Key Factors affecting recruitment in the UK

This report will explain the key factors affecting recruiting, training, motivating and rewarding of the employees at Sainsbury’s Supermarkets Ltd. It will focus the relevant literature on HR, recruiting, training, motivation and rewarding systems. The organisation has keen awareness about their level of customer service due to a drop in sales and position in the market.

To recover the position they are focusing on HR policies and cultural change within the organisation. To move forward, increasing their level of customer service and sales the organisation is well maintained about their recruitment policies, training, motivation and rewarding systems.

1.0: Introduction

Tesco is the largest British retailer and is also the world’s third largest grocery retailer with outlets across Europe, USA and Asia. The company has more than 470,000 employees and 4,331 stores in 14 global locations (Annual Report 2009). It is the biggest private sector employer in the UK with nearly 260,000 staff (Poulter, S. 2005). Tesco has four range of store: small local store Tesco Express, Tesco Metro, Tesco Superstore and large store Tesco Extras. More than 86% of all sales come from the UK market.

Source: The times 100

Tesco’s international expansion is part of its strategy to diversify and grow the business. It has diversified from banking to insurance services, electrical goods, telephone equipment and airtime. Tesco operates it business in very competitive market where people have alternative choice. That’s why the company is trying to give customer excellent service. To meet customers all the purchasing need in one place Tesco is moving towards ‘one stop shopping’. Tesco’s online shopping chain is the biggest one in UK grocery market which attracts more than one million regular customer in 24 hours through its website www.tesco.com

Tesco’s primary aim is, to serve the customer with `every little help’. Keeping existing customers happy and attracting new customer is equal is important but keeping existing customer is more cost effective than acquiring new ones for the business, as they are more likely to return, although it has on going strategy to attracting new customer.

Source: www.tesco.com

Tesco needs people across a wide range of both store-based and non-store jobs:

In stores, it needs checkout staff, stock handlers, supervisors as well as many specialists, such as pharmacists and bakers.

Its distribution depots require people skilled in stock management and logistics.

Head office provides the infrastructure to run Tesco efficiently. Roles here include human resources, legal services, property management, marketing,

accounting and information technology.

To meet the customers need and provide them excellent service Tesco at first need sufficient staff in right place and right time. To do this, it has a structured process for recruitment and selection to attract applicants, training and rewarding to motivate the existing staff for all roles from top level to bottom level. Tesco recognises that increasing knowledge, improving skills and job satisfaction of employees are most important to achieve the objective of the company. That is why Tesco provides training and development opportunities for its employees.

This case study looks at the difficulties in recruiting, training, motivating and rewarding staff in Tesco.

1.1: Background

The business began in 1919 with one man, Jack Cohen, selling groceries from a stall in the East End of London. Jack bought surplus stocks of tea from a company called T.E. Stockwell. T.E. Stockwell and Cohen combined their names to brand the tea Cohen originally sold – TESCO tea. In 1929, the first Tesco store opened in north London. (For full brief background see appendix A)

1.2: Report Aims

To explain the difficulties in recruiting, training, motivating and rewarding staff in Tesco?

To find out how the gap between Tesco’s current HR practices in the design and delivery of its staff rewarding systems?

To identify which HRM strategies or theories are Tesco currently practicing?

1.3: Objectives

Evaluate the cost implications for the Tesco’s current HRM policies particularly in relation to recruitment, training, reward system and their impact on stakeholders.

To find out the most appropriate and effective motivational and reward system for Tesco.

2.0: Information & Approach

This report is based on data gathered from a variety of secondary academic sources, Magazine, Journals and some other relevant secondary sources from internal and external to the Tesco’s Supermarket. Most of the information gathered from the annual reports of 2009, websites and some articles which add value to the discus. Though in order to explain the difficulties in recruiting, training, motivating and rewarding staff in Tesco primary sources are more efficient, still we have to depend on secondary sources because of our time limitation.

