With the coming of planetary fiscal crisis hitting difficult about all over the Earth and impacting both domestic and transnational companies, the period of economic downswing has influenced the corporate and human resource schemes of every administrations ( Hay Group, 2009 ) . Forces and labor costs being one of the important outgos in most companies, is frequently the immediate mark for cost film editing as portion of the asceticism steps of companies in crisis. Decrease in work force head counts, benefits or freeze of compensation addition will hold an inauspicious consequence on the work force. This circumstance demoralises the people within the administration particularly those who are first-class performing artists that contributes much to the realization of overall company aims and ends.

As in the instance of the first retail merchant, TESCO, a vulnerable economic state of affairs forced the company to suit strategic alterations in both external and internal environment. Human resource direction is the chief mark of internal environment of the company to turn the crisis into chance by following and using the HR theories and patterns into its schemes.The attending of this study is to pull out some theoretical constructs and rules of Human Resource Management along with the critical analysis in the instance of TESCO. In depth deductions, comparative analyses, amplifications every bit good as decision and recommendation will be presented towards the terminal of this study.


TESCO is UK ‘s biggest private employer holding more than 470,000 employees dispatch globally. The elephantine retail company is runing in 14 states including China, Japan, Turkey and United States in line with its international enlargement scheme to diversify and turn concern ( TESCO 2010 ) . Its enlargement attack was made possible through a combination of geting new shops and client based and centred version procedure. Relative to the enlargement and growing of the house is the growing in the work force.

In order to complement the organizational push of TESCO, it needs to maintain extremely flexible and well-trained staff that responds to the demands of their clients of both in shop and non-store maps and operations.Changeless betterment in the employees ‘ cognition, accomplishments, attitudes and occupation satisfaction is critical in the sustained growing of the company ; TESCO strategizes its human resource direction attacks. With the economic downswing being experienced by companies like that of TESCO, keeping quality human resources is an acclivitous conflict. Human resources are the common casualty in recession among of which is the decrease of indispensable preparations and calling development activities. Others may fall back in cutting benefits and other inducements ( Boston Consulting Group 2009 ) . As Tesco diversify and spread out its concern, it is necessary for the company to engage the right people in the right topographic point at the right clip ( Torrington, Hall, and Taylor 2008: 51 ) .

Discussion: The HRM Theories and Practices Applied by TESCO

Balain and Sparrow ( 2009 ) suggested that employee battle is a dynamic procedure in human resource direction whereby good motivated employees will be able to lend to the overall aims of the administration or company by progressing the company involvement and its clients at all times. Such type of battle is a signifier of payback for trust and investing made by the administration in its work force and human resources. Under asceticism steps, employee battle will be a concern wherein the attempt and committedness of the employees to execute good although inauspicious economic status is critical and critical to the endurance of the administration. It is hence necessary for the companies to concentrate on the option or and benefits or intangible wagess to accomplish or keep higher degree of employee committedness and battle to the company.

Sutherland and Canwell explained that pecuniary inducements are simply short-run motive. In order to prolong and complement the growing of the company despite the planetary economic downswing, non-monetary inducements is of import, it includes occupation expansion, occupation enrichment, occupation rotary motion, and assessment ( Sutherland and Canwell 2004: 189 ) .TESCO are cognizant that they needed work force that is motivated, flexible and well-versed of the client demands. Sing the bing fiscal restrictions in human resource development, the company motivates employees through non-monetary benefits such as increasing their cognition base, accomplishments and occupation satisfaction cost effectual custodies on preparation plans along with timely acknowledgments and minimal wagess ( The Times 100, 2011 ) .TESCO believes that motivated human resources will be able to work excess stat mis and maximise end product. This therefore creates efficiency at work therefore, cut downing cost of labor.

It will besides necessitate lesser supervising as each single tend to take pride of their several work. It is besides expected that good motivated employees are more focussed, shows greater trueness to the company, less absenteeism and are less likely to acquire involved in industrial motions or struggles ( The Times 100, 2011 )With limited fiscal resources poured out in developing manpower accomplishments, TESCO resorted to the use of assorted motivational theories. Among of which is the Taylor ‘s Motivation Theory developed by Frederick Taylor in 1911 which advances the premiss that people worked for pecuniary benefits as the premier motive ( Accel 2010 ) . This theory was interpreted by TESCO through their Employee Reward Programme which chiefly offers comprehensive fiscal bundle for first-class performing artist and extremely productive employees ( The Times 100, 2011 ) . However, the company highlighted on the non-monetary benefit riders of the bundle. Among of the motivation factors that was implored by the company was to aim the prevalent life styles of the employees and offer benefits that suits their demands. Besides the company emphasised that it is more rewarding if employees exhibit their love for work and their satisfaction to be of service to clients being following to none ( make non understand? ? ? ? ) .Harmonizing to Elton Mayo who develop motive theories at work in 1930 ‘s explained that motive at work will be catalysed by internal and external factors such as good communications, teamwork, involvement in others, active engagement in determination devising procedure and publicity of entire well-being ( Envisionsoftware 2009 ) .

