Research Proposal

Significance of motivation at a retail organization in Tesco



Retailing is a dynamic industry, consisting of activities such as food, fashion, consumer goods, financial services and leisure, which is growing at an exponential rate. To stay competitive in this globalized world, retailers should be able to launch products and promotions quickly and provide enhanced customer service. In an industry notorious for high turnover, retailers are faced with the challenge of hiring and retaining an effective workforce which performs efficiently and effectively towards their predetermined goals.

Motivation plays a vital role in an organisation as it is responsible in getting increased performance from employees. The greatest factor lacking amongst managers is their ability to precisely apprehend the aspects that motivate their employees. With the organisations being assessed against international standards as an outcome of globalisation, workforce diversity and benchmarking, various organisations including retail organisations are keen to conceive as to how they can motivate employees to have a competitive edge. According to Broadbridge (1999), there is a complexity of forces dictating transformations in retailing employment.

As competition in UK retail increases, retail organisations increasingly realise that the contribution of motivation and behaviour of store employees are the key aspects of competitive and business success. The success of retail firms relies on a motivated workforce. The British Retail Consortium is the lead trade association representing the whole range of retailers, from the large multiples and department stores through to independents, selling a wide selection of products through centre of town, out of town, rural and virtual stores.

In the 1980s, Tesco main focus had been on revenue generation and the work culture in the company was dominated by fear. The staffs were scared of their managers. People were hired and fired indiscriminately. The staff were neither paid well nor managed well. With a workforce of about 45,000, Tesco's average employee turnover was 75%. About �1000 was spent per employee on recruiting and training which added up to �30 million per year. Leahy implemented a new strategy relating to Tesco's people as an integral part of the Tesco Steering Wheel, because he was convinced that Tesco employees were the key to success in organizational strategies and achievement of goals.

To keep the things simple for customers as well as for employees, Tesco adopted several new systems such as electronic shelf edge labelling all across the store, through which prices could be changed from a single central point; self scanning tills; self service pre-packaged products, coffee shop on mezzanine floor and also merchandising of fresh produce.


Tesco's rapid growth in the early 2000s attracted severe criticism mainly for its HR policies and procurement policies. Although Tesco prided itself at being a people- centred organisation, media reports revealed that the company paid unduly low wages. One move that received lot of opposition from all quarters was Tesco's stand on employee absenteeism. In order to reduce absenteeism, Tesco came up with a policy of not paying for the first three days of sick leave taken by employees. After the policy was implemented, Tesco claimed that the absenteeism came down to 4.6% from 5.8%.

Based on this argument, the motive for choosing this particular organisation to conduct the research was that UK business accounted for 80% of Tesco's total sales in Feb 2005. Tesco's distribution network in the UK was among the best in the world, and is currently active in 13 markets in Europe and Asia.

It is very essential for an organisation to ensure efficient and effective staff and to assure a conducive environment that enables the organisation to achieve organisational success through its human resource. Retail organisations should be acquainted of the factors motivating and encouraging employees.


In light of the motivation for the study, the objectives of the research are three-fold:

    (a)To determine the major motivating factors within a leading retail company in the Tesco;
    (b) To determine whether motivation as a factor is directly related to the organisational output.
    (c)To determine how essential it is for manager to understand the concept of motivation.



According to the report, produced by international property consultancy King Sturge in association with Business in the Community, more than 3.2 million people work in retail which, following the slump in manufacturing jobs is now the UK's third largest industry behind business services and the health sector. As per The Advanced Institute of Management Research (AIM), Supermarkets make up a substantial part of the retail trade in the UK, and the two largest UK retailers being Tesco and Sainsbury's.

Organisations are under extreme pressure to improve performance and become increasingly competitive (Buitendach & De Witte, 2005). As the success of retail organisations is dependent on a motivated workforce it is therefore important for Tesco to be aware of what keeps employees and managers motivated as this would increase their job performance and therefore their productivity. Motivation is one of the key factors in getting employees to increase performance. In today's competitive world and market it is essential that an organisation have positively motivated employees to improve productivity and efficiency.


According to Richard Romando, Motivation can be defined in a number of ways. Generally, it is defined as a driving force that initiates and directs behaviour. In other words, motivation is a kind of internal energy which drives a person to do something in order to achieve something.

Motivation, for the purpose of the study, is considered to be the desired positive willingness that prompts a person to action. The factors that influence or lead to this positive willingness, are considered to be motivation factors, and include specific needs, wants, drives.