3.0: Tesco’s HRM policy

This section will discuss the theoretical HR policy of Tesco, which I have taken from Tesco’s web site and some current articles.

Tesco’s sale increase 15.1% and underlying group profit soared 10.0% by last year which has taken it in the top market place in UK. It was another challenging year for staff who worked really hard for customer to give them `every little help’. As the biggest employer in UK market Tesco has nearly 470,000 staff. (Tesco annual report 2009)

Source: www.tesco.com

To Handle the growth of sales and manage the large number of staff Tesco is doing their human resource strategy very simple and challenging, from head office staff to shop floor check out staff. In this way Tesco is managing to achieving steering wheel targets and doing linked to performance management (Anonymous 2003)

Tesco advertise job in various way that depend on the level of position and availability. The company has procedure to attract right standard people in right position. Tesco try to fill vacancy from internal people. This process can give staff promotion or job rotation opportunity which can be an effective motivation factor as well. If there are no suitable staff to move than the company advertises the position on its web site for two weeks.

For some specialist jobs, such as bakers and pharmacists, Tesco advertises externally in its website, offline media, television and radio even Google, job centre plus or in some magazines like `The Appointment Journal’ as well.

Tesco try to seek people cost effective way, but some times for right people get to know about the vacancies, it is necessary to advertise on television and radio which are expensive. The company has a simple application form.

Source: The times 100

Tesco does their advertisement in vacancy boards in store as well. Usually online advertisement is for managerial positions and vacancy board is for shop floor position. The sort listed candidates have an interview call at an assessment centre for selection process.

Tesco has a flexible and structured approach to train staff to develop their knowledge and skill. This kind of training gives each and every employee the opportunity to understand and realise their individual responsibility, value and contribution. They become more organised, productive and better able to meet customers need. It makes them motivate as well. Although the frontline staff especially checks out staff play the main roll to give customer excellent experience but all the employee has very important role to play. (Paauwe, J & Boselie, P. 2003)

Tesco arrange induction programme that help new recruited people to understand the business and the objective of company. The company wants to make sure that all the employee in every sector are conscious about their responsibility and they can clearly see their value, result of their commitment in overall business.

This processes help to solve problem, put high performance and make situational leadership. In quarterly board meeting the company analysis its human resource issues as important as finance issues. (Guest, D 1999)

Recently, Tesco got recognition by the National Business Awards “Employer of the Year” when the judges declared that: “Tesco was voted Employer of the Year because its solutions were seen to be more holistic”. Tesco discover a positive effect on Company performance by the motivated staff. The company invest several million pounds each year to train and motivate staff which are based on Herzberg motivator’s theory.

3.1: Herzberg theory as a relevant theory to Tesco

Herzberg divides his factors of motivation into two categories called Hygiene factors and Motivation factors.  The Hygiene factors can not create satisfaction, but Motivation factors can do motivate or create satisfaction. The Hygiene factors can be cause of dissatisfaction if they are not present, but Motivation factors are rarely the cause of dissatisfaction. 

The Hygiene factors depend on: Company Policy, Supervision, Relationship with Boss, Work Conditions, Salary and Relationship with Peers. Most of job frustrations arise from this factor due to bureaucracy, poor organisation, internal politics of feeling exploited. But Tesco’s has strategically integrated HR into their overall plans. The company decision making part has high expectation about their HR practice from managers. This shows high commitment to HR. The company offer basic and advanced training for all employees from top to bottom which bring acceptance from all employee (Beardwell I 2004). These practices help to understand them about the value of their individual role and importance within the organisation.

Motivation factors depend on: Achievement, Recognition, The work itself, Responsibility, Advancement and Growth. Probably one of the most important ideas that Herzberg postulated based on his findings of satisfaction is that of ‘job enrichment’. This is the addition of different tasks to a job to provide greater involvement and interaction with that job.  It is obviously a continuous management process:

The job must use the full ability of the employee and provide them with sufficient challenge

Any employee who demonstrates an increasing level of ability should be given correspondingly increasing levels of responsibility

But in Tesco rapid training schedules make them able to develop their first level management position as a team leader in store within six month.

