widely by superstoreswhich basically compete with each other in termsof price, may result in Shortcomings as regards theobjectives of quality and specialization beingaimed at.

Generally speaking, the employment of staff onfixed term and part-time contracts tends to reduceemployees' interest in professionalism, training,and working as a team, quite apart from the factthat they involve lower salaries which people seekto complement either by taking on several jobs orlooking for a full-time job when the firm hasnothing better to offer.

On the other hand since the training given by thefirm is directed to all employees, whatever hoursthey work and whatever their contract of employ-ment, there is a risk of some people deciding toleave for the reasons already mentioned and oftheir then being taken on by firms offering betterterms of employment, with the result that theconsiderable investment in training fails to payoff. If, moreover, one also bears in mind that thegeneral educational level of new employees tendsto be higher and is further enhanced by thetraining the firm gives, the opportunity andmotivation for moving on increases.

Furthermore, given the job structure of a depart-ment store with its large number of sales assistants,promotion possibilities - which frequently call formobility - are also fewer. This again may causeemployees to lose interest, take little advantage oftraining and ultimately, result in high staff turnover.All this works to the detriment of the firm's currentobjectives.

Summing up, therefore, the recruitment policyinitiated in 1985 in response to a certain stagein the development of the retail trade, may nowact to frustrate the firm's new strategy, which again

is in line with a new phase in the development ofthe retail sector observable throughout the westernworld and which gives priority to aspects such asquality, services, service to customers and special-ization, rather than to price.

2. Training policy

2.1 Training strategyThe firm has been organizing training coursesthrough its specializt training department since theseventies. Training was initially targeted atmanagerial staff and subsequently at lower-gradestaff. In the course of one of the takeovers sufferedby the firm, the training department disappeared.It was recreated when the firm was nationalized.

Throughout this whole period and until the currentmanagement team arrived on the scene, the firmundertook specific training activities in response torequests from store or department managers, aswell as basic training for new recruits or theunemployed - the latter activities being almostalways heavily subsidised. In the years immedi-ately preceding the arrival of the new manage-ment team, the quality of training considerablydeteriorated and had basically developed into asource of funds through official subsidies.

As a consequence of the management's newcommercial policy, from late 1990 onwards theHuman Resources Department and its training unitwere revitalized and the training strategy waschanged to lend impetus to the firm's new policy.

The greatest change in training policy consists inthe definition of training as part of a widerdevelopment plan which combines a formerlystructured process aimed at remedying shortcom-ings and helping people to adapt to their jobs inthe short term, with a continuous planning processdesigned in the longer term to develop thepotential of the staff by offering them a widevariety of courses and situational activities fromwhich to choose.

The whole process is designed to meet the firm'sneeds for a team of sales staff and supervisory andmanagerial staff at the stores, most of them withmany years of service with the firm and able torespond to the new policy in which fashion andservice are key aspects. It is also intended to meetthe need for greater competitiveness, allowing thefirm to regain and expand its market shares.

The firm's current training policy has also meantmore and better tiaining staff and technical aids,as well as a clear definition of the objectives setand training courses in line with them.

Training is aimed at the staff as a whole, whetheron permanent or fixed-term contracts and whetherworking full-or part-time. Training may be volun-

E. 0

tory or compulsory, depending on the courseinvolved.

In 1989 the firm organized a total of 210 courseswhich were attended by 3,099 people, aroundhalf of them permanent employees and the otherhalf temporary sales assistants being given basictraining

In 1991, 435 courses were organized andattended by a total of 6,600 people. In this casethe percentage of sales assistants taken on forspecific periods was less than half.

The main differences between these two years,apart from the number of courses and participantsinvolved, were the target groups. In 1991 moreemphasis was placed on training the firm's ownpersonnel and on a course content which gavepriority to subjects relating to the firm's newcommercial strategy. This has also been the casesince.

Courses vary in duration between 6 and 200hours. Most courses are 24 hours, but the"Consumer goods sales assistant" course that willbe described later covers 200 hours.

Courses take place in working hours.

Courses generally involve a great deal of studentparticipation and group work, during whichsubjects are discussed without the trainer andlater with him. There are frequent visits to storesand shopping centres, after. which trainees have towrite assignments and do practical work in stores.

The new concept of training as part of a widerprocess of development, led to the creation in1992 of a personal development plan whichclosely links training and promotion.

This plan, of which the firm is very proud, wasbegun in 1991 because of the firm's need forsupervisory and managerial staff to implement itsnew policy at its store. The aim was to utilize thepotential of existing staff at lower grades to enablethem to rise to the highest level their abilitiespermit.

Other major objectives of this plan are thecreation of a corporate culture such as existed inthe past but which in recent years had becomediluted, and at the same time to enhance theprofessional and social status of sales assistants.Achieving this aim involved the efforts of theHuman Resources Department and its three units- development, selection and recruitment andtraining - which followed the whole projectthrough from defining necessary qualifications,drawing up job specifications, selecting lowei -grade staff with development potential, planningthe training courses, evaluating them and follow-ing them up.

