tesco motivation case study answers

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Motivational theory in practice at Tesco

Tesco  began in 1919 with one man, Jack Cohen, a market stallholder selling groceries in London. Tesco was formed out of a merger with T.E. Stockwell from whom he purchased tea for sale on the stall. The first store opened in 1929.

Since then, Tesco has expanded across the world. It now has over 2,200 stores including hypermarkets and Tesco Express outlets to meet different customer needs. As a conglomerate, Tesco also offers alternative goods and services such as insurance, banking and online shopping. With net profits of around £3.4 billion, Tesco has become the largest British retailer and one of the world’s leading retail outlets on three continents. Tesco’s growth has resulted in a worldwide workforce of over 468,000 employees.

To support its growth, Tesco needs staff that are motivated, flexible and well-trained and who recognise customer needs. In turn, Tesco’s employees are supported by the company in their various roles and at different levels – from customer assistants in stores to department managers; from warehouse employees to office and logistics staff. Tesco recognises that employee motivation is important for the continued growth of the company.

This case study looks at how Tesco motivates its employees by increasing their knowledge, skills and job satisfaction through training and development and providing relevant and timely rewards and recognition.

What is motivation?

Motivation may stem from personal interests such as keeping safe or from external factors such as praise and reward.

Different theories have been suggested for motivating employees. Pay is considered a primary motivator. Other motivating factors include:

• appreciation of hard work
• a sense of achievement
• responsibility and empowerment
• opportunity for advancement
• a sense of challenge and enjoyment.

Continue reading

More from this company >, vision, values and business strategies, building a better workplace through motivation, developing appropriate leadership styles, motivating and engaging employees for better business, using diversity and inclusion to provide better service, healthy eating, changing working patterns, motivation within an innovative work environment, motivating through total reward, the importance of employee motivation, motivation how egg unleashes the power of people, implementing a management development programme, developing a motivated workforce, motivation in action, motivation within a creative environment, more case studies >, ‘the luck of the irish’: the rise of the gambling industry in ireland , understanding the fees and interest rates of payday loans, 10 cost-efficient ways to strengthen your brand, 10 market analysis mistakes to avoid, 10 tips for writing your will, 3 tips for finding and choosing the right wood tone for your flooring, 5 key benefits of call handling services for small business, 5 keys to success for future ready companies, 5 negotiation tips to consider when buying a business.

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Tesco Case Study: Analysis Of Relevant Theories And Its Application

Task: Through completion of this assessment you will develop your case study skills through undertaking research and analysis on a targeted organisation. If applicable, you may refer to this case study in your essay to support your arguments.

Where to start (1) You will first need to identify an organisation that is of interest to you AND for which you are able to examine, through research, its work-related management strategies, practices, processes and/or outcomes and be able to analyse and assess these in relation to the topic/s identified at point 2.

(2) You will be expected to analyse your case using theories/concepts/frameworks from the following topic/s that we cover early in this unit:

• Diversity and People Management

Background : Tesco, one of the largest retailers in the United Kingdom was incorporated in 1950 with the launch of its first supermarket store in London (Tesco plc, 2019A). The company has more than 34000 stores in the UK with approximately 300000 colleagues working for them. The management of the company is making their best efforts to strengthen their foundation each day so that they can offer improved quality, wider product portfolio, better services and sharper prices to their consumers (Tesco plc, 2019B). The core purpose of the organization is “Serving shoppers a little better every day”, which boils down to them being a champion for their customers by assisting them in having an easier life. On average, the stores serve 66 shoppers every second, making them adopt a consumer-centric approach of business and marketing (Tesco plc, 2019C).

As per the annual report published by Tesco which is referred in this Tesco case study, their group sales were £49.9 billion with statutory revenue of £55.9 billion (Tescoplc.com, 2019). Despite the frequent changes in the business environment and stiff competition, Tesco has managed to maintain their leading position in the retail industry. One of the key factors making the company market leaders is their workforce. The company employs 460000 people in their company and consider them as colleagues signifying equal position for all workers rather than using the terminology of employees. With appropriate motivation techniques and workforce diversity measures, the human resource department of Tesco has managed to create motivated and engaged workforces who are dedicated to attaining the company goals. The Tesco case study would contain a detailed discussion on the motivation techniques used by the company along with their approach to diversity and people management. Several theories and models would be evaluated in order to understand the effectiveness of the strategy used by Tesco.

