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Performance and Reward Problems in the Retail Sector

REPORT ON PERFORMANCE AND Prize Problems RETAIL SECTOR FACE WITHIN THE Modern WORLD.

OVERVIEW

This report aims to discuss, analyse the Praise and Performance troubles faced by the retail sector, there have been two major retail organisations found in the brands of Tesco Store and Waitrose Supermarket, Hence the survey considers tips and solutions to these challenges with the aid of performance and incentive ideas by the article writer.

INTRODUCTION

Organisations generally need to screen the performance of itself and its own employees in order to accomplish its goals either in a short or long lasting, however, in order to attain an acceptable performance level, there is a motivating factor attached to the employer/employee relationship which is called reward.

In relations to the Retail organisations there's a dependence on organisations to sustain and motivate employees to work due to the demand for manpower to satisfy the retail sector needs, for employees to execute well, it's important for an life of a reward package set up; this is basic in retail organisations exactly like every other business organization, on the other hand, organisations desires a good performance from the rewarded employees as well, thus, there are a few arising issues and differences of ideas between both get-togethers such as inability in psychological contracts, low staff morale, absence, e. t. c which results in major troubles for organisations to attain their goals, however, there is a need to explore what performance and praise really entails to be able to have a easy understanding as this report evolves, hence, verify how rewards plan enhances worker performance as there are major problems faced by organisations to fulfil internal contracts between them and their employees which has a vast implication on performance.

PERFORMANCE MANAGEMENT

This has transformed over time, it's been a general think that performance management is about rating employees using a trait-biased device such as neatness, punctuality and attendance instead of focusing on the work productivity, it is commonly secretive while employees weren't really involved in the process nor advised of what rating they received, however, this style of performance method is no longer considered to be of good practice.

It is the method of improving results from the company, teams, and individuals where there can be an agreement of targets, skills and competence required so it is therefore, the way in which an company improve and develop its labor force, nonetheless it is also used to measure the circulation of rewards aligned to a performance related pay treatment. (Armstrong, 2002:373), hence it's the think that PM is an activity of management by it to analyse, measure, monitor performance and arrange for organisation advancements.

Furthermore, as it's been highlighted before that performance management supports the measurement and circulation of rewards, another paragraph would describe what pay back is, and how it helps performance within an organisation.

REWARD MANAGEMENT

This has been related to the performance output of a person, it has altered the traditions of status but contribution as employees are being granted benefits which could be tangible or intangible rewards for their additional hard work, Armstrong and Murlis, (1998) argued that performance related pay is a motivator for reward management but stressed that it should not only be about money but those non-financial rewards which gives intrinsic and extrinsic inspiration such as ongoing development, more employee involvement, relationship, mutuality, trust and transparency hence, it is currently noticeable that performance is related to rewards.

As they are both key factors in company success, there would now be an in-depth analysis of the existing obstacles retail organisations face today. You will find two retail organisations considered in this record, first is Tesco Plc that i have worked with for five years, second is Waitrose supermarket which is also a leading retail company in the U. K, the use of the two organisations has given me benefits to compare and contrast while I was able to critically consider these difficulties they face.

TESCO Backdrop/OVERVIEW

Tesco is the greatest food shop in UK with over 2, 200 stores worldwide and 450, 000 employees around the world, it also offers around 1, 878 stores throughout the UK with many other stores outside the country which includes America, Asia and European countries.

The company offers online shopping and home delivery, it's largest market is in the united kingdom with four different types of stores particularly Extra store which operates 24hours, Superstore which also works 24hours, Metro and Exhibit, it includes as a non-food and clothing section with three different own label known as value, normal and finest which accounts for almost a 50 percent of the company sales.

REWARD AND PERFORMANCE MANAGEMENT IN TESCO

Tesco organisation buildings runs in form of an bureaucratic composition as electric power and authority flows from the most notable to the low level in the company, this similarly has similarity in the rewards framework as well because top level employees get much pay back that the low level although latter are usually more influential in the undertaking of the functional activities which makes the company succeed.

The present salary structure does not praise individual or team effort, the staff will get the expected automatic annual increments that are integrated into their platform pay in addition to that they get cost of living go up which is determined by the location, this framework reflects the increasing value which individuals are deemed to provide to the company as they gain experience in the work, it includes major down sides as increments reward the duration of time and dismiss performance as the existing reward composition is thus intended for rewarding staff for his or her time and devotion to the organisation and disregards specific shows within the organisation(Boyne, 2002)

The pay composition is standardised as directors, mature managers are establish on specific basis, and new employees are normally placed on the lowest salary point within the grade for their post and service longetivity, the appropriate grade for a post is identified using HAY job evaluation scheme, progression in the level is come to by acquisition of total annual increments until the maximum of the class is come to which however leaves employees "stuck" near the top of their grade without real prospects to advance further or get a advertising into the next salary quality as this may be considered as a factor which derails the morale of individual and it really affects performance too.

