Evaluating the Effectiveness of Reward Strategy at

Tesco: Evidence from Selected Stores in UK

Shafiqul Alam & Udayan Raut-Roy

Introduction
Nowadays adopting effective reward
strategy is one of the most prominent
Reward strategy is one of the
and frequently discussed issues in
challenging parts in an organization’s
many [Link] the reward is
cost structure. It has direct impact on
managed and distributed effectively
the financial statement of any organi-
it can benefit many organizations
zation and strategic influence on em-
including Tesco. This paper seeks to
ployees’ attitudes, behaviors and or-
analyze the effectiveness of reward
ganizational performances. So, it is a
strategy at Tesco based on the se-
vital issue for any organization to per-
lected stores in UK. It has adopted
suade its own employees through ap-
a mixed approach of analyzing re-
propriate reward strategy. Failure to
ward effectiveness at Tesco. Data
implement this issue may cause im-
collection technique focused on both
mense loss both for the organizations
primary and secondary sources. A
and employees. In recent times, work-
total of 40 interviews were con-
ers have already become more con-
ducted of which 10 were in-depth
trastive and they certainly do not pre-
interviews that combine both struc-
fer to stay in the same organization
tured and open ended questions. The
for a longer period of time. They are
study found that the employees at
more aware of strategic compensa-
Tesco were satisfied with existing
tion rather than traditional pay system.
reward system, and also felt that cur-
So, reward cannot be [Link] so,
rent reward strategy is meaningful
workforces are abandoned from equal
and effective.
pay, flexibility, job security, health and
safety and different other benefit
Shafiqul Alam is Lecturer, Department of HRM, School packages in many organizations in UK
of Business, Independent University, Bangladesh (IUB), and other countries. In the USA, re-
Dhaka1229, Bangladesh. Email: kshafiq2004@gmail. searchers identified that female fac-
com. Udayan Raut-Roy is Senior Lecturer, University ulty members earn on average 27%
of Northampton, Faculty of Business & Law, Waterside
Campus, Northampton, NN1 5PH,England. Email:
less than their male counter parts and
[Link]-roy@[Link] also found the salary imbalances

The Indian Journal of Industrial Relations, Vol. 55, No. 1, July 2019 105
Shafiqul Alam & Udayan Raut-Roy

between private and public sectors (Lon- and adjust current program based upon
don, 2011).Another research finding by the feedback they receive from em-
Hey group revealed, whilst employees ployees. Discussion on these issues
were committed to work and optimistic may be to scrutinize current system and
about the future, more than half of them redesign for the future reward system
believed that there was no meaningful at some point. In this regard,
reward for extra effort, over 40% felt Armstrong (2009) states that the main
not appreciated, and one in every five said objectives of employee reward system,
they were actively looking for other are to attain the organization’s strate-
[Link] though some companies are gic goal through ensuring that the ex-
practicing rewards which are not auto- isting workforce are committed, com-
mated and exciting to keep their own petent, and well-motivated. However,
staffs in peace and motivated them in challenges may come in return in terms
repeating positive behavior (Perkin, Whit of setting strategic reward based upon
& Jones, 2011).As a result,almost fifty dynamic nature of changing business
percent of the US companies already and employee demand. Despite some
have undergone systematic review of challenges reward strategy must be
their existing reward plans and adopted meaningful and effective in order to
the concept of strategic reward. Later impact employees’ perceptions to the
on, it was followed by many of the Brit- organization and have positive impact
ish companies (Manas & Graham, 2003). on its retention and motivation
[Link] research, therefore, in-
tended to scrutinize existing reward
It is crucial for the organization to
strategy and evaluate the effectiveness
invest and design future reward
of current rewards at Tesco as a case
strategy and adjust current pro-
organization.
gram based upon the feedback they
receive from employees.
Case Organization

Though reward is one of the ne- The global retail market has been
glected areas of HRM research it is not experiencing a dramatic transformation
anymoreconfined only with the traditional over last few decades and it plays a cru-
recruitment, retention, motivation, recog- cial role in global economy. In 2014, glo-
nition and cost control, rather has been bal retail sale was U.S. $22.492 trillion1
appearing well beyond the system and and it is expected that worldwide retail
connecting more closely to the market will have a steady growth over
organization’s key success factors such next few years, and retail sales are pro-
as, competitive advantage, organizational jected to reach 27.732 trillion U.S. dol-
effectiveness, increasing performance
and achieving goal (Guest et al., 2012). 1
Retail Sales Worldwide Will Top $22 Trillion This
Year. Available; [Link]
So,it is crucial for the organization to in-
Article/Retail-Sales-Worldwide-Will-Top-22-
vest and design future reward strategy Trillion-This-Year/1011765

