1. “Organizations would be far less effective systems than they actually are if economic rewards were the only, or even the principal, means of motivation available’ (Simon, 1991). Justify the statement using the motivation theories. Based on the organization selected, critically evaluate various reward strategies adopted by the organization to motivate the staff. You are expected to show a deep understanding of extrinsic and intrinsic rewards and various theories of motivation (e.g. Maslow’s Hierarchy of Needs Theory, Herzberg’s Two Factor Theory, Alderfer’s ERG Theory, Expectancy Theory and Equity Theory). Based on your assessment, provide recommendations and justify your recommendations by relevant theories.
2. Critically analyse the Performance Appraisal and Training functions of the organisation selected. You are expected to highlight the differences between the traditional practice of Personnel Management (PM) and modern practices of HRM.
Tesco company report on motivation theories, performance appraisals and training functions
Successful organizations comprehend the value of their employees and are always looking for ways to motivate them. When employees are motivated their turnover rate decreases as their performance increases. Increase in performance has a ripple effect in the progression of the organization with respect to achieving its set objectives.
According to Daft 2012, motivation is a continuous process that focuses on stimulating an individual either positively or negatively to achieve there set goals. Motivation is complex since people have different needs and desires hence organizations need to use different approaches to motivate their employees. Motivation is divided into two categories monetary and non-monetary. Monetary involves providing the employees with an increase in their salaries to motivate them to deliver results. On the other hand, non-monetary refers to focussing on promotions, holidays, flexible working hours, accommodation among others to motivate the employees (Huczynski, and Buchanan, 2010).
A good example of an organization that has made tremendous step in motivating their employees is Tesco Company. The company considers their employees as being central to their success and goes out of their way to keep them satisfied. The rewards objectives of the company include attract, motivate, recognise, align and remain. The term reward in general refers to appreciating the work someone has done (Humbly, Hunts and Philips, 2008).
To determine the motivational theories applied by Tesco Company
To distinguish between the traditional personnel management and the modern practices of HRM using real life examples
1. Organizational Theories interlinked with operations in Tesco Company
I. Maslow’s hierarchy of needs
Biological and physical needs
The Maslow’s hierarchy of needs is composed of 5 levels which each must be satisfied as one ascends the ladder. The first one is the biological and physical needs the level does focus on ensuring that people have the basic needs accessible to them that is food, shelter, and clothing. Tesco Company has launched a new program in the UK to provide their employees with housing. The reason for this imitative is to ensure that their employees in London are able to get descent affordable housing (Employee profile Tesco: Employee benefits, 2017).This will satisfy the first level.
The second level deals with safety needs the company does provide their employees and customers with sufficient security in their different stores. The employees are also trained on various safety techniques they can apply in case of any danger at the workplace. In addition, the company has focussed on providing the employees with job security by introducing contract employment system (Alegbejo, 2013).
Belonging and love
Additionally, there are various laws in the policy manual that govern the interactions of the employees at the workplace. The policy manual leads to the achievement of the fourth level that deals with belongingness and love needs. The employees are encouraged to co-exist harmoniously at the work place and in case of any issue the counselling in corporation with the human resource department are ready to aid. The aspect does promote interactions that foster the spirit of belongingness within the company (Finance, 2014).
The fourth level deals with esteem needs which often are more complex compared to the other lower levels. The esteem needs are different from one employee to another. In Tesco employees are rewarded based on them achieving their set goals. The employee can get a promotion, recognition where there photo is placed at strategic places within the organization, a holiday or a bonus in terms of shares (Finance, 2014). The various ways are applied individually and differently depending on the management team.
The last level which most people find it hard to achieve is the self-actualisation level which entails personal growth and fulfilment. In Tesco Company based on the low turnover, most of the employees are working towards reaching this level. Some have based on the opportunity for growth in terms of social, academic and work life instituted in the company (Cole, 2012).
II. Herzberg’s Two Factor
In Tesco the management team does work towards striking a balance between the intrinsic and extrinsic motivators while still achieving the organizations goals (Hearifar, 2012). Intrinsic motivators often lead to satisfaction and they include, providing the employees with recognition, opportunity for development and building healthy relationships. Contrariwise, the extrinsic motivators deal with providing them with status, salary and job security. The two motivators are referred to as the Herzberg’s two factor theory (Beckmann, 2012).
When analysing the concept of motivating employees within the organizations the management team are tasked with the responsibility of eliminating any dissatisfaction. The dissatisfaction factors are referred to as hygiene factors while promoting job enrichment factors that consolidate the satisfaction of employees (Brannen, Moore, and Mughan, 2013).