This theory emphasised that people are far more motivated at work when they are more valued and holding a grade of brand informed picks and recognizing their societal demands. This construct has been applied in TESCO by advancing an effectual communicating procedure whilst guaranting extreme employees engagement ( Beardwell and Holden 2001: 190-1 ) .Figure 1: TESCO 360 degree feedback: the Personal Development Tool( The Times 100, 2011 )Besides, Tesco implemented the self-development tool called 360 grade feedback sing Mayo doctrine. The tool aimed to assist employees and their directors to understand strength and failings in order to supply the suited preparations. This has been manifested by the company ‘s policy for directors to pass on one-on-one to its employees. Line Managers are on a regular basis carry oning team meetings and follow up on their mark ends and public presentations. Company communicating instruments are being published on a regular basis even to the day-to-day footing which highlighted the value awards of staff who accomplished something for a twenty-four hours as a agency of recognizing accomplishments ( The Times 100, 2011 ) .Figure 2: Maslow ‘s ‘Hierarchy of Needs at TESCO( The Times 100, 2011 )Another popular theory widely used in actuating people and administration is the Maslow ‘s Hierarchy of Human Needs which was presented in the pyramid of indispensable human demands.

The theory explained that people are motivated to work when their basic demands are being met through their plants. After their physical and physiological demands are being meet, they tend to work hard to run into their societal demands and their self-fulfilment demands which challenges their innate creativeness and challenges their involvements. The theory suggests that the hierarchy of demands continue to be achieved from one degree to another ( First-level-leadership 2011 ) .Figure 3: Tesco ‘s Employee Reward Programme( The Times 100, 2011 )At TESCO, people are being provided with competitory rates of wage, indispensable installations for favorable on the job conditions, and lifestyle wagess for hiking the motive. Employees in Malaysia, for illustration, received the minimal salary 30 % higher than its poverty base line. Furthermore, people in several states such as Thailand will acquire excess benefits such as price reduction nine card, life insurance, house loans, and portion ownership ( TESCO one-year Report and Financial Statement 2010 ) . In footings of security demands, the company assures security of term of office through their written contracts every bit good as the proviso of pensions and other societal benefits.

Figure 3: Performance Management of TESCO utilizing Steering Wheel with KPIs( TESCO one-year Report and Financial Statement, 2010 )On top of these basic demands, the company provided the Steering Wheel that supported persons and group to work in a squad and usage Cardinal Performance Indicators ( KPIs ) as a measuring of the advancement ( Corporate Responsibility Report 2009 ) . To guarantee that all employees are valued, TESCO are underscoring self- regard, regard for others and a witting acknowledgment of employees achievements ( The Times 100, 2011 ) .TESCO considered their employees as the greatest plus ( TESCO one-year Report and Financial Statement 2010 ) . The company hence maintains the fight and people capablenesss following the construct of “ Talent Planning ” procedure to assist each employee to accomplish his/her potency. The endowment planning can be defined by Pilbeam and Corbridge as “ the systematic attractive force, designation, development, engagement / keeping and deployment of those persons with high potency who are of peculiar value to an administration ( 2010: 100-103 ) . TESCO besides applies “ Succession Planning ” procedure to prosecute the hereafter needs ( TESCO one-year Report and Financial Statement 2010 ) .

Those employees are ever given due acknowledgment of their accomplishments and endowments. Opportunities are being to carry through their self-actualisation demands through continued preparation plans that fast track capacity developments of staff to make their ultimate calling ends.Figure 4: Herzberg ‘s Motivation Theory at TESCO( The Times 100, 2011 )Frederick Herzberg presented that to better understand the factors that motivates manpower to work, there should be comprehensive apprehension of the work environment.

He argued that other than pecuniary benefits and inducements, people are motivated to work with the favorable working hours and environment. This besides includes work duty, accomplishments and acknowledgments, personal and professional growing besides motivates people to work ( NetMBA 2010 ) . In Tesco, employees are being provided with conductive working environment, appropriate compensation and timely communications.

Peoples are being given chances and necessary support to be recognised on their first-class public presentation and work end products. Staff are being delegated and actively involved in the determination doing procedure such on affairs of the types of wagess even to the sort of nutrients on the bill of fare and the schemes to increase gross revenues ( The Times 100, 2011 )International Human Resource Management ( IHRM ) is cardinal strategic direction for transnational companies. It can be explained that IHRM concerns the direction of different people in different geographical countries and environment ( Scullion 2005: 4-10 ) . IHRM is an of import function in the period of asceticism. Most transnational companies have been seeking to happen the new market topographic point to cut down the hazards by diversify their market topographic points. TESCO generates competitory advantages over its rivals by beef uping human resource preparation and development squad world-wide. TESCO Academy hubs were located inSouth Korea and the UK as the preparation Centres.

