CHAPTER ONE
1.0 Introduction
Employee motivation is widely undisputed as the most important element in an organization. This is because organizational growth depends on employee performance, which is driven by the motivation of the employees. When an employee feels motivated, the employee will be willing to take complicated risks and work harder when given a task. By contrast, a demotivated employee will be hesitant to take risks and will demonstrate little efforts (Fernandez and Moldogaziev, 2012).
It is normal for a motivated employee to see the organization’s success as theirs. Thus, putting in an extra effort. However, it is not so lofty because motivating employees is comprised of many elements. Although there are many routes that can be taken toward motivating employees, one will examine the reward system. It is a strategy that motivates emeployees to perform exceptionally. In an organisaiton, a reward system is designed around promotion, theincrement in salaries, and bonus (Fang and Gerhart, 2012).
This study will focus on the reward system that is employed by ASDA to motivate and drive the performance of their employees. It will analyse the positive and limitations of its reward strategies on its employees by linking each strategy to employee performance.
1.1 Background of the Research
Reward systems are motivation instruments that stir employee energy and enthusiasm (Byron and Khazanchi, 2012). It increases the determination to do better and strengthens commitment among employees to the organisation. There are various forms of reward systems, which include bonuses, sharing of profits, incentives, and salary increases are the most common methods. Now, modern reward systems have evolved that are acontrast to the ones identified above (Chen et al., 2012). These modern rewards can be categorized into two: group reward system and individual reward system. But reward systems have been described to be complex and difficult (Cummingsand Worley, 2014). Thus, rewards have been segmented by priorities, market competition, organisational objectives, and employee performance (Deciand Ryan, 2012).
This makes it inherently necessary to have a peculiar reward system for each segment. For example, other forms of extrinsic rewards could be used to complement financial rewards, and thus, motivate employees that are not satisfies with the latter. Such rewards may include tickets to important events like football games or tennis tournaments.
Bonuses, financial incentives, overtime pay, and insurance policy may be used to motivate those who are driven by financial rewards. It has also been pointed that recognition is another great form of reward. It requires the senior management to come forward and show appreciation to an employee that has performed exceedingly great on an assignment (Frey et al., 2013).
However, recognition, while a great form of reward, is not intrinsic nor extrinsic. Its capacity to motivate employee remains unanswered. Therefore, as part of this research, one aims to include this factor and other forms of reward to determine their impact on employee motivation within an organisation- in this study, ASDA.
1.2 Background of the company(ASDA)
ASDA is a British supermarket retailer headquartered in Leeds, UK. The company began in 1965 out of the merger between Queens’s Supermarket and Associated Dairies. However, Associated Diaries became the single owner in 1968 after it bought Asquith stockholding- the owners of Queen’s Supermarket (ASDA, 2016).
The company continued to expand in the seventies and eighties with many acquisitions but suffered greatly in the same decade because it spread too thinly. This resulted in a plummeted share price until in the early nineties when a new management under the leadership of Archie Norman and Allan Leightoncame on board. The new management established a new formula that centred around restoring the value of the ASDA brand and revitalizing internal communication and motivation. The formula worked, and the company became successful again, leading to its $10.8 billion acquisition by Wal-Mart in 1999, and thus, became a family of the world’s biggest retailer.
The backing of Wal-Mart has made the company to be Britain’s second largest supermarket with a 16.8% of the grocery market share. The company also boasts more than 160,000 employees and over 525 stores across the UK.
1.3 Rationale of the Research
Just last year, the women working at ASDA won the right to lodge what has been called the UK’s largest equal pay claim in the private sector. This was because an employment tribunal ruled that the women working across the company’s shop-floor could compare their jobs with the ones done at the company’s warehouses that are largely comprised of men. According to the lawyers representing the workers on the shop-floor, the women were earning between £1 and £3 less than those working at the distribution centres. If they win, ASDA may be liable for back payments that dated back to 2002, which has been estimated to be up to £100 million (Osborne, 2016).
This is not the first time that ASDA will be having employment relations issues. In 2005, the company was accused by a charity organization of exploiting its workers. The company was accused of planning to remove sick pay for the first three days, encouraging supervisors to end their rest times as early as possible to serve as anexample to others, and to implement single man loading for a task meant for two people (Macalister, 2005).
While ASDA denied these allegations, it may be argued by outsiders to be true. For example, in the accounting year to 31 December 2015, the company’s profit rose amid slip in sales (). The company aligned this success to its cost-cutting measures, which include areduction in wages, pensions, and workforce as well as areduction in the number of its senior directors. What is the impact of these cost-cutting measures on its employees? Does this reduction affect employee performance in any way? What are the programmes that have been used to complement this reduction in wages and pensions? What is theimpact of these reductions on employee performance and on employee turnover? This study would enable one provide answers to these questions.