The first course, which has already begun, is

aimed at training selected sales assistants forpromotion to section supervisors. The selection ofsuitable staff for the course was made on the basisof reports from team leaders at the stores, as wellas on the information which the personneldepartment was able to provide. Subsequently,people originally chosen were put throughpsychological and professional aptitude tests andin-depth interviews. Those who did well were puton the training and promotion programme if theyso wished. Once they had accepted to do so,attendance at the courses became obligatory.

In future candidates will be selected on the basis ofan open competition for which those interestedcan apply. This will open up the opportunity toattend training courses to the entire staff.

The human resources department has alreadybegun working on the next training programme, tobe targeted at future department managers.

This programme will be open to all lower-gradestaff, whether on fixed-term or permanent con-tract. Since those on fixed-term contracts will beyounger and better educated, they will tend toform the majority of the group chosen.

Employees' reasons for attending training coursesare basically their desire for professional andsocial recognition, and financial considerations.

The firm plans to run a number of specificprogrammes for the entire staff designed tounderpin the current policy of specialization, withcourses on fashion and "total service quality" inorder to improve customer service.

It also has a third project which is a result ofresearch carried out for the personal developmentplan. Here the objective is to improve the staff'sgeneral level of education, which is very low. Theprogromme will be voluntary and take the form ofa correspondence course offering a grounding inlanguage and mathematics.

Training carried out during the 1990/91 financialyear is shown in table on the following page.

In addition to the courses listed above, voluntarylanguage courses subsidized by the firm are heldoutside working hours.

2.2 Training structure

Organizational structure

Human resources department

Development unit

Training unit Selection andrecruitment unit 87

88

Table 3 - Training in 1990/91 Financial Year

Course target group Attended by Tota I Hours

Soles assistants Permanent staff 1,326 200

Commercial sales assistants Possible temp. staff 1,763 200

Introduction to selling Possible temp. staff 1,125 30

FOSS programme Senior management 66 24

FOSS programme Middle management 376 24

FOSS programme Permanent sales staff 1,538 20

Stock management Buyers 38 15

Instructors' course Junior instructors 4 24

Instructors' course Management 12 20

Production of visual teaching aids Management 11 6

Product training (Furs) Sales assistants 67 8

Retraining for sales assistants Sales assistants beingtransferred

48 24

Gift packaging Packaging staff 24 15

Bar codes Monitors 54 16

Computer programmes Central unit staff 148 40

The training unit, which forms part of the

Development Department, is responsible for

implementing the company's policy. It is respon-sible for identifying training requirements, settingobjectives, designing training courses, preparingteaching aids, arranging training courses andfollowing them up, and carrying out studiesrelating to training and vocational guidance. Theunit has very close links with other areas of theHuman Resources Department and works withthem whenever its tasks so require.

The training unit currently has a head of unit, onesenior and four junior training specializts, andoffice staff. In the near future it will be acquiringmore training specialists and it is planned to havea training officer at each store. Similarly, it is

hoped that the new training courses for super-visors and managerial staff at store level willinvolve the latter more in the practical traininggiven to their staff.

The firm currently has 80 monitors who are trainedspecifically for this work. On occasion the firmmakes use of external training courses andtrainers, especially when it comes to courses forsenior management.

2

Training is evaluated mainly on the basis ofquestionnaires, interviews and tests which showboth how much people have learned and theiropinion of the training they have received.Evaluation and follow,up in situ is less advancedbecause people occupying supervisory posts instores tend to be older and with no previousresponsibility of managing personnel and train-ing. However, with the start of the FOSS trainingprogramme for supervisory staff, assessment ofon-the-job training is beginning in practice.

Training courses are offered through store man-agers who, when the course is not intended for theentire workforce, suggest who should attend. Aswe have already mentioned, participation in thepersonal development plan will be on the basis ofopen competition.

Account is taken when planning courses of anysuggestions made by employees, managers, orteam leaders.

The unions are not directly involved in the prepara-tion of training courses, although they areinformed about them in the two or three meetingswhich the firm holds with them each year.

In 1990/91 (the financial year runs from 1

September to 31 August) spending on trainingtotalled ESP 163 million, equivalent to ESP

20,000 per employee. However, this high spend-ing was exceptional because this was the year inwhich considerable reforms were made through-out the firm and a large proportion of the materialsrequired for effective training were purchased.

No information has been provided as to any costbenefit analysis of training activity, and given thepresent situation and the firm's evolution, any suchanalysis would be premature.

The firm does have a budget allocation of ESP 25million for university scholarships for personnel.Such studies are voluntary and must be carried outoutside working hours.

As already mentioned, the changes to the structureof training made in 1985 were very far-reaching.At that time there were only two people respon-sible for training, and material means were veryinadequate.

2.2.1 Impact on training of new tech-nologies, legislation, changes in salesmethods, internationalization etc.

the previous paragraphs we have discussedfactors which have affected training. Basicallythese have been two - the introduction oftechnology and a switch in commercial polizy toput more accent on fashion and service - with oneoperating in the past and the other currently.

2.2.2 Involvement of the social part-ners in training policyFirm A is the Spanish retail firm with the largestpercentage of unionized employees the figure isover 5000 - and has been the starting base formany union leaders in the retail sector. The moststrongly established union is the CCOO, closelyfollowed by UGT.