Hence, there is certainly a big issue that should be resolved as Tesco must balance the features of having a long service, reliable, experienced, commited workforce against the inherent conservatism, inflexibility and resistance to change usually associated to them, the company faces pressures to be better and performance-oriented. Automatic service increments are costly to Tesco and they are not fully liked by employees that feel they have entitlement to annual raises and progression though star performers are inspired and signed to a programme called Options which is training on how to be always a manager but you may still find questions if everyone is determined with such purpose as some wouldn't be thinking about this effort.

As a result they may devote the "minimum" work because they are fully aware that they can be guaranteed a pay increase by the end of the year which some writers referred to as a golden handcuff as poor performers continue to stay with the organisation because they continue being rewarded well, as a matter of fact, a director brought up 2we have many long-serving staff", as pay and conditions here are very good and there are not too many performance objectives. (Dittenhofer, 2001). This may donate to organisational inertia if professionals are reluctant to control poor shows through the performance management system and employees may feel as the program manager said to allow them to get away mediocre and contribute to under- performance.

Additionally, there's a free company stocks given each year to employees as a way to reward them for his or her hard work which is a good idea and gives them the benefit of 10% discount from some of their buys from the company by issuing employees a discount/privileged greeting card after half a year of service but how are the exceptional performers compensated? It is left be unknown which is a major obstacle to be considered and looked into.

Therefore, the problems faced by Tesco from the conversation above could be stated as follow

  • Non-existence of Individual/Team Reward
  • Lack of Motivation
  • Organisation is Less Performance Oriented
  • Low Performance Output from Employees
  • Inability to Manage Poor Performances

Hence, the necessity for evaluation with a comparatively successful and large retail organisation is needed to be able to justify the challenges the retail sector is facing in the incentive and performance management world, this would enable one to measure the situation more and leads me to the debate of reward and performance management in Waitrose supermarket in the subsequent paragraphs.

PERFORMANCE AND Prize MANAGEMENT IN WAITROSE

Waitrose is a comparatively big supermarket in the united kingdom; it offers 221 branches across the United Kingdom. Waitrose creates some act of uniqueness for itself from opponents by offering high quality food and emphasising good customer services which is important for the success of any company.

However, for the company to achieve the required degree of customer services offered, they strategized by causing cultivating the culture of making all its employees a co-partner which is very welcoming from the view of any employees as this gives them sense of belonging in the business running, lovers get certain benefits called partnership bonus which is around 10-20% of the partner's gross annual income which is paid in a value sometimes in the year, discount cards are released after three months of service which entitles those to 15% discount in Waitrose and 25% in John Lewis departmental store concerning rewards for his or her efforts into the success of the company, this appear to be a good effort to prize the employees for their good and hard work.

There is a concentration to train new associates for customer services skills, health and safe practices, fresh food handling and fire safety, partners are trained to drop whatever they may be doing(within reasoning) after the need of the customer and business lead customers to the merchandise, which means this shows the level at which customers are being taken to be their concern.

In 2005, there was an introduction of performance management scheme called "Mystery Shopper" which scores its branches on the service they offer considering the presentation, service on the shop floor by the employees ranging from the service counters, checkouts, wine, grocery store departments and standard assistants, this effort is believed to help keep degree of performance of each partner at the top but it is still left to be known if it is a motivator once and for all performance or technique for the organisation to succeed

In 2008 W?itro?? released training because of its p?rtn?r? with a fresh program called 'fr??h on ??rvic?' which ?im? to lift up primary ??rvic? ?t?nd?rd? and continue to make the bu?in??? ?t?nd away from its competitors by training partners to be more confident on their job to provide great service by motivating among other activities an attitude to trust things can be carried out. (www. johnlewispartnership. co. uk)

At this aspect, it can be deduced that Waitrose attempts its best to attain the best performance level with range of offers and trainings they provide to the companions of the business, additionally they coach visitors to be professionals, and where college leavers are being trained to become section managers within a period of few years, they also provide a graduate plan that bridegroom people reaching high managerial articles within some couple of years.

The last few paragraphs evidently shows how Waitrose rewards its co-partners in order to attain its place goals but the argument is the fact, does these rewards and benefits directed at the partners encourage and spur all of them to put in a much better performance on their careers, is money a good key to inspire them or is everyone encouraged with tangible things?