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Management Strategies and Practices: As per the article published in Campaignlive.co.uk (2019), Tesco has been regarded as the best performing supermarket in the retail industry with regards to its growing sales figure. The management of the organization credits their success to its motivated, well-trained and flexible workforce (Misra, Jain & Sood, 2013). The human resource management of the company is robust and provides support to all their employees irrespective of their position. However, in order to understand the motivation techniques used by the company, the meaning of the term has to be understood. As per Nscpolteksby.ac.id (2019), motivation is defined as direction provided and influence cast on individuals in order to persuade them to achieve a certain goal. The three important components of motivation are – direction, effort and persistence.

The management of Tesco understands the need of having a motivated workforce due to which they use several means to maintain positive employee relations and high levels of employee engagement. Apart from that, the management of the company has realized the need to use diversity management tools to manage their staffs as the company has workers belonging to different age group, gender, religion, background and ethnicity. One of the methods of motivation used by the supermarket giant is treating the employees with care and making them feel important. The employees are regarded as “colleagues” and treated with trust and respect (Tesco plc, 2019C). The company believes in working in teams ensuring that every employee is included in the decision-making process and valued.

Another motivation technique used by the company is the reward management system. The human resource department understands the need of using monetary and non-monetary incentives of retaining their staff in the increasing dynamicity of the labour markets (Shields et al, 2015). The company has formed reward objectives that are – attract, motivate, recognize, align and remain (Tesco plc, 2019D). The individual contributions of every employee are tracked, and the best performance is rewarded, which motivates the employees to work harder and deliver their best performance. The reward packages include – annual bonus and share incentives along with recognition and appraisal.

Employing a large workforce comes with the responsibility of caring for the health and safety of the employees, which Tesco executes meticulously. Recently, in order to protect the health of its workers, Tesco has forged a partnership with three UK based health charities – Cancer Research UK, British Heart Foundation and Diabetes UK, so that they can develop new workplace health programmes (Scott, 2018). These partnerships would allow the company to focus on their pillars of a healthy body, healthy mind and nutrition along with campaigning for mental health issues. This move has helped the company to motivate its employees further as the workforce is overwhelmed with the fact that the management cares about their health. Moreover, the company also provides its employees with training and development opportunities so that they can grow and develop their skill set and expand their expanse of knowledge. By introducing the apprenticeship program, the company has managed to improve its existing workforce (Tesco plc, 2011).

The human resource management of the company lays equal emphasis diversity management techniques also as the workforce of the company is extremely diverse. The company abides by the principle of – equality, diversity and inclusion and abide by the principle of providing equal opportunities to all their colleagues (Tesco Careers, 2019). This has helped the company to hire people of varied backgrounds providing more insights about the market and customer thought process (Hunt, Layton & Prince, 2015). Diversity in the workplace improves the decision-making process of the company and makes employees from all walks of life feel welcome.

Despite working towards creating a motivated and diversified workforce, Tesco is facing certain issues. Recently in one of the articles published, it was highlighted that the company is not being able to motivate their young staff (aged between 17 to 24) properly leading to high attrition rate for that demographic (Peacock, 2008). The company was not being able to understand the needs of the young staff and communicate with them properly due to which issues were arising. Moreover, a worker dragged the company to court also over the charge of gender and age discrimination concerning pay structure (Topham, 2016). Although these issues have not caused a stir in the workforce, it is important for the company to mitigate these problems in advance and resolve it soon to avoid unnecessary glitches in employee performance.

Analysis and Relevant Theory Application: The effectiveness of the human resource strategies and techniques used by Tesco can be judged by aligning and analyzing the theories of motivation and diversity management along with the practices of the organization. Abraham Maslow had stated that five essentials needs that motivate an individual to deliver the best performance. He demonstrated those five needs in the form of a pyramid, which came to be known as the hierarchy of needs. Basic needs such as food, shelter and clothing formed the base of the pyramid that could be met by providing proper pay and remuneration. This is followed by safety and security needs, which includes – health and safety requirements at the workplace and conducive working conditions (Taormina & Gao, 2013). Post this came, the social needs or esteems needs where the individuals demand to be recognized for their effort and want to feel a certain sense of belongingness with the environment. The last section of the pyramid was self-actualization need, which includes – interest, creativity and challenge. As per the theorist described in this Tesco case study, attaining of one need led to another and motivated the workers to deliver the best performance.