This might suggest that there has been consider-able industrial conflict throughout the difficultyears when financial problems constantly poseda threat of closure. In fact the reality was verydifferent. Although there were conflicts, some ofthem serious, the union representatives throughoutnegotiated and cooperated with the managementto ensure the firm's survival and the security of theirjobs, even though this on occasion obliged them tocompromise in matters of salary and job shed-ding. "Industrial peace was needed to save ourjobs", as one of the union leaders put it.

All this did not take place without some impact onthe morale of the employees and their unionrepresentatives, who were frequently frustrated byrepeated promises from successive new ownersthat came to nothing. The frustrations and fearsreflected in the lack of confidence they had in themanagement until very recently.

There is now a growing feeling among theemployees and their representatives that at lastsomething is beginning to move. Efforts on the partof the management to change the firm's image,the remodelling of buildings, rethinking of productlines etc. have been first indications and havebeen underscored by visible changes in the firm'spersonnel policy, particularly as regards trainingand promotion.

However, there is still some anxiety on the staff'spart - mainly because of the financial situation ofthe foreign group which owns the firm, whichmight oblige it to take decisions affecting firm A'sfuture.

Union representation at the various stores takesthe form of a committee elected by the employees,and at company level by an inter-store committeemade up of representatives of the majority unions.

At present the inter-store committee has 13members, 5 of whom belong to CCOO, 4 toUGT, 3 to FASGA and 1 to the Sindicato Unitario.

Relations 'oetween the firm and the unions are nowsmooth ami iriendly. There is constant communica-tion between them and the unions are allowedfacilities for carrying out their work.

The involvement of.the unions in training is limitedto what is laid down in the collective agreement.This requires that the management "inform theinter-store committee of training given, as well asof courses planned and further developmentsintended during the life of the agreement".

This information is given at regular meetingsbetween the unions and the various units of thepersonnel department, when training and relatedsubjects are discussed informally.

The collective agreement governing departmentstores for 1991 contains the following clause onvocational training by firms: "Firms undertake toincrease by at least 5% the total number of hoursof vocational traiiiiiig currently given".

The inter-store committee is provided with all theinformation necessary to enable it to check thatthis is so.

2.3 Description of a training courseThe training course described here is the"Consumer goods sales assistant" course thathas been organized for a number of years with thecooperation of the National Institute for Employ-ment which in the past helped with a subsidy.

The course is intended for the retraining of salesassistants and together with the FOSS course oncustomer service is that most generally attendedby lower-grade staff.

83

89

90

The courses take place in rooms allocated for thispurpose at individual stores or at the head office inMadrid.

Attendance is voluntary, but managers and super-visors suggest those who need such training.

The course lasts for 200 hours, with 80 hours ofpractical and 120 of theoretical training. Instruc-tion is given in two-week modules occupying halfthe working day.

Practical sessions take place on the job, enablingtrainees to put the theory they have learned intopractice by observing, doing the job themselvesand working with their immediate superiors.

In 1990/91, 1,326 sales assistants from stores indifferent cities attended these courses. This figureis equivalent to 25% of the total.

The course is targeted at all categories of employ-ees, whether on permanent or on fixed-termcontracts and whatever their working hours andthe courses are arranged at suitable times to allowfor this.

"Consumer goods sales assistants" courseThe department store, its evoiution and its futureorganization.The professional sales assistant. Knowledge,skills and behaviour. The modern professional.Product information: characteristics and uses.Knowing about customers and their psychology.Communicating when selling.Selling techniques.The AIDDAS process.Simulated sales situations and demonstrations.Modes of payment.Updating administrative procedures.Fundamentals of merchandising.Advertising and sales promotion.Inventory discrepancies.Department store security systems.New technology. Unitary control.

3. Description of a particular store

3.1 General informationThe store chosen is situated in a middle/upperclass residential area with service-sector busi-nesses in Barcelona.The store has a total area of approximately35,000 sq.m., 15,000 of which constitutes salesfloor while the remainder is used for car parks,warehouse, offices etc.

The sales floor covers 5 storeys with the usualdepartments to be found in a big departmentstore. In accordance with the company's newpolicy, the hardware, car accessories, kitchenfurniture and bedroom furniture departments havebeen done away with. Other departments such ascomputers, furniture, books, records etc. will either

a

be reduced or redesigned in the near future. Allthis is being done with a view to achieving theobjectives already mentioned and to focus theactivity of stores on fashions and home furnish-ings.

The store we describe here was opened in 1983.Previously it belonged to an American retail firmwhich withdrew from Spain. Some of the staffworking in the store were taken over from theAmerican firm. In recent years the store has seen achange in its type of customer, who originally wasmiddle and upper-class, and now serves agrowing number of people with less purchasingpower. It is now regaining ground among itsoriginal target group and is also trying to reachyounger one groups.