Month 1: visit and work in all parts of a store to familiarise themselves. The new manager is allocated a ‘buddy’ – an experienced member of staff who they can go to with problems.

Months 2-4: practise their knowledge and skills in real situations and identify any skills gaps

Months 5-6: undertake a placement as a Department Manager.

Months 6-12: take on their first manager role.

Month 12: review progress with their manager and discuss future development

These initiatives have helped Tesco deliver record growth and sales profits and illustrate how theory may be used in practice.

3.2: Analysis of HR Approach and practices at Tesco’s

This section of the report will discus Tesco’s strategic fit with its current HR practices in the design and delivery of its staff rewarding systems.

Recognition of the importance of human resource is increasing in the world everyday because of more competitive international market after globalisation. To survive in global market, UK leading company are reviewing their policies on HR as Japan, Germany and Sweden investment is higher than the UK in HR development. (Beardwell, l et al 2004)

Tesco operates it business in very competitive market where people have alternative choice. That’s why to make sure about great customer service the company is giving more importance in recruiting and selecting system, training, motivating and rewarding. So that each and every staff get chance to understand their individual role to contribute to the main objective of company.

It is very important to practice a good HR policy in recruitment and selection. If company need to change the organisational culture, the recruitment process can chose a right candidate and it can be helpful to success of the change. Recruiting right candidate is not very easy, it is always problematic. There is various ways to recruitment although the recruitment depends on type of company characters and job skill required by company. Nixon, B. (2004)

Tesco has procedure to attract right standard people in right position. Tesco try to fill vacancy from internal people. If there are no suitable staff to move then it advertises externally in its website, offline media, television and radio even Google, job centre plus or in some magazines like `The Appointment Journal’ as well.

Following right recruitment process for right organisation can lead to recruit right candidate which reduce employee leaving rate.

Recently, knowledge based economies have great impact in company growth and production which depend on skill and expertise. Tesco’s has strategically integrated HR into their overall plans. The company decision making part has high expectation about their HR practice from managers. This shows high commitment to HR policies. Tesco’s HR policy’s strategic direction is discussed with all employees about the individual role and importance within the organisation. This makes feel them more valuable in the company. Because there are common motivational factor is to share employee’s experience, feeling and thinking with line manager or supervisor or any higher level colleagues. According to Mitchell, “psychological process that cause the arousal, direction, and persistence of voluntary actions that are goal oriented” (Mitchell (1982) cited in Ramlall, S. 2004:55).

According to Maslow’s hierarchy theory in organisation managers should provide good and effective environment so that employee can develop themselves. If manager fail to provide the appropriate climate then employee frustration can increase as a result staff performance will go down, job satisfaction will decrease and leaving rate will increase (Steers & Porter, (1983) cited in Ramlall, S. 2004:55). Replacing an employee cost can be two and half for the specific employee’s annual salary. There is no job offer for life longer in organisation now a day. So there is no more pension as a reward for compliance. Employees are shifting any time any where to get promotion and job satisfaction (Prickett, R 1998). That’s why providing good organisational culture and climate is very important.

The slogan of “Every little helps” is showing how Tesco concern about their customer service and therefore its employee as well. The slogan also shows company’s ethos and culture. The organisation has key process to survey if any employee need training to give customers expected service in competitive market. With this training individual employee can develop their career. It is a big motivation factor. Career development is important for individual employee (Armstrong, M 2005).

3.3: Most appropriate HRM policy for Tesco

3.4: The cost implications for Tesco’s HR policy

4.0: Conclusion and Recommendations

In future, Tesco intends to make learning into a truly integrated part of its culture and continue its emphasis the skills of workforce, as an important way of developing organisational flexibility and remaining one step ahead of its challengers (Anonymous 2003)