Employee Motivation and Organizational Performance in Retail Case Study

Discover intrinsic and extrinsic motivation factors, motivation models like Maslow and Herzberg, and key drivers for improved productivity, employee engagement, and business success.

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Literature Review

Introduction of Employee Motivation On Organizational Performance In UK Grocery Retail Sector

Evaluating The Impact Of Employee Motivation On Organizational Performance In Mid-Sized UK Grocery Retail Sector - A Case Study Of TESCO

Organisational performance is directly proportional to the motivation of employees. A performing organisation is one which is achieving its goals. According to Mason and WRLC (2020), organisational performance objectives are navigated towards achieving improved profits, sales, innovation, and market share. Employees are an integral part of an organisation. An organisation can perform well when its employees are fulfilling their tasks. A positive attitude of employees is vital for a functional organisation. Management of a performing organisation needs to ensure the performance of the organisational plant, equipment, finance, systems and employees to achieve the strategic goals of the organisation. Priorities of an organisation need to be set for outstanding performance. An organisation is dependent on the motivation level of its employees to perform. Low motivation generates low productivity. Performance accomplishment of employees must be rewarded to encourage the motivation of employees. Motivated employees act intelligently and appropriately. Productivity, profit, quality of work life, employee turnover, quality of product, a satisfaction of customers and service are the parameters to measure the performance of an organisation.

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Definition of employee motivation

The energy, enthusiasm, commitment, desire to work and creativity brought by an employee to a particular organisation defines employee motivation. As per the opinion of Lasisi (2018), motivation ignites the urge to perform in a manner that can fulfil the goals of an organisation. Employee motivation needs its establishment in an organisation whether the economy is growing or sinking. Management needs to take the concern to employee motivation. Large businesses and small businesses have different roles to play in employee motivation. Employee motivation is related to intrinsic and extrinsic methods. Large businesses have the ability to provide extrinsic rewards to their employees. Small businesses sometimes face problems to provide extrinsic rewards. Small businesses can give an ideal office environment. Feedback in small businesses is swift. Employees perform better in a free work environment. Owners feel less burdened when their employees work diligently. Feedback is an emotional reward. Employees feel the difference in a free work environment where creativity can take its ride. A feeling of accomplishment is the result of good work performance.

Rewards are also necessary. According to Pohjolainen (2021), material rewards are necessary to improve employee motivation. Organisations have the responsibility to make policies that can improve employee performance. Organisations need to know the functions of motivation to motivate its employees. Incentive policy is established already. Organisations can apply different motivational theories by having a deep understanding of the individual traits of their employees. Motivation is actually an inner feeling that inspires employees to perform tasks willingly. Some people are motivated by challenges. Employees sometimes prefer certain autonomy in their work. Organisations need to provide opportunities to grow higher. TESCO pays for hard work. They organise seminars, and training sessions to upgrade skills. As per Ratemo (2018), the job itself should provide satisfaction to motivate employees. Sufficient scope, challenges, variety and skills in the job motivate employees. Motivation means competence. Increased payment can motivate employees. Promotion plays a role in the way of motivation. Career advancement is important to boost performance. Discipline also has a slight role in motivation. Employees need to work diligently with certain rules to perform. People generally do not like criticism. Employees try to work in a manner that can deviate from criticism. Fear of payment withholding action encourages employees to perform. Motivation in an employee can find its root in various sources.

Types of employee motivation

Intrinsic and Extrinsic motivations are seen as two types of employee motivation. As stated by Barrett et al. (2020), Organisations need to understand that employees are individuals with different qualities. An organisation needs to acknowledge the various aspect of motivation to motivate its employee effectively. Employee satisfaction and engagement can be increased by categorizing different employees and motivating them accordingly. Two types of motivation get various responses from employees.