Organizational chart

Area manager

Store manager

Assistant Store manager

Merchandise admin. Customer serv.Personnel display

Department manager

Section managers

Sales assistants

3.2 Human resources

Operations

3.2.1 Personnel structureThe store currently has a staff of 308, 63.6% ofwhom are women. In 1985 there were more staffbut the proportion of women was lower, being inthe region of 50%.

The breakdown of staff in age terms in 199; wasas follows:

Table 4

-25 26-40 41-55 55+

43 115 117 33

The average age of the workforce has decreasedsince 1985 since, as we have already mentioned,measures to trim the workforce resulted in earlyretirement, and the subsequent recruitment ofyounger staff.

If we compare this personnel structure with that ofthe firm as a whole we find that in 1991 theproportion of women in the store was greater -

4

63% compared with 60%. It also had a largerpercentage of people under 25 14% comparedwith 10%, and of people over 55 10.7%compared with 8.1%. However, the differencesare not very striking.

Table 5 Breakdown by job category in 1991

Men Women Total

Senior management 2 1 3

Sales managers 5 11 16

Sales assistants Approx. 75% women 199

Service managers 5 5

Service personnel Mainly men 43

Administrative 4managers

Clerical staff 38

Sunday. Half the sales assistants, and approxi-mately 32% of the total staff are on part-time andwork 20 or 30 hours a week.

Wages have been referred to in the generaldescription of the firm. At store level commissionsaccount for a substantial part of wages, as muchas 30% though differing from one department toanother. While this might be thought of as asource of problems, it does not seem to be so bythe staff who appreciate other matters such asproduct knowledge and good relations with theircolleagues.

3.2.3 Selection and recruitmentIn recent years the intake of younger staff with asecondary or even university education has raisedthe general educational level of staff at this store.

Almost the entire staff have acquired their trainingon the job, many of them when it was still owned

4 by the American firm. Selection of lower-gradestaff is made from among those attending thebasic training courses run annually in order to

38 recruit casual staff for peak periods.

The differences that have occurred in the jobstructure since 1985 have mainly been in thebreakdown by sex. In 1988 there was a smallerpercentage of women among the sales managersand there were men on the administrative side,which is now entirely occupied by women.

Although no figures cre available for the break-down of job categories by sex for the firm as awhole, such information as we were given showsthat the situation of ihis store as regards thenumber of women and the positions of responsi-bility they hold is not typical. In the remainder ofthe firm far fewer women are in managerialpositions in the stores.

3.2.2 Working conditionsThe store's opening hours are .om 10.00 to21.00 without a break, from Mc.iday to Saturday.

Sales assistants have three types of working hours.The first is a split shift with fewer hours, starting at12.30 and finishing at 20.15 with one hour'sbreak for lunch. The second is a split shift with afull working day starting at 9.45 and finishing at20.15 with 2 hours for lunch. Staff with thesehours have one day off a week in addition toSunday. The third possibility is a 5-hour day withno break, 6 days a week.

Batt, types of working day split or continuousare a permanent arrangement and there is noperiodic rotation. Changes may be made byagreement.

The remainder of the staff work split shifts of 8hours a day with one day free a week apart from

The criteria used in selecting staff are personalaptitudes and the willingness to learn, rather thanspecific knowledge.

Appointment to supervisory and managerial postsis made by internal promotion at this store. So farpromotion has been based on reports from directsuperiors and the head of personnel. Currently thefirm is implementing the personal developmentplan already mentioned and four sales assistantsfrom this store are attending courses.

The firm's recruitment policy has dready beendiscussed. During the eighties use was regularlymade ef temporary and fixed-term contracts whenrecruiting new staff. Now new recruits are givenfixed-term contracts, which after three years aremade permanent. There is a high rate of turnoveramong staff on fixed-term contracts mostly part-timers during the three-year period. This rises ashigh as 50% a year compared with 3% amongstaff on permanent contracts.

In 1991 the breakdown of contracts was asfollows:

Fixed-term

PermanentReplacement staff

55(all part-timers)

2512

Although no figures are available for the numberof staff on fixed-term contracts in 1985, informa-tion provided confirms that they virtually did notexist.

Each year some 80 or 90 people are recruited ontemporary contracts to cover the additional staff

E 5

91

2.

92

requirements over the holiday periods and atChristmas, the period involved varying fromseveral weeks to 2 months. A large number ofpeople on such contracts are students in variousdisciplines; others are unemployed and are thusable to make their way into the firm where theymay end up on the permanent staff.

3.2.4 CommentsThe situation at this store reflects the growing trendin large stores, with a nucleus of low-grade staffworking full-time and on permanent contracts andanother group, which is steadily growing, ofyoung staff who are on part-time and fixed-termcontracts. Most of the latter are women.

The fact that the proportion of people under 25(14%), on fixed-term contracts (17%) and part-timers (32%) is higher than the figure for the firmas a whole reflects the strategy pursued by largefirms in their retail outlets.

The firm has bn organizing training coursessince the sixties and is thus one of the pioneers inthis field in Spain.

The comments made in the chapter on the firm as awhole are particularly relevant to this store.

3.2.5. TrainingTraining at this store follows the general pattern ofthe firm itself, though with the possibility, whichhas already been utilized, of organizing its owncourses where this is considered necessary.