The management of Tesco understood all these and worked towards satiating the needs of the employees. As described in this Tesco case study the company provided handsome salary to their employees as per the industry standards and also partnered with three health charities so that they can protect the health of their workers, leading to the satisfaction of physical and security needs (Is.muni.cz, 2019). Tesco believes in working in groups and mentions inclusion in their mission statement leading to the satisfaction of social needs. The company has a robust reward system and provides its staffs with the opportunities to take part in the decision-making process, which help them in achieving the last two needs of the pyramids also (Refer to Appendix 3).

Another theorist named Frederick Herzberg proposed the two-factor theory of motivation, which stated two factors cast an influence on the motivation of employees – satisfiers or motivators and hygiene factors (Alshmemri, Shahwan-Akl & Maude, 2017). The hygiene factors were – pay and benefits, working conditions, work-life balance, job security, status and others, which caused dissatisfaction. However, the management of Tesco provided good pay and work-life balance to their employees leading to high satisfaction. Moreover, the company ensured that employees get equal growth opportunities and recognition for effort, which boosted their morale (Refer to Appendix 4).

The aim of the management of Tesco as discussed in this tesco uk case study is to motivate their employees by paying attention to both satisfiers and hygiene factors. For instance, the company intends to empower their employees by delegating responsibilities and providing them with the opportunity to take decisions and communicate with senior management. Additionally, the company holds an open forum every year where the employees are encouraged to participate and discuss regarding pay rises and reward systems (Is.muni.cz, 2019). Through the forum, the employees are rewarded and recognized as an important asset of the company making them feel valued.

Another criterion that the human resource management of Tesco has to consider is managing the diversity in the workforce as it also motivates the employees to perform better and feel like a valuable part of the company. Therefore, Tesco manages its diversity through – recruitment, employer branding, training and performance appraisal systems. For instance, in case of any vacancy, the company first looks into its internal Talent Plan to fill up the vacancy by means of promotion or departmental shift (Colbournecollege.weebly.com, 2019). Therefore, this step the employees get the opportunity to get promoted or venture into new departments that help them to gain knowledge and hone new skills. Therefore, through proper recruitment methods, the company ensures that the employees feel valued and get equal opportunities irrespective of age, gender, background, race or ethnicity.

Additionally, the company follows the inclusion criteria to eliminate any kind of discrimination to take place in the work premises. The company welcomes people belonging to different religions, sexual orientation, age, disability and gender, as they believe in embracing diversity. One of the management practices adopted by Tesco for managing diversity is forming UK Colleague Networks, which are – Black Asian Minority Ethnic Network, The Armed Forces Network, Women in Tesco Network, Out at Tesco (Transgender, gay, lesbian, Bisexual and Intersex) Network and Disability Network (Tesco plc, 2019E). They have a separate provision for young people, other groups and retirement, which have helped the company to incorporate different people in their workforce.

Furthermore, despite efforts of keeping the staffs motivated and managing workplace diversity, the company is facing issues. As mentioned, few workers sued the company over pay cut and pay discrimination based on age and gender discrimination grounds. Although the company has proper management practices, they are lacking in some areas. Similarly, the organization fails to motivate the young people in the workforce despite having a separate network for young people. Hence, the company needs to take steps to rectify these areas to ensure that they have a dedicated workforce.

Recommendations Therefore, based on the discussion above in this Tesco case study, it can be stated that the human resource management of Tesco, post-consultation with the senior management uses a variety of effective strategies and techniques to keep their colleagues motivated and encouraged. However, owing to the continuously changing business environment and dynamicity of the labour markets, the management of Tesco has to amalgamate their existing strategies with new policies. They need to conduct surveys among the employees to understand their future needs, job inclusion criteria, future threats to job security and decision-making needs. Using the results of the survey it is recommended in this tesco uk case study, the management of Tesco would be able to prepare contingency plans for the future and ensure that their workforce is always motivated. Additionally, the company needs to involve their employees more in the decision-making process and even impose equal pay criteria more strictly to avoid discrimination of any sorts. Tesco case study assignments are being prepared by our online management assignment help experts from top universities which let us to provide you a reliable online assignment help service.