106 The Indian Journal of Industrial Relations, Vol. 55, No. 1, July 2019
Reward Strategy at Tesco

lars by [Link] terms of country,the re- restructuring and fast pace technologi-
tail sector’s economic output has followed cal changes it is hard to keep up employ-
an average growth (2.5%) in the UK ees moral and motivation. In many cases,
economy last ten years from1997 to huge compensation, benefits and psycho-
2018. The economic contribution was logical contract also fail to define em-
GBP £92.8 billion which represents the ployee needs and working culture. In this
5% of total UK’s GDP (Gross Domestic research, therefore, the researchers in-
Product) and the total employment of this tend to define and redefine the current
sector was 2.8 million in 2017 (Rhodes, reward strategy at Tesco and the extent
2018). As the largest grocery retailer in it is meaningful to its own employees.
UK and 3rd largest in the world, Tesco
has more than 6351 stores, 360,000 em-
Huge compensation, benefits and
ployees worldwide. Every £8 people
psychological contract also fail to
spend on the high street in UK, £1easily
define employee needs and work-
goes to Tesco. To certain extent, Tesco
ing culture.
takes more than 50 pence of every pound
spend on groceries 3. Approximately 40
percent retail market share in UK is Concept of Reward, Total Reward
owned by Tesco which generated a sale & Reward Strategy
of over GBP £157.7 billion in 2017 and
employs over 1.4 million people across The term “reward” means remunera-
the UK 4. Despite its economic contribu- tion for the service in an organization. It
tion, Tesco has a growing concern to is designed to reinforce desired behavior
meet the manpower demand and make of the employee and the employer. It
its own people happy. Employee devel- comprises both financial and nonfinan-
opment, procurement and retention have cial returns provided by the employer.
never been so crucial than today. Tesco Reward helps to connect employee and
is persistently searching ways to retain employer for understanding their feelings
its core employees. Therefore, right com- and gratitude to each other. Malhotra et
pensation strategy has become a vital al. (2007) state that “work rewards” in-
factor for employee motivation, retention dicate the returns employees receive
and performance development. Specially from their employers. However, in recent
in the era of economic crisis, downsizing, days, the reward system is not confined
any more only with bureaucratic pay, in-
centives and benefits. Rather, it has been
2
Total retail sales worldwide from 2015 to 2020 (in
trillion U.S. dollars). Available;[Link]
designed, redesigned; assessed, reas-
[Link]/statistics/443522/global-retail-sales/ sessed; produced and developed an ap-
3
Does Tesco account for £1 of every £7 spent in the
parent simplified term of ‘Total Reward’.
UK retail sector? [Link] In fact, the term ‘Total reward’ has been
tesco-account-1-every-7-spent-uk-retail-sector/ embraced to explain strategic reward that
4
KPMG (2018). Tesco in the UK, The Socio- includes additional elements such as, flex-
economic contribution in F/Y 2017/18 ibility, working environment, workforce

The Indian Journal of Industrial Relations, Vol. 55, No. 1, July 2019 107
Shafiqul Alam & Udayan Raut-Roy

training and development, recognition, ous private sectors including Tesco.