In 1990/91 the course most frequently organizedwas the FOSS course on sales techniques in its twovariants, one aimed at managerial personnel andthe other at lower-grade staff, and the course forconsumer goods sales assistants already de-scribed.

Responsibility for training lies with the head ofpersonnel who organizes the courses as plannedby the central departments. Five members of thestaff have been trained as instructors and have oneclerical assistant.

4. Assessment

By the firmThe firm's current assessment of training is markedby its awareness of the radical changes that aretaking place throughout the organization and,specifically, in the Human Resources Departmentand the training unit.

A criticism heard of training given prior to 1985was that it was more concerned with generatingfunds than with meeting the workforce's needs.

Now that a number of courses have been recentlylaunched while others are in tile pipeline, thG

firm's perception is more positive. It feels that thecourses are having desirable side-effects, such asrestoring the confidence of older employees andarousing enthusiasm and motivation in the young-er ones.

By the employees or theirrepresentativesIn the opinion of the employees and theirrepresentatives "They are now taking it (training)seriously". They feel that training is meeting theirneeds and is in line with their interests, that it is

linked to promotion, that it helps to encourageprofessionalism and raises the social status ofsales assistants by stressing the importance of theirwork and the need for training to do it.

A sign that employees are beginning to appreci-ate training in another way is shown by anoticeable increase in willingness to accept theidea of training during working hours, eventhough this means a reduction in their commissionearnings. Although some reluctance is noticeable,employees are more willing to attend courses inworking hours because of the interest they arearousing.

By the authorThe most important aspect of training at this storeis the fact that it is regarded as an essentialelement of the firm's commercial strategy. Thus theway has 1.-Gen paved for the qualitative changesthat are taking place. Because the policy is so newthere is little scope for evaluation at present, butthe first steps taken, particularly the drawing up ofa personal development plan, would seem to befollowing the right lines and meeting very specificneeds on the part both of the firm and ofindividuals.

Interviews clearly revealed the side-effects of thecurrent training programme in the sense ofmotivation and higher expectations.

5. TransferabilityA very comprehensive training programme withregular courses enables employees to keep pacewith the latest changes in the retail sector andrefresh and improve their knowledge. The prac-tical component encourages and strengthens theinvolvement of a number of employees with manyyears of service with the firm, who tend toappreciate practical aspects more than theory.

Persons interviewed- Assistant manager responsible for industrial

relations and personnel managementHead of the training unit

- Head of Personnel at the store described- Two union representatives, one at national and

one at store level- One junior and one senior sales assistant at the

store described

6 6

PART 3:

9. Concluding comments

10. Sources of information

11. Methodological note

87

SECTION 9 - CONCLUDING COMMENTS

1. The case studiesThe five Spanish firms selected as case studiesshare to a greater or lesser extent something thatmay be typical of many firms in the retail sector.This is the fact that they are, or in the recent pcsthave been, involved in radical processes ofchange and restructuring because of the threat ofor actual loss of competitiveness due to penetra-tion of the Spanish market by foreign firms andretail systems.

The five firms are facing up to the process ofreorganization in different ways, but all of themconsider the training of their employees as part ofthe restructuring. Some firms are including trainingas an element of their policy for the first time.Others are modifying earlitT practice and aregradually formulating new poiicies to cope w:ththe present situation.

In three of the five firms chosen for study, decisionsin the matter of training lie with the management.In the fourth firm they are the responsibility of thehuman resources manoger and are part of generalmanagement strategy, while in the fifth firm thereis a growing tendency to link training more closelywith the firm's general and commercial policy.

This latter characteristic is perhaps not common tothe retail sector as a whole, although the fact thattraining policies are in their infancy and beingimplemented at a vital moment in the life of thefirm justifies the hypothesis that linking trainingand general policy is far more frequent than mightbe expected.

The personnel policy in a number of the firmsstudied is aimed to c greater or lesser extent atimproving the working conditions of employees,by means of salaries higher than those collectivelyagreed, more rational and improved promotionsystems, better channels of communication andcther methods in order to arrive at a lower ratec I staff turnover, greater productivity, a higherstandard of service and a return on the traininggiven.

Allowing for the struoire of the retail sector, whichis largely made up ot small individually-ownedfirms, one cannot say that the picture presented isa general one. However, it is an example of thetraining policies firms are putting into practice.

Our choice of an institution in the retail trade, theConfederación del Comercio de Cotaluña in

conjunction with a medium-sized enterprise, is

due to the desire to offer a serious alternative tosmall and medium sized enterprises which cannotafford their own training organization but canformulate policies that include training.

Another of the case studies revealed a trainingprogramme offering innovations in continuingtraining because of its methodology, particularly

in situations and cases where lack of motivation isan important factor.

The third case was a firm whose general policyhas traditionally linked staff training with totalquality and the strategies used to achieve it asituation as yet infrequently met in the retail trade.

The remaining two cases are larger organizationsin terms of capital, number of retail outlets andemployees, who allocate substantial sums to stafftraining.

