Tesco's HRM Strategies: A Report on Minimum and Living Wages

This report analyzes the concepts of minimum wage and living wage within Tesco, a globally recognized supermarket chain. It examines the legal regulations surrounding minimum and living wages in the UK, including the National Minimum Wage Act 1998 and the implications of national living wage standards. The report highlights the benefits of adhering to these wage standards, such as increased employee productivity and loyalty, as well as reduced HR costs. However, it also addresses the issues Tesco faces in implementing these wage policies, including budget constraints, complex labor market dynamics, and potential negative impacts on low-wage workers. Recommendations are provided to Tesco, such as building long-term relationships with employees, consulting with business experts, and collaborating with organizations like ETI members and trade unions, to effectively address these challenges and ensure fair compensation for its workforce. Desklib provides access to similar solved assignments and study tools for students.

Introduction to human
resources management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK ..............................................................................................................................................3
Minimum wage and living wage.................................................................................................3
Legal regulation..........................................................................................................................4
benefits of minimum and living wage for organisation..............................................................4
Issues ..........................................................................................................................................5
Recommendations.......................................................................................................................6
CONCLUSION................................................................................................................................7
REFERNCES:..................................................................................................................................8
Books and Journals:....................................................................................................................8

INTRODUCTION
The report aims to analyse the concept of minimum wage and living wage in the
organisation. HR managers play a crucial role in ascertaining salaries and wages to each
employee of the organisation. An employee is entitled to get a minimum amount of salaries in
order to earn its livelihood for day to day activities. It is the most crucial form of motivation of
the employees by getting a minimum amount of salaries and wages which would fulfil their
objectives and their own needs. Therefore, organisation workers needs to get minimum wages as
it has many benefits for organisation and economy too. It shows concern towards equality which
eliminates poverty from the country (Caliendo, Wittbrodt, and Schröder, 2019). The report aims
to present a thorough understanding of the minimum and living wage on Tesco, the company is
globally scattered and comes under the largest supermarkets store. It was first established in
1919 in UK. The company needs to eliminate the issue of living wage for banana production
workers. For that instance, the report will provide all the legal regulations, benefits and issues
regarding it.
MAIN BODY
TASK
Minimum wage and living wage
Minimum wage pay is that amount that employees hold as per the UK laws. An
employees is entitled to get salaries as per the national wage law to maintain a balance of income
in the country (Rubery, Grimshaw, Keizer, and Johnson, 2018). Living wage is that amount paid
by organisation to the workers in order to eliminate poverty and individuals could fulfil their
basic needs like food, clothes and shelter. Businesses are known for contributing in the highest
GDP in economy that smoothly work for every people by giving employment opportunities, new
technology as well as products and services. Therefore, these wage acts are mainly focus for the
welfare for low educated and living below poverty line.
Aim for minimum and living wage: The tesco is the most renowned and reputed
organisation of UK. The supermarkets have taken a long journey and success across globe. so
that, the company needs to work on the economic welfare as well by focusing on each employee
welfare. The aim of tesco is to eradicate the difference among women and men, poor and rich by
enhancing equalities and giving equal wage pays (Graham, and Woodcock 2018). It becomes an

important concern for the organisation to hold a positive image into market. Therefore, the
company is require to work for the development of factory workers who have major contribution
in Tesco productivity and profitability.
Legal regulation
National Minimum wage act 1998: As per this act in UK, an individual who is belongs
to 16 or above the age group is entitled to get the minimum wages irrespective of the lactation,
occupation and size of the business. These mainly are casual labours, factor labours, home
workers and agricultural workers (Cengiz, Dube, Lindner, and Zipperer, 2019). Therefore,
Britain minimum, wage must be $8.72 per hour to each worker. Tesco needs to make assure of
providing this much wages to secure a positive image into market. Therefore, it has ascertained
that Tesco is seems to taking action towards low class worker in banana production in terms of
raising their income.
National Living wage: As according to this act in UK, the people who belongs to below
poverty line. The main purpose of giving living wage is that, the workers could live in the UK by
not facing poverty traumas (Link, 2019). The workers must be belong to above the age group of
16. The tesco needs to give living wages through which they could easily survive in the country.
Even every employees who is working in company must get salary or wages to live effectively.
benefits of minimum and living wage for organisation
Productivity of employees and workers: minimum wages and living wages are the
important concern for the organisation. Paying salaries to secure their living will result In
enhancing employee productivity. They will dedicatedly work in the organisation to get their
salaries and secure job in the organisation. Tesco could look at growth and expansion into market
by taking advantage of employee productivity. This makes the product and service more of
quality effective and cost effective.
Employee loyalty: by giving a minimum wage and living wage, employees will keep
their trust and loyalty towards the work practices of company. As it is the great motivation
factor for the employees which keeps them closely connects to the organisation. Tesco will not
suffer with the shortage of employees by fulfilling their demands and pay according to their
work specification (Bruttel, Baumann, and Dütsch, 2018). Also, following the employment acts
and legal regulation it will create a great impact in the eyes of government.