This leads me to spotlight the challenges experienced by Waitrose in Respect of Performance and Pay back Management.

  • Inability to manage performance
  • Non-existence of Person/Team Reward
  • Too focused on customer satisfaction

INTRODUCTION

Organisations generally need to keep an eye on the performance of itself and its employees to be able to accomplish its goals either in a brief or permanent, however, to be able to attain a satisfactory performance level, there is a motivating factor mounted on the employer/employee relationship to create reward.

In relationships to the Retail Supermarket sector, there is a dependence on organisations to preserve and motivate employees to work due to the demand for manpower to meet the retail sector needs, for employees to execute well, it's important for an existence of a reward package set up; this is basic in retail organisations exactly like other business company, on the other palm, organisations expects a good performance from the rewarded employees as well, thus, there are some arising issues and differences of views between both functions such as inability in psychological contracts, low staff morale, absence, e. t. c which results in major obstacles for organisations to attain their desired goals, however, there is a need to explore what performance and reward really entails in order to truly have a easy understanding as this survey evolves, hence, take a look at how rewards program enhances staff performance as there are major issues experienced by organisations to fulfil psychological agreements between them and their employees that includes a huge implication on performance.

RETAIL SUPERMARKET SECTOR OVERVIEW

The retail sector an extremely active in the society in conditions of day to day living as it will involve food, clothing, furniture. e. t. c it will always be an increasing market although present financial situation in term of recession making decelerate of development as companies who cannot be competitive suffer, however organisations face problem of conference both customer and staff needs, organisations make an effort to secure the self-confidence of customers as there's a risky of shedding them because customer spending will decrease, hence you can find need to be at utmost best delivery best service at every given time, on the other hand, this would need a 100% performance from its employees in order to deliver a higher and suitable service but there are issues being experienced in this respect at the sector as employers face the challenges of meeting employees goals such as emotional deals which this record aims to evaluate and suggest recommended solutions with the help of academic ideas. This statement would discuss results on the performance and incentive challenges faced currently by have two of the Britain most successful retail supermarkets namely Tesco and Waitrose.

It aims to go over and analyse the Reward and Performance troubles experienced by the retail sector, there is a SWOT and PEST analysis carried out in order to realise the situation of the supermarkets and the obstacles they face.

PERFORMANCE MANAGEMENT

This has improved over the years, it's been a general think that performance management is about rating employees using a trait-biased device such as neatness, punctuality and attendance instead of focusing on the work productivity, it is commonly secretive while employees were not really mixed up in process nor advised of what ranking they acquired, however, this style of performance method is no more considered to be of good practice.

It is the method of improving results from the company, teams, and individuals where there can be an agreement of aims, skills and competence required so it is therefore, how an company improve and develop its workforce, nonetheless it is also used to gauge the syndication of rewards aligned to a performance related pay process. (Armstrong, 2002:373), hence it is the assume that PM is a process of management by using it to analyse, solution, screen performance and arrange for organisation advancements.

Furthermore, as it has been highlighted earlier that performance management aids the dimension and distribution of rewards, the next paragraph would make clear what praise is, and how it helps performance in a organisation.

REWARD MANAGEMENT

This has been related to the performance outcome of a person, it has modified the custom of status but contribution as employees are being granted benefits that could be tangible or intangible rewards for his or her additional hard work, Armstrong and Murlis, (1998) argued that performance related pay is a motivator for reward management but pressured that it should not only be about money but those non-financial rewards which provides intrinsic and extrinsic motivation such as ongoing development, more worker involvement, collaboration, mutuality, trust and transparency hence, it is now evident that performance relates to rewards.

As they are both key factors in company success, there would now be an in-depth evaluation of the current troubles retail organisations face today. You can find two retail organisations considered in this statement, first is Tesco Plc that i been employed by with for five years, second is Waitrose supermarket which is also a leading retail firm in the U. K, the utilization of these two organisations has given me benefits to compare and contrast while I was able to critically consider these troubles they face.

TESCO History/OVERVIEW

Tesco is the greatest food store in UK with over 2, 200 stores worldwide and 450, 000 employees surrounding the world, it also offers around 1, 878 stores throughout the united kingdom with a great many other stores beyond your country which includes America, Asia and European countries.

The company also offers online shopping and home delivery, it's most significant market is in the united kingdom with four different types of stores namely Extra store which runs 24hours, Superstore which also runs 24hours, Metro and Express, it includes as a non-food and clothing team with three different own label named value, normal and finest which makes up about almost a one half of the company sales. (www. tesco. com)

REWARD AND PERFORMANCE MANAGEMENT IN TESCO

Tesco organisation buildings operates in form of a bureaucratic composition as power and authority flows from the top to the reduced level in the organisation, this evenly has similarity in the rewards structure as well because top level employees get much reward that the low level though the latter tend to be influential in the carrying out of the functional activities that makes the company succeed.

