Comprehensive Literature Review: Retail Business Employee Motivation

This literature review explores the critical topic of employee motivation within the retail sector. It begins by defining intrinsic and extrinsic motivation, highlighting their distinct impacts on employee behavior and performance. The review emphasizes the importance of motivation, citing studies that link it to improved employee attitudes, job satisfaction, and overall organizational culture. It discusses various strategies for motivating employees, including fair compensation, effective leadership, and fostering a positive organizational culture. The review also addresses the specific challenges and considerations of the retail sector, such as high employee turnover and the impact of online shopping. It emphasizes the importance of aligning employee motivation with the company's goals and adapting motivational approaches to the unique needs of retail employees, including the significance of training and development. The review concludes by underscoring the vital role of motivation in the retail industry's survival and success, especially in an increasingly competitive and customer-focused market.

Running Head: LITERATURE REVIEW – RETAIL BUSINESS EMPLOYEE MOTIVATION1
Title: Literature Review – Retail business employee motivation
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LITERATURE REVIEW – RETAIL BUSINESS EMPLOYEE MOTIVATION 2
About motivation
Motivation may either be intrinsic or extrinsic. Intrinsic motivation is determined by the
actions and behavior of the individual, and is focused on improving the quality of work life.
They are more long term than extrinsic motivators. These involve benefits that are tangible such
as salary or promotions. They are outside the control of individual managers. They have a
powerful but only temporary effect (Osabiya, 2015).
Importance of motivation
In their research on the effect of motivation on employee performance in Kosovo
municipalities, Ismaijli et al (2015) found that employers need to invest highly to achieve this.
Motivation was cited as the most important element in the organizations surveyed, since it
affected employees’ attitudes towards their work, enabling them to decide whether their jobs
were worth the effort or not. In some sectors, motivation is doubly important, since employees
may not always have the same level of expectations from their employers as other employees
would have.
Srivastava and Barmola (2011) on the other hand focus on the issue of poor performance
even with employees who are well skilled and qualified. Rather than the notion that people are
naturally lazy and are only forced by circumstances to work, the researchers find that employee
performance is instead a product of how well motivated they are. Motivation is crucial if
employees are to be satisfied with their jobs. This in turn will enable them to expend more
energy in fulfilling their roles in the organization, and feel that they belong. Motivation
therefore helps not only in improving performance, but also in creating an ideal organizational
culture.

LITERATURE REVIEW – RETAIL BUSINESS EMPLOYEE MOTIVATION 3
The findings by Srivastava and Barmola (2011) are further backed in research by Achim,
Dragolea and Balan (2013). The research finds that employee motivation is critical if an
organization is to help its employees achieve job satisfaction. Job satisfaction means that they are
not only happy about their position within the organization because they feel valued and
respected, but that they are fully committed to helping the organization achieve its objectives. It
is therefore clear from these articles that for an organization to succeed, employee motivation is
vital. It will determine the levels of performance the employees deliver, and the type of culture
that the organization will collectively forge as it responds to the environment.
How to motivate employees
In discussing how organizations can better motivate their employees, Abbah (2014) goes
from the basics of having fair compensation for their work. Quoting Fredrick Taylor, the article
describes money as the primary motivator that pushes people to be better performance and is
important element in employee retention. The article also cites effective leadership within the
organization as a powerful motivator which helps individuals aspire for bigger things, both
within their roles, and in the context of the entire organization. Employees need leaders they can
trust, and who are able to led them through the turbulent environment that is today’s business
world.
Rynes, Gerhart and Minette (2004) agree that money is an important motivator for any
employee, whose primary motive is to make money through work. However, there are other
motivators that employers ought to look at. For instance, after a certain level, money stops
becoming a great motivation, as it loses its marginal utility. The employer then needs to look at
issues such as participation in decision making, and how interesting the role actually is.
Employers must be seen to take an active interest in the wellbeing of their employees. At a

LITERATURE REVIEW – RETAIL BUSINESS EMPLOYEE MOTIVATION 4
certain level, they must give their employees the ability to make material decisions about their
roles. This will help in creating ownership of process, and greater responsibility. This further
fuels motivation.
Seppala (2016) writes that for motivation to take hold in the organization, the
organizational culture is paramount. Culture that inspires the people to do more will achieve
more in terms of motivating employees. Employees will have a strong sense of purpose, and be
more confident about their place within the organization. While maintaining professionalism is
important, the human resource department and senior management must foster an environment
of cooperation and recognition of individual effort.
Training also greatly helps in fuelling motivation and better performance. In training and
developing employees, the organization enables them to better perform their roles, thereby
creating more job satisfaction. Training also helps in showing the employees that they are highly
valued by their employer, which creates a sense of belonging and dedication to the course of the
organization (Elnaga & Imran, 2013).
Retail sector considerations
In the retail sector, things are not markedly different. Pay is still the most important
element in motivating employees to work more, and to remain loyal to the organization.
However, managers have to contend with a workforce that is ever changing, with employees
frequently being recruited and others leaving. At the same time, organizations need to manage
the expectations of their employees, through a rigorous orientation exercise. This will enable the
employee to make a well thought out decision to commit to the organization. At the same time,
training and development help not only in assisting the employer chive their aims, but in helping
the employee cope with a job that is usually their first (Zafar et al., 2014).

