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Employee Motivation in Business Organizations: Theory and Practice at Tesco and Walmar

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BA 501 Organizational Behaviour EMPLOYEE MOTIVATION IN BUSINESS ORGANIZATIONS - THEORY AND PRACTICE AT TESCO & WALMART - Lorena Gamez Alex Heusener Janine Jaeschke Schiller International University Fall 2006 November 21, 2006 TABLE OF CONTENT INTRODUCTION 1 APPLICATION OF MOTIVATIONAL THEORIES 2 TESCO VERSUS WALMART 3 Maslow's Hierarchy of Needs 3 Herzbergļæ½s Two Factor Theory 5 CONCLUSION 6 SOURCES 7 INTRODUCTION Motivation originates from the word "move" and refers to the internal drive necessary to guide people's actions and behaviours towards the achievement of some goals. It is the force that makes people do things, which results from individual needs being satisfied (or met) giving people the inspiration to complete the task. Motivation is a multiple-step process that moves a person towards a goal. However, motivated behaviours are voluntary choices controlled by the individual employee. In a corporate environment, the supervisor (motivator) wants to influence the factors that motivate employees to higher levels of productivity. Motivation and Performance Management usually go hand-in-hand. Performance Management consists of all activities that ensure that goals are consistently being met in an effective and efficient manner. The focus of Performance Management can be placed on the performance of the organization as a whole, a single department, processes to build a product or service or the individual employee. Basically, Performance Management is the practice of actively using performance data to improve the organizational health in terms of quality, financial aspects, learning effects of the employees, decision-making and managing organizational change. ...read more.


While Tesco sees motivated employees as an asset/driver to profit maximization and market-share growth, WalMart focuses on maximum cost reduction (at all levels) as a driver to profit maximization. As a result of its practices, Tesco enjoys a good reputation among the public and its employees, with 81% being very or extremely satisfied. This has led to Tesco being awarded with the 'Employer of the Year Award' in the UK in 2004. In contrast, WalMart is widely criticized for its policies and business practices, which results in an estimated average of 1500 lawsuits running against the company at any given time. Consequently, an average of 44% annual employee-turnover is not surprising and contributes to the company's ambiguous reputation. The differences between the two companies become even more obvious when contrasting them using the motivational theories of Maslow's Hierarchy of Needs and Herzberg's Two-Factor Theory. Maslow's Hierarchy of Needs The fundamentals of Maslow's hierarchy form the physiological needs. They encompass basic human needs to sustain life itself and family. Tesco responds to those needs through fair and adequate payment and offering flexible working hours to its employees. On the other hand, WalMart only pays the minimum wage which is just enough for its employees to live above the poverty line. Furthermore, WalMart employees are forced to work off-the-clock if necessary without getting paid for the overtime. The second level are the safety, security and self-preservation needs, which particularly concern the future. ...read more.


reflect the lower level needs, whereas the motivators (satisfiers per-se) are mainly focused on the higher level needs; it mainly describes needs in terms of satisfaction and dissatisfaction. According to this theory, motivating employees is a two-step process, consisting of firstly providing the hygienes and then motivators. The key point is that hygiene factors do not motivate, but if they are not very good, then the satisfiers will not motivate either. As illustrated in the case of WalMart, its motivational plan is condemned to fail, because the emphasis on motivating employees by merely creating a sense of belonging (as motivator) is not enough, as long as the basic hygiene factors are not covered. On the other hand, Tesco seems to fully understand this concept and its application, since it further empowers the effect of motivators through providing a solid basis to build upon (correct implementation of hygiene factors). CONCLUSION When companies see employees as an asset and manage them well (performance management, and motivation) these valuable "assets" will generate the maximum, and live up to their fullest potential. Thus, companies should design a tailored motivational package that, when implemented, will lead to optimal employee satisfaction/motivation . As a result, this will cause a change in performance and help employees utilize their full potential, and even excel. Ultimately, the employees will contribute to the company's success and growth through meeting its objectives, and eventually maximize its profit. SOURCES Key point: hygiene factors do not motivate but if they are not very good then the satisfiers will not motivate either . 7 ...read more.

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