work-life balance, and other advanced Tesco has developed its reward philoso-
benefit packages. It is an apparatus used phy, principles and guidelines and inte-
by the employer to attract, retain and grated with comprehensive business
motivate employees in the organization. strategies like consistent growth, cus-
Total reward works as the tool, used by tomer loyalty, gaining competitive advan-
the employer to attract, motivate and re- tages and bring innovative concept.
tain staff (Tsede & Kutin, 2013).So, the Tesco incorporates the concept of reward
term “total reward”includes everything strategy with business and corporate
employee receives to be valued by their strategy through internal resourcing, cre-
employment relationship. Total reward is ating healthy working environment, tak-
horizontally integrated with HR strategy ing employee opinions, training and de-
and vertically integrated with other busi- velopment and many other HRM prac-
ness strategies and it also goes beyond tices. So, the people at Tesco feel re-
typical remuneration by embracing orga- warded for the work they do. As given
nizational culture, raising employees’ reward must reflect the priorities and
voices, inviting collective bargaining, and needs the of the employees for different
in return certifying better employee per- markets, Tesco pays good basic pay, fair
formance. In order to justify individual overtime and many other facilities to sat-
and organizational needs total reward is isfy employees in each country. For in-
integrated with corporate and HR strat- stance, albeit there is no legal minimum
egies. Appropriate reward strategy works wage in Malaysia,Tesco recompenses
as a guideline for the organization for the thirty percent 5 more than the Poverty
present-days operations,brings maximum Line Index for household. In USA, Tesco
return, builds up employment brand and delivers a variety of competitive benefits
proceeds of sustainable competitive complying with local labor laws and regu-
growth in an organization. lations; more than 75% of the cost of
medical, prescription drug, dental and vi-
Currently, many organizations in UK sion coverage and many other benefits.
have better understanding of total reward Employees who are students,are eligible
and they are acknowledging it ever more for tuition subsidy in South [Link] UK,
than before. The important role of re- more than 193,000 employees received
ward programs is to achieve organiza- £92 million worth of free shares
tional goals. Employers rstarted realizing under‘shares in success scheme’ in 2008.
that individual company needs to develop Around 52,000 staffs were eligible for
its own reward strategy rather than du- £126 million worth of payout from risk-
plicating from other companies. Own re- free “save as you earn” share option
ward strategy ultimately will support the scheme, out of 44,000 staffs were able
company’s human capital strategy and to save money through a tax-efficient
will allow them to align with business
strategy. This implication of reward strat- 5
Tesco internal report, 2011; Tesco Home plus,
egy has significantly increased in vari- Chelmsford, UK

108 The Indian Journal of Industrial Relations, Vol. 55, No. 1, July 2019
Reward Strategy at Tesco

scheme of “Buy as You Earn”(Clark.

2014). Furthermore, Tesco also offers a Reward practices will be effective
range of employee discount across the when it extends employee skill and
countries. In Czech Republic and capacity, broaden employee per-
Slovakia, employees are offered with formance and increase motivation.
family discount days, while in UK em-
ployees receive hundreds of benefits Work, a nonprofit association for human
packages including pension scheme, tax resource professionals, Schlechter et al.
free vouchers, and many other benefits. (2015), described a total reward model
In an internal report of Tesco, it is which comprises five fundamental ele-
stated;”Tesco has future oriented reward ments namely, total compensation; rel-
strategy across the countries so that it evant benefits; work-life balance of the
can make a clear plan on how Tesco will workers; identify employees’ perfor-
invest on employee benefits in every mance and their recognition and continu-
country it operates. The entire manage- ous career development opportunities.
ment team of Tesco enjoys the business Each of them collectively explains orga-
success as it is growing through market nizational strategy and these elements are
driven benefit plan which is also linked very powerful for employee attraction,
to the profitability and goal of the com- motivation and retention. Many organi-
pany” (Internal Report,2009). zations are exercising this model to ac-
celerate their business as well as satis-
Again, reward strategy is a process fying their employees. This model also
that describes how an organization will can be an ideal framework to structure a
design and articulate total reward and meaningful reward strategy at Tesco and
support the business strategy. It is not just guide the company for better understand-
about the incentive and benefit rather ing of reward strategy. Though a single
alignment with the aspiration and values approach may not be adequate to evalu-
of the organization. Reward strategy will ate the reward effectiveness, a combi-
be effective and meaningful only when it nation of the approaches may be effec-
is transparent, motivates employee, align tive to evaluate reward effectiveness at
with organizational goal and increase the Tesco.
organizational [Link] effec-
tiveness also can be evaluated based Motivational Theory& Reward
upon the cost and financial impact, ex- Strategy
ternal benchmarking, employee retention
rate, business KPI (Key Performance The development of reward manage-
Indicator) and stakeholders’ feedback. ment policies and structures are under-
Thomson (2003) identified that reward pinned by the assumptions whether
practices will be effective when it ex- people are motivated to deliver optimum
tends employee skill and capacity, level of performances, optional efforts
broaden employee performance and in- and contributions. These assumptions
crease motivation. Referring to World at may not be recognizable to all organiza-

