Impact of Employee Motivation on Profitability of Retail Industry: A Study on Tesco

This study focuses on the impact of employee motivation on the profitability of the retail industry in the UK, with Tesco as the base company. It examines the strategies adopted by Tesco for enhancing employee motivation within the organisation. The study aims to identify the concept and significance of employee motivation within an organisation and its influence on the profitability of Tesco.

Business Management
and Leadership project

Abstract
Employees are the asset for an organisation and employee motivation is the key to a
company’s success and growth. Employee motivation is vital as it help company to retain staff
members, ensure organisational efficiency, gain higher profitability and so on. There are many
strategies of employee motivation that is training and development, allow participation in
decision making, monetary and non-monetary rewards and many more. All this help to motivate
and encourage staff members because of which they put full potential to attain objectives timely.

Contents
Abstract (150 words).......................................................................................................................2
Introduction......................................................................................................................................4
Aim, Objectives, Research Questions.............................................................................................4
Research aim:..................................................................................................................................4
Methodology (250 words)...............................................................................................................5
Review of the Literature..................................................................................................................5
Data analysis:...............................................................................................................................8
Conclusions and Recommendations..............................................................................................11
REFERENCES..............................................................................................................................12

Introduction
Employee motivation is defined as the level of creativity, commitment and energy which an
organisation’s employees brings to the workplace or to their jobs. In addition to this, it is an
intrinsic drive to put forth the necessary action and effort towards work related activities. It is
important for an organisation to motivate its employees on continuous basis as it help a company
to achieve objectives and meet with the targets timely (Kellner, Cafferkey and Townsend, 2019).
Employee motivation plays an important role within an organisation as it helps in gaining
various benefits such as increase in performance, improvement in brand image, high
profitability, effective execution of activities, timely achievements of targets and so on.
For the present study, Tesco is chosen as a base company. It is the third largest retailer in
world and is a British multinational general merchandise and groceries retailer which was
established in year 1919 and headquartered in UK. The company has around 4,00,000 skilful and
talented staff members which is one of the major reason of its success and growth. The company
is facing issue as it employees did not put their full potential at workplace which has a negative
impact on the productivity and profitability of company. Employee motivation allows respective
company to encourage its staff members and improve their productivity which further allow
organisation to gain various benefits that is high profitability, timely execution of activities,
maintenance of positive working culture, attainment of competitive advantage and so on (Lin, Li
and Lam, 2020). The present study will also allow company to satisfy and retain its staff
members for longer time period.
The main objective to conduct the study is to analyse the impact of employee motivation on
the profitability of retail industry within the United Kingdom. Along with this, it assists in
analysing the importance of employee motivation along with the strategies adopted by company
for employee motivation. Moreover, the present research will also help investigator in improving
and learning skills that is data analysis, data collection, time management and many more.
Aim, Objectives, Research Questions
Research aim:
“To analyse the impact of employee motivation on the profitability of retail industry in
UK” A study on Tesco

Research Objectives: To identify the concept and significance of employee motivation within an organisation. To identify the influence of employee motivation on the profitability of Tesco. To examine the strategies adopted by Tesco for enhancing employee motivation within
the organisation.
Research Questions
 What is the influence of employee motivation on the profitability of Tesco?
 What are the strategies adopted by Tesco for enhancing employee motivation within the
organisation?
Methodology
The present study is based on secondary research methodologies so that data is gathered by
using online libraries, books, search engines that is Google scholar, VLE books and so on. All
this assist researcher to gain in-depth knowledge about topic.
Quantitative research
It is one of the research method which assist in collecting and interpreting numerical data
in an effective manner. In addition to this, it is used to conduct and collect large data because of
which research objectives are attained (Kellner, Cafferkey and Townsend, 2019). It is analysed
that quantitative research method help investigator to gather data from large sample size and to
implement study in a proper manner. On the other side, quantitative results are sometimes not
accurate and genuine and involves biasness because of which researcher attain ineffective
results.
Qualitative research
It is another method of research which is used to collect, evaluate and assemble non-
numerical data for understanding concepts, experiences and opinions. This type of research assist
in gathering in-depth data about the research problem and also help in providing detailed
information regarding the research topic. It is analysed that qualitative research help to gather
data based on observations. On the other hand, qualitative research gives unreliable data as some
factors are uncontrollable. Moreover, it does not emphasis on giving updated piece of data to the
researcher.

