Tesco_Essay_-_Employment_Relations

Analyse the strategies used by TESCO that can be used to achieve AND measure effective employment relations. Tesco is an international retailer and relies on effective employment relations in order to remain profitable and also to maintain the wide skill base of all those employed. As a Transnational Corporation Tesco needs to be able to adapt to the various markets and be able to manage employment relations across all markets effectively. The Strategies that can be used include the use of Communication Systems which involves the use of grievance procedures, worker participation and team briefings. Rewards are another strategy as well as the Use of Training and Development and the use of Flexible working conditions. These can be measured by the levels of staff turnover as well as the absenteeism, the levels of disputation, the quality and the benchmarking. Focus of Tesco’s operations will be the United Stated and the United Kingdom as both are large markets and show the potential and the employment relation practices of the company. The two sides of Tesco are somewhat remarkable in the local market Tesco is known as a reputable company but this is almost the opposite of how Tesco is seen to behave in the international market. Communication Systems are an important strategy in effective employment relations. Well developed communication systems allow for senior management to communicate their goals and ideas to employees clearly. The use of communication system also extends to employees; Employees can better share their useful contributions and ideas. Employees are able to feel part of a team so their job satisfaction and motivation will increase which leads to higher productivity. Finally the use of Communication systems allows for efficient resolution of problems which can avoid prolonged conflict in the workplace. Tesco’s grievance procedure is listed as an Informal Discussion followed by Verbal and written warnings eventually ending in dismissal. This is done to try and ensure the effective relations between employees and management and also to help correct any mistakes that may occur during the workplace. Tesco has also aimed to achieve more effective employment relation by allowing the incorporation of employee decisions to help maximise operations and help the business. The inclusion of employee ideas into a business can result in higher job satisfaction, increased company loyalty, increased motivation and greater workplace harmony. As well as this Firms benefit from improved communication between worker and employers as well as workers’ experience and knowledge on the job. Tesco attempts to utilise Team briefings in order to help maximise communication at the work place. Team briefings are the meeting of the team designed to pass on essential information, promote open communication and invite input into decision making. These help to identify any problems or misunderstanding and help to strengthen the commitment of employees to any changes through motivation. The use of rewards is another important strategy for Tesco and involves the use of both Financial and non financial measures. Tesco has attempted to provide rewards through various strategies such as the use of Shares in the company allocated proportionally according to salary and income which are held in trust but can then be collected tax free. Another offer is the use of financial deposits in which money is invested at tax free and allows for the option of the purchase of shares below market price or cash. Staff also receives rewards such as the improved conditions and the use of the Tesco club staff card giving discounts of 10% and other discounts on Tesco Finance and Communications. There is even an allocated pension scheme for long serving employees of Tesco. There are also savings on recreation and healthcare to promote the balanced lifestyle. In the United Kingdom these policies have been successful as of the high working conditions granted through the partnership between USDAW is the UK's largest union with 300,000 members of which 85,000 are Tesco employees this deal makes Tesco the company with the largest number of Union members in the UK. However, In the United States Tesco’s practices have raised issues as Tesco has not allowed for collecting bargaining putting Workers in a worsened position, In the UK there is a high level of wage protection and condition for workers but in the United States there is little to no protection and employees believe they are being unfairly treated.  While it claims to support employees' freedom of association and, where it is allowed by national law, their right to join recognised trade unions, in Turkey Tesco refused to recognise the Tez-Koop-Is union, even though 51% of employees were already members, and it has appealed against a Turkish court decision recognising the union. And in the US it deferred and finally downright refused to meet the United Food and Commercial Workers' union. These are examples of Tesco’s failures to address the employment relations effectively. The use of Training and Development is important in Tesco as the company realises the values of the Assets within their company and believes in the potential and as such offers a range of training programs to help assist and educate staff to help them gain a greater skill base and have a greater level of qualifications. At any one time Tesco has around 7,000 members of staff on development programs specifically designed to help them gain the experience and skills they need to move on to harder tasks and challenges. Each year there are also over 10 000 