Reference List Alshmemri, M., Shahwan-Akl, L., & Maude, P. (2017). Herzberg’s two-factor theory. Life Science Journal, 14(5), 12-16.

Colbournecollege.weebly.com. (2019). Retrieved 3 April 2019, from http://colbournecollege.weebly.com/uploads/2/3/7/9/23793496/tesco-recruitment__selection.pdf

Diversity and Inclusion | Tesco Careers. (2019). Tesco-careers.com. Retrieved 3 April 2019, from https://www.tesco-careers.com/explore-our-world/everyone-is-welcome/

Hunt, V., Layton, D., & Prince, S. (2015). Diversity matters. McKinsey & Company, 1, 15-29.

Is.muni.cz. (2019). Retrieved 3 April 2019, from https://is.muni.cz/el/1451/podzim2013/np2330/tesco_15_full.pdf

Misra, P., Jain, S., & Sood, A. (2013). Compensation: impact of rewards and organisational justice on turnover intentions and the role of motivation and job satisfaction: a study of retail store operations in NCR. International Journal of Human Resources Development and Management, 13(2-3), 136-152.

Nscpolteksby.ac.id. (2019). Retrieved 3 April 2019, from https://nscpolteksby.ac.id/ebook/files/Ebook/Business%20Administration/ARMSTRONGS%20HANDBOOK %20OF%20HUMAN%20RESOURCE%20MANAGEMENT%20PRACTICE/19%20-%20Motivation.pdf

Peacock, L. (2008). Tesco failing to motivate its young workers - Personnel Today. Personnel Today. Retrieved 3 April 2019, from https://www.personneltoday.com/hr/tesco-failing-to-motivate-its-young-workers/

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Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P., ... & Plimmer, G. (2015). Managing employee performance & reward: Concepts, practices, strategies. Cambridge University Press.

Taormina, R. J., & Gao, J. H. (2013). Maslow and the motivation hierarchy: Measuring satisfaction of the needs. The American journal of psychology, 126(2), 155-177.

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Tesco plc. (2011). Tesco is developing the skills and training of Britain's largest private sector workforce. Retrieved 3 April 2019, from https://www.tescoplc.com/news/news-releases/2011/tesco-is-developing-the-skills-and-training-of-britains-largest-private-sector-workforce/

Tesco plc. (2019A). History. Retrieved 3 April 2019, from https://www.tescoplc.com/about-us/history/

Tesco plc. (2019B). Tesco in the UK. Retrieved 3 April 2019, from https://www.tescoplc.com/about-us/our-businesses/tesco-uk/tesco-in-the-uk/

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Tescoplc.com. (2019). Retrieved 3 April 2019, from https://www.tescoplc.com/media/474803/68336_tesco_ar_digital_interactive_250417.pdf Tesco is best performing big supermarket in latest sales figures. (2019). Campaignlive.co.uk. Retrieved 3 April 2019, from https://www.campaignlive.co.uk/article/tesco-best-performing-big-supermarket-latest-sales-figures/1435036

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Appendices Appendix 1 Financial performance of Tesco

(Source: Tescoplc.com, 2019)

Appendix 2 Average number of employees at Tesco in the United Kingdom from 2012 to 2018

(Source: Statista, 2019)

Appendix 3 Maslow’s Hierarchy of Needs theory – Tesco

(Source: Is.muni.cz, 2019)

Appendix 4 Two-Factor Theory of Motivation – Tesco

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Tesco Change Management Case Study

Change is a necessary part of any business’s growth and success. However, managing change can be a challenging task, especially for a company as large as Tesco. 

The UK-based retail giant faced numerous challenges during its journey of growth, including increasing competition, changing consumer preferences, and economic uncertainties. 

To overcome these challenges, Tesco embarked on a change management journey that transformed the company and enabled it to become one of the world’s largest retailers. 