In the present study, researcher has used qualitative research method as it assists in
gathering detailed information because of which pre-defined aims as well as objectives are
attained (Lin, Li and Lam, 2020). Moreover, it also consists of opinions and viewpoints of
different people because of which investigator is able to develop valid and reliable conclusion.
Review of the Literature
Literature review is defined as the survey of scholarly sources such as articles, books and
Journal associated to a particular topic. In addition to this, it is mainly written as a part of
dissertation, research paper or thesis with the objective to gain existing knowledge and data in
relation to specific topic. It is basically an academic piece of writing that is collected with the
purpose to gather data and information on specific topic (Babaeinesami, 2019). The main
objective of literature review is to identify research gaps from the previous studies and to fulfil
the research gap. In the previous studies, there is a discussion about concept of employee
motivation along with the strategies of employee motivation used by an organisation but it lacks
data about impact of employee motivation on the profitability of retail industry in UK. In order
to fulfil this gap, some of the research questions were developed which are as follows:
Theme 1: Concept and significance of employee motivation within an organisation.
As per the view point of Nelson (2020) Employee motivation is one of the critical aspect
within an organisation which leads a company towards higher growth and success. Along with
this, employee motivation is refereed as the energy level, commitment, enthusiasm along with
the creativity level which an employee brings at workplace. It is all about how satisfied and
engaged staff members feel at workplace and how they work with the full potential to achieve
the desired goals. It is analysed that employee motivation is basically of two types that is
extrinsic motivation and intrinsic motivation. Extrinsic motivation is defined as motivation that
is derived by external factors that is rewards and recognition whereas intrinsic motivation states
that a person is motivated from within or has the inner desire to perform well. It is important for
a company to motivate its staff members on continuous basis as it help to make employees feel
valued and important at workplace and also ensure that they put full potential to meet with the
targets of company(Employee motivation, 2020). It is analysed that employee motivation is one
of the vital factor in order to maintain positive working culture at workplace and to maintain
effective relationships with the staff members. All this allow company to gain higher growth and

success at marketplace. The importance of employee motivation in relation to respective
company is given below:
Improve productivity: Motivation is defined as the procedure which leads to improvement
in the productivity of staff members. It is analysed that motivation meets the requirement of staff
members and thereby develop the enthusiasm in employees to give best of their abilities.
Moreover, it is analysed that a motivated employee put their full zeal towards the betterment and
improvement of organisation.
Facilitates direction: Motivation is one of the integral part of direction which is basically
the procedure which includes initiating and directing action as per the employee’s requirement. It
is analysed that the procedure of direction is only possible when the staff members proceed in the
direction which higher authorities determines and is requires motivated workforce.
Ensure organisational efficiency: Motivation plays significant role within changing the
behaviour and attitude of staff members at workplace. It is determined that motivation develop
positive mind-set of staff members towards company due to which they take interest in
implementing activities and attaining objectives. All this leads towards increase in organisational
efficiency in an appropriate and effective manner.
Help in employee retention: It is undertaken as one of the positive aspect that is gained by
company because of employee motivation. It is stated that a motivated employee prefers to stay
loyal with the company for longer time period. This further help an organisation to save the cost
of hiring and providing training to the new employees. Moreover, it also helps company to
satisfy and retain staff members for longer time period.
Improve brand image: Employee motivation allow an organisation to execute the activities
in a systematic and appropriate manner which further enhance brand image of the company. It is
determined that motivated employee spread positive message to others about the company which
help in improving brand image in an effective manner.
Apart from this, there are also aspects for which employee motivation is vital such as
increase in profitability and revenue level, attainment of competitive advantage, ensure loyal
workforce and so on. All this further assist an organisation to gain higher growth and success at
marketplace.
Theme 2: Influence of employee motivation on the profitability of Tesco