2. Planning and design of trainingcoursesAs we have pointed out above, in most of thecases studied training is starting to be regarded asan important element in the restructuring orexpansion of the firm and is planned as part ofthe company's general strategy. Those firms thatare aiming for success through specialization orquality are altering their training concept and aredevising new and ambitious plans that accordwith their current strategy, while disregardingprogrammes devised with a different policy inmind.

Here the success of their strategies is linked to abetter training of staff, so that efforts are made toincorporate commercial objectives in daily prac-tice.

In other cases training is seen as a means ofeasing the change to different policies. Thisapplies to companies involved in processes ofexpansion or specialization. In all of them the newtraining programmes have been thought out tomeet the needs of the firm and its objective ofpenetrating new markets.

Other express objectives are the creation orstrengthening of a corporate culture, especiallyin those firms vho base their strategy on qualityand high standards of service.

An objective added by one of the firms studiedwas a greater motivation, enhanced social skillsand the "dynamization" of its staff. This is animportant objective in a sector which until veryrecently was not notable for its human resourcespolicy.

In all the cases studied the elaboration of atraining policy and the planning of trainingcourses is decided at top management level, orin the personnel departments in close contact withthem, so as to guarantee consistency with thecompany's objectives. Its implementation is theresponsibility of the personnel or training depart-ments.

Training needs are usually analyzed on the basisof reports or requests which are gathered more orless formally at meetings between the firm's middle

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and top management. Only one of the firms hadcarried out a systematic study to ascertain thecurrent level of qualification of its employees,needs for qualification, the skills and aptitudesnecessary to achieve the objectives set, and thetraining programme designed to meet theseneeds.

The absence or the shortcomings of such ananalysis has in some cases led to weaknesses inthe planning of training which become moresignificant with the firm's size. In one case it wasalso possible to note a certain inconsistencybetween the strategies formulated and the plan-ning of the relevant training courses, and betweenthe analysis of the workforce and its qualificationsand its present and future needs.

No involvement of the employees or of theirrepresentatives was found to exist at any stage inthe decision-making process or the organizationof training. In some cases this was at the expresswish of the firm and in others was due to theweakness of the staff representatives or theirfailure to give priority to the matter because ofmore urgent issues such as salaries, working hoursetc. In most cases staff representatives wereinformed of the firm's plans beforehand.

None of the firms studied had formulated a policyas regards employees' need for training and theresponse to it was not systematic. As a result,training needs become individual issues whichwhen treated as such may lead to arbitrariness.

The planning and designing of training in almostall the firms reflects the situation of transition froman absence of policy to the emergence of one, orfrom one concept to another. This situation wouldseem to be common to the few firms in the retailtrade which do have a training policy. Moreover,as we have seen in the course of this report, thisparallels the evolution of the retail trade itself,which is faced with competition an a scaleunknown until the eighties. Traininy understoodas a list ot activities has given way to plannedtraining aiming to meet the needs for qualificationin the firms concerned.

3. Beneficiaries of trainingIn the five cases studied all categories of employ-ees had access to training with the exception ofthose employees not strictly involved in selling(drivers, dressmakers, biologists, etc.). This doesnot mean that the quality ,;nd quantity of trainingoffered was the same, but simply that no categoryof employee was excluded from training in thefirm's planning.

In principle all the firms studied have continuingtraining at all levels, thus for employees alreadyworking in different jobs It is, therefore, notdirectly aimed at helping them to adapt to a newjob

1 1 I

Basic training only exists - and this is important -in three of the five firms, which happen to be thelargest and also those with a strategy based onstandard of service, quality of goods andspecialization. In all three cases basic training isused as a source of subsequent recruitment, firstlyon a temporary basis and later on to permanentposts.

On the other hand, this basic training exists almostsolely for lower-grade sales staff because of thelack of any sales training in the general educa-tional system. In the case of heads of department,floor managers, purchasing managers and thelike, the firms had no systematic basic training,although this is found in superstores, which arerapidly expanding.

Organizational differences may be observedbetween the training of lower-grade personneland that of supervisory and managerial staff. Oneof these differences is in the planning. The trainingfor lower-grade staff is better planned and iswider-ranging than that given to supervisory staffin the various firms and is also organized in-houseboth in terms of rooms used and instructors. Thismay have something to do with the difficultiesfirms have in finding personnel suitable forsupervisory positions on the labour market andtheir need to get to know and train their lower-grade staff better, even though all firms do not givethis express objective. The organization of in-house training may also be explained by the firms'fear that hopes of promotion may be, encouraged,as indeed they are.

Training for lower-grade sales personnel is alsoimproving, a fact which reflects in employees'acceptance of training; they now consider it

worthwhile.

The training for supervisory staff and managementis very often left to the personal judgement of thoseinvolved, and is designed to accommodate theirneeds and the time available. In many cases it isorganized outsi.cle the firm. Older firms withemployees with many- years of service haveconsiderable problems convincing people of theimportance of training for themselves and for theirsubordinates. The need for rejuvenation of theworkforce is seen as very important - hence thecreation in one of the firms studied of specifictraining programmes for lower-grade personnelwith a view to preparing them for promotion tosuch posts.