job changes or internal transfers within the company. Tesco aims to offer a training program for every career stage which is often flexible and tailored to the personal needs which is one of the reasons why 80% of Tesco’s management roles are filled by existing team members. Tesco is also trying to offer greater protection and flexibility to employees to staff as Flexible Conditions allow Flexible working hours give firms some flexibility to operate shifts during peak seasons with the benefits passed on to employees e.g. they can juggle between work and family commitments. Flexible working hours may take the form of: Variable working days/weeks with the specific core hours as required but with the starting and finishing times flexible thus being more effective and greater profits. Extension of ordinary hours to weekend and public holidays which makes Tesco more cost effective and the use of Job sharing, this allows workers to share the hours required for one job. Family-friendly programs are effective in attracting and retaining staff in the longer term as they recognise the interdependence of work and family life and reduce problems involved in managing family responsibilities. Staffs are able to leave and later re-enter the workforce, thus reducing separation, recruitment and training costs for new employees. Such programs create a positive image of the firm in the community which is a benefit for the reputation of Tesco. They also enhance employee morale and improve productivity through the lowering of stress and unpredictable absenteeism levels. Measures of Effectiveness Staff turnover refers to the percentage of employees who leave their jobs voluntarily per year. A high level of staff turnover indicates a failure of the employment relations function because it may not have developed reasonable working conditions, a fair pay structure or the chance of career development. A high level of staff turnover leads to higher costs for recruitment, selection and training and can reduce employee morale. As of 2007 Tesco staff Turnover was down from the 29% staff turnover of 2003-4 and below the industry average of 35-40% this shows signs in United Kingdom that Tesco is operating employment relations effectively and is in line or in a better position as opposed to other competitors. However, in the USA Staff turnover is higher as Tesco is seen to be failing to provide employees with a chance to voice opinion and gives little offer or pay to the workers as well as refusing to recognise the role of the unions overseas. This has cost the Company more as they constantly have to recruit and train the new applicants as the existing employees are tired of the low quality they receive. Absenteeism is time taken off work by employees that has not been approved in advance by employers. This is a large cost to business and is generally seen as a result of workers being unhappy and thus a failure of the employment relations function. Tesco has attempted to overcome this by the negotiation of sick pay arrangements so that the first three days leave on sick leave are not paid. After three days, staff will be able to claim sick pay but will not be compensated for the previous days. Tesco is making the scheme compulsory in two new stores and voluntary in some existing ones. And it added that part of the trial would involve looking at how staff that is off ill for less than three days can prove they have actually been sick. Other schemes under consideration by Tesco offer rewards for good attendance or give staff more holiday allowance but reduce it when they take a day off sick. The sick-pay scheme already operates in Tesco's Irish stores, where it says that absenteeism rates are lower. Sick leave is estimated to cost UK businesses £11billion a year and research has found that more than eight out of ten workers feign illness at least once a year to skip work. These policies bring Tesco in line with other stores such as Asda. Disputes refer to strikes (where employees refuse to work) or lockouts (where employees are denied access to the workplace). Disputes are a complete breakdown of the employment relations function. Tesco’s practices in the UK have raised few disputes but in the United States the exploitation of workers is more obvious. Tesco is not allowing the use of collective bargaining and not recognising the unions and their roles in maintaining a balance in the employee relations. There are few laws which stipulate minimum conditions in USA and as such Tesco is failing to give staff the same benefits as seen in UK. Failure to resolve these have made the American stores less profitable and they are not achieving near the full potential. Effectiveness of employment relations can be measured by assessing the quality of the goods produced and services provided by the company. Quality can be measured against the past performance of a business in that area, or against the performance of another business. Tesco is currently expanding range and choice of goods sold this shows Tesco is currently in a great position according to this benchmark and is coping with employment relations effectively and the goods and service are seen to be of a quality with value for money. Benchmarking is a tool that allows businesses to assess their position against the Industry and other competition Tesco’s staff turnover has been lower than the Industry Average by over 5% in most periods the last noticeable figure recorded Tesco at a staff turnover of below 29% compared to the Industry’s 35%. Tesco also holds a greater market share and profit base than all of the other competitors in the United Kingdom.