Management Report on Minimum Wage and Living Wage at Sainsbury

This management report provides an in-depth analysis of the minimum and living wage at Sainsbury, a major UK supermarket chain. It begins with an introduction to management reports and the company, then delves into the National Minimum Wage and National Living Wage, outlining their legal frameworks and application within the UK. The report explores the financial implications for Sainsbury, detailing the costs associated with wage increases, such as the impact on profit margins and the need for financial management. It also highlights the benefits, including employee retention, improved employee relations, and potential for business expansion. The report offers recommendations, emphasizing the importance of compensating skilled employees appropriately and balancing wage costs to ensure financial stability. It concludes by summarizing the key findings, emphasizing the significance of adhering to wage regulations and its effect on the economy.

Management Report

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Management report is the communication of business results, risk and issues which are
created by the manager for audience of a manager, government bodies and executives
management. It is the critical tool which is helpful for directing and controlling business.
Sainsbury was established in 1869. It is the largest supermarket chain in the United
kingdom. The company had its headquarter in the Holbron, London, United Kingdom. The
above report includes the management report on the minimum wage and living wage. It has been
applied on the specific company which operates in the business in UK. The report includes the
aim, legal regulations and cost and benefits to the company by these wages. The report ends with
the recommendation to the company.
MAIN BODY
Sainsbury is the largest chain of supermarket in the United Kingdom. The company has
15.35 of the market share. The company was founded by John James Sainsbury. Net Income of
the company is £518 million. The number of employees in the company are 186,900 which is the
biggest number of employees in this sector.
National Living Wage -
It is the amount of money which is entitled to the employees over the age of 25. It was
firstly set as National Minimum Wage in 1998 by labour government in the United Kingdom.
This National Minimum Wage was rebranded again rebranded as National Living Wage. Last
year there is hike in National Living Wage from £7.50 to £7.83 for the employees whose age is
25 and over. This wage amount came into existence from 1st April last year. It is the level of pay
which is recommended by Living Wage Foundation which is the independent campaign group.
It is the paid voluntary that is chosen by employers to pay this amount to the employees. It was
worth around 55% of median hourly earning which the working hour wage which is equal if
everyone is paid the living wage in the country. Last year the target of country for the Living
Wage is amount to 60% of median earnings by 2020(Wills, 2016). The Latest forecast suggest
that Living wage will be £8.57 by 2020. The rate is calculated by Resolution Foundation. It is
based on the cost of achieving an adequate standard of living.
National Minimum Wage-
The National Minimum Wage is minimum pay which is paid per hour to the workers of age 16 to
24. This rate is reviewed every year by the government and it is advised to have a minimum

wage at by Low Pay Commission. It is the independent body for advisory which is made up of
employers, academics and union leaders. There are several types of minimum wage which is
being received by the employees, its all depended on their age(over the age of 16). For the
employees of age 21-24 it is £7.38, 18-20 years it will be £5.90, under 18 it would be £4.20 and
£3.70 for the apprentices. The minimum wage for the employees of 25 and over is known as the
National Living Wage.
The Minimum Living Wage and National Minimum Wage Rate is legally enforceable by
the government. Over 4000 organization has signed up for following the living wage employee
rates and rendering this to their employees. This companies are listed in FTSE 100 companies
and some could be wide local authorities to charities and small businesses. The self-employed,
company director, voluntary workers and family members who resides in home of the employer
and perform household work which is not qualified for the either rates(Machin, 2015). There is
no difference among the people who resides in London or who had come from any other country
and working in the London. Workers who are employed before the October 2013 are liable to
have the minimum and living wage.
Costing and benefits to the organization-
This costs the high amount to the Sainsbury as there major number of employees who are
working with the company. The number of employees are 186,900 million. So this Minimum
and Living Wage could be higher as the employee with different age group are to be paid with
the minimum wage amount. This could reduce the profit of the company as the unskilled
individual who do not have that much contribution in the company are also entitled with the
minimum wage to be paid by the company to them. For example if the worker is employed as
obtaining the 10% production in the company but the individual was nit much capable and can
not accomplish the target & achieved the 4.5% of production in the month which is the loss to
the company. Sainsbury had the costing for that for employee as well as other losses also which
are associated with the company's production. The company must have their estimated costing
which being paid by them will pay to their employees(Anker and Anker, 2017).
This could be the financial management and assessment which to be done by each and
every company so that they can manage their profit and losses. They can also get to know that
whether there is loss profit due that. The minimum and icing wage is to be regularised by the
government of United kingdom and must be followed by each and every company in the country.

