Reflection Assignment

Business Improvement Proposal

April 22, 2018

To: Elli Jacksons, Owner

Date: March 10, 2018

Subject: Proposal to implement systems to curb theft in retail stores

Joy Shop is a retail store that sells all the necessities for babies; including clothes, shoes, bottles, baby toiletries and toys. Joy Shop stores have a wonderful atmosphere which is one of the main reasons the stores have been the leading baby store in the country in recent years; having multiple branches across the East and West Coast and serving a larger market compared to its competitors. The store operates twelve hours a day excluding Sundays. The stores have many staff on hand including sales representatives, store keepers and delivery staff among others. For the stores to continue being the best in the country, we need to ensure that there are minimum opportunities within the operations division that may lead to theft by customers or employees. As the Sales Department Supervisor, I have suggestions that if implemented could have many benefits in terms of resources and finances. After gathering substantive information about the stores, I found solutions to aim in reducing and minimizing theft among our employees and clients.

Current Situation

In the retail stores, many cases of theft from employees and customers have been reported in recent years. The theft has taken different forms of cash theft, inventory theft, misuse of organization assets, vandalism and shoplifters among our customers. The cases have been on the rise for a year and if not managed, the organization might suffer a reduction in profit levels, or it may even hinder the atmosphere that Joy Shop has worked hard in achieving. The cases of employee theft amounted to roughly about $500 monthly in the previous year resulting in a total loss of over $9000 and that is only in two of the retail stores. If these losses continue to incur it could put a strain on the organization and possibly cause closure of business. Theft can be greatly reduced by closing the loopholes within the system. Targeting these loopholes could decrease our problem with theft and therefore allow the organization to meet financial obligations, ensures the business to run smoother, and might stop hindering the overall outcomes on a month to month basis. As an employee whose career started in working at retail stores, I was able to see the problem first hand and when I noticed it occurring at Joy Shop stores, it motivated me to dig into the problem and do my best to find the solution to end theft. In addition, seeing how shoplifters in supermarkets and other stores are handled and taken seriously, made me realize that Joy Shop Stores should also take action to rectify this problem. With my experience in business related courses, I am aware of the steps and the methodology we can use to solve theft in the business, motivate, and reward employees without sacrificing the business.

Goals

The curbing of theft could help the organization achieve both shorter and long-term organizational goals that are very important to the company. Sales maximization is one of the goals that the organization is focused on achieving; to do so you need to decrease the number of cases related to theft. By following through with the plan to curb theft, sales may increase since the goods that were previously being stolen from the store could now reflect in the sales of the organization. Sales maximization would, in turn, help the organization achieve another one of its core goals; profit maximization. When profits are maximized, the operation of the organization would run smoothly, and that way long-term goals could be met. Cost minimization can also be achieved through curbing employee theft; most of the financial and nonfinancial assets that employees were pocketing might be reduced.

Proposed Methodology

Employee theft can be reduced by putting up internal measures and controls. Segregation of duties could be adopted in the stores to make sure that the entire duty of handling assets is not left for one individual in an organization but rather distributed among many individuals to lower the loopholes available that make it easy for employees to steal (Veit, 2017). Also, whistle blowing could help greatly in reducing employee theft. Avenues such as complaint boxes should be implemented in the organization to help employees raise their concerns when they note that their colleagues are stealing from the organization. Whistle blowing could help address the concerns whenever they arise before they get out of hand and reach unmanageable levels.

The HR Department has a big role in this subject, partly because there maybe an issue during the hiring process that does not eliminate possible thieves. Of course, it is impossible to eliminate theft and people that steal completely but reducing them from the beginning is important and could be done by simply administering a personality test to see the type of person the company might employ. Another reason they play a big role is due to the fact that the organization lacks an incentive program.

One of the main reasons some employees steal, is due to their current salary package. Employee theft could be reduced by creating a way of rewarding employees for their constant hard work and increasing their pay. Employees could be stealing to better their living standards by selling the stolen goods via different outlets which increases their pay indirectly. Therefore, if HR implements an incentive program and increases their pay, rewarding them according to their output with incentives like bonuses or commission, could better their living standards and could decrease their desire to steal from the stores. When employees do not get a pay commensurate to their work and they are not rewarded for their efforts they might feel the need to steal to cater for that gap (Robertson, 2018).

