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Employee satisfaction and productivity By barbradozier Abstract

a case study based on the asda retailer

The thesis concerns human resource management, the relationship between employee productivity and satisfaction is explored in both primary and secondary researc h. The researcher has gone into the theoretical construct to establish the relat ionship and to understand the different schools of thought available on the subj ects of productivity and employee satisfaction. In the process, the researcher h as gone through the concept of satisfaction and also gone into what constitutes satisfaction and how it is measured. The researcher has also sought to explain t he role of culture and perceptions on satisfaction and has also arrived at the d efinition of satisfaction as an attitudinal disposition rather than an emotion. The primary research went into analyzing the satisfaction levels and the self-pe rception of productivity of employees from ASDA. The sample population was chose n from different levels in the company, different ages and also from the differe nt shifts that the company operates. The significant insights from analyzing the data were that ASDA employees overall satisfaction is at best average, older emp loyees display better loyalty, employees feel their full potential is not put to use by the company and the overall enjoyment at work and treatment by superiors differed according to the shift in which the employee works. In the analysis section, the researcher has tried to ensure that the primary dat a and the findings from the secondary research were validated against one anothe r and thus enable conclusion. It can be thus concluded that employee productivit y and satisfaction are correlated and the increase in satisfaction can lead to i ncrease in productivity. The recommendations made to the company are too become more proactive in ensurin g that the company is sensitive to the attitudes of employees and to become an i ndustry leader in best human resource practices.

Introduction This thesis is the culmination of the efforts of the researcher in understanding employee satisfaction and its relationship with productivity of an employee. In the process of arriving at a conclusion on this question, the thesis will raise a number of difficult to answer questions. Is there a correlation between emplo yee satisfaction and productivity? Does a satisfied employee mean a more product ive employee? What is productivity? What is satisfaction? Can employee satisfact ion be measured? What factors contribute to employee satisfaction? What external factors affect satisfaction and performance? How does organizational culture af fect satisfaction and productivity? Can managers ensure satisfied employees? How does all this add up in the retailing industry in the UK, considering all the c ompetitive forces? These are the important questions which will be addressed in the thesis. The nature of these questions is vast and deep. As consumers we are faced with consumption decisions every day, what to buy and what not to buy and where to buy what from. Marketing of services is to a large part people intensive and the connection with the consumer happens through their interactions with the representative of the company or brand. Retail stores for m a very important part of our lives, being an important part of the family or h ome supply chain. Retail store spending based on our consumption decisions form a major part of our budgets and any nation s economy, making retailing a large rev enue business, also entailing huge investments by the retailer, in creating the infrastructure, supply chain and other associated structures which are necessary

. This makes the retailer look out for every opportunity to improve operating ma rgins. Added to this is the fact customer loyalty in retailing is dependent most ly on price. The price sensitivity of the customer keeps increasing with every d epression we go through. With national brands and store brands competing for she lf space, price wars among retailers and innovative pricing methods are common p lace industry practices. With the fact that a large volume is necessary in ensur ing lower prices for consumers, retailers need to expand very quickly to very hi gh volumes. Retailing being a service industry, the significant operating expens e for the retailer is the human capital. Every penny saved in human cost is a di rect addition to operating margins for the retailer. This makes the dissertation very relevant can retailers gain in productivity by ensuring better employee sa tisfaction and thus aim to gain better margins from their business? The setting of the industry in which ASDA operates is important in the study bec ause of the fact that the competitiveness of the company depends on its pricing, with customers moving away from the traditional loyalty to stores for better va lue and variety. The adherence to price as the competitive advantage means that the company has to minimize its costs on all fronts or better put, has to optimi ze costs. In a retail industry setting, manpower costs are a significant part of the overall cost structure, and hence a comprehensive dissertation on the emplo yee satisfaction in such a setting is of paramount importance. In the past, hard discounters in the UK have come under severe criticism for their anti-employee policies, for example, Lidl has been accused of spying on its employees, forcing its employees not to join unions, forcing its employees to work without pay whe n they did not finish the allocated work, etc. (Pidd 2007). One of the important aspects of successful management of the brand in retailing is public relations. The perception on retailers as they grow large is adverse, with the world s large st retailer Wal-Mart also not being an exception. Consumer activism, trade union ism and several other issues which are relevant to the human angle of retailing are significant topics for discussion, in theory and practice. Due to the import ance of the retail industry in the economy, governmental regulations and interve ntions and public attention on the industry is heavy, with every move of the lar ge retailer being watched by the government, the stakeholders and also the consu mers. Considering its employee intensive model and its large size, retail chains are the perfect studying ground for human resources. Retail stores of this cent ury are the factories and cotton mills of the previous century. ASDA is a retailing giant in the UK, the second largest in retailing and the lar gest in food retailing. The company began as a dairy producers representative com pany, which strived to better the profits of dairy farmers by establishing their own brand and stores, thus to get a better floor price for themselves. In the a ftermath of the Second World War, dairy product prices in the UK took a beating, with imports eating away on traditional strongholds, coupled with better storag e and transportation infrastructure. This made the company seek out synergies in its retail and supply chain, thus diversifying into a number of food related bu siness which could be relevant to the consumer in the North of England. Thus was started ASDA, in 1965, as the first hypermarket in the UK. Its stores were of a different format, usually found in abandoned factory sheds on the edge of town. The crowd puller for this strategy was the new found post-war automobile mobili ty of the Britons. This strategy proved to be an enormous success. ASDA retail e ventually overtook its parent in revenues and grew to become the retailing giant in the UK. It started diversifying on its own, entering into mergers or even ac quisitions and growing bigger. The company was in trouble in the early 1990s aft er a major acquisition, but it eventually recovered, to be finally acquired by W al-Mart. ASDA became a solely owned subsidiary of Wal-Mart of the USA. Wal-Mart chose acquisition as the ideal way of entering the UK because of its global expa nsion strategy and ASDA was the ideal target with its brand equity and its long standing reputation in the British market, including Scotland and Wales.