Various theories were developed to enhance the understanding of motivation and uncover the factors leading to motivation. Given the focus of the study to explore the factors that lead to motivation, particular attention is paid to the following content theories of motivation, namely, Maslow's Hierarchy of Needs, Herzberg's Two

Factor Theory, Alderfer's ERG Theory and McClelland's 3 Need Theory.

2.3.1 Maslow's Hierarchy of Needs

Maslow, described motivation in terms of a need hierarchy theory.

He distinguishes a number of needs ranging from lower order to higher order needs, namely, physiological needs; security and safety needs; belonging, love and social needs; status and self actualisation needs. These are described as follows:

(i) Physiological needs are the lowest order of human needs. It consists of the basic survival needs like the need for food, water and shelter.

(ii) Safety and security needs represent stability (including financial security) and freedom from physical threats and dangers.

Furthermore, according to Maslow (1954), it is the need for physical and emotional security in the form of clothing and shelter. In the modern setting it could include protection in the form of unemployment insurance, retirement benefits and pension.

(iii) Belonging, love and social needs include affective relationships and the need to belong to a group or family.

(iv) Status and self-esteem needs refer to the need to feel valued and respected by one and significant others. Furthermore, Maslow identifies it as the need for accomplishment and achievement

(v) Self-actualisation needs refer to the need to utilise one's potential to the maximum, working with and for other people and developing one's capacity. This can also be utilising one's full potential in serving a noble cause.

According to the theory, needs at lower levels have to be fulfilled to some extent before those at the next higher level can be satisfied. The lower four needs are called deficiency needs because they motivate people to meet them and until they are met, people find it difficult to respond to higher order or so-called growth needs.

In general, Maslow's theory has not received a great deal of support with respect to the specific notions it proposes, namely, the exact needs that exist and the order in which they are activated. Specifically, many researchers could not prove that there are only five basic categories of need and that they are activated in the precise order that Maslow had specified.

2.3.2 Herzberg's Two-Factor Theory

In the late 1950s, Frederick Herzberg (considered by many to be a pioneer in motivation theory) interviewed a group of employees to find out what made them satisfied and dissatisfied on the job. From these interviews, Herzberg went on to develop his theory that there are two dimensions to job satisfaction: "motivation" and "hygiene". Based on research investigating the relationship between motivation and job-satisfaction, Herzberg concluded that all variables that make people feel either good or bad about their jobs can be grouped into one of two categories, hence, his theory being known as the two-factor theory of motivation. The more intrinsic factors, such as achievement, recognition, the work itself, responsibility, growth and advancement, seem to be related to job satisfaction; whereas extrinsic factors, such as status, security, company policy, administration, remuneration, supervision, working conditions, and interpersonal relations with subordinates, peers and supervisors, tend to be associated with job dissatisfaction.

Herzberg suggests that the opposite of satisfaction is not dissatisfaction. Removing dissatisfying aspects (the hygiene factors) from a job does not necessarily make the job satisfying. According to Herzberg, job satisfaction is a function of challenging, stimulating activities or work content. This represents the first factor of his two-factor theory of motivation, known as the "motivators" refers to this set of factors as "the actual execution of the work." Herzberg emphasizes on achievement, recognition, the work itself, responsibility and growth, as these are the factors that people find intrinsically rewarding.

2.3.3 Alderfer's ERG Theory

Alderfer's theory is based on the fulfilment of three basic needs as opposed to the five levels of basic needs identified by Maslow. The three needs specified by ERG theory are:

(i) Existence needs which refer to material needs, necessities for basic survival and environmental factors such as food, water, pay, fringe benefits and working conditions.

(ii) Relatedness needs which correspond to Maslow's social needs and refer to significant relationships in which the individual is involved. These include relationships with an individual's co-workers, family, community members and friends.

(iii) Growth needs which refer to the need of certain individuals to be creative and productive while desiring opportunities for personal development and achievement.

2.3.4 McClelland's 3 Needs Theory

McClelland proposes that there are three basic needs that are operative in the workplace, that is:

� The need for achievement, which is the desire to exceed some standard of behaviour; the need to excel; the need to be successful.

� The need for power, which is the need to make others behave in a way in which they would not otherwise have behaved, the need to control others, to be influential.

� The need for affiliation, which is the need for warm and close interpersonal relationships, to be liked and accepted by others.

2.4 The Relationship between Motivation and Satisfaction

It is often assumed that motivation and satisfaction are very similar if not synonymous terms; however, they are very different.