The Indian Journal of Industrial Relations, Vol. 55, No. 1, July 2019 109
Shafiqul Alam & Udayan Raut-Roy

tions. However, the reward philosophies to discourse their opinions on almost ev-
and policies of an organization can be ery segment of their job including cur-
better explained by different motivational rent reward system.
theories and [Link] theories
also can propose guidance to organiza-
The difference between the “pay
tion with an interest of different issues
people receive” and the “pay they
like reward, retention, motivation and
feel they ought to receive” is the
engagement. Maslow (1954) stated that
main issue of reward.
employees are better motivated by dif-
ferent level of needs and satisfactions.
He also stated that only unsatisfied need Furthermore, Adam (1965) declared
motivates employee for further action. that employee satisfaction is closely re-
Unlike Maslow, Alderfer ERG (1969) lated with reward and pay which are
demonstrated that in some cases, need measured by the employee perceptions.
for the higher-level can be the principal The difference between the “pay people
motivating factor even though the needs receive” and the “pay they feel they
at low level are not entirely satisfied, ought to receive” is the main issue of re-
while Taylor (1911) argued that only a ward. It is not about paying something
bigger amount of continuous pay can which ultimately makes employees happy
force employees to work and they will (Wright, 2004).Likewise, dichotomy of
be motivated only if their rewards are extrinsic and intrinsic reward was de-
directly associated with their perfor- scribed by Herzberg (1968). He declared
mance. Gellerman(1963) stated that that most of the managers do not accept
people perceive money as a means of money as a key motivator rather they
achieving desire ends (Wright, 2004).The prefer job enrichment, rotation and con-
concepts of all the theories came with a tinuous professional development. He
common view that money is directly or also addressed and acknowledged that
indirectly associated with motivation and money issues are ended up with the con-
there are few other factors than money ception of non-physical rewards. A simi-
which motivated employees in their work- lar concept was pointed out by Paul
ing life and personal life. However, these (2002), motivation is about intrinsic rather
theories have a lot of connections with than extrinsic. It is the manager who can
the current reward program at Tesco. create a positive work environment so
Tesco’s reward program is far more than that employees feel good at work, and
the discussed theories which support prefer working in the company for a
employees through thousands of mon- longer period of time. Earlier, this con-
etary and non-monetary benefit pack- cept was supported by McGregor (1960)
ages. In order to make sure the effec- and he stated that employee motivation
tiveness of existing reward packages, at workplace is affected by the manag-
Tesco offers every worker to join in a ers’ behavior. A parallel research has
staff feedback survey called ‘Viewpoint’ been published at Harvard Business Re-
which is the platform for each employee view that employee motivation begins

110 The Indian Journal of Industrial Relations, Vol. 55, No. 1, July 2019
Reward Strategy at Tesco

with recognition and positive work envi- double-dip recession in UK. Financial
ronment which ultimately meet the emo- limitations threw Tesco in a puzzling situ-
tional need, drives and bond (Simms, ation especially when it came down to
2015; Nohria & Grasberg, 2008). Further, managing employee reward system ef-
Kaliski (2007) stated that affirmative fectively. Hence, it has managed to re-
association between reward and motiva- cover the reward crisis through various
tion leads to job satisfaction and employee reward strategies including one-minute
retention. Hence, this discussion can be approach to satisfy employees during the
a very useful tool for Tesco in both con- huddle time of recession.
structive and destructive amplification of
inspiring existing employees. Positive
The entire package of reward is
motivation may support Tesco to encour-
linked to the overall growth strat-
age employees creating good quality job
egy of the company, so that staffs
and increase organizational perfor-
can share in the success they cre-
mances. Also,other executives may use
ate.
their own designed techniques to encour-
age employees, from preventing negative
manners. Therefore, this discussion can Tesco has already introduced ad-
be reviewed further in details to enable equate number of flexible employee ben-
the researcher, evaluating reward effec- efit provisions to recognize employees
tiveness at Tesco. individually and in a group. These provi-
sions have already been valued and
Reward Strategy of Tesco praised by the staffs and reinforcing
them working at Tesco. The entire pack-
According to Ajila & Abiola (2004) age of reward is linked to the overall
a good combination of reward maximizes growth strategy of the company, so that
employee’s motivation, commitment and staffs can share in the success they cre-
increase the overall performance of the ate. The recent announcement of its big-
organization. Likewise, Tesco has always gest wages increased (10.5%)6 and fur-
been consistent and liberal in maintain- ther increment of maternity benefits in
ing reward strategy for business growth. next two years is the further extension
Tesco believes that employees deserve of effective reward strategy at Tesco.
reward for working hard and makes sure Existing employment policy, sick pay,
that employees are motivated with the holiday structure, choices of extra leave
existing reward system. Tesco also fa- and or additional pay schemes are far
cilitates good working environment and better than in many other retail shops in
ensure both financial and nonfinancial
benefits through several reward schemes. 6
Tesco to give workers big pay rise and boost
Nonetheless, Tesco’s strategy has been maternity leave; Tesco said that 97 per cent of
changed marginally since the global melt- staff will be better off under the new terms.
Available: [Link]
down and it has been continuing to fight business/news/tesco-payrise-workers-maternity-
enormous challenges thrown up by [Link]

