Customer Service and Human Resources

Introduction

In specialty jewelry retailing, the level and quality of customer service is a key competitive factor as nearly every in-store transaction involves the sales associate taking a piece of jewelry or a watch out of a display case and presenting it to the potential customer. Therefore the ability to recruit, train and retain suitably qualified sales staff is important in determining sales, profitability and the rate of net store space growth. Consequently the US division has in place comprehensive recruitment, training and incentive programs and uses employeeattitude and customer satisfaction surveys. A continual priority of the US division is to improve the  quality of customer experiences in its existing stores, while providing sufficient staff that are well trained and with suitable experience to run any new stores being opened.

During fiscal 2010, focus was on increasing the efficiency of in-store execution and aligning store staff hours to sales volume, subject to minimum staffing levels. In addition, at the start of fiscal 2010 a further reduction in staffing levels at the divisional head office was implemented. Staff training, which centered on product knowledge and selling skills, remained a priority. In a difficult year, employees remained motivated, focused on maintaining excellence in execution, and were well, and appropriately, incentivized.

Customer satisfaction

Based on customer feedback, each store is benchmarked against others in its district, region and across the division using a customer satisfaction index covering 12 criteria. The scores are reported on a monthly basis, highlighting areas of good performance and those for improvement, and are one of the key performance indicators used to manage each store.

Training

Providing knowledgeable and responsive customer service is a priority, and is regarded by management as a key point of differentiation. It is believed that highly trained sales associates, with the necessary product knowledge to communicate the quality, attributes and competitive value of merchandise, are critical to the success of the business. Store staff also receive training on supply chain issues such as conflict diamonds and the environmental impact of gold mining.

Retail sales personnel are encouraged to become certified diamontologists by graduating from a comprehensive correspondence course provided by the Diamond Council of America. Some 60% of the division’s full time sales staff who have completed their probationary period are certified diamontologists or are training to become certified. All store managers are required to be so qualified, and there are over 5,000 certified diamontologists employed by the US division. Employees often continue their professional development through completion of further courses on gemstones and timepieces.

The US division’s substantial training and incentive programs, for all levels of store staff, are designed to play an important role in recruiting, educating and retaining qualified store staff. The preferred practice is to promote managers at all levels from within the business in order to maintain continuity and familiarity with the division’s procedures.

Goals and Incentives

All store employees are set daily performance standards and commit to goals. Sales commission based on individual and store performance is paid. Sales contests and incentive programs also reward the achievement of specific targets with travel or additional cash awards. Apart from sales-based incentives, bonuses are paid to store managers depending on store contribution and to district managers for the achievement of key performance objectives.

US head office bonuses are based on the performance of the division against predetermined annual profit targets and predefined objectives. Promotion and salary decisions for principally non-management head office personnel are based on performance against service level and productivity goals; for managers they are based on annual objectives and performance against individual job requirements.

Store Managers

Each store is led by a store manager who is responsible for various store level operations including overall sales and branch level variable costs; certain personnel matters such as recruitment and training; and customer service. Administrative matters, including purchasing, merchandising, payroll, preparation of training materials, credit operations and divisional operating procedures are consolidated at divisional level. This allows the store manager to focus on those tasks that can be best executed at a store level, while enabling the business to benefit from economies of scale in administration and to help ensure consistency of execution across all the stores.

Recruitment, Retention and Promotion

Although staff recruitment is primarily the responsibility of store and district managers, field recruiters support the hiring function.  The internet provides numerous opportunities to attract and recruit high caliber talent.

Management believes that the recruitment and retention of highly-qualified and well-trained staff in the US head office is essential to supporting the stores.  A comprehensive in-house curriculum, including leadership development, diversity coursework and mentoring programs, supplement specific job training and emphasizes the importance of the working partnership between stores and the head office.

A key motivator for all staff, and in particular for store based team members, is the division’s practice of internal promotion. It is a requirement that District Managers and Vice Presidents of Regional Operations have previously been a store manager within the division.

UK

Introduction

Management regards customer service as an essential element in the success of its business, and the division’s scale enables it to invest in industry-leading training. The Signet Jewellery Academy, a multi-year program and framework for training and developing standards of capability, is operated for all store staff. It utilizes a training system developed by the division called the “Amazing Customer Experience” (“ACE”). An ACE Index customer feedback survey gives a reflection of customers’ experiences and forms part of the monthly performance statistics that are monitored on a store by store basis. In fiscal 2010, the UK division implemented an improved staff coaching methodology.

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The UK divisional head office staff numbers were reduced in early fiscal 2010 as part of a cost reduction program. Store staff hours continued to be flexed, where possible, to reflect sales volumes.

Training

ACE is a flexible program consisting of six elements that better enable store staff to meet the needs of customers. In addition to the normal training program, one day ACE workshops were again used in fiscal 2010. All store personnel have daily performance targets. They are given training and weekly feedback on their performance from store and field management to help them achieve these targets. Training in management skills is provided to all tiers of store operations management to support the store associate training program and to build general management skills.

The division’s continuing program to improve the training of its staff is reflected in the number of employees that have now passed the Jewelry Education & Training (“JET”) Level 1 qualification accredited by the National Association of Goldsmiths (“NAG”). 93% of store management have achieved this qualification. Signet employs 32% of all JET Level 1 qualified people that work in the UK retail jewelry industry.

In addition the division has established award winning workshops run in partnership with the IGI to increase product knowledge in the diamond category, and a partnership has been developed with the BHI to deliver workshops that increase service levels in store and help drive the sales performance of the watch category. These courses form part of the training program for Ernest Jones staff wishing to achieve a higher level of expertise.

Recruitment and retention

Recruitment procedures, including online facilities, continue to improve the suitability of new store personnel, helping to ensure that they meet key basic requirements and are motivated to work within a jewelry store environment. Field and human resources management are responsible for the recruitment, review, training and development of sales staff, thereby ensuring consistency in operating standards and procedures throughout the business. All new store staff receive a structured induction program that covers store operations, product knowledge and customer service. A financial reward is received upon completion.

A commission-based remuneration program first implemented in fiscal 2006 was further refined during fiscal 2009. The level of commission paid is dependent on a combination of store and individual performance.

Promotion

The division’s preferred policy is to promote store management from within the business and aim for 80% of appointments to be internal applicants. Each chain always has a number of sales staff who are qualified to advance to store management level, thus assuring the availability of newly trained managers familiar with the division’s operating standards and procedures.

Store support

In order to increase staff selling time and to improve efficiency, operating procedures are routinely reviewed to identify opportunities to enhance customer service and reduce in-store administrative tasks. The Signet intranet was further upgraded in fiscal 2010, and provides a computer-based platform for improved communication between stores and head office, with sales floor and back office administrative functions being simplified and standardized through this medium.

Head office

Management believes that successful recruitment, training and retention of divisional head office staff is important. Accordingly, structured recruitment, training and performance management systems are in place. Internal career advancement is supported by succession planning. Teamwork and service to the stores are encouraged through a performance bonus plan for head office staff, which is based on the division’s results. A program to drive continuous improvement, cross functional alignment and customer-focused decision making was continued through fiscal 2010. The program includes back-to-the-shop-floor exercises, development workshops and e-learning.