University Management Report: Employee Engagement at Tesco

This management report delves into the employee engagement challenges faced by Tesco, a major UK-based supermarket chain. It analyzes issues stemming from leadership styles, specifically highlighting the impact of an autocratic approach under a former CEO, which led to high attrition rates and financial losses. The report examines the transition to a new CEO and the implementation of transformational leadership, emphasizing the importance of employee engagement for improved performance and profitability. It explores the nature of employee engagement issues, analyzes their impact, and recommends strategies for improvement, including delegating and empowering employees, fostering open communication, and providing time for creativity and rest. Furthermore, the report applies Herzberg's Two-Factor Theory and discusses the benefits of a matrix organizational structure. The report concludes by emphasizing the importance of employee engagement for organizational success and provides a framework for Tesco to enhance employee morale, productivity, and overall performance, ultimately minimizing costs and maximizing employee value.

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author note

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Executive Summary
The report has helped in analyzing and identifying the issues related to employee engagement
which is faced by the employees working with Tesco. At Tesco, during the period of previous
CEO, there was incorporation of autocratic type of leadership that impacted the performance of
the company and it led to the high incurring of cost that impacted the productivity of the
company. In case of the new CEO, the company has been able to perform well, however, there
are few recommendations such as proper and effective communication along with other
techniques which can be incorporated for the high level of performance of the company.

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Table of Contents
Introduction......................................................................................................................................3
Overview of Tesco.......................................................................................................................3
Analysis...........................................................................................................................................4
Nature of Issue of Employee Engagement..................................................................................4
Analysis of Issue..........................................................................................................................5
Recommendations to Improve the Employee Engagement with Application of Theories.............6
Conclusion.......................................................................................................................................9
References......................................................................................................................................11

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Topic- Management Report on Employee Engagement at Tesco
Introduction
The report throws light on analyzing the issues which are cropping up in the companies
regarding the engagement of employees. In the present scenario of the complex environment of
business, there are different issues faced by the companies wherein the percentage of the attrition
is high and it impacts the growth of the company negatively. The concept of the employee
engagement is relatively latest one in the market wherein most of the companies feel that the
different employees work for pay which is given to them. However, the respective kind of
thinking is outdated as well as faulty in the present scenario as there should be inclusion of other
non-financial rewards which can be helpful for the companies to improve the morale of
employees and enhancing the productivity. The main aim as well as purpose of the management
report is to identify and analyze the different kinds of issues which have been faced by Tesco
while engaging the employees and the analysis of recommendations that can be incorporated for
improving the scenario appropriately.
Overview of Tesco
Tesco is considered to be one of the largest British multinational groceries as well as
general supermarket which is incorporated at England, United Kingdom. The company has been
found in the year 1919 and the name of the founder is Jack Cohen. The number of employees
working with Tesco includes 450000 till the year 2018 and the different products which are sold
by them includes various health care, daily grocery items along with other accessories for both
men and women (Tesco.com 2019). There has been increase in the level of revenues till the year

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2019 is UK dollars 63911 and it has been of huge effectiveness for the company in comparison
to competitor companies.
Analysis
Nature of Issue of Employee Engagement
At Tesco, the main problem which was faced by the management of the company was the
high level of attrition among employees during a certain period. The employees at Tesco were
unhappy with the leadership style of the CEO of Tesco which impacted their growth prospects as
it became stagnant (Ruck, Welch and Menara 2017). At Tesco, the former CEO was not
supportive and there was hierarchical structure which was followed and the employees were
made to do the tasks and agree to the different changes without taking into considerations the
views provided by them. It impacted their morale and there was high level of decline in the
profitability of the company as a whole. The average annual salary in the United Kingdom
market is around Euro Dollar 47000 and therefore, a single disengaged employee at Tesco and
other companies in UK market is costing companies which will be Euro Dollar 16000 per year
(Personneltoday.com 2019).
In addition, there was no transparency and honesty existed in the culture of Tesco that
affected the efficiency of the company negatively. There was no such adaption of the
opportunities for development of career that affected the growth of the company and the
development of employees negatively. These are the different issues related to the engagement of
employees at Tesco leading to the ineffectiveness in the process of managing the growth of
employees (Personneltoday.com 2019). At Tesco, in the previous year, the company spent
millions of money in the company for engaging employees, however, due to the autocratic style