The Indian Journal of Industrial Relations, Vol. 55, No. 1, July 2019 111
Shafiqul Alam & Udayan Raut-Roy

the UK. Perhaps, ‘Every little help’ is dossier on Tesco’s hypocrisy, called ‘Two
the most resourceful slogan which archi- Faces’ of Tesco is exposed by the crit-
tects several ways to help employees and ics. The critics and publishers uncovered
customers. For instance, child care ben- the difference between how Tesco be-
efits, shopping vouchers, free shares, haves at home and in other countries.
health insurance, great pension plan, Tesco also does not extend its lauded
share schemes & many other non-mon- principle of partnership to its entire em-
etary benefits are prominent benefit ployee outside UK though it claims to
schemes. However, many young employ- support employees’ freedom of speech
ees in this organization perceive pensions and, right to join their chosen trade union.
as a distant and totally irrelevant and However, Tesco refused to recognize
many older female employees feel that trade union ‘Tez-Koop-Is union’ in Tur-
maternity benefits are not suitable for key even though 51% of employees were
them. As a result, in some cases, Tesco already trade members. In USA, it de-
fails to form the standardization of its ben- layed and finally refused to appreciate
efits packages. the USCF (United Food and Commer-
cial Workers Union). Avoidance and
Although Tesco is very loyal of Brit- carelessness of union activities notify the
ish employee, it also penalized the staffs researchers a glimpse of another Tesco
who missed the days to turn up to work which is not to be. Instead of engaging
during the big freezer on 13th February, and recognizing trade union positively it
2009. More than 12 inches of heavy snow refused to meet with them and accepted
fell across the country, lasted of remote conflict instead of partnership (Hansen,
areas and paralyzed the entire transport 2008).
network. Instead of day-off Tesco has
overruled and told their staff to choose Reward is occasionally problematic
between ‘having less pay day’ or ‘losing and susceptible due to cultural, economic
day’s holiday’, ‘shift swapping’, or ‘shift- and individual worker perceptions and
ing a day off’. The firm’s shelf stackers, preferences. Majority of the reward pro-
customer care assistants, and check out fessionals, therefore, preoccupy and ad-
staff, many of whom are Britain’s under just reward strategy for future cost, eco-
paid workers took this action as a mis- nomic differences and uncertainty.
ery of Tesco (Steiner, 2009). In 2007, Meanwhile, many private organizations
when Tesco extended its store chain in in UK including Tesco have practiced
USA, most of the union welcomed the inflated rate of pay rise. In 2008, Tesco
news. The union expected it would her- paid 3.8% pay rise, sent managers in dif-
ald a new chapter in employee relations ferent stores to educate workers on how
in America’s groceries industry. Unfor- to face economic turbulences, delivered
tunately, it looked totally different in two discounted product line and double up the
years. As a business, Tesco only admires club card. Despite the economic crisis,
British community and workers. When Tesco created thousands of new jobs and
it operates away from British shores, a provided free assistance for the employ-