Two types of employee motivation

Figure 1: Two types of employee motivation

(Source: Inspired by Kadir, 2019)

Internal elements of an organisation generate motivation in employees. Teamwork, training, performance appraisals, employee satisfaction job security, compensation, incentives and rewards and the structure of the organisation play a key role in the performance level of employees. Motivation plays a psychological role in performance. Motivation increases willingness towards work. Motivated employees can easily choose the direction in which they need to work. They are able to fulfil the organisational needs. They possess the desire to perform. TESCO needs motivated employees to widen the growth of the organisation. The company gave support to the employees in various manners. TESCO motivated their employees by providing a balance between work and life. Reward, training, and appraisals are key factors in the motivation of TESCO employees. Motivated employees help achieve desired goals ahead of time. An organisation by growing in an effective manner is able to satisfy its customers’ needs. Motivated employees are attentive towards their work. This quality of employees reduces the chances of mistakes at work. TESCO‘s growth increased its workforce worldwide. Leading grocery retailer, TESCO is performing well and effectively with the performance of their motivated workforce.

Intrinsic Motivation

Intrinsic motivation gives motivation from within. An employee feels the urge to perform well. An organisation by applying intrinsic motivation methods helps the employees to give better performance in their workplace. As per the opinion of Kadir (2019), employees perform according to their belief system. An individual’s deep-rooted beliefs can give him the highest motivation. Intrinsically motivated employees have the qualities of acceptance, respect, urge, desire and curiosity. Intrinsic motivation can be increased by praise and positive feedback. Supervisors and managers play an important role in instilling intrinsic motivation among employees. An employee has the ability to understand the ingenuity of feedback. Intentional positive feedbacks are necessary. Leaders need to make sure that the employees understand their expectations. TESCO motivated its employees to upgrade their skills to perform well (academia.edu, (2022). The organisation motivated employees to identify the task properly and understand the significance of the task. TESCO provided intrinsic motivation by not only giving positive feedback but also providing certain autonomy to work.

Extrinsic Motivation

Extrinsic Motivation provides motivation to individuals through external factors. Rewards and recognition are the main external factors that work in proportion to employee motivation. Different employees have different qualities. Intrinsic motivation does not work always on all employees. Extrinsic motivational factors play a vital role for those types of employees. Extrinsic rewards promote willingness among employees. As stated by Weinstein (2018), they become more interested to achieve new skills. Bonus, perks, and awards motivate people to grow in their work field. Incentives also play a key role in extrinsic motivation. Performance needs rewards that can boost the energy to perform better. Rewards are linked towards higher performance criteria. Incentives and bonuses grow the urge to achieve goals. TESCO gave its employees impressive External rewards. The employees of the organisation performed constructively together to widen the growth of TESCO. Performance appraisal played a vital role in the company’s overall growth. Employees felt more satisfied while working at TESCO.

Model of employee motivation

TESCO needs motivated staff to support its growth. Staffs need to be flexible and trained. Staff must have the ability to recognise the needs of customers. TESCO’s employees got the support of the company at different levels. TESCO provided support to departmental managers, logistics staff and warehouse employees. TESCO recognised the importance of motivation in the performance of employees. As per the opinion of Weber and Badenhorst (2018), TESCO motivates its employees by providing job satisfaction, timely appraisal, incentives and skill training. TESCO recognised the performance of employees. Recognition promotes growth. TESCO ensured the employees’ commitment towards the company. TESCO followed model methods to motivate employees.

Maslow Model

Humans feel motivated by five essential needs as per Abraham Maslow. A pyramid structure demonstration is given by Maslow in the name of the hierarchy of needs model. Basic needs like food and shelter are at the bottom of the pyramid. Security needs to get the next place in the pyramid. As per the opinion of Matacena (2019), TESCO ensured security by providing schemes related to pensions and sickness. Employees got the option to join the union for a better sense of belonging to the organisation. The company ensured the health and safety of the employees. Social needs get the 3rd position from the bottom. TESCO encouraged team working. Positive working conditions encourage group work among the staff. The social esteem of the employees was prioritised in TESCO. Self-respect and respect for others and praise for hard work helped to achieve self-esteem in TESCO’s employees. Self-fulfilment is the final level of Maslow’s pyramid. TESCO gave personal development plans by identifying talent and by giving promotion opportunities. The fast-track management programme helped TESCO towards its growth.