As per the viewpoint of Roy, (2020), the motivation process plays a very important role
on the profitability of the organisation. In context to Tesco, the employee motivation plays a very
important role on the profitability of Tesco. In relation to organisation, it is very important to
motivate the teams and the members who are basically struggling in order to maintain the level
of performance in the organisation. In context to Tesco, the organisation aims to motivate its
employees by focusing on both the satisfiers and hygiene factors. The major motivational tools
comprises of involving staff in decision making process, delegation of the responsibilities and
communication in a timely manner. With the help of motivation, it basically creates a major
impact on the willingness of the employees to work. With the help of motivation, the employee
become more productive and efficient as compared to the non-motivated employees. In addition
to that, high level employee motivation helps in providing higher quantity work and stimulating
the production of better performance(How to drive profitability by motivating your employees,
2020).
In any organisation, the motivated employee results in increasing long term employee
retention and providing a high level of job satisfaction. The employee motivation plays a very
important for both the employees and organisation. It helps an employee to contribute towards
attainment of organisational goals and achieving personal objectives. In context to motivated
individual, it results in heightened performance, a willingness to succeed and having greater job
satisfaction. The process of motivation results in both positive and negative outcomes and it
might result in creating a situation of tension and conflict at the workplace. The negative impact
of motivation comprises of various issues such as diminished productivity, high employee
turnover, poor communication, lower level of engagement and various other issues. In context to
Tesco, the process of development plays a really important role and in most of the organisations,
the employees prefer training and career development opportunities as the monetary rewards.
With the help of development, it allows the employee to contribute more towards the
organisation and becoming self-dependent which further enhances their performance. In context
to Tesco, the motivation plays a significant role in improving the self-confidence of employees
and results in enhancing the self-discipline. A motivated employee contributes towards boosting
the productivity and profitability of the organisation and helps in improving the work
performance through bridging the gap among willingness to work and the ability. With the help
of Motivation, the managers and leaders of the organisation can build friendly relationships with

the employees, can put human resources into action, leading to stability of work force, leading to
achievement of organizational goals and improving level of efficiency of employees. The
process of motivation is highly goal directed behaviour and helps the organisation in enhancing
their performance and boosting up the confidence of its employees working in the organisation.
Theme 3: Strategies adopted by Tesco for enhancing employee motivation within the
organisation
According to Sengupta (2022) it is analysed that motivating staff members is vital for a
company in order to enhance productivity and to meet with the targets as well. In order to
motivated staff members, it is determined that there are many strategies faced by Tesco in order
to enhance employee motivation and to retain them for longer time period. The employee
motivation strategies used in relation to chosen company is given below:
Rewards and recognition: It is considered as one of the effective employee motivational
strategy. Herein, the higher authorities of an organisation provide both monetary and non-
monetary rewards to its employees of their good working. In addition to this, the respective
organisation ensure that employees must receive the level of input as per the output they put at
workplace. Furthermore, it is determined that gaining rewards and recognition of good
performance in front of all the staff members makes employees feel valuable and important at
workplace. Moreover, rewards and recognition also assist employees to gain both personal and
professional growth which is vital for them to attain higher success. The various forms of
rewards and recognition provided to employees are bonus, incentives, holiday packages, pension
and so on. All this motivate staff members to stay loyal with the company and put their full zeal
to achieve objectives of company within the given time frame.
Training and development: Another employee motivation strategy is training and
development which ensure organisational growth and success. It is determined that it is vital for
a company to provide training and development session to its staff members as it help them to
fulfil their job responsibility in an appropriate manner. In addition to this, it also assist
employees to gain both personal and professional growth effectively which is one of the factor of
motivation.
Allow participation in decision making: It is determined that organisation which
provide employees to share their ideas and suggestions at the time of decision making is able to
effectively motivate the staff members. It is analysed that employees feel motivated and valued

at workplace when their ideas are considered by the higher authorities. Moreover, it also help an
organisation to bring out the creativity of employees because of which there is growth of both
company and staff members as well.
Provide meaningful feedback: It is vital for the managers of company to continuously
assess the performance of its employees as it help them to know where they lack and what are
the skills they required in order to make improvements in an effective manner. It help higher
authorities to give meaningful feedback to its employees because of which they feel motivated
and work with full zeal to achieve objectives of an organisation.
Data analysis:
Theme 1: Concept and significance of employee motivation within an organisation.
Interpretation: From above figure, it can be analysed that there are various motivational
factors that plays a really important role in the company which comprises of Job Attachment,
Job Satisfaction, Good team spirit and increased performance. In context to organisation,
employee motivation is considered to be one of the key factor for the success of the organisation.
The motivation is considered to be the energy factor and the level of commitment drive that a
organisation's workers brings to the role on an everyday basis. With the help of motivation, it
helps in reflecting a unique attribute about every individual in the organisation and also helps in
gaining various possible outcomes such as sense of purpose, improved performance, personal
growth and enhanced well being.
The process of motivation is considered to be the pathway to change our way of behaving,
thinking and feeling. With the help of employee motivation, it helps in providing various benefits