In this blog post, we will delve into Tesco’s change management case study, discussing the strategies the company employed to manage change, the challenges it faced, and the results and achievements of the change management program. 

We will also examine the lessons learned from Tesco’s success story and provide insights into best practices for effective change management

Background of Tesco 

Tesco is a British multinational retailer that was founded in 1919 by Jack Cohen. Initially, the company started as a market stall in London’s East End, selling surplus groceries from a stall. 

In the 1920s, the company expanded its business by opening its first store in Burnt Oak, North London. 

The company went public in 1947 and continued to expand its business throughout the UK in the following years. 

By the 1990s, Tesco had become the largest supermarket chain in the UK.

However, despite its success, Tesco faced several challenges in the early 2000s. Increasing competition from discount retailers such as Aldi and Lidl, changing consumer preferences, and economic uncertainties had a significant impact on the company’s growth. 

Tesco’s sales started to decline, and the company’s market share was shrinking. To address these challenges, Tesco’s management team realized the need for a change management program that would transform the company and enable it to regain its position as a market leader.

History and growth of Tesco 

Tesco’s success story began in the early 20th century when Jack Cohen, the founder of Tesco, started selling groceries from a stall in London’s East End. By the 1920s, Cohen had established his first store in Burnt Oak, North London, under the name Tesco. 

The name “Tesco” was derived from the initials of TE Stockwell, a supplier of tea to Cohen, and the first two letters of Cohen’s surname.

In the following years, Tesco continued to expand its business by acquiring other retailers and opening new stores throughout the UK. 

By the 1970s, the company had become one of the largest supermarket chains in the UK. In the 1980s, Tesco introduced new products and services, including Tesco Metro stores, Tesco Express, and Tesco Clubcard, which enabled the company to enhance customer loyalty and increase sales.

In the 1990s, Tesco’s growth continued, and the company expanded its business beyond the UK by entering new international markets such as Poland, Hungary, and the Czech Republic. By the early 2000s, Tesco had become the largest supermarket chain in the UK, with over 2,500 stores worldwide.

However, the company faced several challenges in the early 2000s, including increasing competition, changing consumer preferences, and economic uncertainties, which had a significant impact on the company’s growth. Tesco’s management realized the need for a change management program that would transform the company and enable it to regain its position as a market leader.

Key Reasons of making changes at Tesco 

There were several key reasons for the changes at Tesco, including:

• Increasing competition : The rise of discount retailers such as Aldi and Lidl had a significant impact on Tesco’s market share and profitability. These retailers offered lower-priced alternatives, which attracted customers away from Tesco’s stores.
• Changing consumer preferences: Consumer preferences were shifting towards healthier and more sustainable products, which Tesco was slow to respond to. This led to a decline in sales and customer loyalty.
• Economic uncertainties: The global economic recession of the late 2000s had a significant impact on Tesco’s financial performance. Consumers were more price-sensitive, and there was increased pressure on retailers to reduce prices.
• Internal issues: Tesco’s rapid expansion had resulted in organizational complexity, which made decision-making slow and inefficient. There were also issues with employee morale and engagement, which impacted the company’s ability to deliver high-quality customer service.

Steps taken by Tesco to implement change management 

To address the external and internal challenges, Tesco’s management team realized the need for a change management program that would transform the company and enable it to regain its position as a market leader. The changes that were implemented included a focus on cost reduction, improving customer service, and enhancing employee engagement.

To implement the change management strategy, Tesco took several steps, including:

• Leadership commitment: The company’s senior leadership team was fully committed to the change management program and provided clear direction and support throughout the process.
• Communication : Tesco developed a comprehensive communication plan to ensure that all employees understood the rationale for the changes and their role in implementing them. The plan included regular updates, town hall meetings, and training sessions.
• Cost reduction: Tesco implemented a cost reduction program to improve efficiency and profitability. The company reduced its product lines, renegotiated supplier contracts, and streamlined its supply chain.
• Customer focus: Tesco implemented a new customer service strategy, which included improving the quality of its products, enhancing the in-store experience, and increasing customer engagement through loyalty programs and personalized marketing.
• Employee engagement: Tesco recognized the importance of employee engagement in delivering high-quality customer service. The company implemented initiatives to improve employee morale, including training programs, recognition schemes, and improved working conditions.
• Technology: Tesco invested in new technologies to improve its operations and enhance the customer experience. This included the introduction of self-checkout machines, mobile payment options, and online shopping platforms.
• Measurement and feedback: Tesco established metrics to measure the success of the change management program and solicited feedback from employees and customers to identify areas for improvement.