The present salary framework does not praise specific or team work, the staff obtains the expected automated gross annual increments that are designed into their platform pay moreover they get cost of living surge which depends upon the positioning, this structure shows the increasing value which individuals are deemed to give to the company as they gain experience in the work, it offers major drawbacks as increments praise the passage of time and ignore performance as the current reward composition is thus geared towards rewarding staff for his or her time and loyalty to the organisation and disregards individual performances within the organisation(Boyne, 2002)

The pay structure is standardised as directors, mature managers are set on individual basis, and new employees are normally placed on the cheapest salary point within the grade because of their post and service longetivity, the appropriate grade for a post is recognized using HAY job analysis scheme, development in the level is reached by acquisition of total annual increments before maximum of the grade is reached which however leaves employees "stuck" near the top of their grade with no real prospects to advance further or get a promotion in to the next salary level as this may be considered as a factor which derails the morale of individual and it really impacts performance too.

Hence, you can find a big issue that needs to be solved as Tesco must balance the advantages of having a long service, reliable, experienced, commited workforce resistant to the inherent conservatism, inflexibility and amount of resistance to improve usually associated to them, the company faces pressures to be more efficient and performance-oriented. Auto service increments are costly to Tesco and they are not fully loved by employees that feel they are entitled to annual boosts and progression though superstar performers are urged and signed to a program called Options which is training on how to be always a manager but you may still find questions if many people are determined with such purpose as some wouldn't be considering this initiative.

As an outcome they may devote the "minimum" work as they are fully aware that they will be assured a pay increase by the end of the year which some writers known as a golden handcuff as poor performers continue to stick with the organisation because they continue being rewarded well, as a matter of fact, a director mentioned 2we have many long-serving staff", as pay and conditions here are incredibly good and there are not way too many performance goals. (Dittenhofer, 2001). This might donate to organisational inertia if managers are reluctant to control poor performances through the performance management system and employees may feel as the program manager said to allow them to get away mediocre and donate to under- performance though company sometimes tend to stick to the throat of employees endeavoring to impose behaviours that complies with the necessity of company.

Additionally, there's a free company shares given each year to employees in an effort to reward them for their hard work which really is a good idea and gives them the benefit of 10% discount from some of their buys from the business by issuing employees a discount/privileged card after half a year of service but how are the exceptional performers rewarded? It is left be unfamiliar which is a major challenge to be looked at and investigated.

The next paragraph shows the strong and poor factors of Tesco with aid of Swot evaluation to determine its issues.

Therefore, the performance and incentive challenges faced by Tesco from the conversations above could be shown as follow

  • Non-existence of individual/team reward
  • Lack of motivation
  • Organisation is more performance focused than rewards
  • Low performance output from employees
  • Inability to manage poor performances

STRENGTHS

Increasing Market Share

It has an increasing market share and a good ratio of the UK retail market of around 13% which continues to grow share in food and non-food, it has also harvested to into differing of the united states and world rendering it the next biggest string convenience store chain retailer up to now and it blueprints to explore with new stores openings so it has a good market show which really is a strength.

Tesco Online

The company's dot. com is the entire world online biggest online supermarket with huge millions of sales with an increase of 29% on last year and operates in over 250 stores in the UK which means this is a strong platform where they could still exploit for longer time.

Brand Value

The results from the previous fiscal year shows that the company profits on operations across the world increased by 78% which is damaged by the strong image the company has as well as the good quality that equals to value, earnings from the other forms o their market such as insurance and money is a significant factor to this.

WEAKNESSES

Reliance after Success.

The company is too reliant on the believe they are the leading store in U. k which could cause them lapses making them exploit in some cases as they believe that people should come for his or her products because of their customer base and also could exploits personnel too as it is widely known that people will always come to work for them.

Reliance upon the UK Market.

The company is too dependent on the UK market providing 73. 8% of profits in 2003 though it could not influence them in short term nevertheless they are of risk of any changes in the united kingdom supermarket industry soon like hazards from organisations merging could change the total amount of power and affect them, nevertheless the international business is still growing and well known to contribute huge amounts to the company's profit till the near future.

Signs of Serial Acquisitions

The company is in risk of learning to be a serial acquirer because of the firepower it has and the blood circulation of its product range usually in the UK while the gap filling up strategy would be useful equally it is to the convenience markets which means this may reduce income visibility and quality.