Motivational theory practice

Figure 2: Motivational theory practice

(Source: Inspired by Shi, 2018)

Herzberg Model

A two-factor theory of motivation is Herzberg's model. Satisfiers and hygiene factors are the two factors. Achievement, recognition, job role, responsibility, promotion and growth work as satisfying factors. Personal life, working conditions, job security, supervision, relationship with co-workers, company policy and administration and pay and benefits play as hygienic factors in the Herzberg model. According to Shi (2018), TESCO provided opportunities to its staff and managers to take an interest in their own work. Different needs and aspirations of employees were encouraged by TESCO. The company provided salary friendly environment to work. Supportive teammates are important in hygiene factors. The availability of hygiene factors enables perfect workplace support. TESCO offered both satisfiers and hygiene factors to ooze out the best possible outcome from their employees.

Key aspects of employee motivation

The pressure of the workroom can make a person flinch, regardless of their respective job and decreasing motivation for one’s work makes an impact on the organisation in a much worse way. If a company were to lose one of its hardworking staff due to lack of work inspiration, it could take a long time and sometimes even years to fill the satisfaction and position the company with another employee mating the graphs (ism.edu, 2022). Companies should motivate their workers which will make them work efficiently with loyalty for years. By proving new and challenging tasks, TESCO is making a great effort to keep the employees' engagement with their work, productivity and motivation for the job at a high level. A new creative task can provide the staff reduce the boredom and exaggeration of the job, on the other hand, a challenging task can provide the workers with a sense of importance that will make them realise the value within the organisation. There are some key aspects of essential ideas that a company can assimilate its employees motivated, these are

  • A hassle-free work environment: the productiveness of the company largely depends on the atmosphere of the workplace of the organisation. In the words of Pohjolainen, (2021), The overall setup of the workroom can be left a great positive as well as negative impact on the employees' actions, feelings and engagement with their work.
  • Communication: Regular communication between the employees and the regulatory body is a very easy way to bring motivation among the staff. Opening up with a pleasing conversation can make the employee feel valuable;e as a person in the company which will lead them to realise there are some people in the company to whom they can approach.
  • The art of constructive criticism: Motivation for the employee is nothing but positivity or getting the p[ositive feedback from the higher authority for the job they have done. As stated by Jackson, (2018), too many admiring comments can sometimes make the staff insincere. Feedback should be positive and negative which will help the employee assess themselves accurately and helps them to improve their work.

It is always a must-important thing to support the employees’ inspiration and well-being. A person with a good mentality can work on improving themselves which will make them stay loyal to any organisation that is looking out for them.

Organisational performance

The performance of an organisation is the capability of an organisation to achieve its targeted goals and optimizes the results. In today's competitive industry, organisational performance can

Be considered as the ability of a company to reach its goals in a place of constant change. The regulatory body shares its responsibilities together for ensuring the employees’ contribution to the business. TESCO is one the leading company in the present industry that used management of performance and leadership in the retailing industry to develop business success rate. According to the speech of Elberg and Noton (2019), from the very wee hours of the foundation in 1919 in London and starting its production in 1924 TESCO has become a multinational company now securing the second highest place based on its revenue. According to the graph, of TESCO in 2019, the turnover of the company in the U.K. has touched about $6000 each minute. Though in 2010 TESCO faced some problems with its monetary performance that led to its wealth of shareholders with a fall.

The main purpose of performance management is to increase the productivity, quality and efficiency of controlling the resources of the business in order to dominate the industrial market in long run. According to Pohjolainen (2021), TESCO has its aims to stay longer in the market the retail industry and to ensure that the company is making good quality products and satisfactory services with affordable cost and competitive prices lower than the rival companies.

Here this statistical graph depicts the average number of individual employees in TESCO in the U.K. which shows the company’s upgrading success rate for every upcoming year. As stated by Schamp (2019), by reducing cost, being innovative, producing performance measurement tools and techniques, communicating about the performances with stakeholders, taking feedback from the customers as well as from the employees, maintaining the balance sheet, monitoring the financial performances and taking risks in the market, TESCO is leading the organisation as well as the employees to a better performance day by day.