1.4 Aim of the Research
This study aims to investigate the impact of ASDA’s reward system on employee performance. One aims to evaluate from this research if its present reward system is relative to the productivity and performance level of its employees.
1.5 Research Question
To investigate the impact of ASDA’s reward system on the performance of its employees.
1.6 Research objectives
1. To review the previous studies on reward systems concept and models that organisations employ and the strategic objective of each model;
2. To identify and outline the benefits and limitations of each of these reward systems;
3. To review previous studies on employee motivation and analyse associated theories;
4. To investigate the predominant reward systems employed by ASDA and determine its impact on the performance of its employees;
5. To provide appropriate recommendations.
1.7 Dissertation Structure
Figure 1.1: Structure of the dissertation
CHAPTER TWO
2.0 Literature Review
2.1 Introduction
This chapter will review previous literature about reward systems and how they drive employee motivation. It will identify why it is important for organisations to have a reward system that will guide them on how to motivate their employees. A deep dive will be taken into the concept of reward system. This would enable a comprehensive understanding of the phenomenon by examining and evaluating different theories around it. Further, one will review literatures on employee motivation and different theories of motivation, and how they impact employee performance in an organisation.
2.2 The relationship between reward system and employee motivation
It is widely accepted that employee motivation has a direct impact on performance and productivity (Cerasoli et al, 2014). This makes it sacrosanct for an organization to develop a system that will address how its employees will be motivated to driver their optimum performance. Achieving this would require that an organization design a reward system that is carefully linked towards achieving this sacred objective. This is often designed and developed with a consideration for both their intrinsic and extrinsic needs to optimize the productivity level of the employees. Further, a reward system could be employed for a specific objective that an organization wants to achieve (Hau et al., 2013). For example, a reward system could be designed to specifically improve the performance of the Business Development department. This is made possible through the wide scope of a reward system, which is comprised of several components such as management decisions and rules that are inherently linked to rewarding employees for their performance and service to the organization (Vance et al., 2012).
Achieving corporate objectives in an ever-changing global landscape demands management to create and maintain a mutual relationship with their employees that would consequently help to achieve corporate objectives (Frey et al., 2013). While there is an expected level of performance that the management wants to see from their employees, which is to perform their given tasks efficiently and effectively and maintain given standard, apply self-initiatives, and an immersion in a learning and development process; likewise, there is an expected level of action that the employees want to see from their management (Frey et al., 2013). For example, this may include a comfortable working environment or an atmosphere that promotes equal opportunity. Because, the expectation level of an organization and employees differs from one to another, addressing these variety demands that the employee motivation process is understood (Cho and Perry, 2012).
2.2. The concept of a reward system
The idea of a reward system comes from the entitled benefits that an employee receives because of a discharged duty or performed task. It remains undisputed that a base pay in exchange for a task performed motivates employees to a very large extent. Thus, the main factor that drives an employee to seek a job is the pay that will exchange hands in return. While there are other factors that drive the definition of what value means to an employee, payment remains the most common (Hamari et al., 2014). Nonetheless, monetary rewards have also been argued to be a demotivating factor (Chen et al., 2012). For example, a motivation that is mainly based on monetary rewards can be challenging for an organization whose employees are not impressed with its payment structure or system (Burris, 2012).
The supporters of the expectancy theory argued that an employee behaviour is directly proportional to performance and will perform at an optimum level if he or she recognizes that there would be a valuable exchange for a better performance. Thus, they concluded in their argument that incentives have the most effective effect on employees and should be employed to drive employee performance to a higher productivity level. As corroborated by Kehoe and Wright (2013), employees can be motivated by incentives, which invariably leads enhances better work behaviour and productivity and will bring the organisation a long-term advantage. This makes a good incentive system to be directly proportional to a better employee productivity and resulting in mutual benefits to the employees and the organization (Robbins et al., 2013).
It was identified above, that a base pay in exchange for the work performed is a key component of a reward programme. However, a base salary can be supported with other benefits such as health insurance, children’s tuition fees, car or car allowance, annual bonuses, and or quarterly bonuses. Several factors and scenarios will need to be considered to determine the most appropriate reward (Larkin et al., 2012). Such factors may include the appropriate rate at which salary will increase within a specific period (Byron and Khazanchi, 2012).It is also necessary that the cost of maintaining the organisation’s key talents be considered. Posthuma et al., (2013) pointed that the impact of motivation to drive employee performance and bring benefits to the organization is also a factor that should be considered, especially as avital element when implementing a major organizational change.