The management needs to focus on creating policies that are employee friendly to draw them to the organization. This can be achieved through getting the employee feedback when formulating the company policy. Secondly, the management needs to provide the employees with undivided support when it comes to execution of their daily duties. Thirdly, the management can work towards creating a culture that ingrains respect and dignity in all employees (Alegbejo, 2013).
Fourthly, the employees need to be provided with reasonable pay with respect to the other employees in the industry. A competitive salary will make them feel motivated to perform their various duties effectively. Additionally, employers need to match the responsibility of their employees with their skills. The aspect will ensure that their employees work to their full capacity in the different roles that they are assigned with the company.
The management of the company has improved the working conditions of the company when compared to other stores in the UK. The company has flexible working hours that allow employees to work hard towards achieving a balance between their work and social life. In addition, the company has introduced a share scheme that allows the employees to invest in the company. 90,000 of the company’s employees have invested in the share save schemes while another 30,000 have invested in the BAYE scheme (Employee profile Tesco: Employee benefits, 2017). The investment provides the employees with financial security and also does encourage them to work hard to solidify the company. The employees comprehend that as the company grows their investments also grow hence ensuring that they all benefit.
Tesco Company does offer their employees internal and external training that does ensure that they are able to enhance their skills and knowledge. The employee in the company also does create a flexible work timetable for those employees who are attending various institutions in the country. 45% of the employees within the company are enrolled in various colleges and universities (Alegbejo, 2013). Based on the above paragraphs, Herzberg clearly indicated that employee motivation always begins from ensuring that they have the best working conditions. The conditions will make the employees at the work place feel satisfied and appreciate their work.
III. Aldefer’s ERG Theory
Aldefer consolidated Maslow’s 5 levels into 3 which are existence, relatedness and growth.
Tesco does work on the principle that the little pays. They therefore focus on ensuring that the basic needs required ensuring that the safety and physiological health of their employees is guaranteed. The employees in the company are enrolled in various health insurance schemes. The aspect does ensure that their employees and their families are insured (Wood, Coe and Wrigley, 2016).
Tesco has gone further ahead to organize various employee functions that are geared towards fostering employee connections. The company has end year parties, charity events, and in-house coffee tea times among others. All the functions are centred on promoting relatedness in the company. The employees are social people and giving them lunch breaks at a common lunch patio enables them to interact with each other hence fostering cordial relations (Wood et al, 2016).
The last aspect focuses on growth of the employees on an intellectual, personal and work perspectives. In most cases the productivity levels falls due to inconsistent in design of the jobs, the measurement systems, and the evaluation and reward systems with respect to the corporate strategy of the organization.
IV. 360 Degree Feedback Technique
In Tesco the management does employ the 360 degree feedback technique. The methodology involves the use of the other team members’ comments and feedbacks to measure a co-workers productivity level (Lowe, George, and Alexy, 2012)). The method in this case will be essential in detecting the reason for the fall in productivity since the members of a team interact with each other on a daily basis. The methodology does require one team member’s productivity level to be evaluated by every team member.
The evaluation is conducted on a yearly basis and it does outline areas where the employee failed to meet their goals. The aspect does enhance employee performance at the work place and fosters team work. Additionally, the company has discussed in the essay has broadened their training programs to cater for the needs of all employees in the organization. The training offered is diverse and is geared towards making the employee’s better people in the company and the society at large (Lowe et al, 2012).
V. Expectancy Theory
According to Vroom an employee’s performance is often tied down to their individual elements. He came up with three beliefs that are valence, expectancy and instrumentality. Employees often give their best when they expect that their efforts will be rewarded. Different employees want different things as indicated in the discussion. On the level of expectancy, employees need a number of resources to achieve their goals. The management often needs to identify this and deliver them to the employees.
In Tesco the management has provided the employees with the latest technology to enable them to deliver their tasks. The management has an enterprise resource planning software that does integrate the functions within the company. The software does synchronize operations eliminating any hiccups in the delivery of the various organizational activities. The company has gone further ahead to train their employees in service delivery techniques and on ways to utilize their software (Kelly, 2000).
