please read the case and answer questions 1-4.

62 Human Resource Management 62 CHAPTER 1 Human Resource Management Gaining a Competitive Advantage MANAGING PEOPLE Zappos Faces Competitive Challenges Zappos, based in Las Vegas, is an online retailer with the change and learn. For example, they observe whether job candidates talk at lunch with others or just the person they Initial goal of trying to be the best website for buying shoes by offering a wide variety of brands, styles, colors, sites, and think is making the hiring decision. The HR team uses width Zappos has over 1,500 employees and carries more unusual interview questions such as. "How weld are you?" than 1.000 brands. The Zappos.com brand has grown to and "What's your theme song?"-to find employees who are offer shoes, handbags, eyewear, watches, and accessories for creative and have strong individuality. Zappos provides free online purchase. The company's goal is to provide the best lunch in the cafeteria (cold cuts) and a full-time life coach service online, not just in shoes but in any product category (employees have to sit on a red velvet throne to complain), Zappos belleves that the speed with which a customer managers are encouraged to spend time with employees out- receives an online purchase plays a critical role in how that side of the office, and any employee can reward another customer think about shopping online again in the future, so employee 1 550 bonus for good performance. Call center the company is focusing on making sure the items get delle employees can use an online scheduling tool that allows ered to its customers as quickly as possible. them to set their own hours, and they can earn more payir Zappos CEO Tony Hsieh has shaped the company's cut they work during hours with greater customer demand. Most tomer service-focused culture, brand, and business strategy of the over 1.500 employees at Zappos are hourly. Every new around 10 core values hire undergoes four weeks of training, during which the com- Deliver WOW through service. pany culture must be committed to memory, and spends two Embrace and drive change weeks dealing with customers by working the telephones Create fun and a little weirdness New recruits are offered $3,000 to leave the company during Be adventurous, creative, and open-minded training to weed out individuals who will not be happy work Pursue growth and learning. Ing at the company, Zappos provides free breakfast, lunch, Huild open and honest relationships with communication snacks, coffee, tea and vending machine snacks. Employees Build a positive team and family spirit participate in more than 25 parades every year. Work is char Do more with less acterized by constant change, a loud, open office environ Be passionate and determined. ment; and team Interactions. Employees at Zappos move Be humble around. For example, call center employees can bid for dif ferent shifts every month. "Dellver WOW through service means that call center To reinforce the importance of the 10 core values, employees need to provide excellent customer service. Call Zappos's performance management system asks managers center employees encourage callers to order more than one to evaluate how well employees' behaviors demonstrate the size or color because shipping and return shipping is free.core values such as being humble or expressing their per They are also encouraged to use their imaginations to meet sonalities. To evaluate task performance, managers are customer needs. asked to regularly provide employees with status reports on Zappos has received many awards for its workplace cul- such things as how much time they spend on the telephone fure and practices, including being frequently recognized in with customers. The status reports and evaluations of the Fortune magazine's annual rankings of the "100 Best core values are Informational or used to identify training Companies to Work For." The job of human resources at needs. Zappos also believe in helping others understand Zappos is more than just a rule enforcer. HR's job is to pro what inspired the company culture. The company created tect the culture and to educate employees. HR focuses on the Zappos.com library, which provides a collection of interactions with managers and employees to understand books about creating a passion for customer service, prod- what they need from HR (HR is even invited to attend work ucts, and local communities. These books can be found in teams' happy hours). Zappos's employment practices help the front lobby of Zappos offices and are widely read and perpetuate its company culture. Only about 1 out of 100 discussed by company employees. applicants passes a hiring process that is equally weighted Corporate culture is more than a set of values, and it is on job skills and on the potential to work in Zappos's cul maintained by a complex web of human interactions. At ture. Some managers at Zappos