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of leadership, the employees did not feel like working in such kind of environment that impacted
their morale and it led to the high level of attrition. Tesco slides to record £6.4bn annual loss till
the last year which is considered to be the loss for the growth of the company (Mone and London
2018).
Analysis of Issue
From the analysis of the issues faced by employees at Tesco, it can be seen that there has
been high level of changes incurred in Tesco by the new CEO who has been capable of handling
the situation appropriately. The new CEO of Tesco has aimed in recruiting more than 11000
employees in the current year as three years ago, the turnover rate of the employees was more
than 29.9% that impacted the effectiveness of the company (Mann and Harter 2016). The new
leader of the company has been successful in following the transformational leadership approach
as engagement is significant through considering fact that the disengagement of employees leads
to the lack of commitment towards work among employees. In addition, it has been highlighted
that the highly motivated employees perform more than 20% more than the ones who have
average level of engagement towards the work (Mann and Harter 2016).
The highly engaged workplace will be suitable for providing the output beyond
expectations and during the different researches on engagement of employees. As a
transformational leader, the new CEO of Tesco has been effective in understanding the
employees better and due to the same; it increased the level of profitability and revenues in a
proper manner (The Guardian 2019). The development and sustainability of the different
employees play a vital role in showcasing their viewpoints in the development of employees
which led to flexibility in managing the tasks. As per the Harvard Business Review, Tesco has

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spent more than $720 million each year for engaging employees and that is projected to rise to
more than $1.5 billion till 2020 (Huang 2016).
Recommendations to Improve the Employee Engagement with Application of Theories
From the analysis of the employee engagement issues which have been faced by Tesco,
the aspects which have been identified is the fact that in order to engage the employees in the
company, the main aspect which needs to be followed is the leadership effectiveness as well as
the different motivational approaches that will be making the employees feel that they are
essential part of the company and their opinions are being valued.
Figure 1: Steps in Employee Engagement Process
(Source: Huang 2016)

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Delegating and Empowering Employees- It is the first and foremost step which needs to
be included in the companies for improving morale of employees. The employees are considered
to be the vital part in the process of managing the different tasks and managing decision
successfully (Graban 2018). The leaders who are considered to be the CEOs of the companies
need to be transformational leader who will be capable of sharing the ideas with one another and
allowing the employees to showcase their views on the process of changes which are being
incorporated. It will be capable of engaging the employees and making them feel that they are
valued and the company needs their support to innovate the different aspects in the company
successfully (Forbes.com 2019). The empowerment is the other approach which needs to be
incorporated in the company wherein the employees need to be provided with autonomy for
taking decisions regarding the job on their own and it will be increasing the productivity as well.
Evolving through Help of Communication- The open communication can be included in
the process of including the employee engagement in the company. It is essential for establishing
the proper communication among one another that will enhance their appropriateness in dealing
with the changes which are taking place in the company (Eisenberger, Malone and Presson
2016). Most of the top companies ask for suggestions from employees as the new ideas can be
contributing towards the success of the company and it will be effective for providing rewards to
the employees for supporting the company.
Providing Time to think and Create- It is the other effective approach which can be
utilized by the companies towards their employees as the overstress can backfire the businesses.
The employees need to be provided with ample time for resting and recuperating will be helping
them in achieving the peak performance at work (Bailey et al. 2017). There can be matrix
organizational structure which can be followed by Tesco Company which will be creating small

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teams of six to seven members that will be helping the employees in dealing with the work
which are specific to their domain and achieve the best results. There can be inclusion of various
policies which can be incorporated at Tesco for having the extra protection regarding their health
and the work life balance will be helping the company in generating high level of profitability.
With the inclusion of Herzberg’s Two Factor Theory at Tesco, the employees will be
able to perform well as there will be inclusion of job satisfaction. Job satisfaction is the critical
aspect which needs to be incorporated by the companies as the financial and non-financial
rewards are essential, in the respective manner, the satisfaction gained from job through sharing
their ideas can play a more critical role in making the employees feel wanted in the company
(Albrecht et al. 2015). Through the application of matrix organizational structure and the
incorporation of the transformational style of leadership, the costs which have been incurred and
led to the annual loss of Tesco can be resolved. The timetable prepared can be helpful for
improving the scenario and the employees will be feeling that they are being valued. Through the
incorporation of the different techniques, the situation can be brought under control and improve
the effectiveness.
Employee
Engagement
programs
January February March April May June July August September
Generating
Open
Communicatio
n between
employees and