Thus, it can be easily inferred that employee motivation is directly proportional to the growth of an organisation. This supports the conclusions of Thom et al., (2012) that a reward system is the most potent technique to motivate employees. Because the employee needs are comprised of different variables, a reward system is all-encompassing that addresses them all (Aguinis et al., 2013). Thus, employees that feel motivated will perform better and as a result, help the organization achieve its corporate objective (Mowday et al., 2013).
2.3 Different models of reward system
2.3.1 Total Reward System
The total reward model remains the most common reward methods. It is an embodiment of strategic design that promoted learning and development within a work environment (Jiang et al., 2012). It is a reward that has both indefinable and concrete reward equalized and used simultaneously. The government needs to know the concrete rewards, which include base pay and bonuses (Chiang and Hseih, 2012). By contrast, intangible rewards depend on the level of skills learning, and experience of the employee (Li et al., 2012). Examples of intangible rewards included the gained experience, the recognition from theemployer, and more. It has been pointed that a total reward system is mainly designed to enhance the positive impacts that broad reward packages have on the employees’ commitment and dedication to the organisation(Zhang et al., 2013).
Total Rewards Strategy Definition
Compensation
“Base pay
Incentives
Merit pay
Pay increases
Promotions”
“Wages and salaries”
“Base-pay increases based on length of service”“with the organization”
“Base-pay increases based on employee “performance|”
“Base-pay increases based on potential to perform “new job”
“Cash bonuses based on employee performance””
Benefits
Health and welfare
Paid time off
Retirement
Payment for injuries and illness both on and off the job
Payment for vacation time or excused days from work
Payment for work no longer performed based on length of employment
Personal Growth
Training
Career development
Performance management
Skill development through on- or off-the-job instruction
On-the-job coaching to develop skills
Ongoing goal setting and feedback to develop skills
Source: SHRM Foundation
The total reward model plan to have an integration of all important reward strategies to create one group of rewards in a what that one complements the other as well as having one reinforcing the other in an accord. It has been pointed that only when the strategies in the model are in accord horizontally by employee resource activities and vertically by corporate approaches that repeatability can be guaranteed (Pinder, 2014). Further, Muson and Consolvo, (2012) explained that total reward model has some broad effects with long term implications. Because total reward model is comprised of different elements, it will to a large to extent have a huger impact on the commitment, performance, and motivation of employees (Chen et al., 2012). Fernandez and Moldogaziev, (2012) pointed that total reward model remains the most appropriate because it is a brings the best of relational and transactional reward together in one programme. Further, because it is a strategy that demands a comprehensive communication, it represents the complete value of a reward package, and as a result, employees find it more valuable (Trevor et al., 2012). Additionally, because it is comprised of multiple rewards, it seamlessly sparks a relationship with the employees, and thus, collects important data about the needs of the employees. Also, the difficulty associated with relational reward because of individual pay is resolved as it separates the process of recruitment and selection, and thus, creating an atmosphere that promotes the attraction and retention of employees (Gerhart and Fang, 2013).
2.4 Employee Motivation
Motivation and employee performance have been characterized to be directly proportional, and thus, it creates a psychological process that is made possible during the interaction process between employee and the workplace (Seba et al., 2012). Noe et al., (2014) posited that the performance of employees is linked to the specific level of rewards, and thus, adjust performance accordingly to achieve it.
Fang and Gerhart, (2012) broke motivation into three categories: persistence, effort, and direction. Starting with the last, directions tells what an employee is interested in doing; theeffort will show the employee’s willingness and commitment; and persistence shows the level of perseverance that the employee has (Hernandez, 2012). This corroborates the motivation theory that employees direct their energy toward their desired level (Deci et al., 2012).
Figure 2.2: Model of Employee Motivation
(Source: Moriano et al., 2014)
The idea of employee motivation is built on the acknowledgment of unsatisfied employee needs, either wittingly or unwittingly. It is these needs that become burning desires that in turn makes it a priority to achieve a specific objective.
Meeting these needs demand that goals are generated and a plan is developed to achieve the goals (Murayama and Elliot, 2012). The plan will be harnessed whenever there is a need for it, but will not be harnessed if it does not meet the desired objective (Jiang et al., 2012).
There are two processes by which employees can be motivated: intrinsically and extrinsically. The intrinsic motivation inspires from within, that is, it satisfies internal desires. It is generated from the pleasure derived from performing a task or assignment. It may be influenced by autonomy, progression to professional growth, job design, and responsibility (Ifinedo, 2012).
Extrinsic motivation is comprised of external factors that keep the employees motivated. This includes money, criticism, promotion, and demotion that have been identified to drive a great level of satisfaction (Minibaeva et al., 2012). However, while these types of motivation have aquick effect on employee motivation, their effects have a short-term lifecycle (Amayah, 2013).