The management team often does use promises to motivate the employees through their supervisors. The employees in Tesco for example are permitted to set their goals that are in line with those of the departments. The management team has always fulfilled the promises it has made to their employees (Kelly, 2000). Based on Vroom, this is referred to as instrumentality and has motivated the employees of Tesco to keep on working towards achieving the organizational goals. The management team has implemented a transparent process that ensures that the people are being rewarded based only on performance. An internal committee that works in conjunction with the necessary supervisors does control the reward system (Pettinger, 2013).
VI. Equity Theory
The fairness aspect plays a critical role in enhancing the performance of the employees. The belief that the management team does care about the welfare of the employees is a great motivator. In Tesco the management team does involve external consultants to audit the performance of the organization and their employees. Based on the assessment the employees are rewarded only on the aspect of their contribution to the organization (Lowe et al, 2012). Employees often have to alter their input that is what they bring to their work to their outcome that is the end results. When analysing inputs the value employees bring to the organizations often revolve around skills, knowledge, and education among other characteristics. On the other hand, the benefits in the case of Tesco shift from insurance, security, promotion, progression among other benefits (Waldman and Jensen, 2016).
The employees need to belief in distributive justice for them to give their all to the company. Distributive justice often comes into play when the company ensures equitable hiring, conflict resolution, positioning, and pay for all employees. In the case the employees in an organization detect in equity they tend to be demotivated and this increases the employee turnover within the company. (Waldman and Jensen, 2016).
According to the equity theory the involvement of the employees in the organizations activities makes them feel appreciated. The appreciation will definitely trickle down to good performance since they will feel that they are implementing one of their suggestions.
Provision of job security is a feature that is present in nearly all the motivation theories. When employees are assured of this they are able to put all their effort in ensuring the growth of the corporation. Tesco Company does hire part time employees to supplement the contract employees within the company. The part time employees do not have job security since they are hired during a peak season or to handle a particular shortage of employees in a certain area. The introduction of reasonable pay and flexible working hours for these employees will motivate them to work towards achieving the organizations objectives.
In nearly all countries in the globe there is an imbalance between the hire management wages and the junior staff. The disparity is so huge in some companies like Apple Inc. where the CEO earns 300 times what the junior staffs earns. The management has a responsibility of balancing the pay range within their company to enable the junior employees to feel that they input within the company is appreciated.
The institution of flexible organization hierarchical structure will facilitate regular interactions between the management team and the employees in the organization. The aspect will motivate the employees to deliver as they will be on a regular friendly basis with their employers. The aspect fosters idea sharing which in the end contributes to the growth of the organization. The late Steve Jobs when he was the CEO of Apple Inc. he introduced a new strategy referred to as management by walking, this involved the management team walking around during office hours and interacting with the employees.
2. Traditional Personnel Management versus Modern HRM Management
Traditional personnel management commonly referred to as TPM concentrated on the administration of employees and the minimal issues when it comes to labour relations. The modern human resource management is more advanced. It does focus on the selection, recruitment and training of the employees in the work place. The modern HRM practice also does dwell on improving the morale of the employees through various motivation and reward schemes (Guest, 2011).
Tesco Company has an open selection process that focuses on the inclusiveness of everyone during the application process. The company has introduced the Enterprise rent a car selection and recruitment process to oversee the selection process with an aim if ensuring that the company gets the best talent in the market that will fit their organizational culture. (Whitelock, 2003).
In the traditional personnel management the recruiting process was less intensive and the selected employees were offered less training before being absorbed into the company. The modern HRM practices emphasizes on the training of the employees to enable them to perform their activities efficiently. The employees’ skills and personality are measured before they are fitted in their respective positions within the company (Guest, 2011).
At Tesco Company after the recruitment process and the suitable candidates are selected they are enrolled in a training program before being ushered into the day to day operations of the company. The company does not concentrate more on the educational level but on the personality and skills that one has. The academic qualifications are important in getting one into the company but there is more to a person than there papers. This is what Tesco taps into when creating the ideal employees for their company (Employee profile Tesco: Employee benefits, 2017).
In the traditional personnel management employees often handled issues based on their perception of what is accepted and what is not accepted at the workplace. Contrariwise, in the modern HRM practices each organization has a manual both in soft and hard copy for the employees. The manual does provide guidance on ways of operating that will enhance the performance of the employees. In additional, the HR department is trained to identify and handle issues before they escalate into problems that will affect the organization.
In Tesco the human resource department does provide all its employees with a manual that provides guidance on ways they are to conduct themselves at the workplace. The company has also listed its policies on their website that allow potential employees to determine if their personality will fit the organizational culture of the company. The aspect has ensured that the retail store operates effectively when it comes to achieving their end goals (Whitelock, 2003).