Key drivers for organisational performance

The organisational culture of a company is the main ground of the company on which everyone and everything in the organisation stands- it is the main field from which the sustainability of a business develops. And here strong and balanced leadership is the main key driver for organisational performance that will need to succeed in the upcoming future. But here the main trouble is the leaders with good intentions do not give importance to the culture during disruption rather they provide focus on guarding the liabilities and boosting the efficiencies. In the words of Dos Santos (2020), research has shown fact that the best leaders do not remain in the mode of defence rather they play the role of offence by examining the importance of creating a strong company culture and providing resources to initiatives that sports it. Like this, the leaders of the industries have been treating disruption like fuel for long-term growth in the market. Side by side the values and rituals of any company are another key factor for the organisational performance, as strong values make the leaders `to be to stay aligned in every communication and update ng the team. That is why clear and lucid values are an example of landmarks that provides guidance to the employees and lighten up the path ahead.

Modifying the culture of the organisation requires the leaders to hold their teams on productive paths that will help them to flourish individually. Leaders have now found opportunities to transform the culture depending on performance development where every individual is capable to develop as they achieve the outcomes for the organisation. As stated by Lasisi (2018), on the other hand, the performance of the employees, as well as the organisation, is another key driver for the success of any company. When the chief regulatory body gets its performance management right and the “how” becomes a powerful inspiration for everyone who belongs to the organisation, though this is invincible it can be felt by the employees well as by the customers alike. The chiefs who take the time to nourish and fertilize their culture by acting on palpable drivers, sowing seeds which will bring amazing benefits especially when disruption is utilized as an energy source to drive towards the bright possible future.

Impact of employee motivation on organisational performance

Motivation is the prime need for making the employees devoted and improving their mind set by using some strategies of human resource management. TESCO believes that by keeping the employees happy and inspired they can achieve a better outcome for their organisation.

Supervisors of different companies are devoted to using contrasting methods of motivation built by business researchers based on the need of the establishments. According to the words of Mason and WRLC (2020), it is one of the most important tasks of any regulatory body of companies. Inspiring the workers makes it quite easy for the management to increase the profit and outcome of the organisation and accomplish their goals by developing the standard of the services. The supervisors use different techniques and tools to inspire the workers to increase their self-confidence and devotion towards their work. Like TESCO is trying to give its workers a better package of salary and yearly and occasional bonuses based on their work and improvement in their respective work. First and foremost the organisation tried to meet their employees’ psychological and basic safety needs. Focusing on assuring a healthy and better working atmosphere TESCO is providing a professional balance in work life, increasing the safety of the work and their health by providing medical facilities as well. They also make their workers permanent after a certain period of service.

The most general way is by giving rewards and commissions for their every better work and as a result, they get a huge benefit from the employees are:

  • Employees execute their work very well which leads to their productivity on a high scale of admiration.
  • Workers who are motivated build healthy long-term relationships with honest customers and their organisations.
  • They can take part in the company’s decision-making procedure and become better assets of any organisation.

Motivated staffs of a company are very honest to their organisation and add value and social status to their service. In this way, they are driving their best selves in the companies. In the words of Balthu and Clegg (2021), whenever an employee is providing his or her best in the workplace or respective service the workflow becomes more dedicated and efficient. Thus the ability of the organisation to create a high standard of work increases. With time employees are getting able to take on more and more responsibilities without compromising the actual quality of their work. As stated by Kadir (2019), the company can upgrade both the productivity and the quality of the product effectively with the help of theory-inspired workers. With this outcome, organisations can provide their staff's proper recognition as well as incentives while receiving fresh talents to increase overall productiveness in a very significant way.


Organisational performance has a directly proportional relation to the motivation of employees. The accomplishment of the performances of the employees in an organisation must be awarded to encourage the motivation of employees. There are two types of motivation employee motivation, one is Intrinsic and the other one is Extrinsic. The organisational culture of a company is the chief ground of any company on which every staff and everything in the organisation stands, it is the main field from which the sustainability of a business develops. With this result, organisations can give their employees, proper recognition as well as incentives while receiving fresh talents for the betterment of overall productiveness in a very significant way.



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