112 The Indian Journal of Industrial Relations, Vol. 55, No. 1, July 2019
Reward Strategy at Tesco

ees during credit crunch. The managers hour consisting 17 questions at 3 differ-
at various level work together with the ent stores; Tesco Home plus at Parkway,
staffs for creating team spirit, reducing Tesco Express at Duke Street and Tesco
absence and assisting them to save their Superstore at Princes road, Chelmsford,
mortgage. During recession, it doubled [Link] study attempts to present a de-
the value of employee’s club card vouch- tailed picture of the compensation theory,
ers for buying not only clothes and toys literature, and models, based on the case
but also [Link] 2016, Tesco had consid- of Tesco. The interview was conducted
ered cutting store staffs by 39,000 which on customer care assistants, team lead-
was equivalent to one in every six em- ers, and line managers in all the 3 stores
ployees or reducing hours (Ruddick, of Tesco. A total of 17 questions were
2016). Recently, Tesco has further con- asked to the interviewees regarding
firmed that almost 90007 jobs across head Tesco’s reward strategy, employee per-
office and different stores are at ception about reward, reward vs. perfor-
[Link] discussion can be further re- mance, motivation, and retention. The re-
viewed and considered in details to en- spondents were from different levels in
able the researcher in evaluating the re- a particular Tesco store and their demo-
ward effectiveness at Tesco. graphic characteristics are given in Table
1.
Research Method
Responses were measured on a
This study employed a mix of ap- 5-point Likert scale (Strongly agree 5&
proaches to evaluate reward effective- Strongly disagree 1). A higher score re-
ness of Tesco. The interviews were car- flects a higher employee satisfaction on
ried out as structured interviews. A total existing reward practices at Tesco. Pri-
of 40 interviews were conducted, of mary data were complemented using
which 10 were in-depth interviews that other secondary data, such as, annual
combined both structured and open-ended reports and business analytics available
questions which allowed the interviewees on internet and company website. Non-
to provide information about their probability convenient sampling tech-
experiencesregarding the existing reward nique was used to collect data since it
program and practices. The question- was conveniently available to collect data
naire was sent to the respondents before in a particular store rather than access-
the interviews in order to give them ing several stores (Creswell, 2012). As
enough time for preparation. The inter- an employee of Tesco Home Plus, one
view was taken place approximately one of the researchers had appropriate op-
portunities to closely observe reward sys-
7
Tesco confirms 9,000 staff across its stores and tem prevalent in the Tesco store and its
head office are at risk of the chop as part of drastic impact on employee perception, motiva-
business overhaul; Accessed from https://
[Link]/money/markets/article-
tion, and effectiveness. SPSS (Statisti-
6640523/Tesco-confirms-job-cuts-9-000-staff- cal Package for the Social Sciences) soft-
[Link] ware and Microsoft Excel were used to

The Indian Journal of Industrial Relations, Vol. 55, No. 1, July 2019 113
Shafiqul Alam & Udayan Raut-Roy

Table 1 Demographic Characteristics of the Respondents

Demographic Characteristics (N=30)

Demographic Variables Values Percentage
Gender
Male 22 73.3
Female 8 26.7
Age
15-20years 6 20
21-30years 11 36.6
31-40years 9 30
41-50years 2 6.6
51-60years 1 3.3
More than 61 years 1 3.3
Education
Primary School and lower 4 4
High School and lower 16 16
College/ Diploma 5 5
Bachelor’s Degree 3 3
Master’s Degree 2 2
Position
Customer Care Assistant 23 76.6
Team Leader 4 13.3
Duty Manager 2 6.6
Personnel Manager 1 3.3
Store Manager 0 0
Tenure of Job
<1 year 0 0
1-5 years 17 56.6
6-10 years 8 26.6
11-15 years 4 13.3
16-20 1 3.3
>20 years

perform a statistical [Link] had been providing competitive pay, in-

analysis was done to evaluate reward ternal equity, flexibility, and other employ-
effectiveness based on the respondents’ ment benefits. Employees were much
feedback. aware about Tesco’s compensation
policy and competitive pay [Link]
Findings fact, greater portion of the respondent

In regard to the feedback, all respon- The employees believed that

dents had strongly agreed (or at least Tesco had been providing com-
agreed) with the statements that reflect petitive pay, internal equity, flex-
overall employee satisfactions on exist- ibility, and other employment ben-
ing [Link] to the survey find- efits.
ings, the employees believed that Tesco

114 The Indian Journal of Industrial Relations, Vol. 55, No. 1, July 2019
Table 2 Respondents’ Feedback on Reward Effectiveness

Descriptive Statistics (N=30)