2.5 Theories of employee motivation
2.5.1 Maslow Hierarchy of Needs Theory
In his research to determine how individuals get motivated, Maslow developed what is known as the hierarchy of needs (Reiss, 2012). He observed that people consider their basic needs as the first objective that must be satisfied. These are physiological needs such as food and cloth. This is followed by an upward movement to security and safety needs such as a roof over their heads. The needs of association then follow, which may include self-esteem, and feeling loved. Lastly, the self-actualization stage (Chen et al., 2012)
Figure: Hierarchy of Needs Theory
As pointed by Schyns and Schilling (2013), it was only one person that reached the self-actualisation stage during Maslow’ study, and the person had satisfied other needs in the needs hierarchy. Thus, it is important that organisations are aware that it is the desire of all employees to reach their highest level and would need the organisation they work for to motivate them to achieve their desired level in the need hierarchy (Cho et al., 2012).
2.5.2 Motivation-Hygiene Theory
A popular motivation theory is a theory by Frederick Herzberg, which is known as the motivation-hygiene theory that outlined the factors that motivate and demotivate employees (Anderson et al., 2014).
Figure 2.6: Motivation Hygiene Theory
Thus, as clearly demonstrated by the figure shown above, there are factors that influence an employee motivation within a work environment. If these factors are considered satisfactory by the employees, then, there would be anincrease in the level of motivation and productivity (Page et al., 2013).
2.6 Impact of reward system on employee motivation
It can be inferred from these reviews that employee motivation is comprised of the rewards that the employee receives. Key talents in an organization can only be retained when the structure of the reward is effective and be designed to enhance efficiency (Heras‐Saizarbitoria et al., 2013). Past research has proven that reward system determines employee enthusiasm (Truxillo et al., 2012). When employees feel adequately compensated, their productivity level will be influenced and vice-versa. Surprisingly, research has proven that as employee’s income increases, money will not be a major motivator, and as the experience of the employee increases on the job, his motivation will also increase (Abramovich et al., 2013).
CHAPTER THREE
3. Research Methodology
This chapter discusses the research methodologies that will be employed to achieve the research aims and objectives that were identified in thefirst chapter of this study. The discussion will comprise of the approaches, philosophies, and strategies that will aid the data collection and analysis methods. The changes in employee productivity will be used to assess the impact of ASDA’s reward system on employee performance.
3.1 Research Philosophy
3.1.1 Positivism
Positivism and interpretivism are two main philosophies that guide researchers. Positivism is premised on the idea that a true understanding of a phenomenon is only achieved when it is observed or measured. Thus, it constrains the capacity of the researcher to the results obtained from an observable and a quantifiable data in the collection and interpretation stage.
As explained by Burrel and Morgan (1979) positivism is an epistemology that examines the causal and regularities with its constituent elements and adopts it for forecasting. It is a philosophy that stands on four pillars, which are: regard for experience and dismissal of all abstractions; abstraction cannot bring fresh insights; separating facts from values; and scientific methodology (Kolakowski, 1972). Positivism is a philosophy with the idea that the world’s future projections can be predicted if the rules guiding the cause and effect are observed with scientific methods. Thus, it relies on quantifiable observations that aids to develop statistical analysis. It stems from an ontological view that requires non-sentimental variable that is discrete and observables to the researched phenomenon in a manner that is repeatable. (Levin, 1988).
3.1.2 Interpretivism
By contrast to positivism, interpretivism is premised on the idea that a true understanding can only be gained through subjective interpretation. It recognises that while phenomenon can be learned in their natural form, it must be subjected to scientific interpretation. Willis (1995) says it is rooted in the belief that interpretations cannot be excluded from the scientific knowledge process because it is part of it. Additionally, that no theory is right nor wrong because the validity of every theory is dependent upon the ways it is discovered and developed.
3.2 Research Approaches
3.2.1 Inductive
Inductive approach is an approach in which the data is developed by the researcher. Thus, it moves from specific to generic. This shift relies on the richness and sufficiency of the data collected as well as its robust analysis (Thomas, 2006).
3.2.2 Deductive
By contrast. Deductive approaches tests theory by using quantitative methods and analysis. It starts with a hypothesis that is strongly focused on the causes. This makes it an approach that is a sharp contrast to inductive approach because it shifts from generic to specific (Hyde, 2006).