Office staff are given less training, whether basicor continuous, since they are recruited with thetraining provided within the framework of theeducational system and Ihey adapt to the job bydoing the work. Training given tends to be morerelot-d to the introduction of new systems.

69

No firm excludes employees from training on thebasis of type of contract of employment whetherfixed-term or permanent or on the basis ofwhether they work part-time or full-time. In two ofthe firms part-time employees have the sametraining opportunities as full-timers and coursesare organized to ensure that they can attend themin working hours. Another two firms have no part-time staff. In the fifth part-time staff are notexcluded but they may have to make a personaleffort to attend certain stages of training.

No training exists for temporary employees bywhich we mean those working one day a week orfor several days over Christmas. However, trainingis available for those who are taken on by largerfirms, firstly for a period of three months overChristmas or in the summer. Such people may thenbe put on longer contracts that are converted intopermanent contracts in due course.

In the course of our case studies we found thatwomen represent approximately 60% of theworkforce and account for almost 90% of lower-grade posts, and that, with one exception,promotion has to date not been available tothem. Selection of those to attend training coursesand be promoted are traditionally based on theopinions of superiors and are currently beingaltered in an attempt to ensure that the firmbenefits more from the potential of its employeesthrough the application of more objective promo-tion criteria. Firms are increasingly aware of thisfact and although no positive action is being takenas regards women, attitudes are changing. More-over, since most of the staff attending courses arewomen, their job prospects can be improved.

4. Content, methods and organizationThe organization of training in four of the five firmsstudied was the responsibility of the humanresources, personnel or training departmentthe latter exists in three of the firms studied withdifferent degrees of autonomy. These departmentsgenerally design the training programmes with itscontent and duration and decide on the instruc-tors, especially in the case of sales assistantswhose training is generally done in-house. Thereis also a tendency to provide training for super-visory staff in-house, whereas for senior staffpreference is given to training facilities availableoutside the firm.

The organization of internal training courses forsales assistants also presumes the existence ofinternal instructors. These may be another employ-ee, whether or not superior to the trainees, whois trained to carry out this task, or specializtinstructors employed by the firm specifically forthis purpose.

The use of employees who occasionally giveinstruction on a particular subject encourages theidea that training is important by involving

employees at different levels and is appreciatedby everyone. Something similar happens with thefirm's own instructors, with whom employeescooperate better and from whom they learn morebecause they feel closer to them. However, thissystem imposes an additional burden on thepeople acting as instructors if they are not toneglect their normal jobs.

In the case of Supervisory staff such as heads ofdepartment, floor managers, managers of smallstores etc. there is a tendency to adopt the samesystem, although in the past they tended to takepart in outside courses. At present the impressionthat "There are no good trainers" for such staff andthe desire to create a corporate culture is leadingto a movement within some firms to develop theirown facilities for training staff at these levels.

In general there is also a tendency to alternatetheoretical training with practical training super-vised at the workplace or elsewhere, and thesuccess of this system in the case of sales assistantsdepends very much on the importance theirimmediate superiors attribute to training and theencouragement they give to those of their staffwho receive it.

The content of training courses in the retail sector issteadily being developed. This is because modernforms of retailing have only recently come to Spainand there has been no tradition of reflecting andpreparing training materials nor, in many cases,even people with any real knowledge of thesubjects involved. The first step was to usematerials and systems originating abroad, whichhad to be adapted to Spanish needs. If they weresuccessfully adapted they were rapidly renderedobsolete because of the pace of development ofthe retail trade in Europe. At present firms who areinterested in training devote staff and effort to thematter and devise course contents more in linewith the needs of consumers and of the firmsthemselves.

More frequently courses deal with the manage-ment of stores and the different departments,emphasizing both the financial and administrativeaspects, as well as team leadership, productknowledge (perishable produce in a first stagefollowed by other goods) and selling techniqueswhere the subject of corporate culture is introduced.

The various types of subject-matter depend on thedifferent posts and job categories of trainees butas a general rule product knowledge is that mostrelated to the workOace. Subjects connected withmanagement or selling techniques, which are of amore general nature, can be found in trainingprogrammes for both cashiers and departmentmanagers.

The general nature of many training courses isprobably necessary as part of the process of

no

95

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providing retailing qualifications which hithertowas only gained on the job. In this sense it canencourage job mobility at this stage.

Teaching methods are changing as well as coursecontent, and discussion, case study, simulatedsituations, audiovisual aids, correspondencecourses and games are habitually used tostimulate motivation and involvement on the partof employees, the majority of whom have a lowlevel of general education and need such methodsto help them get the most out of training.

The training activities of the firms studied reflectthe different stages of evolution of the retail tradeand, since they involve different systems applic-able to different stages, may be transferable inwhole or part to those countries that are of asimilar stage of socio-economic development.

5.. Cost and financingFor some firms struggling with the urgent problemof achieving cost effectiveness in the short-term,training is an additional cost that slows downtheir progress or expansion. For others it is aninvestment for the medium or longer term. Thedifference in views sometimes lies in the objectivesthe firms have set themselves and the strategiesthey have devised for attaining them.

As a general rule firms are now investing more intraining than in the recent past, even though theamounts involved are in some cases insignificantin relation to total personnel costs.

