Maastricht University, School of Business and Economics
Course: Management Control EBC 4154
Most of the executives of Store24, a New England based convenience store, were gathered for an important meeting to discuss a way to increase store level employees retention. Some of the suggestions were to increase wages and bonuses, training enhancements or career development programs. However, top management lacked sufficient information available that would explained the relationship between manager and crew tenure on store level financial performance. Hence, the purpose of this paper is to shed light on the “employee tenure-store level performance” relationship as well as to discover how managerial skill, …show more content…
Thus, MTenure≈187. All in all, this means that manager tenure is a significant driver of store level performance and that store level performance varies with tenure level, i.e. store level performance reaches its optimal level when manager tenure is equal to 187 months.
Hierarchical Regression is used to find out how important employee tenure is, relative to other site location factors (see the summary statistics in Appendix D). In the first model, all the site location variables are added first, followed by the manager as well as crew tenure variables. From the R2 change (significant at the 1% level), it can be concluded that the explanatory power of the model substantially increases from an R2 of 0,369 to an R2 of 0,688 when the two tenure variables are added. If the employee tenure variables are added individually in two steps, it appears that manager tenure causes the biggest increase in R2. However, both R2 changes are significant (in the second model the R2 change from CTenure is only marginally significant at the 10%-level). Therefore, it can be concluded that the ‘people’ factors have significant power in explaining store level performance relative to the site location factors. From a logical point of view, managers are able to direct their store in a certain direction with their skills. However, some of the site location factors are given, i.e. managers mostly cannot do anything about it. For instance the number of competitors in the area or