Staff motivation and retention in tesco

Introduction and background to research

Tesco PLC is the UK largest supermarket chain with both by global sales and domestic market share. Tesco was found by Jack Cohen in 1924, the name Tesco contains the initials of the owner of the firm, Mr. T. E. Stockwell, who supplied the firm with tea and of the initials of Jack’s surname Cohen. Tesco has a long term strategy for growth based on four key dimensions; growth in the core UK business, expand internationally and strong in non-food. Tesco has over 4,331 stores worldwide, operating in 14 countries and has employed 470,000 staff both in UK and worldwide. Tesco mainly specialises in food but also diversified in other areas such as clothing, electronics, financial services, fuel, telecommunication etc. (Tesco, 2010)

Despite of size however, each organisation needs to consider staff motivation and retention very carefully, if they wish to succeed. Dedicated and hard working staff are the foundation to achieving business objectives. If employees are demotivated or not associated with the vision of the company, in that case it becomes complicated to ensure consistently high levels of performance. This conflict is part of why it is so important to research the impact of a slow economy on staff motivation and retention and introduces new questions about how far businesses should invest in their staff through financially dark times.

David A. Hume 1995,claims that motivation is a force that drives people to do things. Employees are normally motivated to achieve their needs. It may be intrinsic or extrinsic. Employees motivation is an important function which every manager performs by assigning the people to work for accomplishment of objectives of the company. Motivation also increase the willingness of employees to work. However motivation is the process of attempting to influence others to do their work through the possibility of gain or reward.

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As a significance of this economic downturn many organisations will be discovery it difficult to trade and will be making cutback and employees are likely to be demotivated. Generally for the reason that their money is not going to be going as far as it used to, for many it may not even cover the cost of living.

Between 1990 and 1993 the UK experienced a period of sharp economic decline, where output declined and claimant unemployment increased to nearly 3million. The Uk fell into sharp slum in the second half of 1990,using the technical definition of recession, this involved two successive quarters of negative growth.

This economic storm is going to present particular problems for companies such as Tesco as with the cost of transporting goods increasing as a result of the oil price rises and consumer spending taking a massive rinse as people are full blown by the recession they are going to be looking for areas to cut their overheads. This means that they are possibly less likely to offer pay rises, staff incentive schemes, subsidised staff days out and any other staff incentive that means additional expenditure in difficult times. However it is in these hard times that businesses such as supermarkets need to work hard to keep morale high and currently Tesco do offer some decent reward schemes for staff such as their share scheme (The Sunday Mirror 1999). The big question however, and indeed the focus of this research is: will such good intentions break under the pressure of the credit crunch, and if so what will this mean for a business like Tesco?

Aims and objectives of Research

To explore the impact recession and economic downturn has on employee motivation and retention at Tesco.

These questions will be explored through qualitative analysis. Through research in books, journals and online resources and through interviews of Tesco staff and management. Business theory suggests that at all times businesses need to minimise expenditure and maximise income in order to be successful. In the present global economy income is slumping for many businesses and has caused many organisations to close their doors for good (BBC News 2009)example Woolworths stores. thus cutting back expenditure is more important now than it ever has been for businesses. There is of course a conflict in that in order to maintain and retain a large and productive workforce, Tesco will have to spend money. This conflict is part of why it is so significant to research the impact of a slow economy on employees motivation and retention and introduces new questions about how far businesses should invest in their staff through hard financially times and how the huge business can create a climate of staff loyalty even though incentives are low and pay aren’t going as far as they used to.


Literature Review

Several employees believe that they only approach to motivate employees is through financial incentives. In addition to the offer of extra holidays, comfortable, hygienic working environment and employee reward schemes. Employers can take many steps in order to motivate and retain superior employees. Strategies such as positive performance reviews, the opportunity to grow with in a job role, optimistic morning briefings etc. Therefore this research will explore the possible ways Tesco managers could motivate staff without exceeding overheads adding to the literature around employee motivation in huge companies and the difficult balance managers have to strike in hard financial times.

Research Design

The research will focus on Tesco and to gain interviews at a local Tesco store. This will also allow the research g to explore an depth complex issue of staff motivation in a large company during a difficult financial time.

Secondary Data: this will include financial report from Tesco website.

Primary Data: this will consists of interviews with Tesco management team. Target number of questionnaires is 25 shop floor staff and 5 managers.

Shop Floor Staff

Q1. Have you felt that managers have motivated you during your time at Tesco and if so how?

Q2.Have you had any communication about any changes to your staff incentives, rewards or pay structure since the economic downturn has taken hold?

Q3.Are you worried about job security with Tesco under the current economic circumstances?

Q4. Are there things your manager could do to motivate you on an everyday basis that they are not doing already?

Q5. Do you feel you would be missed if you left the company?

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Q1. What kinds of incentives do you offer employees at Tesco?

Q2. What other ways do you use to motivate your staff?

Q3. Has the way you motivate and retain staff had to change under the pressure of the economic downturn?

Q4. Do you feel that staff feel valued at Tesco?

Q5. What barriers are there to motivating staff in a large company?

Secondary data will be analysed through research around the research aims. Texts relating to Tesco and businesses attempting to continue high levels of employee motivation and retention through difficult financial periods.

The primary data will be analysed using the following method:

  1. Interviews will be transcribed according to tape recording taken at the interview.
  2. Interviews will be read with significant points from the interviewee noted in the margin.
  3. Major themes or categories identified
  4. Data arranged by category in order of relevance to research questions.
  5. Conclusion drawn in relation to research aims and analysis of secondary data


  • Secondary data collection and analysis – 2 weeks
  • Primary data collection and analysis – 3 weeks (depending on schedule and availability of Tesco staff).
  • Research write up – 2 weeks

Resources and access to study population:

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Type of Paper
Number of Pages
(275 words)