HRA

Assignment
Problem:
Ms. Lily is the HR manager of a newly opened luxury boutique store. The store owner Ms. Rajni
briefed Lily that she wants to monitor the growth and the performance of the store. Based on the
requirement, Lily decided that the number of visitors per day will be a major KPI for the store’s
performance. Every evening after the working hours, she used to congratulate the staff for the
increasing number of visitors, as the number was growing significantly daily. To attract
customers, the luxury boutique brand was offering a 100% discount for first-time visitors.
However, at the end of the month, the financial numbers were not up to the expectations. Where
did Ms. Lily go wrong? What other KPIs should have been monitored to avoid the last-minute
cry?
Solution:
The KPI stands for Key Performance indicators which is a quantifiable measure and
demonstrates how effectively a firm/company is achieving its key objective.
It should be noted that too many KPIs under one KRA may create difficulty in managing them
and also may create ambiguity. Ideally minimum 3 KPI and maximum 5 KPIs should be opted.
Here the objective was to know the growth and performance of the store. Ms. Lilly considered
number of visitors per day will be the KPI. There was significant increase in the visitor’s day by
day but financial numbers were not up to the mark. The problem associated in this KPI was:
It did not tell whether the visitors are actually buying the product in that store.
Suppose every day there were 25 visitors to the store and in the month, store was open for 25
days. It shows there are 625 visitors in the month which is quite a huge number but did not tell
whether all these 625 visitors have purchased the product.
It also ignores the repeaters/same person visiting the store. It also ignores customer retention and
conversion rate.
Instead of having just visitors per day as KPI Lilly should opt conversion rate as KPI.
Conversion rate states out of total visitors to the store what is proportion of visitors actually
purchased the product.
Out of 25 visitors if 5 visitors actual made any purchase then the conversion rate is 20%. If only
one visitor made any purchase, then the conversion rate is just 4%.
Sales by per employee states what is the sales made by per employee. This can be used as a tool
when organization is planning to incentives to its employees. This can be calculated on the daily
basis calculating daily sales made by employee or month end sales.
Items sold per transaction measures number of units sold per transaction. This is also known as
basket size. It is calculated as total units sold divided by number of invoices. A store having a
large basket size indicates that the store is performing really well.
The other KPI which can be used as customer retention rate and inventory turnover ratio.
Using the above KPI Ms. Lilly can actually evaluate performance and growth of the store.
Specify the scale of measurement of the variables and identify the appropriate statistical
technique for each of the following research problems.
Situation 1: A recruiter wants to know the association between the gender of the candidate and
their chosen specialization.
Solution: Chi square test is a statistical hypothesis test used to test goodness of fit of a theoretical
distribution to an observed distribution. Other application of chi square test
 To test whether population has given variance
 To test independence/association of attributes in a contingency table. (2*2
contingency table).
In the above situation the two attributes are ‘gender of the candidate’ which is a nominal variable
and the ‘specialization taken’ which is also nominal variable. The statistical test here needs to be
applied is Chi-Square test to find out the association between these two attributes.
Situation 2: A manager wants to review the employees before and after introducing MBO.
Solution: In the above situation considering manager wants to review the performance of his/her
employees before and after introducing MBO. The performance is an ordinal scale (Manager can
use Likert scale where 1 being very bad and 5 being very good). The paired sample t test gives
mean level of performance before and after introduction of MBO which will provide insight on
whether MBO has significant affect on the performance of the employees.
Situation 3: An aspirant immigrant wants to know the influence of their PG marks and their
IELTS score on the probability of getting PR visa to Canada.
Solution:
 IELTS scores are reported on a 9-band scale where 9 the highest and 1 is the lowest.
This is an ordinal scale. PG marks is interval/ratio scale.
 The aspirant wants to know the influence of above variable on the probability of
getting PR Visa to Canada.
 This probability has only two outcomes either the aspirant will get visa or he/she will
not get visa.
 As there are only two outcomes, we use binomial logistic regression to know the
influence.
Situation 4: An MBA graduate wants to know the relationship between their MBA marks and
their salary.
Solution: MBA marks and salary is a ratio variable. As the marks as well as salary cannot be
negative (less then 0). To understand the relationship between this two variables Pearson
correlation coefficient is used to understand how these variables are related to each other the
magnitude of relationship, direction of relation

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