3.2 Research Design
Research design is an approach on how the findings will be collected, analysed and distributed. While the design can be either qualitative or quantitative, both may also be combined if so desired by the researcher. The researcher decides the design of the research by considering several factors, but ultimately the framework of the research will be in concord with the design (Burns and Grove, 1997). Polit and Hungler (1995) says the design is largely relying on the structure of the research that the researcher opted for and the level of flexibility that he or she would like to have. But, in general, quantitative design will lead to a structured analysis, while a qualitative design will lead to a flexible analysis (Burn and Grove, 1997).
3.2.2 Quantitative research
Quantitative research is the application of numbers to test hypothesis with the aid of statistical methods (Ary, Jacobs, and Razavieh, 2002).Quantitative approach is a more structured approach than the qualitative approach because it is a more objective, thorough, and systematic process that is confined by a specific plan with the aid of formal applications for data collection (Polit and Hungler, 1995). One will not be using statistical applications for this research, and thus, the research design will not be quantitative.
3.2.1 Qualitative research
The patterns of qualitative research are distinct from quantitative research because data is collected from experiences and perceptions of participants (Vos et al., 2002). This data could either be from verbal or written words by using some purposeful samples and non-statistical applications. It is most useful when more research is required to have a thorough understanding of a phenomenon (Polit and Hungler, 1995). Little is known about the impact of ASDA’s reward system on employee performance and thus, one will be employing qualitative research patterns.
3.3.1 Descriptive Research
Descriptive research explains the full characteristics of a phenomenon (Polit and Hungler, 1995). It can be employed to develop a theory and pinpoint causes of defects in an existing operation and in the actions performed by others in similar conditions (Waltz and Bausell, 1981). One of the benefits of a descriptive research includes its ability to use both qualitative and quantitative data. Additionally, it is also more comprehensive than exploratory because it progresses to explain the explored phenomenon (Knupfer and Mclellan, 1996). Descriptive research will be used for this research because of its flexibility.
3.3.2 Exploratory Research
Exploratory research delves into a new phenomenon that is yet to be studied and aims to discover new perspectives, insights and similar drivers (Brink and Wood, 1998). It has been described as research design that searches the real nature of the subject matter (Polit and Hungler, 1995). Further, with it, the sample has a clearer picture because its results are not constrained to the larger population (Burns and Grove, 2009). One aims to use secondary data to answer the research objectives and thus, the research question is not a phenomenon that has not been researched before.
3.3.3 Causal Research
Causal research deals with a relationship between two variables and it is mainly focusing on achieving two objectives, which is to gain an understanding of the cause and effect and the association between the two variables. (Isaac and Michael, 1971). Thus, the cause and effect are the two variables that the research question in a causal research aims to compare. One will not use causal research design for this study because the cause and effect of the reward system at ASDA is not the purpose of this study.
3.4 Research Strategy
Research strategy is an empirical technique that studies a phenomenon based on reality to validate the phenomenon from an unproven perspective (Yin, 2013). It is comprised of specific objectives that are drawn from the research questions and the researcher’s preferences in terms of data collection with an appreciation for possible constraints that might be encountered in the study (Saunders et al., 2003).
3.4.1 Case Study
Case study could be employed when it is important to clarify the phenomenon and the perspective (Yin, 2003). Additionally, it constrains the findings of the case study (if single) or case studies (if two or more) to be examined qualitatively (Goertz et al., 2008), and then adds richness to the research (Robzon, 2002). There is also some wiggle room for quantitative data, which also adds to the quality of the data (Gerring, 2007). Nonetheless, it does have its criticisms which includes not being objective and short of rigor. It has also been criticized as uneasy to digest, consumes time, and generates a complex document. But these criticisms have been counterargued to be trivial if a case study passes four test, which are external validity, internal validity, construct validity, and reliability (Yin, 2013). Case studies on ASDA’S reward system will be used to determine its influence on its employee performance.
3.4.2 Survey
A survey requires the use of questionnaire to collect the opinions of participants’ population from the sample (Creswell, 2009). Obtaining such data could be via several means such as interviews, observation, phone calls, emails, and online questionnaire. One did not consider survey for this research before the influence on employee performance will be looked in terms employee turnover.
3.5 Population
Research population is the focus of the research. It is the essence of the study and on which findings and analysis will be applied. Impact of ASDA’S reward system on employee performance is the population of this study.
3.5 Sampling procedure
Sampling is the approach of selecting few objects to determine the characteristics of the population. Its accuracy will convey the exact nature of the population; and thus, makes the discovery from the sample to be applicable to the population- helping to have a reduced and manageable population size (William, 2003).
3.5.1 Probability Sampling
Probability sampling is usually linked with surveys so that generalisations can be derived from it. Simple random sampling, stratified sampling, systematic sampling, and multi-stage sampling are the techniques used in probability sampling (Cooper et al., 2003).