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According to Evans et al. (2008), the international retail business is in decline, due to
several factors including online shopping. Employees can be the biggest asset as struggling
organizations aim to survive in the market. For this to happen, motivation has to be given the
highest priority, since it is only through the dedication of these employees that the retail business
may survive. As the business increasingly becomes internationalized, employees should also be
equipped with the skills which would enable them perform in different circumstances, further
increasing their job satisfaction.
Leadership plays a particularly important role in retail chains. Managers in retail chains
face the challenge of ever high employee turnover. Employees view their jobs mainly as
temporary assignments which has additional challenges in terms of motivation. However, a
strong leadership style is needed so that the employees can be inspired to focus on their roles for
the period they are at the organization. Efforts to increase profit margins sometimes give the
manager the temptation to pay employees just what they need to perform their jobs. This strategy
is however not advisable, since it fails to create a connection between employee performance and
motivation to the store’s success. A successful manager will therefore exploit this connection by
paying people fair value for work done (Mekraz & Gundala, 2016).
Tan and Waheed (2011) also delve into the importance of money for retail sector
employees. The paper says that while this is an important part of their motivation, it is not
necessarily the most important. However, money is not the only thing needed to garner increased
employee dedication and motivation to their roles. Instead, there is a need for employers to equip
their employees with skills necessary to cope with an ever changing environment, and increased
internationalization. For retailers faced with increased competition and dwindling market share,

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motivation is not only for the sake. It is a vital survival strategy, since service is increasingly
becoming the most important consideration for customers.
As employers seek to better motivate their employees, they have to decide between
tangible and intangible rewards for work done, and as a means of motivating their employees.
Culture plays an important role in this, as does age differences and other unique features. For
instance, younger people may be keener on getting tangible rewards in the form of money to
spend for a job well done. For others, it may be time off to spend time with their family. To
successfully motivate, it is therefore crucial that the employer be able to understand the culture
and other categorizations of the employees, so that suitable motivation can be applied (Saqib et
al., 2015).

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References
Abbah, M. (2014). Employee Motivation: The Key to Effective Organizational Management in
Nigeria. IOSR Journal of Business and Management, 16(4), 01-08.
Achim, I., Dragolea, L., Balan, G. (2013). The Importance of Employee Motivation to Increased
Organizational Performance. Annales Universitatis Apulensis Series Oeconomica, 15(2),
685-691.
Elnaga, A., Imran, A. (2013). The Effect of Training on Employee Performance
. European Journal of Business and Management, 5(4), 137-147.
Evans, J., Bridson, K., Byrom, J., Medway, D. (2008). Revisiting retail internationalization:
Drivers, impediments and business strategy. International Journal of Retail Distribution
Management, 36(4), 260-280.
Ismajli, N., Zekiri, J., Qosja, E., Krasniqi, I. (2015). The Importance of Motivation Factors on
Employee Performance in Kosovo Municipalities. Journal of Public Administration and
Governance, 5(1), 23-37.
Mekraz, A., Gundala, R. (2016). Leadership Style and Retail Store Performance – A Case Study
of Discount Retail Chain. Journal of Business and Retail Management Research, 10(2),
1-10.
Osabiya, J. (2015). The effect of employees’ motivation on organizational performance. Journal
of Public Adminstration and Policy Research, 7(4). 62-75.
Rynes, S., Gerhart, B., Minette, K. (2004). The importance of pay in employee motivation:
discrepancies between what people say and what they do. Human Resource Management,
43(4), 381-394.

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Saqib, S., Abrar, M., Sabir, M., Bashir, M., Baig, S. (2015). Impact of Tangible and Intangible
Rewards on Organizational Commitment: Evidence from the Textile Sector of Pakistan.
American Journal of Industrial and Business management, 5, 138-147.
Seppala, E. (2016). To Motivate Employees, Do 3 Things Well. Harvard Business Review,
Retrieved from: https://hbr.org/2016/01/to-motivate-employees-do-3-things-well.
Srivastava, S., Barmola, K. (2011). Role of Motivation in Higher Productivity. SMS Varanasi,
7(1), 88-99.
Tan, T., Waheed, A. (2011). Herzberg’s motivation-hygiene theory and job satisfaction in the
Malaysian retail sector: the mediating effect of love of money. Asian Academy of
Management Journal, 16(1), 73–94.
Zafar, N., Ishaq, S., Shoukat, S., Rizwan, M. (2014). Determinants of Employee Motivation and
its impact on Knowledge Transfer and Job Satisfaction. International Journal of Human
Resource Studies, 4(3), 50-69.