Tesco Case Study

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Motivational theory in practice at Tesco

Curriculum Topics • Motivation • Taylor’s theory • Mayo effect • Maslow and Herzberg

Tesco began in 1919 with one man, Jack Cohen, a market stallholder selling groceries in London. TESCO was formed out of a merger with T.E. Stockwell from whom he purchased tea for sale on the stall. The first store opened in 1929. Since then, Tesco has expanded across the world. It now has over 2,200 stores including hypermarkets and Tesco Express outlets to meet different customer needs. As a conglomerate Tesco also offers alternative goods and services such as insurance, banking and online shopping. With net profits of around £3.4 billion Tesco has become the largest British retailer and one of the world’s leading retail outlets on three continents. Tesco’s growth has resulted in a worldwide workforce of over 468,000 employees. To support its growth, Tesco needs staff that are motivated, flexible and well-trained and who recognise customer needs. In turn, Tesco’s employees are supported by the company in their various roles and at different levels - from customer assistants in stores to department managers; from warehouse employees to office and logistics staff. Tesco recognises that employee motivation is important for the continued growth of the company. This case study looks at how Tesco motivates its employees by increasing their knowledge, skills and job satisfaction through

training and development and providing relevant and timely reward and recognition.

What is motivation?
Motivation may stem from personal interest such as keeping safe or from external factors such as praise and reward. Different theories have been suggested for motivating employees. Pay is considered a primary motivator. Other motivating factors include: • appreciation of hard work • a sense of achievement • responsibility and empowerment • opportunity for advancement • a sense of challenge and enjoyment. A motivated workforce will work harder and achieve greater output in less time, therefore reducing labour costs. It requires less supervision and demonstrates pride in its work, making a greater impact on the customer. Motivated employees have greater concentration and are less likely to make mistakes, cause accidents or be involved in conflict. They are also likely to show greater loyalty to the company and have less absenteeism. An unmotivated workforce will be the opposite, being dissatisfied with its role in the work environment. This can negatively affect both the quality of the work as well as how efficiently employees carry out their jobs.

Conglomerate: A group of businesses joined in a single entity. Each of the businesses focuses on a different product or service area.

Net profit: The gross profit less all fixed overheads and other expenses. Logistics: The logical organisation of a cost-effective supply chain.

Motivation: Attracting a person to do something because he or she wants to do it.

Skills: Specific abilities and capabilities.




Tesco | Motivational theory in practice at Tesco




Tesco considers that the business depends on two groups of people – customers and staff. It appreciates that staff are unique and have diverse lifestyles outside of work. To this end Tesco supports staff with a work/life balance and offers reward through: • flexible working • free or reduced rate health benefits • discount gym membership • competitive salaries • staff discount • company share options. Tesco has discovered that it is important to create trust and respect. It has found that by valuing employees, providing realistic goals and an interesting environment for them to work in, it increases employees’ motivation. At Tesco a motivated member of staff ‘works in partnership with others to achieve individual and team objectives’. This means that he or she focuses on...
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