3.5.2 Non-probability Sampling
In a non-probability sampling, selection of objects is based the judgment of the researcher and they do not depend statistical models for generalisations. Moser and Kalton (2008) pointed that statistical model are inappropriate when employing non-probability sampling. This study will employ non-probability sampling to investigate the impact of ASDA’s reward system on employee performance.
3.6 Data Collection
3.6.1 Primary Data
Primary research is the first research carried by using a scientific approach to providing answers to unresolved curiosities. It involves using interviews, surveys, and questionnaires. One will use primary research to investigate whether the employees find company’s compensation practice as satisfactory or not and it if influences their performance.
3.6.2 Secondary Data
Secondary data interprets an existing primary research. Here, a research simply collects an existing research on the subject matter and interprets the findings. Secondary research will be employed to investigatethe impact of ASDA’s reward system on employee performance. Interpretation will be drawn from Cases in Management Volume 4.
3.7 Method of Data Analysis
Data will be analysed from the company’s compensation practice and what its employees say about it. This would inform one to determine if the employees are happy on the job or not. It would also enable to know the changes that the employees would like to see in the company.
3.8 Validity and Reliability
The validity of a research is determined by how chosen sample reflects the nature of the population. The validity of this research can be justified from primary research that would include the company’s employees as well as an existing literature on the company’s compensation practice. The validity of a research can also be established if an expert endorses it. To establish the validity of this research, one sought the advice of the supervisor to arrive at the appropriate framework. Reliability queries the repeatability and reproducibility of the instrument used for the study. One took this factor into consideration while determining the appropriate framework for this study.
3.9 Summary
This chapter explains different approaches and philosophies that will be employed for this research and why these approaches and philosophies were chosen. The validity and reliability of the employed framework were justified as appropriate to answer the research questions and objectives.
CHAPTER FOUR
4.0 Findings and Analysis
The aim of this study was to investigate the impact of the ASDA reward system on employee performance. This chapter reports findings on various forms of reward at ASDA. Data on the company’s compensation and benefits practices which include top rate, standard rate, adoption pay, maternity pay, paternity leave, sick pay, and other pay, are among the areas researched in this chapter. It will also present and discuss the findings of the primary research that was carried out at five ASDA stores to determine the satisfaction level of the employees with the company’s reward system.
4.1 Employee Compensation at ASDA
Data obtained from theSDM Research Center for Management Studies (2015), showed that employees are compensated a week in arrears every month. Compensation is decided by using several rates and significant provisions of its compensation rates include the following:
4.1.1 Top Rate- this is the rate that all employees that joined on or after 15th October receive. Employees who got transferred into the company after this date and those that were previously employed have opted for this rate, which are paid at a day rate (6am -10pm) or night rate (10pm-6am).
4.1.2 Standard Rate- this is the rate applicable to employees that joined the company before 15th October 2000 and did not opt to change to the top rate. Thus, when working hours exceed 38 hours in any week, these employees will be paid at the rate if time and one half of the standard rate and are paid at double rate of time of standard rate when they work on customary holidays.
4.1.3 Adoption Pay- this is a special provision for the company’s employees that would like to adopt a child. These employees will be granted adoption leave and pay. They will also be provided with babies@ASDA- a useful information about on adopting.
4.1.4 Maternity Pay- all expectant employees are entitled to maternity leave and pay and may return to work after the leave.
4.1.5 Paternity Leave- expectant fathers are entitled to two weeks of paternity leave. This also is applicable to partners whose spouses adopt a new child or baby.
4.1.6 Sick Pay- Statutory Sick Pay (SSP) is paid to all qualified employees. To qualify, an employee must have worked for a minimum of 39 consecutive weeks before the period of sickness absence.
4.1.7 Other Pay- ASDA has other forms of compensating employees. One of these forms is the 2 weeks leave with pay that employees get for bereavement. Leaves will also be granted to go to court service or other associated public duties.
4.2 Employee Benefits at ASDA
4.2.1Employee Benefits- ASDA has a bonus scheme that is aimed at rewarding employees for their contribution and dedication to the company. It is a scheme that runs from 1st of January to 31st December every year. The actual bonus that will be paid is based on set profit targets and other measures that are communicated every bonus year.
4.2.2 Colleague Discount Card – there is an ASDA-Wal-Mart College Discount Card for employees that have been with the company for at least 12 weeks. The card gives the user a 10% discount on all purchases at ASDA. Another benefit is that the user may have nominated user and they both can enjoy the discount.
4.2.3 Death Benefit Scheme–if an employee is between 21 and 64 and is not in the pension scheme, he or she is entitled to a lump sum payment if he or she has worked for up to three years with the company. The payment will be proportional to the gross earnings in the tax period before death.
