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.
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.
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.
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/
Scott, K. (2018). Tesco partners with UK health charities to inform workplace health programme. Employee Benefits. Retrieved 3 April 2019, from https://www.employeebenefits.co.uk/issues/january-2018/tesco-partners-uk-health-charities-inform-workplace-health-programme/
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.
Tesco group employees United Kingdom 2018 | Statistic. (2019). Statista. Retrieved 3 April 2019, from https://www.statista.com/statistics/490882/tesco-group-united-kingdom-uk-number-of-employees/
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/
Tesco plc. (2019C). Core Purpose and Values. Retrieved 3 April 2019, from https://www.tescoplc.com/about-us/core-purpose-and-values/
Tesco plc. (2019C). Core Purpose and Values. Retrieved 3 April 2019, from https://www.tescoplc.com/about-us/core-purpose-and-values/
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
Topham, G. (2016). Tesco workers take company to court over alleged discrimination. the Guardian. Retrieved 3 April 2019, from https://www.theguardian.com/business/2016/oct/16/tesco-workers-take-company-to-court-for-discrimination
Financial performance of Tesco
(Source: Tescoplc.com, 2019)
Average number of employees at Tesco in the United Kingdom from 2012 to 2018
(Source: Statista, 2019)
Maslow’s Hierarchy of Needs theory – Tesco
(Source: Is.muni.cz, 2019)
Two-Factor Theory of Motivation – Tesco
(Source: Is.muni.cz, 2019)