Motivation is the relationship between performance and rewards, while satisfaction refers to people's feelings about the rewards they have received. There's a significant positive relationship between motivation and job satisfaction. They indicate that managers can potentially enhance employees' motivation through various attempts to increase job satisfaction. Work satisfaction is the most prominent result of work motivation.

However, according to a research, focussing solely on satisfying workers will not result in high performance and productivity. High performance may cause high job satisfaction, which is re-inforced by the rewards that accompany performance. In other words, performance leads to rewards that in turn produce satisfaction.


Intrinsic motivation is when employee is motivated by internal factors, as opposed to the external drivers of extrinsic motivation. Intrinsic motivation drives employee to do things just for the fun of it, or because he believe it is a good or right thing to do.

There is a paradox of intrinsic and extrinsic motivation. Intrinsic motivation is far stronger a motivator than extrinsic motivation, yet external motivation can easily act to displace intrinsic motivation.

Some authors see motivation as being contained within the individual whereas others view it as arising from sources outside the individual. Daft (1999) defines motivation as the forces (either internal or external to a person) that arouse enthusiasm and persistence to pursue a certain course of action. External motivation, on the other hand, is viewed as something outside the individual.

Although the responsibility of management is emphasised in the external motivation theory, proponents of this theory do not negate internal motivation theory. They rather consider external motivation as a theory that builds on internal motivation.

External motivation theory, in other words, includes the forces which exist inside the individual as well as the factors controlled by the manager, namely, job context items such as salary and working conditions, and job content items such as recognition and responsibility. It can therefore be said that each individual is already motivated, but that such inherent motivation can and should be stimulated by means of external motivation to inspire performance.

Intrinsic factors are related to job satisfaction, while extrinsic factors are associated with dissatisfaction. Extrinsic satisfaction refers to satisfaction with aspects that have little to do with the job tasks or content of the work itself (such as pay, working conditions and co-workers) and intrinsic satisfaction refers to the job tasks themselves (for example, variety, skill utilisation and autonomy). Furthermore, it is found that sales managers generally place more emphasis on intrinsic rewards than extrinsic rewards.



According to Fiona Hutchison, some 34% of current barriers to business success are people related. It would seem not only desirable, but indeed essential, that staff is kept motivated.

In 2004 National Business Awards, the company which was chosen as Employer of the Year was Tesco. In their citation the judges said that "Tesco was voted Employer of the Year because its solutions were seen to be more holistic." These "solutions" involved recognising the importance to company performance of a committed and motivated staff. To ensure that they have this and also retain it, Tesco have invested �12m this year alone in training schemes all of which are pure Herzberg motivators. For example:

    1. new and more open lines of communication between managers and staff;
    2. a scheme whereby directors and senior managers spend a week on the shop floor listening to ideas and suggestions from customers and staff;
    3. a "talent spotting" scheme to fast-track shop-floor workers up the promotional ladder; and
    4. A better understanding of individual employee circumstances.

The result of all these initiatives is that Tesco is continuing to show record sales growth and profits - proof if it were needed that keeping staff motivated is good for business.

This methodology will explain the factors used in Tesco to motivate employees.


The investigation is based on an interview with the personnel manager at the Ashford branch of Tesco and a questionnaire given to 10 employees in different parts of the organisation.

Key findings:

  • Tesco motivate staff using quality circles and team building.

  • Tesco feel it is important to give staff a sense of responsibility leading to empowerment.

  • Tesco believe communication is vital.

  • Tesco use profit sharing as an incentive and to give staff a feeling of ownership of the company.

  • Tesco rewards achievement which helps to raise productivity.

The above method of directly asking the employees as to what motivatesthem more seems to be feasible. This can be elaborately understood with the help of the following example; A Motivating Workplace.

In a manufacturing plant�the tough, competitive, results-oriented management team was under pressure to improve plant performance. They decided to do this by getting people more involved, capitalizing on their energy and experience. To build a workplace that did this, they asked themselves this question, "When do we feel involved and motivated?" They also asked supervisors to discuss this question with employees. Based on what everyone said, the management team committed to develop an open plan to create the kind of workplace people described.

In response to the new openness, and the encouragement of their immediate supervisors, employees initiated changes in the production processes close to their own jobs. These changes made life simpler for the employees, removed annoying roadblocks, and correspondingly improved efficiencies.