4.2.4 Flexible Working–ASDA has several schemes aimed at encouraging work life balance and taking care of home priorities. These schemes help the employees have flexible working conditions with a consideration for family and friendly values. However, when an employee opts for one or some of these schemes, it may affect their other bonuses. These schemes include career break, anti-natal care, dependent leave, etc.
4.2.5 Long Service Retirement – ASDA helps employee transition smoothly from life as a worker to life as a retiree. Once an employee has stayed with the company for at least 5 years, he or she gets support regarding transition into retirement, which includes information such as leisure time, investments, useful phone numbers. These employees receive this information six months prior to State Pension Age, which is 60 for female and 65 for male.
4.2.6 Pension Plan – The ASDA pension plan is available to all employees that have completed six months of continuous service and are from the age of 18 and above and under the age of 65. Contributions from these schemes are paid into the employee pension account with Prudential and there is a bonus every year. It is also possible that an employee gets life assurance, which makes him or her entitled to four times of the amount paid if he or she dies while on the plan- which the company calls Death Benefit Scheme.
4.2.7Relocation – ASDA covers relocation expenses if there is a change in place of service for 12 weeks or more.
4.2.8 Share Plans - ASDA has two share plans that are solely based on the company’s discretions. The two plans Colleague Share Ownership Plan (CSOP), and Sharesave Plan, but are guided by governing rules that the company outlines in its policy guidelines.
4.2.9 The ASDA Colleague Hardship Fund- ASDA launched the College Hardship Fund in 2010 to support employees who are faced with great financial hardship. It provides support to both the employees and their immediate relatives that may be in a financial hardship.
4.2.10 ASDA Foundation- Employees at ASDA can take advantage of thediscretionary funding available to them by applying to the ASDA Foundation. The ASDA Foundation is a foundation where employees raise funds for their colleagues or immediate relatives who in dire need of financial assistance or who are seriously sick.
4.3Employee Training and Development at ASDA
ASDA also has several opportunities for career growth of its employees. These opportunities are created to support and invest in its employees and make them the next generation of leaders at the company. Some of the opportunities the company offers include the following:
i. BA Honours in Retail and Distribution, which is the industry’s first;
ii. George (ASDA’s fashion line) retail foundation degree;
iii. Accredited apprenticeship programme aimed at developing its next General Store Managers;
Some of the training that is used to develop its General Store Managers include:
i. Standing in for Regional Operations Managers when they are on holiday;
ii. Getting mentorship from one of the Retail Board members;
iii. Representing the Regional Operation Managers in meetings;
iv. Apportioning employees with regional projects.
There also is off-the-job training for General Store Managers, which include:
i. Being at my best- a programme that focus on emotional intelligence and helps General Store Managers understand their strengths and weaknesses;
ii. ‘Multi-site coaching’- employing different coaching styles and conversations to improve an employee’s ability to coach others;
iii. ‘Influencing across the business’- aimed at providing an opportunity to understand how to proselytize;
iv. ‘Thought Leadership’- a programme that enhances the ability to lead a team through innovation and creative practice.
4.4 Results of the survey
As pointed in Chapter 3, one carried out a face to face interview at some ASDA stores to determine the satisfaction level of the employees with the company’s reward and compensation practice. One visited five ASDA stores in Bexleyheath, Lewisham, Old Kent, Peckham, and Stepney Green respectively. One sent out a questionnaire that was comprised of nine question to four people at each of these stores (See Appendix).
4.4.1 Gender and Years
While one expected a total of 20 respondents to fill and return the questionnaire, only 14 respondents filled and returned the questionnaire. Out of the 15 respondents, 10 were females while 4 were males. The average years of these employees with ASDA are between 5 and 10 years.
Table 1. Gender of the respondents
Gender Male Female
Number 4 10
Table 2. Average number of years with ASDA
Range of Years 1-5 5-10 10-15 15-more
Persons 4 8 2 0
4.4.2 Compensation Practice
When asked how they would describe the company’s compensation practice, 8 out of the 14 respondents described it as fair, while the remaining described to be good.
Table 3. Compensation Practice
Fair Good Very Good Excellent Bad
8 6 0 0 0
4.4.3 Recommend to friend or family
When asked to the rate from 1 to 10, the scale of their likelihood to recommend the company to a friend or family, 6 respondents rated their likelihood 5, 2 respondents rated it 8, another 2 respondents rated theirs 7, 2 respondents rated theirs 6, and the remaining 2 respondents rated theirs 4.