None of the firms have attempted a cost/benefitanalysis. They have expressed the difficulties theyfind in performing such an exercise in a sectorundergoing rapid change, where a variety ofinternal and external factors may influence thefirm's progress and sales. Two years ago one ofthe firms attempted a cost/benefit analysis as an

91

experiment but did not continue the exercise anddid not consider the results very accurate.

The impact of training is sometimes measured interms of customer satisfaction, which is ascer-tained by means of periodic surveys or bymonitoring changes in the behaviour of personnelwho have received training.

The opinions of staff as regards their behaviourand sales perk, ..ance are alsO a useful means ofassessment, since many employees are veryaware of the fact that the new tools they havebeen given will help them to sell more and sellbetter.

Firms call for a more active involvement of thepublic authorities through fiscal incentives orsubsidies for training in order to remedy thetraditional lack of training in the retail trade.

Subsidies are currently granted by a number ofdifferent local, regional and national authorities,who on occasion serve as a channel for ECvocational training funds. These subsidies may bepaid directiy to firms if they are large enough andwell enough organized to meet the iequirementsset, or to intermediate bodies in the retail sector,thereby ensuring that small and medium-sizedenterprises can have access to training at lowercost.

However, these subsidies are not widely used inthe retail trade and only large firms have reallybenefited from them.

The two largest firms in our study had receiveddirect subsidies while the smallest used an outsideorganization which was also in receipt of funds.The other two firms financed their trainingactivities entirely from internal sources.

SECTION 10 - SOURCES OF INFORMATION

Previous studies of the retail tradeAndlisis de la Distribución Comercial enEspana. Andersen Consulting. 1989Caracteristicas estructurales del comercio min-orista y mayorista en Espana, IRESCO, 1983Centros comerciales y mercados minoristas.Informe y Directorio. Dirección General deComercio Interior, Ministerio de Economia yHacienda, 1989Construction d'une professionnalité: Le cas ducommerce espagnol. CIREM, 1989La distribution en Espana. Embajada Francesaen Madrid, 1987Informe sobre el comercio asociado en Espa-na. IRESCO, 1984Encuesta sobre el Comercio interior 1988.Instituto Nacional de Estadistica, 1991

Informe Nielsen, )985, 1988 y 1990. NielsenMarketing ResearchLa estructura del comercio catalOn. Generalitatde Cataluna, 1989

Sources of informationIn preparing this report we made use not only ofthe publications already mentioned but also ofspecialist publications concerned with the retailtrade, such as Alimarket, Aral, Codigo 84,DistribuciOn Actualidad, Drogueria Actualidad,Apuntes de Franchising etc. and publications ofthe National Statistical Institute and the Ministry of-Labour, the Artuarios del Mercado Espanolpublished by the Banco Espanol de Crédito, andLa Renta Nacional de Espana published by BancoBilbao Vizcaya.

9297

SECTION 11 - METHODOLOGICAL NOTE

The lack of the relevant statistical data has been aconstant feature of the preparation of this report.Either figures did not exist, or the statistical serieswere not long enough, or they did not relate toidentical groupings. The chief obstacle .has beenthat data on the retail trade is almost alwayscombined with that of other related sectors, suchas repairs and the hotel and catering trade, andthat when data was available the wholesale tradeand middlemen were also included.

The following are the explanations we considermost necessary listed chapter by chapter.

Section 2Table 3 lists retail licences, that is to say the licencethat any trader has to hold in order to sell a certainarticle in his shop.

This data had to be used due to the lack of anykind of commercial register in Spain, so that thenumber of licences was the nearest approxima-tion.

However, it is important to realize that shops arenot granted just one licence, but are granted alicence for each group of articles. Thus a shopwhich sells only shoes will have one licencewhereas a shop which sells food, clothing andtoiletries will have three.

Another problem with retail licences is that there isno guarantee that the figures allow for the numberof closedowns in the sector a further reason forregarding the figures as somewhat inflated.

Some autonomous communities have starteddrawing up a detailed register of retail outlets.This has made it possible to calculate a coefficientwhich, divided into the number of licences, shouldgive us the number of retail outlets in existence asaccurately as ppssible. This coefficient may varybetween 1.2 and 2.

However, what is important is to realize theincrease that has taken place in the number ofretail licences issued for any kind of article overthe period 1985/1990. This reflects the growth ofthe retail trade over this period.

No reliable figures have been found for the marketshare of the different forms of retailing, except inthe case of food. When dealing with specializa-tion, retail licences were again used.

Section 4Employment statistics pose the greatest problemsfor the reasons mentioned above. No figures arepublished for the job structure in the retail trade orfor the number of part-time and fixed-termcontracts. Statements not drawn from officialstatistics are based on information obtainedduring interviews with personnel managers in theretail trade.

Section 5Again, no reliable figures are available for theamounts spent by firms on training, not just in theretail trade but in any other sector.

93

CEDEFOP - European Centre for the Development of Vocational Training

Training in the retail trade in Spain

Marisa Mendez-Vigo

Luxembourg: Office for Official Publications of the European Communities

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