Positive outcomes and results of change management by Tesco 

The change management program implemented by Tesco resulted in several positive outcomes and results, including:

• Increased profitability: Tesco’s cost reduction program resulted in improved profitability, with the company’s profits increasing by 28% in the first half of 2017.
• Enhanced customer experience: Tesco’s focus on improving the customer experience led to increased customer satisfaction and loyalty. The company’s customer satisfaction ratings improved significantly, and it was named the UK’s top supermarket for customer service by consumer watchdog Which? in 2018.
• Improved employee engagement: Tesco’s initiatives to improve employee engagement resulted in increased employee morale and motivation. The company’s employee engagement scores improved significantly, and it was recognized as one of the UK’s top employers in 2019.
• Streamlined operations: Tesco’s focus on improving efficiency and reducing complexity resulted in streamlined operations and faster decision-making. The company was able to reduce its product lines and negotiate more favorable supplier contracts, resulting in improved margins.
• Strong financial performance: Tesco’s change management program helped the company recover from a period of declining sales and market share. The company’s financial performance improved significantly, with revenue increasing by 11.5% and profits increasing by 34.2% in 2018.

Final Words 

Tesco’s change management program is an excellent example of how a company can successfully transform itself in response to external challenges and changing market conditions. The program was comprehensive and multi-faceted, addressing the company’s challenges from multiple angles. Tesco’s leadership commitment, communication strategy, and focus on cost reduction, customer service, and employee engagement were all critical factors in the program’s success.

The positive outcomes and results of the program demonstrate the importance of change management in driving organizational success. Tesco was able to recover from a period of declining sales and market share, and become a more efficient, customer-focused, and profitable organization. The lessons learned from Tesco’s change management program are applicable to businesses of all sizes and industries, highlighting the need for organizations to remain agile and responsive to changing market conditions.

About The Author

Tahir Abbas

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Motivational theory in practice at Tesco

Tesco  began in 1919 with one man, Jack Cohen, a market stallholder selling groceries in London. TESCO was formed out of a merger with T.E. Stockwell from whom he purchased tea for sale on the stall. The first store opened in 1929.

Since then, Tesco has expanded across the world. It now has over 2,200 stores including hypermarkets and Tesco Express outlets to meet different customer needs. As a conglomerate Tesco also offers alternative goods and services such as insurance, banking and online shopping. With net profits of around £3.4 billion Tesco has become the largest British retailer and one of the world’s leading retail outlets on three continents. Tesco’s growth has resulted in a worldwide workforce of over 468,000 employees.

To support its growth, Tesco needs staff that are motivated, flexible and well-trained and who recognise customer needs. In turn, Tesco’s employees are supported by the company in their various roles and at different levels – from customer assistants in stores to department managers; from warehouse employees to office and logistics staff. Tesco recognises that employee motivation is important for the continued growth of the company.

This case study looks at how Tesco motivates its employees by increasing their knowledge, skills and job satisfaction through training and development and providing relevant and timely reward and recognition.

What is motivation?

Motivation may stem from personal interest such as keeping safe or from external factors such as praise and reward.

Different theories have been suggested for motivating employees. Pay is considered a primary motivator. Other motivating factors include:

• Appreciation of hard work
• A sense of achievement
• Responsibility and empowerment
• Opportunity for advancement
• A sense of challenge and enjoyment.

Benefits of motivated staff

A motivated workforce will work harder and achieve greater output in less time, therefore reducing labour costs. It requires less supervision and demonstrates pride in its work, making a greater impact on the customer.

Motivated employees have greater concentration and are less likely to make mistakes, cause accidents or be involved in conflict. They are also likely to show greater loyalty to the company and have less absenteeism. An unmotivated workforce will be the opposite, being dissatisfied with its role in the work environment. This can negatively affect both the quality of the work as well as how efficiently employees carry out their jobs.