Table 4. Likelihood to recommend to friend or family
Scale 1 2 3 4 5 6 7 8 9 10
Number of respondents 0 0 0 2 6 2 2 2 0
4.4.4 Likelihood to leave ASDA
When asked how likely it would be to leave their current job at ASDA for another company, the employees that are likely to recommend are more than the ones that said otherwise. This is summarized in the table below:
Table 5. Likelihood to leave ASDA
Likelihood Very unlikely Unlikely Very likely Likely Never
Number of respondents 4 2 4 4 0
4.4.5 Satisfaction with ASDA’s reward system
When asked how satisfied the employees were with the company’s reward system, only two employees expressed dissatisfaction. The rest were either satisfied or very satisfied. The summary of the findings is shown in the table below:
Table 6. Satisfaction with the reward system
Satisfied Somewhat satisfied Very satisfied Unsatisfied Very unsatisfied
10 0 2 2 0
4.4.6 ASDA’s base pay
When asked to describe the company’s base pay or salary, only 2 of the 14 respondents described it as fair, the rest said it was either good or very good. This finding is summarized in the table below:
Table 7. Company’s base pay
Fair Good Very good Excellent Bad
2 8 4 0 0
4.4.7 ASDA’s non-financial rewards
When asked to describe the company’s non-financial reward, 6 out of the 14 respondents described it as bad, 4 of them said it was fair, while the remaining four described it to be good. This finding is summarized below:
Table 8. Company’s non-financial rewards
Fair Good Very good Excellent Bad
4 4 0 0 6
4.4.8 Other forms of reward
When asked if there was any way they would like to be rewarded outside of salary and bonus, 10 out of the 14 respondents said No, while the remaining 4 said Yes. 2 out of the 4 respondents that said Yes want to be praised frequently for their service while the remaining want more time off work.
4.5Discussion
From the findings outlined above, one can infer that ASDA’s reward and compensation system is good but can be better. The secondary data exposed the comprehensive reward system that the company has for its employees. It also exposed the training and development programmes that it uses to develop its employees. However, the primary data showed that there are mixed opinions of its employees. One thing is certain, almost all respondents agree that the base pay is good or very good. But the company needs to work on its non-financial rewards, which most the respondents describe as bad. With this comparison between base pay and non-financial rewards, one can infer that the company is concentrating more on the financial rewards and less on the non-financial rewards. If the company can increase its focus on non-financial rewards, then it will be able shore up the level of dissatisfaction and increase the likelihood to recommend to a friend or family.
The findings also show that most of the employees that like the company’s reward system have spent between 5 and 15 years with the company. This may explain why they are happy with the company since the number of years comes with experience and invariably more responsibility and financial rewards. However, those that are unsatisfied fall between 1 and 5 years with the company. This means that employees in this bracket are likely to leave the company if they have a better offer from another company and are unlikely to recommend the company to their friends or family within this period. Thus, ASDA may need to look at increasing the base pay for employees within this bracket. This would motivate them to stay as well as recommend the company to other potential employees.
Overall, one can infer that the performance of employees that have stayed with the company between 1-5 years is at a medium level. This is because these are the ones that not willing to recommend the company to their family and friends. They also are the ones that likely or very likely to leave their job and go to another company. They are not satisfied with the company’s reward system, though they are not many. Because they are not many, this finding is consistent with the report that employee turnover at ASDA has dropped by 1.3 percent (Adler, 2015). The performance of employees that have stayed between 5 and 15 years can be inferred to be high. They love their job and the company and do not want to leave for another company. The employees in this bracket do not care about non-financial rewards like recognition or more time off work. They are largely driven by financial rewards and because their number of years has put them in higher positions, it makes it difficult for the company to see the importance of non-financial rewards.
5. Conclusion
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https://www.asdasupplier.com/about-us/about-asda
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Appendix A: Questionnaire
(I am a final year student that was tasked to conduct a research on employee reward system in London top supermarkets)
Questionnaire
1. Sex Male Female Both
2. How long have you worked for this company?
1-5 years
5-10 years
10-15 years
15-more
3. How would describe the company’s compensation practice?
Fair
Good
Very Good
Excellent
Bad
4.One the scale of 1-10, how likely would it be for you to recommend this company to a friend or family?
5. How likely would it be for you leave this job for another?
Likely
Very likely
Unlikely
Very Unlikely
Never
6. How happy are you with the company’s reward system? (This means with both financial and non-financial rewards)
Satisfied
Somewhat satisfied
Very satisfied
Unsatisfied
Very Unsatisfied
7. How would you describe the company’s basic pay or salary?
Fair
Good
Very Good
Excellent
Bad
8. How would describe the company’s non-financial rewards?
Fair
Good
Very Good
Excellent
Bad
9. Is there any other way you would like to be rewarded for your service apart from salary or bonus?
Yes
No
If yes, please state ------------------------------------------------------