By giving the employees better incentives they might work harder and want to avoid stealing to ruin their chances of receiving the rewards in the incentive program. The rewards can be both non-monetary and monetary forms. The rewards could be accorded to employees after a performance appraisal that could be conducted by their direct manager, the Human Resource Department could then decide the rewards based on the rating scales they put in place. In addition, small incentives can be as simple as a thank you. Being recognized for hard work and dedication might drive employees to want to achieve such recognition. Although you may think that recognition is not valuable, at times it is worth more than money in that it gives the employees pride and accomplishment especially in front of their peers. Being the employee of the month or most friendly employee or the employee with the highest sales is something employees could look forward to and strive to achieve. Other non-monetary rewards could be by giving employees gift cards for gas, coffee, or free lunch. These small gestures could provide a fun, loving, and family-like environment; and in the end no one steals from their own family. The rewards could motivate employees to work hard and not only could it solve theft but it could help your stores achieve organizational goals. When employees’ output increases, the income of the organization could go up and the stores could meet their running costs with a lot of ease. In addition, lack of supervision allows them to do as they like. By increasing supervision, during shifts could decrease the likelihood of theft. When employees do not have anyone to watch them as they conduct their duties, they are likely to see an opportunity to steal. Therefore, the HR Department needs to work on creating more jobs for supervisors. By employing supervisors during deliveries and recording the goods that are taken to customers could help solve the problem at hand. Also, introducing employees to be in charge of stock taking and record inventories when they come in could better keep theft at a minimum. This could help to easily evaluate whether all the stock received can be accounted for by the sales.

Another solution to implement is to use mystery shoppers that randomly stop in stores to make sure everything runs smoothly. By informing employees that there could be secret shoppers stopping by, could keep the employees aware that they can get caught at any time. Any customer could be a secret shopper so in turn they might avoid stealing. In addition, an easy, solution is to implement the clear tote bag policy. By providing clear bags for employees to use, they would not steal since they can’t hide the stolen goods.

As for customer theft, and due to the fact that the products sold at Joy Shop are high quality, we could begin to install RFID chips onto the merchandise. The RFID tags are then linked to a security gate that could be installed at the entrance of the store so that if someone were to shoplift, the alarm could go off immediately. Due to the increase of new Joy Shop stores, this technology could to be installed in order to deter “customers” from shoplifting.

The proposed plan is a critical process to implement and could be first discussed by the top management to analyze benefits and the viability of curbing theft in an organization in helping achieve the long-term goals and objectives of the firm. After the organization is satisfied with the proposal, the project is given to the finance department for further analysis. The Finance Department could come up with the analysis of the costs that are needed to purchase required materials such as the RFID tags, suggestion boxes, clear bags, etc. While equipment is being purchased, the Human Resource Department could begin simultaneously to implement the new incentive program and start using a personality test to hire new staff or analyze current staff for a promotion to become supervisors. The staff could then be trained with information on how to manage customer and employee theft. A cost-benefit analysis could be done to make sure the proposal is successful. After implementing the plan, frequent evaluation is required to make sure that the plan is working and producing desired results.

Time and Cost

Due to the scale and complexity of the issue, it could take about six months to a year to fully plan and implement the entire proposal. Some steps like purchasing clear bags or complaint boxes can be implemented as soon as possible to begin with curbing theft immediately. Costs for purchasing clear tote bags in bulk could be as cheap as $2.80 per bag with a minimum purchase of 1,000 pieces (Discount Mugs, 2018). If Joy Shop were to order more based on the number of employees, the cost could be even lower. As for complaint boxes the prices range depending on the type of box the company is looking for. The suggestion box can start at $3.80 and run up to $100+ dollars(ULINE, 2018).

Also, depending on the type of RFID tags needed to be installed the cost ranges between 10 cents up to $20; readers can range from $150 to about $3,000 and more (Watson, 2013). Depending on company needs if implemented, this technology could be useful in the long run and could help eliminate shoplifters, employee theft, and save money.

As for the other steps like improving the hiring procedures, creating incentive programs, and finding proper supervisors could require time in order to get approvals, finalize the program and implement it. A trial period could be used for certain aspects of the plan. During this trial period, the organization could look keenly at how the methods work to establish what areas need improvement. Costs are going to vary based on what could be approved for implementation. The Human Resource Department staff could recruit supervisors and employees that could undertake the process of stock taking. The cost to recruit and hire new staff could include the cost of advertising that there are vacancies to attract applicants, cost of paying staff to screen the applications and also interview the applicants to arrive at the perfect candidates for the positions.