Tesco considers that the business depends on two groups of people customers and staff. It appreciates that staff are unique and have diverse lifestyles outside of work. To this end Tesco supports staff with a work/life balance and offers reward through:

• Flexible working
• Free or reduced rate health benefits
• Discount gym membership
• Competitive salaries
• Staff discount
• Company share options.

Valuing employees

Tesco has discovered that it is important to create trust and respect. It has found that by valuing employees, providing realistic goals and an interesting environment for them to work in, it increases employees” motivation.

At Tesco a motivated member of staff ‘ works in partnership with others to achieve individual and team objectives’ . This means that he or she focuses on customers, treats people fairly and is determined and devoted to receiving feedback from others.

Taylor´s motivational theory

In 1911 the engineer Frederick Taylor published one of the earliest motivational theories. According to Taylor´s research, people worked purely for money. In the early years of the car assembly industry, work on a production line was based on producing quantity and was repetitive. Workers were paid ‘piece rate’, that is, paid for every item produced.

This approach of paying workers by results was good for the business. The outcome was greater production but gave little opportunity, encouragement or time for employees to think for themselves or be creative in what they did. This limited people’s development and their use within the company.

Employee rewards

Tesco’s Employee Reward Programme has some similarity to Taylor”s theory. Its financial reward packages are one motivating factor. However, there are factors other than money which motivate people in both their personal and working lives.  Tesco goes far beyond Taylor and gives more than just simple pay increases. It supports the varied lifestyles of individual employees through relevant and targeted benefits.

Many non-financial factors can and do motivate employees to improve their output. One such factor may be the desire to serve people; others may be to improve personal skills or achieve promotion. A person may be motivated to be a professional footballer not because of the salary but because they love football.

Employees are more motivated if they feel content in their work. This often happens when their employer creates a good working environment where employees feel valued, generally through increased communication and being asked for their opinions. Employee motivation is also likely to be higher if the organisation invests in its staff through training and development. In turn this enhances their knowledge, skills and their sense of job satisfaction.

Measuring staff satisfaction

Every year Tesco invites its staff to take part in a staff satisfaction survey called Viewpoint which gives them the opportunity to express their views on almost every aspect of their job. The results from the survey help Tesco make sure it is offering the right things to its staff to keep them motivated. Some of the benefits available to staff include:

• Lifestyle break offers 4-12 weeks off work and guarantees the job back at the end
• Career break allows staff between 6 months and 5 years away from work with right of return
• Pension scheme this award-winning scheme provides clearly defined long term benefits.

The Mayo effect

Internal or external factors may motivate a person to change or develop their actions. For example, an internal factor may be the desire to learn a new skill. This would reward the individual. External factors include, for example, sales targets and incentives. A more negative motivator might be no pay rise if targets are not achieved.

In the early 1930s the theorist Elton Mayo suggested that motivation at work was promoted by such factors as:

• Greater communication
• Good teamwork
• Showing interest in others
• Involving others in decision making
• Ensuring the well-being of others
• Ensuring work is interesting and non-repetitive.

Mayo based his assumptions on research undertaken with workers at the Hawthorne plant of the Western Electric Company in Chicago. His work resulted in the Hawthorne theory. He suggested that boredom and repetitiveness of tasks led to reduced motivation. He believed that motivation was improved through making employees feel important, giving them a degree of freedom to make choices and acknowledging their social needs.

Communication

At Tesco the Mayo theory is seen to be operating throughout the company. Communication is an extremely important factor in motivating employees. This may be through 1-to-1 discussions with managers, through the company intranet or newsletters or through more formal structures such as appraisals.

Line managers hold a daily Team Meeting to update staff on what is happening for the day and to give out Value Awards. These awards can be given from any member of staff to another as a way of saying “thank you” and celebrating achievements.

Motivation from training and development

Tesco also promotes motivation through its many training and development opportunities. Everyone has access not just to the training they need to do their job well but also to leadership training to grow within the company.  Tesco offers strategic career planning to help staff ‘achieve the extraordinary’.