believe that if you want to Zappos, the liberal use of social media including blogs and get a job the most important value to demonstrate is "be Twitter facilitates the network that links employees with humble" including a focus on "we" instead of "LJob cand one another and with the company's customers. Zappos dates are interviewed for cultural fit and a willingness to takes the pulse of the organization monthly, measuring the Human Resource Management Gaining a Competitive Advantage, 12th Edition 63 CHAPTER 1 Human Resource Management: Gaining a Competitive Advantage 63 health of the culture with a happiness survey. Employees within Zappos created to share the Zappos culture with other respond to such unlikely questions as whether they believe that companies. Zappos Insights provides programs about build- the company has a higher purpose than profits, whether their ing a culture (3-Day Culture Camp), its wow service phi- own role has meaning, whether they feel in control of their losophy (School of WOW), the power of a coaching-based career path, whether they consider their co-workers be like culture (Coaching Event), how the HR function protects the family and friends, and whether they are happy in their jobs. culture and how its programs support it (People Academy). Results from the survey are broken down by department, and and custom programs. The cost to attend these programs opportunities for development are identified and acted upon. ranges from $2,000 to $6,000 for each attendee. For example, when it was clear from the survey that one depart- ment had veered off course and felt isolated from the rest of the QUESTIONS organization, a program was instituted that enabled individu 1. Zappos seems to be well-positioned to have a competitive als in the group to learn more about how integral their work advantage over other online retailers. What challenges dis was. To keep the company vibrant, CEO Tony Hsieh spent cussed in Chapter 1 pose the biggest threat to Zappos's $350 million to develop a neighborhood in downtown Las ability to maintain and enhance its competitive position? Vegas, which is the home of Zappos.com's new headquarters. How can HRM practices help Zappos meet these challenges? Hsieh wants to provide employees with a great place to work as 2. Do you think that employees of Zappos have high levels well as to live and socialize. of engagement? Why? Zappos embraces a management philosophy, holocracy. 3. Which of Zappos's 10 core values do you believe that HR which gives employees the freedom and responsibility to practices can influence the most? The least? Why? For decide how to get their work done and eliminated people each of the core values, identify the HR practices that are managers. Hsieh's intent was to allow employees to act more related to it. Explain how the HR practices you identified like entrepreneurs and help stimulate new ideas, bring their are related to the core values. full selves to work, and have a purpose beyond making 4. How might the change to the holocracy management style money, all of which he believes will benefit the business. undermine Zappos's core values and cause employees to Employees work in teams or "circles" rather than as individu- have lower levels of engagement? als, and team membership can change. However, employees SOURCES Based on S. Healed. "Find Out How Zappos Reinforces in are finding the new management system confusing and Culture September 21, 2018, from www.thebalancer.com, cewed requires them to spend more time in meetings. Also, they Februay 13, 2019 www.appos.com, cessed February 13, 2019, L. Bermin, J. Huncl. N. Canner, and M. Loc. Beyond the Holocacy Hype Hanand wonder how they will earn raises and advance their careers Rusi, July August 2016. pp. 38-49.J. Reingold. "The Zappos without management jobs. In all, 210 employees found the Experiment Fun, March 15, 2016, p. 206-1 Zappos Insiglos, www new philosophy so dissatisfying that they took three months apposinsights.com, accessed March 1, 2017: D. Richard. Al Zappos. Culture of severance pay and left the company. Zappos is changing Puy Strategy Business, August 2010, p. 60, www.stratbusiness.com. accomed March 25, 2002: K. Gurchick. "Delivering HR - Zappos.IR its recruitment process to ensure that its new hires are com Magazine, June 2011: R. Pyril, The Reviews Are In Wonore Managemeni, fortable with holocracy's self-management style. May 2011 pp. 20-25: 1.O'Brien. "Zappos Knows How to kick it," she Despite this setback, other companies are trying to learn February 2, 2009. pp. 55-66 R. Silverman. "Going Bowlen Backes from Zappos's practices. Zappos Insights is a department Zappos." Wall Sireet Journal, May 21, 2015, pp. A1. A10 HR IN SMALL BUSINESS Network is the key to HRM at 1Collision mal mito body shop used to be a small, independent in more business, which requires more employees, wh requires more sophisticated HR practices. the local