OPPORTUNITIES

Health and Beauty

Tesco's UK health insurance and beauty ranges grows up drastically, which is currently the quickest growing skincare merchant in the UK market leading in toiletries and professional medical, it also offers a first school service in the baby goods products. It goes on to invest in price to provide the worthiness customers have come to expect and this year invested 27 million on health and beauty rates and it now has 19 ?tor?? with opticians and directly 200 ?tor?? with ph?rm?ci??.

Non-food retail

The company's plan to make its non-food be as big as the food sector is an indicator of expansion opportunity they are really likely to exploit which would see their retail share climb over another couple of years as it improve sales and development, it has good thing about a good clothing brand as well that could bring earnings too.

TREATHS

UK structural change could spark a price war

The price fans in the UK market are going to become aggressive investors in price, Safeway because of now possession and Sainsbury because of now manegement. Morrison is minimizing safeway's prices by up to 6% ?nd Sainsbury is bound to see lower prices is one of the basic changes essential to drive its restoration. With both Asda and Tesco committ?d to price management, this could lead to a step down in industry profitability.

Wal-Mart/ Asda Challenge

Since the united states shopping giant Wal-mart purchased Asda, Tesco's ranking as the very best UK supermarket has been threatened. Asda is now able to compete very well on price and range of goods. For as soon as, Asda is the 3rd largest supermarket in the UK, just behind Sainsbury's and then Tesco. However, Asda sealed the space on Sainsbury's in 2003, leaving the business to directly struggle Tesco's dominance. Tesco is well alert to this, and has so far been quick to maintain with price reductions or special deals at Asda. Wal-mart may also decide to wield its buying vitality more heavily in the united kingdom, which could spell the end of Tesco's brand dominance in the foreseeable future.

Hence, the necessity for contrast with a comparatively successful and large retail company is needed to be able to justify the challenges the retail sector is facing in the prize and performance management world, this might enable someone to measure the situation more and leads me to the conversation of praise and performance management in Waitrose supermarket in the next paragraphs.

PERFORMANCE AND Compensation MANAGEMENT IN WAITROSE

Waitrose is a relatively big supermarket in the UK; it offers 221 branches over the United Kingdom. Waitrose creates some function of uniqueness for itself from rivals by offering high quality food and emphasising good customer services which is fundamental for the success of any company.

However, for the company to attain the required level of customer services offered, they strategized by causing cultivating the culture of making all its employees a co-partner which is very welcoming from the view of any employees as thus giving them sense of belonging available running, lovers get certain benefits called collaboration bonus which is just about 10-20% of any partner's gross annual income which is paid in a value sometimes in the year, discount credit cards are granted after 3 months of service which entitles them to 15% discount in Waitrose and 25% in John Lewis departmental store concerning rewards for his or her efforts into the success of the organisation, this appear to be a good effort to reward the employees for his or her good and effort.

There is a concentration to train new associates for customer services skills, health insurance and safeness, fresh food handling and fire protection, companions are trained to drop whatever they may be doing(within reasoning) upon the submission of the customer and lead customers to the merchandise, which means this shows the amount at which customers are being taken up to be their priority.

In 2005, there is an intro of performance management structure called "Mystery Shopper" which results its branches on the service they provide considering the display, service on the shop floor by the employees which range from the service counters, checkouts, wines, grocery departments and basic assistants, this initiative is thought to help keep degree of performance of each partner on top but it is still left to be known if it's a motivator for good performance or strategy for the organisation to succeed

In 2008 Waitross introduced training for its partners with a new program called 'fresh on service' which seeks to lift center service specifications and continue steadily to make the business enterprise stand out from its competition by training partners to become more confident on the job to provide great service by inspiring among other activities an attitude to trust things can be done. (www. johnlewispartnership. co. uk)

At this aspect, it can be deduced that Waitrose attempts its better to attain the best performance level with selection of offers and trainings they give to the partners of the business enterprise, additionally they train visitors to be managers, and where university leavers are being trained to become section managers within an interval of few years, then they also offer a graduate design that groom people attaining high managerial content within some few years.

The previous few paragraphs evidently shows how Waitrose rewards its co-partners in order to attain its set goals however the argument is that, does indeed these rewards and benefits directed at the partners stimulate and spur all of them to set up a better performance on their jobs, is money a good key to motivate them or is everyone determined with tangible things?

This leads me to point out the challenges confronted by Waitrose according of Performance and Pay back Management.

  • Inability to manage performance
  • Non-existence of Specific/Team Reward
  • Too centered on customer satisfaction
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