Analysis of the Employee Management and Working Morale in Zara Fashion Company

Zara is currently one of the biggest international fashion companies, specializing in the, so called, fast fashion, they are a part of the Inditex Group and are the largest apparel retailers in the world. Founded in 1975 by Amanico Ortega and Rosalia Mera, this multinational company started off in Coruna, Galicia, Spain. The first store offered low-priced products that were mimicking products of more popular, high-end fashion companies. Few years later, during the 1980’s, Ortega decided to change the design, manufacturing, and the distribution process in order to reduce the lead time, leaving more time to focus on following new trends and answering to those market needs. This change was made by implementing both IT and using larger groups of designers that were constantly working on designing new products. After this, Zara rapidly started expanding throughout the world, opening stores in all corners of the world. I shall now focus on the strategic compensation of their salesperson position.

Zara’s compensation approach for all of their full-time employees consists of direct financial, indirect financial and nonfinancial compensations. A direct financial compensation includes monthly salaries that range from 5.000 to 8.000 kuna. This variable pay most often depends on your rank as a salesperson which can change through time, depending on your performance, you will easily progress and eventually earn higher salaries. Zara doesn’t follow the pay leader strategy, however they still offer fair salaries that are a bit over the average of other similar fashion stores. It is also important to mention that, when it comes to holidays, night shifts and Sundays, Zara pays their employees extra as a reward, and of course it is optional.

Regarding the other types of compensation, aside from their salaries and possible bonuses, Zara also offers their employees additional benefits. An indirect financial compensation includes employee discount of 30%, health insurance, and other benefits such as paid parking. Most employees are also customers as well, so the 30% discount they receive is very much praised. Nonfinancial compensation consists of many different benefits such as training, counseling in case of robberies and similar situations, overtime usually doesn’t happen, but if it does, it's not mandatory, and is based on a good work-life balance with flexible working hours. With all this taken into consideration, we can say that Zara’s employees are quite satisfied. What is also important to mention, Zara rewards hard work and high performance, stores that accumulate highest income on a yearly basis, their employees are usually rewarded with free days off. Overall, most employees believe the salary is decent and fair for the amount of work done, the ability to advance and earn more is a great motivator, the 30% discount is a great incentive for most people, and being able to choose your shifts and plan your week schedule, makes it much easier for the employees.