Item No. Item Description Range Minimum Maximum Mean Std. Variance
Deviation
Q6 Organization conducts performance appraisals as needed 0.00 5.00 5.00 5.00 0.00 0.00
Q4 I am satisfied with the existing fringe benefits 0.00 5.00 5.00 5.00 0.00 0.00
Q2 My organization follows a well-structured compensation policy 1.00 4.00 5.00 4.97 0.18 0.03
Q7 Financial reward is the prime motivator for me 2.00 3.00 5.00 4.93 0.37 0.13
Q10 My organization treat me with respect as an individual 1.00 4.00 5.00 4.90 0.31 0.09
Q18 Overall, I am satisfied with existing reward program 1.00 4.00 5.00 4.87 0.35 0.12
Q16 Enough support for work- life balance 1.00 4.00 5.00 4.87 0.35 0.12
Q8 Reward plan motivates me towards organizational goal 2.00 3.00 5.00 4.87 0.43 0.19
Q14 I am motivated to see the success of the company 2.00 3.00 5.00 4.77 0.57 0.32
Q11 Organization practices employee appreciation programs 1.00 4.00 5.00 4.77 0.43 0.19
Q9 Receive enough support to develop my skills and career 3.00 2.00 5.00 4.63 0.76 0.59
Q17 Employee relation movements in my organization is interesting 2.00 3.00 5.00 4.57 0.57 0.32
Q15 I feel a sense of completion with my job 2.00 3.00 5.00 4.50 0.73 0.53
Q13 Company tries to create an exciting work environment for all 3.00 2.00 5.00 4.47 0.82 0.67
Q5 My organization offer Flexible Spending Accounts 2.00 3.00 5.00 4.37 0.72 0.52
Q3 Available employee benefit options and information 2.00 3.00 5.00 4.20 0.55 0.30
Q12 Feel relax in my job 3.00 2.00 5.00 4.00 1.05 1.10

The Indian Journal of Industrial Relations, Vol. 55, No. 1, July 2019
in Table 2.

with Tesco culture from

Tesco culture, it is very
union. The survey feed-
worked well at Tesco and

Tesco believed that they

and respect each-other,

thatTesco is one retailer,

success, shares knowl-

one team called ‘Tesco
suddenly brings a dough-
spected by [Link] per
On a close observa-

different level of employ-

ciples of equality among
HR seek to apply the prin-
different levels, directors,
[Link] at
edge and learns from their
enjoys work, celebrates
other, and praise more
strive to support to each
nut on Sunday or arranges

team’. Employees trust

The company also assures
Every individual engages

than criticize. Every team

the interview to retirement.
employee feels entitled.
birthday cards so that the
common that a manager
were treated and re-
most of the employees at
back provided by the re-

despite some limitations,

tion, it was also found that
spondents are summarized
wages, negotiating with
they had been paid fair
reward and internal equity
salso believed that existing
Reward Strategy at Tesco

115
Shafiqul Alam & Udayan Raut-Roy

ees. One of the interviewees shared his shop floor for generating new ideas and
experience regarding management ap- suggestions from customers and staffs.
proach: Shields et al., (2015); Gold et al.,
(2013);Huston, (2008); Orsingher,
“Sir Terry Leahy (Tesco’s Chief Ex- (2018);Bwowe&Marongwe, (2018)
ecutive Director) involves issuing, rec- stated that reward must be flexible, ful-
ognizing and directing letter to the best fill different employee needs and align
staff at store level. This is why people with the strategy of the company. An
like to stay with Tesco more than 20/30 effective reward strategy also should
years” (Duty Manager-Tesco Home have the combination of both monetary
Plus; Interview taken April 2013). and non-monetary benefits. Positive pro-
duction and performance only can be
achieved when reward system satisfy
Employees at Tesco also enjoy
employees’ expectations. After inter-
quality work life as they all are as-
viewing team leaders and line managers,
sociated with equitable wages,
it is understood that Tesco is very keen
flexible working hours, working
for adopting mix of benefit packages so
condition, and family friendly
that the employee feels gratified. Shields
policy.
et al. (2015) further stated that higher
productivity can be achieved if the exist-
Further, employees at Tesco also ing reward system justified the workers’
enjoy quality work life as they all are as- needs and [Link] an interview
sociated with equitable wages, flexible a manager also stated that employees at
working hours, working condition, and Tesco are well evaluated their perfor-
family friendly policy. People here are mance and they are given various core
entitled to reduce working hour, home plus options benefit packages.
base work, job sharing and compress
work week [Link] store level, Tesco al- Discussion & Conclusion
lows employee shift swapping with an-
other employee so that each shift is cov- The ultimate aim of this study is to
ered, but gives the employee the flexibil- evaluate the effectiveness of existing
ity to re-arrange their working hours with reward practices at Tesco. On this con-
no disruption to the business. In cern, Karami et al., (2013) stated that
2004,Tesco has been voted as the ‘Em- existing reward program should be ef-
ployer of the year 2004’as its “Holistic” fective and line up with the organizational
solution. Individual performance is rec- goal. The researchers also attempted to
ognized and invest million pounds every identify the way current reward at Tesco
year in training and staff development is effective, equitable and at the end it
with a special emphasis on the long-term drives with ethical [Link] the other
employment. Manager here creates new hand, Armstrong et al. (2011) described
line of communication where directors or that effective reward has to be scientific
senior managers spend a week on the and evidence-based. Even a little