The costing is to be calculated by the Sainsbury with the help of different sources and formulas
which is helpful for them in going with the appropriate data base. The Minimum and living wage
could be sometime reflects to the reduction in the profit of the company which is to rendered by
the company. The company must manage it by estimating the amount before only so that they
could easily handle it(Parker and et.al.,2016). The wage cost hike for the Sainsbury which is
associate with the increase in Living wage was 6% of the average costing, whereas the low-paid
staff is getting the high rate of hourly pay which is averagely 26%. The cost will be mitigated by
saving which is reviewing working practices, decreasing overheard of management and in other
cases it can be done by reducing the working hours.
Benefit to the organization-
The Minimum and Living Wage is very beneficial for the company in many terms. It is
also beneficial for the country in the economic terms. The several benefits which are enjoyed by
the company and helpful for the company in growing rapidly. It majors benefit to the Sainsbury
is that the retention of employees to the company for long term will be accessed by the Sainsbury
can retain their employees for long term with the help of these. If employees are being paid by
the minimum and living wage to them then they are liable to work with the company and they
will not move on to work with the other company if they are satisfied with the company it is the
major thing that if employees are satisfied with company they will enjoy to work with the
company for long term. Further they will decide to work with the company. Sainsbury can also
have the large number of employee ion their company so that they could manufacture, sell and
produce the goods and services in the large quantity. Company could also expand their business
with the employees to pay them with the minimum wage so that it could not charge the high
amount to them(Semple, 2017)
This will be helpful for the Sainsbury in growing their business and getting high revenues
& profits for financial year. Company can also build the healthy employee relationship with the
workers so that they can have a positive attitude towards their work and the target of the
companies can be achieved effectively by the employees. They can also enhance the attitude and
characteristics of the workers which at the end of day will be fruitful for the growth of company
in many terms. As the employees with positive attitude always work for the growth of Sainsbury.
So that company can easily compete with the rivals in market and could sustain in the
marketplace for long term with huge rate of staff turnover in the company. It could retain the

talented people in the organization by raising their salaries and giving them incentives for their
good works so that they will encourage to work with company. This helpful for company in
raising the loyalty of consumer toward the company. So organization with the loyal employees
will always grow and have a high revenue in the market. Employees are also felt valued and thus
they could have the time which they can spend with their family and having holidays so that they
don't fell burdensome.
Recommendation-
It can e recommended that the skilled and talented employees must be paid up with the
high amount of payment as compare to the minimum wage pay so that they could survive easily
in the company with the appropriate amount of pay. This can be achieved by the company in
maximum time period which is two years. Thus, company can maintain and manage their costing
with the help of this strategy. The major priority of the company will be employing the skilled
talent to company. Sainsbury should employ the skilled and talent employees to the company so
that they will be fruitful for the company in achieving the target and aims which is set by
company. The revenue and profit of company can also be raised by this(Anker and Anker, 2017).
Sainsbury can work with the skilled and talented employee and could pay the minimum and
living wage to other employees so that this could balance the overall costing in the company
within the year.
CONCLUSION
From the above study it is concluded that the Minimum and Living Wage are the
compulsory paid by the company to the employees which is mandate by the government of
United kingdom. Company had to paid the appropriate amount of wage with the minimum
working hours. So that the employees are satisfied with the company and wants to retain and
work with the company for long term. The company can thus raise their revenues and profits
easily if employees are loyal to the company. They can compete with their rivals as well.
Minimum wage and living wage is helpful in raising the living standard of the employees also
and thus it will helpful for the country also in raising their economy.

REFERENCES
Books and Journals
Anker, R. and Anker, M., 2017. Living wages around the world: Manual for measurement.
Edward Elgar Publishing.
Anker, R. and Anker, M., 2017. Measuring prevailing wages to compare to a living wage. In
Living Wages Around the World. Edward Elgar Publishing.
Machin, S., 2015. Real wages and living standards. Centre for Economic Performance
Discussion Paper.p.EA024.
Parker, J and et.al.,2016. The living wage: concepts, contexts and future concerns.
Semple, A., 2017. Living Wages in Public Contracts Before and After Brexit. A version of this
paper appears in Sanchez Graells (ed)(2018) Smart Public Procurement and Labour
Standards, Hart Publishing.
Wills, J., 2016. Living Wage. International Encyclopedia of Geography: People, the Earth,
Environment and Technology: People, the Earth, Environment and Technology.pp.1-2.