TESCO besides upgrades human resource squad by puting up Tesco Foundation Degree in Retail delivered and awarded by Manchester Metropolitan University ( TESCO one-year Report and Financial Statement 2010 ) . This aimed to increase possible and capableness from cognition sharing in footings of both concern and human resources, particularly cultural differences around the universe ( Armstrong 1999: 79-82 ) .


Strack et.

Al ( 2009 ) explained that there is a great danger for companies to drastically cut their work force in line with its asceticism steps as an immediate response to economic downswing. Companies may happen the copiousness of endowment and human resources at present happening it easier to cut down the figure of employees to cut down manpower cost and survive in the industry. However, this measure should be the last resort. Companies should look at recession as an chance to animate and introduce their human resource direction attacks. They should keep the rule that meagre resource would non intend leaner work force.

Leonard D’Costa and Murali Aiyer ( 2009 ) reiterated that pull offing the inauspicious impact of economic downswing to the human resources of the company should be to the full understood. Drastic steps such as asceticism that are made as a speedy reaction to the crisis should non be considered as ever positive and concluding. Alternatively Human Resource Managers should take adequate bravery to be resilient and take adequate sum of bravery to be advanced and influence leaders with a long term schemes that will turn to the job. Leaderships of most companies should gain that there is no 1 size fits all or speedy hole attack in maintaining human resources feasible under a badly severe environment. All solutions must hence be originative and sustainable.It is ever a tough challenge for companies to better the battle of their employees and guarantee their committedness to work and be productive. Austerity step will certainly stop dead or even understate pecuniary benefits in order to maintain the company afloat and retain its people at work. However, the quality of the work force might deteriorate as they tend to lose their premier motives.

It should hence be carefully handled and managed. It is besides observed that asceticism step is non a important factor in TESCO ‘s experience as it is a immense administration where human resources development is good funded activity. However, its bing pattern and motivational attack where non-monetary inducements and benefits are given accent and highlighted is believed to work good in an severe environment.


As in the instance of TESCO, it is clear that actuating employees does non ever mean pecuniary benefits. It proves good that employee-employer dealingss should be strengthened at times of recession particularly within an severe environment.

As this study highlighted, it is clear the assorted direction and motivational theories can be to the full adopted and utilized to implement human resource direction plans that will offer non-monetary benefits as actuating factors to employees. This shows that people at work can still be mobilised and motivated in assorted advanced ways.Austerity measures hence creates and chance for companies and human resource directors to be more advanced and originative in crafting schemes that will maintain its people and the company traveling. TESCO ‘s human resources motivational attack is a concrete illustration that people can still be productive and motivated at work even under really limited resources.

All it takes is to foreground on the non-monetary benefits that a company is capable of supplying to its employees. It is necessary for the human resource directors to amplify the assorted demands of its employees that can be supported or provided in a non-monetary signifier or at least at a minimal cost. Whilst it is inevitable for the company to incur cost in implementing human resource plans, but it is far more low-cost and sustainable if it is in a non-monetary signifier of actuating people.


Based on the instance survey cited in this study, TESCO used assorted motive theories to guarantee the viability of its human resources. The company clearly elaborated on the non-monetary benefits of its employees to maintain them motivated and committed at work.

The company goes beyond the realization that money is all it takes to maintain people traveling. As exhibited in TESCO ‘s reading and execution of assorted theories, it showed there are several ways of actuating people to acquire engaged with the company and finally go committed to their plants.The assorted theories applied by TESCO and implemented with the corresponding plans as manifested in the company ‘s work force planning showed that people can be motivated holistically. Human demands are glorious and these can be a good beginning or grounds of their motives. It is in this context that the herein theories were able to work at TESCO ‘s motivational human resource direction attacks. Each theory complements each other.

There is no individual theory that absolutely works on its ain. It is hence recommended to accommodate the theory or theories to be used in the company ‘s bing policies and capacities to prolong the alterations and or invention in line with the asceticism policy.The TESCO attack is extremely applaudable even to those companies non every bit large as it is. The company ‘s reading of the theories and attacks being used can besides be made by those companies who wanted to maintain the dynamism and plangency of its human resources in an severe environment. Small companies could even reinvent its bing human resource policies to use motivational theories that suit their recent state of affairs.

However such step should be complementary to the administration capacity and ability to implement and prolong.Finally, companies and human resource directors should gain that the position on the work force being composed of people and money is non an absolute actuating factor to maintain people traveling to work. It should therefore expression at people holistically non merely as an economic being but as socio-cultural and political person whose motive is non anchored merely on its economic additions. With this, advanced motivation factors can be utilized and antiphonal human resource development plans will be implemented.

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