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superiors
Analyzing the
costs incurred
for recruiting
employees
Analyzing costs
incurred for
training and
development of
employees
Unifying
Experiences of
subordinates
working in the
company
Engaging
Cultural
Diversity and
Leadership
Conclusion
Therefore, from the analysis of the case of Tesco in the past and in the present, it can be
inferred that the engagement of employees is the first and foremost approach which needs to be
handled by the companies for making their employees feel that they are the asset of the

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company. The employee engagement is the crucial element which needs to be incorporated in the
organizations for dealing with the stress everyday which is managed by the employees and
making them feel that the company care regarding their health and the safety policies can be
incorporated in such scenario as well.
For making the company achieves and employees gain the highest peak performance at
work, the main aspect is the open face to face communication which can be incorporated in the
companies for managing the growth of employees. The leadership is the key element which
needs to be implemented in the companies for understanding the grievances of the employees as
they are the vital asset and they should be valued. The prioritization of the recommendations
have been provided can play a vital role in achieving the best which is best for the company and
enhancing the productivity and profitability of the company suitably. Creativity and the rest of
the brain without making employees over work are the two major elements that are required to
be adopted by the organizations such as Tesco for minimizing the cost for engaging employees.
The disengaged employees ate can be reduced to more than 10% within couple of years if the
organizations and the higher officials try to follow the different recommendations and it will be
effective for them to perform well.

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References
Albrecht, S.L., Bakker, A.B., Gruman, J.A., Macey, W.H. and Saks, A.M., 2015. Employee
engagement, human resource management practices and competitive advantage: An integrated
approach. Journal of Organizational Effectiveness: People and Performance, 2(1), pp.7-35.
Bailey, C., Madden, A., Alfes, K. and Fletcher, L., 2017. The meaning, antecedents and
outcomes of employee engagement: A narrative synthesis. International Journal of Management
Reviews, 19(1), pp.31-53.
Eisenberger, R., Malone, G. P., and Presson, W. D. 2016. Optimizing perceived organizational
support to enhance employee engagement. Society for Human Resource Management and
Society for Industrial and Organizational Psychology, 2-22.
Forbes.com 2019 How much Disengaged Employees are Costing You (Online) Retrieved from
https://www.forbes.com/sites/karlynborysenko/2019/05/02/how-much-are-your-disengaged-
employees-costing-you/#183386703437 [Accessed on 15th December 2019]
Graban, M., 2018. Lean hospitals: improving quality, patient safety, and employee engagement.
Productivity Press.
Huang, Y.H., Lee, J., McFadden, A.C., Murphy, L.A., Robertson, M.M., Cheung, J.H. and
Zohar, D., 2016. Beyond safety outcomes: An investigation of the impact of safety climate on
job satisfaction, employee engagement and turnover using social exchange theory as the
theoretical framework. Applied ergonomics, 55, pp.248-257.

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Mann, A. and Harter, J., 2016. The worldwide employee engagement crisis. Gallup Business
Journal, 7.
Mone, E.M. and London, M., 2018. Employee engagement through effective performance
management: A practical guide for managers. Routledge.
Personneltoday.com 2019 Supermarket Sweep: Tesco (Online) Retrieved from
https://www.personneltoday.com/hr/supermarket-sweep-tesco/ [Accessed on 15th December
2019]
Ruck, K., Welch, M. and Menara, B., 2017. Employee voice: An antecedent to organisational
engagement?. Public Relations Review, 43(5), pp.904-914.
Tesco.com 2019 Tesco Supermarket (Online) Retrieved from https://www.tesco.com [Accessed
on 15th December 2019]
The Guardian 2019 Tesco reports record £6.4bn loss (Online) Retrieved from
https://www.theguardian.com/business/2015/apr/22/tesco-suffers-record-64bn-loss [Accessed on
15th December 2019]