The interview process became a plant-wide celebration of all they had done. People saw that everyone felt the same way�the new workplace had all the qualities people originally said they wanted. They had arrived. With the numerous changes initiated by highly motivated people at all levels, productivity now far exceeded the plant's original design capacity. Looking ahead, people at all levels felt that there was no limit to the continuous improvement process they had begun.

These are some good questions to ask employees in order to find out what motivates them to do a better job.

* "Describe an ideal working environment for you"

This question can tell you a lot about what kind of environment your employee will work the most efficiently in.

* "Imagine that in the future, ten years from now, you are receiving an award. What would the award be for? What is the award and under what circumstances did you receive the award?"

A question like this one will tell you about what kinds of goals that the person has for himself.

* "What goals outside of work have you set?"

These kinds of answers would indicate that family and personal happiness is motivating to this person. These types of answers might indicate that the person is motivated by new and exciting challenges.

* "When you are ready to retire, what one thing would you have achieved in order to feel that you were successful in your job?"

This question will let you know to some extent what the person defines as successful. The idea of success is truly an indicator of what kinds of things motivate a person.

* "Tell me about a time when you motivated another person on the job."

When a person can tell you about what motivated another person, especially if they were the ones doing the motivating, then you will know that they are "motivatable. They are able to be motivated to work harder to achieve goals set either by the company or personally.

The bottom line is if you want a motivated workforce that gets results, just ask�and you will receive.

Amongst others, it is vital to respect your employees, to communicate with them, to offer opportunities for growth and development, in short, to make them part of the organisation.


The manager in today's work environment holds the key to two doors: one that motivates employees and the other that inhibits their motivation. The effective manager understands that using the right key, motivation, leads to a more productive and efficient workplace. Indeed, the manager's job is to utilize employee potential in order to get tasks completed in the workplace ("Employee Motivation," 2005). Unfortunately, motivation is often misunderstood by the manager and rarely is motivation practiced in the manner that it was intended ("Employee Motivation," 2005). As mentioned in Employee Motivation (2005), the primary benefit to the manager for using motivation is that motivated employees are both more productive and creative on the job.

Rewards serve as excellent motivators for employees, but it is important that managers reflect on findings that monetary rewards do not always act as the greatest motivators for employees in an organization ("Employee Rewards," 2005). Interestingly, it is explained in Employee Rewards (2005) that rewards should be meaningful and also vary with the employee's performance so that they are specialized for each employee. Ensuring employees receive unique rewards makes them meaningful and gives the manager a great motivational tool, since the employee would be able to easily identify his/ her unique reward with an individual action that took place to obtain the reward . It is important to provide rewards quickly after a positive activity takes place and the reward needs to be related to the employee's performance ("Employee Rewards," 2005). Rewards are a key component for a manager to utilize in their overall motivational scheme, since rewards have been found to increase employee productivity between twenty and thirty percent ("Employee Rewards," 2005). The increased productivity gains associated with rewards that are tangible should not be ignored, since increased employee productivity equates into greater profitability and productivity for the firm as a whole.

The effective manager will also be sure to keep in mind the importance of equity and equity theory in the workplace. With the use of rewards as a motivational factor for employees comes the possibility of favouritism among management towards certain employees in providing rewards. Allen (1998) explains that employee performance is directly related to an employee's perception of the reward(s) they are receiving for the work being done and that the employee will adjust their work output to accommodate the quality of rewards they are given. However, as previously mentioned, the use of small, symbolic rewards have been found to have the greatest effect on motivating an employee, thus increasing their job output as well as their motivation, without the excessive cost associated with monetary rewards ("Employee Rewards," 2005). Managers must ensure all employees are rewarded equitably and offered recognition to offset any perceived inequities, otherwise employee productivity will continue to decline to a level that the employee feels is appropriate for his/her pay scale and given job responsibilities (Allen, 1998). The efficient manager could employ conditioning strategies adopted by B.F. Skinner's research, which aim to control behaviour through rewards (Allen, 1998).

The managers' of today act as the gatekeepers for companies and are usually the ones directly responsible for company profitability as well as other factors including employee morale, satisfaction, and work ethic. The manager that ignores motivational opportunities in the workplace fails to embrace the employee needs for growth and achievement (Allen, 1998). The best managers are those that provide rewards that are unique to each employee and have a symbolic meaning to the employee's positive action. Furthermore, the manager that creates an inviting work environment by fitting the employee into their preferred line of work will see employees that are more motivated and productive ("Employee Rewards, 2005). Motivation theory is a challenging concept for today's manager, but it is one aspect that companies and their managers cannot ignore, because the result of failing to embrace motivational techniques in the workplace results in employees that are less satisfied with their jobs and exhibit less effort when working, thus contributing to lower company output. For the smart company, it makes ethical and financial sense to employ motivational techniques company-wide.