Finally, by using mystery shoppers it could cost only $12-$25 dollars per visit and the number of visits could be decided based on the need of the company (Secret Shopper, 2017). Not only could the mystery shoppers help with theft, but they could also give a complete analysis on their experience as a whole during their visit, could give different views on product placement, and could provide solutions to improve the business in other aspects. By paying for this service you could be able to get more than one benefit from them; which is a bargain and is very beneficial to your business.

Background/ Qualifications

The experience I have working at Joy Shop has enabled me to have an understanding of how the company operates which is why I was able to identify employee theft as a problem in the organization. If addressed, a lot of benefits could be reaped. I have achieved a lot as a loyal and proud employee in the organization and find it very important to better the business in anyway possible. This proposal, once implemented, could improve the company from operations, to financials, to even employee morale. I believe it could be a win-win situation all around. The concepts that I have gained on the job and during my days as a student, helped me identify ways of helping your organization achieve its long-term goals by minimizing any wastage of resources.

Benefits

The curbing of theft in the organization could yield lots of benefits to the stakeholders of the organization. Shareholder wealth maximization which is one of the most important organizational goals could be achieved in the long run (Robertson, 2018). When the organization curbs theft, the cost of production could decrease, causing an increase of profit levels. The profits are then distributed to the shareholders in the form of dividends. When shareholders’ wealth is maximized, the shareholders confidence could also increase. The increase in profit levels could also help ease operations because there could be enough funds to meet any obligations when they arise. The financial benefits of the proposal are around $3000 per month that could amount to around $36000 per year per store apart from usual profits.

Limitations

Whistle blowing might not be very effective because employees are torn between protecting the interests of the stores and covering for their colleagues who they may consider as friends. The process is lengthy, and it could take a lot of time to implement because its a sensitive and risky issue. It could take a long time for the stakeholders to adapt to the proposed methodology. Also, initial costs might be very high depending on which solutions are chosen to be implemented.

Conclusion

The problem of theft has disturbed lots of other organizations including and most importantly Joy Shop stores, but many have succeeded in solving the problem. Theft has been rampant due to the existence of loopholes that make it easy to steal (Kelkar, 2016). The proposal provided could create a long-lasting solution to the problem that might ensure that the company achieves its major organizational goals. These multiple solutions could benefit the company greatly. Until the whole plan is studied carefully, implementing at the very least the clear tote bag policy and employing new supervisors and inventory controller to start the program, could have a high impact alone and decrease theft greatly until the rest of the program is approved. By following through with the complete proposal, theft could decrease significantly if not get eliminated completely. During which Joy Shop could gain lots of benefits that include shareholder wealth maximization, increase profits, boost morale due to increase in salary and incentives, and could create a more efficient environment by using RFID. The costs include human resource costs, costs of acquiring material, and adding a third party to help with the mystery shopping. Despite the lengthy procedure of implementing the plan and the expenses, it is clear that the benefits outweigh the costs.

Thank you for taking the time to read the proposal to help reduce and curb theft in your company. I look forward to receiving your feedback on the proposal and providing you with further information and details on where we can start. Thank you once again for your kind consideration.

Yours Sincerely,

Amal Alsheikh

References

Discount Mugs. (2018). Clear Tote Bags. Retrieved from Discount Mugs: https://www.discountmugs.com/product/tot209-cheap-clear-tote-bags-with-zipper/

Kelkar, M. M., & Emilus, Y. (2016). Applying the Theory of Planned Behavior to the Problem of Employee Theft in the Retail Industry.

Robertson, A. (2018). Theft at work. In Profiling property crimes (pp. 195-218). Routledge.

Secret Shopper. (2017). Shopper FAQ. Retrieved from Secret Shopper: https://www.secretshopper.com/info/shoppers/shopperFAQ.asp

ULINE. (2018). Ballot Boxes. Retrieved from ULINE: https://www.uline.com/BL_5611/Ballot-Boxes?keywords=Suggestion+Box

Veit, D. R., Lacerda, D. P., Camargo, L. F. R., Kipper, L. M., & Dresch, A. (2017). Towards Mode 2 knowledge production: Analysis and proposal of a framework for research in business processes. Business Process Management Journal, 23(2), 293-328.

Watson, T. (2013, October 29). Cost Analysis for RFID. Retrieved from Ami Tracks: https://www.amitracks.com/2013/10/simple-cost-analysis-for-rfid-options/