In 2009 Tesco appointed 3,000 managers 80% internally. As well as an annual career discussion with every employee, the company also emphasises the development of the whole person and has implemented a system of 360-degree feedback. This is a personal development tool that provides feedback from a selection of people with whom the employee works. This helps employees to understand their behaviour, strengths and weaknesses within the workplace as others see them. The idea of the programme is to ‘Take People with You’ and ‘To Gain the Hearts and Minds of Others’ in order to improve individuals and get things done efficiently.

Personal development plans

All Tesco employees have a Personal Development Plan which they build through their 360 degree feedback and other tools. This enables Tesco managers to offer meaningful feedback to employees to help provide opportunities for continuous personal development. This personal approach helps employees to reach their full potential by encouraging self-assessment and providing advancement through ongoing training. It also enables individuals to take responsibility for their development.

This two-way relationship ensures that the employee is committed to the values of the company, that he or she works in partnership with others and helps improve the business for customers.

Maslow and Herzberg

Abraham Maslow argued that humans are motivated by five essential needs. He formed a pyramid demonstrating these needs which he called the ‘hierarchy of needs’.

At the bottom of the pyramid are basic needs, those that motivate people to work food and shelter. Once these needs are met through pay, individuals want safety and security through, for example, good job conditions. Social needs refer to the need to belong, to be part of a group. Self-esteem may arise from a promotion. Right at the top is Self fulfilment – the area for creativity, challenge and interest. Maslow suggested that achieving one level motivates us to achieve the next.

In 1959 Frederick Herzberg developed the Two-Factor theory of motivation. His research showed that certain factors were the true motivators or satisfiers. Hygiene factors, in contrast, created dissatisfaction if they were absent or inadequate. Dissatisfaction could be prevented by improvements in hygiene factors but these improvements would not alone provide motivation.

Herzberg showed that to truly motivate an employee a business needs to create conditions that make him or her feel fulfilled in the workplace.

Tesco aims to motivate its employees both by paying attention to hygiene factors and by enabling satisfiers. For example, it motivates and empowers its employees by appropriate and timely communication, by delegating responsibility and involving staff in decision making. It holds forums every year in which staff can be part of the discussions on pay rises. This shows recognition of the work Tesco people do and rewards them.

Tesco staff can even influence what food goes onto its restaurant menus. Employees thus become motivated to make choices that will increase their use of the restaurants.

Employee motivation is an important task for managers. Early motivational theory such as that of Taylor suggested that pay motivated workers to improve production.

However businesses now need employees to have greater motivation and have a stake in the company for which they work, as shown by Mayo. Maslow and Herzberg demonstrated that employees are motivated by many different factors.

Tesco provides opportunities for its managers and staff to take a share and a greater interest in their own employment. Since every employee is an individual, with different needs and aspirations, the process of reviews and personal development plans allows recognition of their abilities and achievement, as well as potential development.

This benefits the individual by providing career progression. It also benefits Tesco by ensuring the business can deliver high levels of customer service through its skilled employees.

About this case study: This case study looks at how Tesco motivates its employees by increasing their knowledge, skills and job satisfaction through training and development and providing relevant and timely reward and recognition.

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Research Topic: Critically Analysis the Impact of Employee Motivation for Customers Satisfaction-A case study on Tesco Plc. ACKNOWLEDGEMENTS

Every organization must deal with the issues of employee’s motivation, customer’s satisfaction and profitability in the normal course of carrying out business. This paper considers each issue but about how they correlate with, and affect each other. More and more research is being done regarding the effects of employee motivation for customer satisfaction. The focus of this paper is to define fully each issue, highlight the important relationship between each and offer dynamic recommendations to improve the benefits of their correlation. The research on employee motivation is constantly evolving, with new points of view and strategies emerging on a regular basis. This paper will analyze the various components of employee motivation, as well as the key drivers involved in employee fulfillment. After considering the research we can see that Employee Career development project become the key driven force for employee motivation. The results of this analysis will be used to examine the relationship between a “satisfied” employee and effective customer service and satisfaction. The paper highlights the major considerations for retaining customers and the relationship between happy employees and loyal customers. In the end, the issues of employee satisfaction and customer retention are examined about their impact and influence on corporate profitability. This paper will analyze and focus on the touch points that must be considered in the relationship between each issue. The paper will conclude that there is a direct and fundamental link in the relationship between employees, customer’s satisfaction, and sustainable profitability.

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