Even when a sufficient workforce is in place, retailers need to continue to meet employees' expectations to ensure job satisfaction and improved employee motivation and performance. Surprisingly, nearly 60 percent (58 percent) of the respondents who are currently retail employees are completely satisfied with their job. The findings from the Maritz Poll suggest that job expectations and clearly defined roles drive job satisfaction. More than 80 percent of respondents completely agree that they know exactly what is expected of them in their roles.

However, there is much room for improvement. Approximately one-third or more of the retail employees' surveyed feel that they:

- Are not satisfied with the way their organization communicates with them (38 percent);

- Are not consistently recognized for their work performance in ways that are important to them (35 percent); and

- Do not regularly receive feedback on how their work contributes to the success of their organization (32 percent).

Clearly, retail managers can be doing a better job of communicating with their employees, which, in turn, will increase job satisfaction and employee retention.

Research shows that one in three retail employees (34 percent) feel that their company does not genuinely listen to and care about its employees. This perception of retailers does not bode well for the employers.

Say for instance, Tesco's Steering Wheel Strategy enabled the company to emerge as the largest retail chain in UK.

Under the leadership of CEO of Tesco, Leahy, Tesco implemented the Balanced Scorecard concept. This concept had been introduced by Dr. Robert S. Kaplan and Dr. David P. Norton in an article published by Harvard Business School in 1992. The Balanced Scorecard system aimed to change organizations from financially driven to mission driven organizations. Through four business perspectives - financial performance, internal processes, customer knowledge and learning & growth, the Balanced Scorecard converted strategy into an integrated management system. Tesco adapted the Balanced Scorecard approach to meet its own requirements renaming it the Steering Wheel.

Leahy implemented a new strategy relating to Tesco's people as an integral part of the Tesco Steering Wheel, because he was convinced that Tesco employees were the key to success in organizational strategies and achievement of goals.




4.5 The Jungian inventory measures on four preference scales, giving a variable score to show the strength of each one. In the table below, the standard terms are shown first, with alternatives shown in parentheses.

Preference From... ...To
E = Extraversion
E = Extraversion
(Expressive, External)
I = Introversion
(Reserved, Internal)
(Acquiring information, Inferring meaning)
(Observant, Facts)
T = Thinking
N = Intuiting
(Introspective, Ideas)
(Formulating intent)
T = Thinking
(Tough-minded, Logic)
F = Feeling
(Friendly, Emotion)
Living J = Judging
(Scheduling, Structured)
P = Perceiving
(Probing, Flexible, Open)


Associates' Ranking Items Employers' Ranking
1 Interesting work 5
2 Appreciation of work 8
3 Feeling "in on things" 10
4 Job security 2
5 Good wages 1
6 Promotion/growth 3
7 Good working conditions 4
8 Personal loyalty 6
9 Tactful discipline 7
10 Sympathetic help with problems 9

Source: Kovach, 1999.


Motivation is crucial in the process of management. Without little or no motivation you, as a manger of an organization will not be able to get as much from your employees as you may need. Motivation is the driving force in people. It makes people feel committed to others, and feel responsible for the actions of an organization. Motivating to excellence deals with how to ensure a positively motivated team of employees.

Motivation is an important tool that is often under-utilized by managers in today's workplace. Managers use motivation in the workplace to inspire people to work, both individually and in groups, to produce the best results for business in the most efficient and effective manner. It was once assumed that motivation had to be generated from the outside, but it is now understood that each individual has his own set of motivating forces. It is the duty of the manager to carefully identify and address these motivating forces.

Motivation can be properly or improperly achieved and can either hinder or improve productivity. Management must understand that they are dealing with human beings, not machines, and that motivation involves getting people to do something because they want to do it.

Hence, now we can conclude that in a leading retail organization employees can be well motivated towards the organizational goals with the help of Quality Circles and Team Building, by providing them with the sense of belongingness and responsibility towards the organization, by communicating with them appropriately and by emphasizing on non monetary incentives rather than monetary incentives which is appreciated by employees more.

Undoubtedly, a manager plays a very vital role in motivating an employee towards achieving organizational goals efficiently and effectively.

Hence from the employee's perspective, the results indicate that if motivation is carried as an ongoing process in its true sense, then most certainly an organization will be able to achieve its organizational objectives efficiently and effectively.


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