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1.

0 Introduction
Tesco is a British multinational grocery and general merchandise retailer with its headquarters at
Hertfordshire, United Kingdom. The calculation of its profit has acknowledged it as the worlds
second largest retailer while the revenue measurement has recognized it as the third largest
retailer. Its business empire is spread across Asia, Europe and North America.

Source: Gavin Ruthwell, 2011, Dawn of a new era for Tesco, The Institute of
Grocery Distribution and IGD Services Limited, (Online) Available at
www.igd.com/our-expertise/Retail/retail-outlook/4570/Dawn-of-a-new-era-for-

Figure 1:- Overview of Tescos Business Empire

It was founded in 1919 by Jack Cohen as a group of market stalls. The Tesco name first appeared
in 1924 and the first Tesco store was opened in 1929 in Burnt Oak, Middlesex. His business
expanded rapidly, and by 1939 he had over 100 Tesco stores across the country (G. Stojanovski,
2013). Currently, this company owns thousands of stores worldwide. Thus, it needs to hire and
create motivated and skilled staff who can take the company to even higher success while
achieving their personal goals. This can be achieved by increasing the employees knowledge,
skills and job satisfaction through training and reward system. Hence, this paper will critically
evaluate the reward strategy of Tesco while clarifying that how it is linked in managing an
individual and organizational performance.
2.1 Tescos Reward Strategies

Tesco is well aware of the fact that its growth and success is directly concerned with the
satisfaction of its staff so that they can provide a good and humble service to its customers. It is
very important for them to create their staff motivated because it is proven fact that a motivated
employee is keen to perform well (The Times 100, 2011). Hence, they have a very well
organized employee reward system for its staff. To understand this in depth it is important to
know that an employee reward system consists of an organizations integrated policies, processes
and practices for rewarding its employees in accordance with their contribution, skill and
competence and their market worth (Armstrong, 2002). It is also important to know that this
reward management is not just about payment or employee benets; it is equally concerned with
non-nancial rewards such as recognition, learning and development opportunities and increased
job responsibility (Armstrong, 2007). Through research measures it is observed that Tescos
employee reward programmee in some respects is similar to the Taylors theory 1. Good pay is
just one motivating factor. It also looks after its peoples well-being with non-financial benefits.
These include good working conditions, training and development.

In addition to the above, the staff of the Tesco has to complete an annual survey named
Viewpoint so that they can give their views on their jobs and the company. The result of this
survey is very helpful to the company in ensuring that they are offering the correct service to
keep its staff motivated. The following table is an overview of some main examples that Tesco
provides it to its staff:-

Lifestyle break 4-12 weeks off work and the job back at the end.
Career break 6 months to 5 years away with the right of return back to the job.
Pension scheme Offering long term benefits to lifetime loyal staff after their retirement.
Table 1:- Benefits to the staff of Tesco

1 Taylor thought people worked just for money. His view of Scientific Management set out a way of
working where people were paid by how much they produced. This helped to increase production but it
did not keep staff happy
In addition to the Taylors theory it is also observed that Tescos Reward Programmee is similar
to the Maslows Hierarchy of needs2. Now the following diagram will explain about this
similarity in detail.

Tesco offers Personal Development Plans, recognition of skills and talents,


opportuniity for promotion and career progression programme. Carrer
discussions feed into Tesco'S Talent Planning meetings. The options fast-
track management programme provides a route for capable staff to reach
higher level.

Tesco Values emphasise self respect and respect for others and praise for
hard work, its self-assessment, 360 degree feedbackand appraisal system
help to recognise individuals' contributions and importance and celebrate
achievement.

Tesco promotes team and group working at various levels;The company


'Steering Wheel' assesses individual and group work and enables store staff to
work as a team. Working conditions and a home-from-home ethos encourages
long service

Tesco provides security of formal contracts of employment as well as pensions


and sickness schemes and the option to join a union to give people a sense of
belonging. It ensures health and safety in the workplace.

Self-
Fulfillment
2 Maslow's hierarchy of needs is a theory in psychology anticipated by Abraham Maslow in his
paper "A Theory of Human Motivation, which was published in 1943. He suggested that there
are different levels of needs namely basic, security, social, esteem and self-fulfillment
SelfAccording to him achievement of one level will motivate an individual to achieve
respectively.
the next Esteem
level (Jerome, 2013).

This would include a place of work, regular monthly pay and essential facilities
Social such as restaurant or lockers for personal belongings.
Basic/physical
Security
Needs
needs
Needs Figure 2:- Comparison of Tesco with the Hierarchy of Needs
At Tesco the Mayo theory is also practiced very highly. 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.