to the organisation which comprises of increased productivity, increased innovation, high
retention rate and increased employee engagement. In context to organisation, the leaders and
managers could use various ways in order to enhance employee motivation which involves
offering flexible scheduling, offering employee rewards, offering food in the workplace, being
fully transparent, being supportive, respectful and honest manager, offering food in the
organisation, giving employees and staff a room to grow and offering them flexible scheduling.
For any organisation, development plays a really important role and in context to employees they
usually prefer training, monetary reward and career development opportunities. With the help of
development, it makes allows the employees to contribute in a effective manner making them
feel more self dependent and enhancing their overall performance (Work motivation and its
effects on organizational performance, 2019).
Theme 2: Influence of employee motivation on the profitability of Tesco
Interpretation: From the above Figure, it can be interpreted that in order to boost the
profitability of the organisation, there are basically four key performance indicators that need to
be taken into consideration which plays a very significant role for the organisation. The first one
is customer loyalty that comprises of customer loyalty metrics such as repurchasing of the

service or product or number of repeated transactions. Another indicator is employee
productivity which comprises of various financial indicators such as labour hours, performance
ratings, sales per person, revenue, quantity per time period and much more. In context to Staff
turnover, it is basically defined as the voluntary turnover per business unit. Another indicator is
Profitability measures that involves the percentage profit of the sales or revenue. From the above
figure, it can be determined that employee motivation has a direct impact on the performance of
the organisation and when the employees are motivated, it results in providing various benefits
and opportunities to the organisation and also helps in improving the productivity and
profitability level of the company. It is also determined that different motivational factors results
in creating different level of influence on the profitability of the company. In context to
performance indicators, customer loyalty contributes much more as compare to other
performance indicators. The staff turnover, employee productivity and profitability plays a
significant role in the overall development of the organisation. In addition to that it can be
analysed that employee satisfaction has a major influence on the organisation's performance and
profitability (It's official: happy employees mean healthy firms, 2019).
Theme 3: Strategies adopted by Tesco for enhancing employee motivation within the
organisation

Interpretation: From the above chart, it can determined that the employee motivation
basically depends upon the various factors which comprises of length of work, gender and age of
the employees working in the organisation. In context to Tesco, it is very important for the
organisation and its managers to use effective strategies for the purpose to motivate the
employees through motivating employees with the help of enabling satisfiers and paying more
attention to the hygiene factors. The leaders and managers uses various ways for the purpose to
empower and motivate its employee through allowing them to take part in the decision making
process, establishing timely communication process and delegating responsibilities( The Impact
of Employees Motivation on Organizational Effectiveness, 2018).
In addition to that, to boost employee motivation, there are various strategies which are
adopted by the mangers, supervisors and leaders of the organisation which comprises of
recognition, Verbal Reinforcement, opportunities, trips, incentives and rewards. Furthermore,
there are various motivational techniques used in order to increase employee motivation which
comprises of creating an inspiring and comfortable workspace, conducting regular survey for
employee satisfaction, radiating positivity, creating a mentorship program, offering personal
enrichment programs, celebrating achievements and milestones of the employees, setting up
intermittent goals and validating good work. In order to boost employee motivation, it is very
important to have trust and faith towards the employees, creating a healthy and happy
environment for employees to work in, offering career advancement opportunities and offering
reward system to the employees.
Conclusion:
It is concluded from the above that employee motivation is an integral part in an
organisation as it assists to satisfy and retain staff members for longer run. Along with this, it is
determined that there are many strategies used by company foe motivation employees such as
employee retention, increase in productivity, improvement in brand image, ensure loyal
workforce and so on.
Conclusions and Recommendations
Conclusion
From the above discussion, it has been concluded that employee motivation is vital for a
company in order to enhance its performance level and gain higher profitability as well. It is
determined that there is positive impact of employee motivation on the profitability of retail

organisation. It is determined that there are many strategies adopted by companies with the
objective to motivate employees such as rewards and recognition, provide training and
development, allow participation in decision making and so on.
Recommendations
By analysing the above data, some of the recommendations to higher authorities to motivate
employees is given below:
 It is recommended to managers of Tesco to conduct informal meetings with its
employees as it help them to know at what point employees feel dissatisfied at workplace
and what are their requirements (Reizer, Brender-Ilan and Sheaffer, 2019). This assist in
fulfilment of employee need due to which they feel motivated at workplace.
 It is suggested to higher authorities of Tesco to maintain positive working environment
and ensure effective relationship among employee and employer as it help to motivate
and retain employees for longer time period.

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