In traditional personnel management the concentration of the organization was centred on the performance of the employees when they are at work. On the other hand, the modern HRM practise does go beyond the workplace where the organization cares about the welfare of their employees (Treen, 2000). Organizations have gone further ahead to provide their employees with housing near the work place, birthday wishes, family retreats and gifts among other tasks that will ensure that their employees feel appreciated.
According to Piercy, Craverns and Lane, 2010, the company does encourage their employees to relocate in areas that are closer to their workplace. The reason for this is to ensure that their employees reach home on time to relax and engage in other social activities. Additionally, the aspect does lower the cost that the employees will use when travelling to work hence saving them more money. The company does provide family retreats, allow their employees to attend various social family functions, does wish them happy birthdays among other activities to make them feel appreciated.
Traditional personnel management focussed on maximizing the activities of the organization by allocating employees more tasks based on the time they worked in the firms. Times have changed with modern HRM practices where the employee’s time is flexible enough and the organization does operate around their schedules (Treen, 2000). The aspect does reduce employee stress enabling them to work effectively in meeting the organization goals.
An overview of Tesco Company shows the flexibility notion ingrained in their human resource practices. Employees within the company work in shifts which make it easier for employees with family or academic obligations to function effectively in the company. The employees often select the shifts which they are free to work in the company. Later on when they are through with their shifts they can engage in their other activities (Metzeger, 2004).
In traditional personnel management the work activities of handling the employees was an internal process that followed the same structure. The modern human resource management process concentrates on working towards improvement. The department works in conjunction with other human resource departments in other organizations or consultants to effect changes in the profession as a whole. There are seminars that are being conducted by the human resource bodies in different countries to strengthen the field (Treen, 2000). From the seminars the human resource personnel can implement the practices in their organization with the management aid hence effecting progressive change in the organization.
Tesco Company has been in the retail sector since 1994 and has altered its human resource strategies a number of times to reflect that of other organizations in the sector. The company does involve internal and external companies when appraising their employee performance. The reason this is done is to ensure the institution of fairness in the performance appraisals. The results from the appraisals determine the suitable employees who will be rewarded within the organization. The company also does encourage their employees to take part in various seminars in their field of interest (Ma, Ding, and Hong, 2010). The main reason is to enable them to learn and then implement the new techniques within their various departments.
The traditional personnel management can be termed as an operational function that does focus on the daily people management activities within the organization. On the other hand, the modern human resource management is a strategic function that is integrated in all the aspects within the organization. The human resource department in the present time not only manages the employees but also provides guidance on ways the company can positioning (Treen, 2000). The employees an organization has are its resource and if they are treated well they can be the competitive advantage for the company.
In Tesco the management in conjunction with human resource and finance department have created two schemes that the employees can invest in. The schemes provide the employees with security in the long run and they interest does grow on a yearly basis. The company also does train their employees hence imparting them with skills that they can use to better themselves at the workplace. The company does understand the importance of their employees hence the reason they invited an external audit to review their reward systems in 9 March 2017. The company promised to reward the employees of the company nearly 10 million Euros. The failed reward system was corrected to prevent a reoccurrence of the situation (Express & Star, 2017).
Table summary of the points
Traditional Practise of Personnel management
Modern practices of HRM
Administration of employees and the minimal issues when it comes to labour relations
Focus on the selection, recruitment and training of the employees in the work place
Focussed on maximizing the activities of the organization by allocating employees more tasks based on the time they worked in the firms.
Employee’s time is flexible enough and the organization does operate around their schedules
Recruiting process was less intensive and the selected employees were offered less training before being absorbed into the company
Emphasizes on the training of the employees to enable them to perform their activities efficiently.
Work activities of handling the employees were an internal process that followed the same structure.
The department works in conjunction with other human resource departments in other organizations or consultants to effect changes in the profession as a whole.
An operational function that does focus on the daily people management activities within the organization
Strategic function that is integrated in all the aspects within the organization.
Based on the discussions, I can easily conquer with Simons 1991 that if economic rewards were the only aspect used in motivating employee’s organizations will be less efficient. It is more like saying there is more to life than money; money cannot bring total satisfaction to an individual. Additionally, traditional personnel management based on the analysis formed the foundation for the modern human resource management practices. In the present times the human resource personnel are present in most of the meetings to give their input on the impact of the decision on the employees. There is still more that organizations like Tesco need to do to meet the set regulations in the modern human resource management.
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