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Air Force Exchange Employee Retention Program Report

Executive Summary

Army and Air Forces Exchange has warranted the reputation of a very efficient retailer in the target industry. However, because of the need to operate in the environment of increased competitiveness, the firm will have to consider redesigning its current approach to managing human resources. The shift toward a more intense production process will be required. Consequently, staff members will have to deliver better performance.

The above change will be carried out by using the traditional motivational tools such as praise and incentives. A redesign of the current benefits package with a stronger emphasis on the individual needs of the staff members is the primary option of the entrepreneurship. The members of the organization must be aware of the fact that they are valued and that the company is ready to invest in their further progress, including both professional and personal development.

The mission and values of the organization will also have to be reconsidered. The new values and mission will focus on the needs of the staff members and manifest staff satisfaction as its primary goal. As a result, a rapid improvement in the quality and efficacy of the employees’ performance is expected. The promotion of both appraisals and financial rewards will help the entrepreneurship succeed in the global economic environment the same way as it captured the home market.

Introduction: Exploring the Business Environment of the Army and Air Force Exchange

Encouraging staff members to excel in their performance is essential for entrepreneurship entering the realm of the global economy. The Army and Air Force Exchange Company, which has been operating in the retail industry for a while, need the tools that will help it raise its employees’ performance rates (see Appendix A). However, the accomplishment of the above goal will require the redesign of the current mission and vision of the firm, its values, and its concept of staff satisfaction.

Literature Review: Current Trends in the Company’s Evolution. Comparison and Evaluation

Communication Flow


The cooperation rates can be deemed as rather high in the target environment. The staff members are willing to assist each other and provide guidance for the ones that have recently been recruited (Transitioning form, 2012). Thus, a consistent production process is facilitated.


The leader figure has a very strong impact on the people working in the entrepreneurship. The transformative leadership approach adopted in the company contributes to positive changes in the employees’ organizational behavior.


The engagement rates among the members of the entrepreneurship are just as high as those of the primary competitors (i.e, Target, Wal-Mart, and K-Mart). As a recent report shows, “AAFES employees not only love their job but they also like to motivate each other” (Henderson, 2012, par. 9). The environment of mutual help contributes to the increase in involvement rates.


Similarly, staff satisfaction rates are comparatively high at AAFES. A recent report indicates that the employees are willing to contribute to the company’s progress (Average hourly rate for Army and Air Force Exchange Service (AAFES) employees, 2016). The phenomenon above is explained by the fact that the members of the company are motivated well enough to excel in their performance. Similar tendencies can be observed in the ranks of the rivals.

Staff satisfaction rates are also high in K-Mart and Wal-Mart (Employee satisfaction, 2016). Target also includes incentives and encouragements that compel its employees to work efficiently and eagerly.

Staff Satisfaction Rates
Figure 1. Staff Satisfaction Rates (AAFES, Wal-Mart, K-Mart, and Target).

Management Attitudes, Values, and Actions

Fairness and equity

A lot of credit for the current motivation rates among the staff members at AAFES should be given to the policy of promoting fairness and equity. Although the concept of equity is also incorporated into the framework of other companies, the emphasis that AAFES puts in the above principles is much stronger. Therefore, the overall impact of the above notion on the performance of the staff members is much more profound than it is on the people forking for K-Mart, Wal-Mart, and Target.

Employee potential recognition

The current model of employee potential recognition is dubious in all four of the organizations. Target, Wal-Mart, and K-Mart lack the overall strength of their approach toward human resources management as they fail to meet the needs of their diverse members (Mitchell, 2015). However, AAFES also has problems with its strategy for meeting the needs of individual employees. Specifically, the lack of options for individual staff members, such as maternity leave, makes the company somewhat weak in the global arena.

Praise and rewards

As the current rates of staff enthusiasm at AAFES show, the framework for staff members’ encouragement strategy has been sent successfully. The appraisals of the workers’ efforts and the acknowledgment of their positive performance trigger an immediate increase in the staff’s motivation rates. The same occurs in the context of other organizations, such as Wal-Mart, K-Mart, and Target.

However, the above organizations concentrate on skills training rather than the acknowledgment of the employees’ accomplishments. Wal-Mart and similar firms may provide a better environment for skills training and knowledge acquisition: “Walmart’s employee training and performance management are determinants of the company’s human resource management capability in supporting global expansion” (Thompson, 2015). However, they fail to send a powerful message concerning the importance of the employees’ efforts. As a result, the companies listed above cannot create the environment, in which the workers would feel obligated to excel in their efforts, given the fact that the salaries are originally high in the company.

Salaries at AAFES and Wal-Mart.
Figure 2. Salaries at AAFES and Wal-Mart.


The adoption of technological advances could use certain improvements in the environment of the AAFES Company. Wal-Mart and Target incorporate the latest technology tools successfully for a variety of purposes from marketing to communication between the staff members (Ziobro, 2015). AAFES, in its turn, will have to reconsider its current approach towards the use of technology and its inclusion in the design of the firm’s operations.

It is quite peculiar that K-Mart shares a similar problem with AAFES. Technology helps execute control over a plethora of operations, including financial, production-related, and marketing-related ones. Particularly, it helps address numerous communication issues, helping the participants remain in touch. Thus, it must be a part of the company’s design.