Eliminate unnecessary cost in of HR practices: HR practices like recruitment, training
and hiring leads to take high cost of the organisation it is also a time consuming practices. So
that, HR managers of Tesco could smartly look for retaining their existing workers and
employees by paying the salary they want.
Issues
The concept of living and minimum wage in the UK organisations provide them, with
serious issues and problems. As the living wage is just a theoretical income that help the
families to manage and afford their shelter, food and other basic necessities (Simic-Muller,
2021). As the aim of the living income is to provide the employees with enough earning for
satisfactory living standards. On the other hand the minimum wage is the minimum amount of
salary that organisation pay to their employee for work performed in given period of time. But,
Tesco is facing the challenges and issues in achieving the living and minimum wage in their
organisations that are highlighted below:
Lower Budget: if the Tesco does not increase their Budgets than company face issue in
achieving the living wage as the increasing wages for some workers for their performance and to
meet their living standards the other workers are lid off or either are not recruited by the
organisation. This leads towards the lack of talented employees within the organisation and also
to the UK economy there is increased unemployment.
Complex labour supply and demand: In Tesco plc the wages are set by analysing
through the complex labour supply and demand, through negotiation, remuneration policy norms
or through power relations between the workers and employers all this are set as per the
employees capabilities that are practical. But through living and minimum wage their may be
impractical setting of wage which can lead to potential consequences of conflicts in organisation
(Khanna, 2021).
Hurting poor or low wage workers: In UK there is proponents of increasing the
minimum wage as it is often said that it is difficult for employees to support their families with
minimum salary. This lead to putting out the low wage workers out of the job as the some
employees are given high wages for their work. Thus, it seems that in Tesco the concept of not
achieving the minimum wage is because it may hurt the poor families.
Restricts the company: as there are many benefits of minimum and living wage to the
Tesco plc but still it brings some restrictions on the company in relation to their wage level. As

with the implementation of minimum wage and living wage the company is bounded to offer fix
wages and cannot set wages as per the natural labour market forces. Also even there are
employees that does not justify the salary paid to them still employer cannot complain that
minimum wage is unfair to certain niche segment (Lysobey, 2019).
Recommendations
In relation to the above discussed issues that Tesco is currently grappling with due to the
national minimum wage and living wage implementation in the organisation there are some
recommendations that company must take into consideration. Some key recommendations are
highlighted below:
For the retailers like Tesco it is very important to look beyond the calculated methodology of the
wages and ensure that the company is able to ensure that the living wage is the element of
the process of negotiation for the employees to respond to externalities. Therefore, Tesco is
suggested to build long term, trusted relationship with their employees and work together to
recognise and understand the prevailing wage levels.
The Tesco is also suggested to hire the business consultant and consult the workers and
managers to measure the living wage levels for the retail industry (Dobbins and Prowse,
2021). Moreover, this mechanism will advocate the Tesco to set the national minimum wage
that could equate with the living wage of the employees.
The company is also suggested to ensure that living wages are accommodated throughout the
company's value chain and if essential also reflect into the prices of the products as this will
help the company to maintain their profits.
Tesco is highly suggested to increase the boundaries of their budget in order to amend the
national and minimum wage as this issue is big. Also with the increase of budget the
company will be able to hire the new employees as well as pay increased minimum wage to
their existing employees. For this Tesco must pay attention on its productivity and
efficiency in the business as this enable the company to accommodate the living and
minimum wage to their value chain.
Collaboration with the forces like ETI members, companies, NGOs and trade Unions is the most
effective way by which Tesco could easily work on achieving the living wage and minium
wage in the company (Chong and Khong, 2018) . As these institutions are useful in sharing

the lessobns on the working in relation to the living wage for the employees and also they
take care of the rights and situations of the poor and low wage workers.
CONCLUSION
It is concluded from the above report that the aim of minimum and living wage is to
provide the employees in an organisation with effective pay for their efforts that could match
their living standards and also keep them away from the poverty. Also it is analysed that through
minimum wage the organisations are able to set pre budget for the expense on salary of
employees. Thus, the organisations do face some challenges in achieving the minimum and
living wage in the company due to inconvenience and lack of resource with the employers. Also
it is concluded that not achieving living wage some times lead to unemployment.

REFERNCES:
Books and Journals:
Bruttel, O., Baumann, A. and Dütsch, M., 2018. The new German statutory minimum wage in
comparative perspective: Employment effects and other adjustment channels. European
Journal of Industrial Relations, 24(2), pp.145-162.
Caliendo, M., Wittbrodt, L. and Schröder, C., 2019. The causal effects of the minimum wage
introduction in Germany–an overview. German Economic Review, 20(3), pp.257-292.
Cengiz, D., Dube, A., Lindner, A. and Zipperer, B., 2019. The effect of minimum wages on low-
wage jobs. The Quarterly Journal of Economics, 134(3), pp.1405-1454.
Chong, E. and Khong, F.A., 2018. The living wage: Beyond making ends meet. Central Bank of
Malaysia, 16.
Dobbins, T. and Prowse, P. eds., 2021. The Living Wage: Advancing a Global Movement.
Routledge.
Graham, M. and Woodcock, J., 2018. Towards a fairer platform economy: introducing the
Fairwork Foundation. Alternate Routes, 29, pp.242-253.
Khanna, S., 2021. Many Channels of Adjustment to a Higher Minimum Wage: Evidence from
Restaurant Reviews.
Link, S., 2019. The price and employment response of firms to the introduction of minimum
wages.
Lysobey, P.J., 2019. Municipal Minimum Wage Ordinances in Ohio: A Home Rule Analysis.
Clev. St. L. Rev., 67, p.93.
Prowse, P., Dobbins, T. and Fells, R., 2020. The campaign for a ‘real Living Wage’. In Case
Studies in Work, Employment and Human Resource Management. Edward Elgar
Publishing.
Rubery, J., Grimshaw, D., Keizer, A. and Johnson, M., 2018. Challenges and contradictions in
the ‘normalising’of precarious work. Work, Employment and Society, 32(3), pp.509-
527.
Simic-Muller, K., 2021. Who Makes the Minimum Wage?. Mathematics for Social Justice:
Focusing on Quantitative Reasoning and Statistics, 66, p.211.