116 The Indian Journal of Industrial Relations, Vol. 55, No. 1, July 2019
Reward Strategy at Tesco

evidence demonstrates the efficiency of ployee engagements and involved them

reward system. Though it is difficult to in maintaining transparency within the
evaluate reward effectiveness with finan- organization, with a seamless flow of
cial performance, a “soft approach” such information. Further, different theories
as employee feedback, reaction, opinion have been explained and relate to reward,
or theory is sometimes acceptable and recognition and motivation. These theo-
easier method to measure reward effec- ries supported researchers to assess the
tiveness. In many organizations it seems current reward system at Tesco and di-
not to have any concrete evidence to jus- rected towards main objectives. It is also
tify the effectiveness of reward prac- evident from the survey feedbacks that
tices. However, in this study, the re- reward framework at Tesco is guided by
searchers applied “ground theory” ap- the common principles and objectives of
proach that means a case study method the company. Further, discussed theories
to evaluate reward effectiveness at also supported the researchers to iden-
Tesco. The perception and execution of tify the psychological factors which car-
the employees and their contribution to ried the key messages of motivation, en-
the organizational goal is the reflection gagement and retention and explained
of effective reward system. Armstrong employees’ expectations and responsibili-
(2010: 80) also stated that reward effec- ties. Respondents’ feedback regarding
tiveness can be evaluated based on its current reward, recognition and motiva-
association with ‘TEN Cs’ (competitive, tion policy helped the researchers to iden-
convergent, contribution, customized, tify the extent why existing reward sys-
commits, communicated, cost effective, tem at Tesco is effective and meaning-
changes, controlled and compliant). It is ful.
a comprehensive tool of evaluating ef-
fective reward strategy in an organiza-
Reward framework at Tesco is
tion like Tesco. Further, Armstrong et al.
guided by the common principles
(2011) mentioned the most common prac-
and objectives of the company.
tice to evaluate reward effectiveness is
to associate reward cost with employees’
[Link] positive feedback from Based on the survey findings and
the respondents and gradual increment theoretical analysis, this research reveals
of sales and profit at Tesco8 has substan- that employees’reaction at Tesco is posi-
tiated the effective and generous reward tively affected by the rewards they re-
system at Tesco. The company also has ceive. This was also substantiated by the
actively taken several initiatives in many respondents who were surveyed as most
countries including UK to boost up em- of them stated that the quality of the re-
wards they receive is extremely satisfac-
tory. Likewise, Brown and Reilly (2009)
Tesco PLC, Five year record; https:// describe that the existing reward system
8

[Link]/investors/reports-results-and-
presentations/financial-performance/five-year- at Tesco has very powerful linkages with
record/ employee engagement and their financial

The Indian Journal of Industrial Relations, Vol. 55, No. 1, July 2019 117
Shafiqul Alam & Udayan Raut-Roy

Table 3 Meaningful & Effective Reward

SL No. Theorist Meaningful Assumption Adopted by Tesco

1 Frederick Taylor Motivational theory Used for motivating staff fi
nancially and non-financially
2 Adam-1965 Balance employee input & output For employee fair treatment
3 Maslow -1965 Employee is motivated by the Satisfying and motivating
need and demand employees’ need
4 Herzberg-1968 Intrinsic and extrinsic factors Assumed as motivating
factors
5 McGregor-1960 Workplace behavior Highly practices at Tesco
6 Total reward Model Powerful elements for employee Used for employee reward
attraction, retention & motivation and motivation
7 Glaser and Deductive approach Used to evaluate reward ef
Strauss-1983 fectiveness
8 Michael TEN Cs Used to evaluate reward
Armstrong-2010 effectiveness

performance. Hence, without further used for the future research by inculcat-
hung-up on “false precision”, it is be- ing large number of employees in differ-
lieved that Tesco has a meaningful and ent stores at Tesco.
effective reward policy and practices.
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120 The Indian Journal of Industrial Relations, Vol. 55, No. 1, July 2019
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