E-Commerce Sales.
Figure 3. E-Commerce Sales (2016).

Production increase

AAFES is headed toward an increase in its production rates. The company leaders, however, are unwilling to raise the firm’s performance at the cost of the employees’ motivation and enthusiasm (Jowers, 2015). Wal-Mart, in its turn, has already expanded and taken a huge niche in the global economy. Target and K-Mart are trying to keep up the pace, yet they lack the skill required to raise production intensity without damaging other areas.

Production rates
Figure 4. Production rates (AAFES, Wal-Mart, K-Mart, and Target) – Net Sales.


The introduction of telecommuting options will be beneficial for AAFES. While Wal-Mart has already developed a coherent system, the rest of the companies use traditional communication tools. As a result, the corporate processes are slackened down.

Potential Solutions: Addressing the Emergent Issues


A focus on the self-promotion will help manage the emergent staff satisfaction issues. AAFES will include options for employees to promote their ideas and accomplishments.

Tools and Strategies to Consider

The process of quality improvement will be carried out with the help of the Six Sigma framework. Traditionally acknowledged as one of the most efficient tools for quality management, the identified approach will set the bar at the required rate and build the environment necessary for promoting improvement. Specifically, the DMAIC system must be brought up. The framework provides the tools that can be used for not only promoting change but also assessing the outcomes and comparing them to the previous records. The following data will be applied to identify the success of the overall process, state the effects, and set the course of the further improvements.

Market Positioning, Goals, and the Mission

A change in market positioning will affect the firm’s current state. AAFES needs to shift its current mission statement toward striving for the benefit of all stakeholders, including the employees. The market positioning will be shifted toward branding the products as meeting the highest quality standards. The competitive advantage that AAFES will acquire as a result of the above strategy will set it aside from K-Mart, Wal-Mart, and Target in the designated market. The mission, in its turn, will be shifted toward the promotion of satisfaction among all stakeholders involved (i.e., customers, employees, etc.) as the primary goal of the firm.

Compensation Package

Creating an elaborate compensation package that will allow for taking the needs of all employees into account is a must for the company at present.

The health insurance plan should not include the annual maximum. By definition, the PPO plan is preferable to the HMO because of the flexibility that the former provides. Therefore, it should be used to meet the expected quality rate.

The provision of the basic services covered by Medicare is essential. Besides, the compensation package will have to comply with the Bipartisan Budget Act of 2015 (The U.S. Congress, 2016). Also, it will have to follow the Federal Employees Health Benefits (FEHB) Program. The 401K Plan will also have to be incorporated into the design of the firm’s compensation package as it provides favorable employment options or the staff and, therefore, must be viewed as a necessary addition.

The vacation options will also have to be offered to the employees. Particularly, each staff member should be eligible for a 24-day annual vacation. Though vacations are offered from June to August, the employees may have an opportunity to shift their vacation dates in case of an emergency. Furthermore, each staff member will be provided with a chance to take a 20-hour leave by the Special Leave Policy principles.

The staff members will also be provided with options for family leave or maternity leave (12 unpaid months) with the subsequent provision of accommodation for the identified staff members to stay. Nevertheless, the staff members taking parental leave are given provision. The above framework aligns with the Family and Medical Leave Act of 1993.

The staff will also be eligible for time-off. The PTO principles will be applied in case of need for unscheduled absence. After the staff member has worked in the firm for a year, they will be able to take 16-hour time-off. Every year, an extra hour is added to the time-off.

It is suggested that the above compensation package will allow for a rapid increase in staff satisfaction rates. The reconsideration of the current policies is bound to trigger a fast increase in performance rates. As soon as the employees realize that they are a valuable resource and the firm is ready to invest in them, they will be willing to improve their performance quality.

AAFES: Normal Retirement Plan.
Figure 5. AAFES: Normal Retirement Plan.

Employee Engagement and Development

Creating tools for motivating employees financially is not enough. To succeed in its goals, AAFES will have to design an elaborate training program. The focus of the program must be on training the skills that will help the employees acquire further information and abilities independently.

Figure 6. Diversity.

Recommendations: Creating the Environment for Sustaining Competitiveness

The overview carried out above shows that the AAFES Company will have to reconsider not only its current employee compensation framework but also its mission and vision. Altering the latter two entirely will be unreasonable since they make the bulk of the firm’s operations. Moreover, they reflect the organization’s philosophy and history. However, changing them so that AAFES be able to cater to the individual needs of its staff members is, nevertheless, a necessity.

The promotion of an extended and renewed compensation package is a must. By incorporating the elements such as financial benefits for the sick leave, parental leave, etc. into the compensation package, the entrepreneurship leaders will be able to raise satisfaction rates among the staff. Furthermore, AAFES will consider the use of the training sessions that will help invest in the people working for the organization. The increase in loyalty rates among the company members and the following improvement in performance rates is expected.

Reference List

. (2016). Web.

Employee satisfaction. (2016). Web.

Henderson, M. (2012). . Web.

Mitchell, D. (2015). . Time. Web.

Thompson, A. (2015). . Web.

. (2012). Web.

The U.S. Congress. (2016). . Web.

Ziobro, P. (2015). . The Wall Street Journal. Web.

Appendix A: Employee Benefits at AAFES

Employee Benefits at AAFES
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