Defining Satisfaction Defining satisfaction has been attempted by a number of theorists, from differen t schools of thought. Traditionally, job satisfaction has been viewed as an emot ional appraisal of the environment and the job, resulting in an evaluation of wh at the job satisfies for the employee. Job satisfaction is a pleasurable or positi ve emotional state resulting from an appraisal of one s job or job experiences (Lock e 1969, p.317). Viewing job satisfaction as an emotional disposition towards the job and its attributes, positive or negative, has the effect of treating the em ployee as not very rational and thus, falls short of guiding the evolution of ev aluation metrics for enhancing satisfaction among employees. More recently, job satisfaction has been defined as attitude towards one s job (Brie f & Robertson 1989). The fundamental and essential property of attitude is evalu ation (Weiss 2002). An attitude is not an emotional reaction, but an evaluation or an evaluative assessment with regards to an object. When job satisfaction is defined as an attitude, the means of understanding and evaluating job satisfacti on comes to a scale, where an employee can relatively rate his attitude on a sca le which can then be evaluated to understand his attitudinal disposition. If sat isfaction were to be defined as an emotion, the result of measuring job satisfac tion would be binary, with positive and negative emotional feelings being the on ly measures. Thus, when defined as an attitude, a positive (or negative) evaluati ve judgment one makes about one s job or job situation. (Weiss 2002, p.174). Considering that job satisfaction of an employee needs to be measured to evoke p ositive attitudes towards work and thus to aid organizational effectiveness, the definition of job satisfaction as an attitude enables forming metrics for measu ring the same and thus, is the most commonly used definition construct for job s atisfaction.

Research Methodology Research Philosophy Interpretivism is the epistemology in research, especially management research, which advocates that it is important for the researcher to understand the differ ence between human beings and that the role of the researcher is as part of the society or phenomenon under observation and not an external observer (Saunders e t al 2007, p.106). To understand employee satisfaction and its impact on product ivity, the researcher has to study something as variable and intuitive as human attitudes and behaviors. This calls for an understanding of the behaviors of peo ple, which are guided by their perceptions (Saunders et al 2007, p.116). Interpr etivism also helps the researcher to analyze the relationships and connections b etween individuals (Walliman 2005, p.204). As we are dealing with human percepti ons and attitudes which determine satisfaction rather than mere objects and thei r implications, interpretivism is the epistemology which is used in this thesis.

Sampling Technique The primary research tried to gather information from a vast cross-section of th e large employee population at ASDA. The researcher interviewed employees from v arious levels in the hierarchy and simultaneously from the different shifts the company operates morning, day and night shifts. This helped the researcher under stand the dynamics of the environment at various points during the day and also helped in the final recommendations on improving the employee satisfaction at AS DA. The people who were interviewed were between the ages 19 and 62 years, to en sure that the older employees who form more than 20% of the workforce at ASDA ar e also accounted for in the research. As stated by Saunders (2009, p.228), stratified random sampling is a modification of random sampling in which you divide the population into two or more relevant and significant strata based on one or a number of attributes . Here, the divisio n of the population (ASDA employees) into the times they work in the company or the shifts and also the various employee levels from within the organization, fr om various departments. Thus, the sampling technique used in this thesis is Stra tified Random Sampling.

Findings from the Research Introduction The dissertation comprises of both primary and secondary research. The secondary research was used to understand the conceptual background of productivity and e mployee satisfaction in the organizational context. This forms the core of the l iterature review. Also, a case study has been developed to understand the histor y and culture of the organization and also to study the current human resource p olicies of the company and the image of the company in the public eye. The prima ry research was used to understand the attitudes of real ASDA employees on their jobs and how they perceive their environment at work and also its climate. The findings from the researches are distilled from both the approaches and boil down to theoretical background provided in the literature review which is justi fied by the primary research and vice versa. Thus, the researcher has involved h is understanding and knowledge in assessment of human resource management to com e to conclusions, thus making the study purely qualitative, which is essential i n studying human dimensions of management functions. Key Insights from Primary Research The relationships between the various parameters by which an employee forms judg ments and connotations about his work and thus forms his attitudes are examined through the primary research, by analyzing the coefficients of correlation of th e different responses and by other techniques. The snapshot of the responses is available collated into an analyzable form in Appendix 2.

Key Insights from Secondary Research The major take away from the secondary research is that employee satisfaction is an attitudinal inclination of an employee. When job satisfaction is defined as an attitude, the means of understanding and evaluating job satisfaction comes to a scale, where an employee can relatively rate his attitude on a scale which ca n then be evaluated to understand his attitudinal disposition. If satisfaction w ere to be defined as an emotion, the result of measuring job satisfaction would be binary, with positive and negative emotional feelings being the only measures . This has been applied in the primary research, with employee attitudes towards their jobs are measured in relativity and also compared in relativity to unders tand a particular parameter. The researcher has used summation score rating method to measure satisfaction, w ith many continuous scales being used to get aggregate data more concentrated an d comparison being possible after that and so is correlation and analysis. The employer has to understand the expectations of the employees tacitly in term s of rewards and recognitions to ensure that employees are satisfied. This is th e core of the expectancy theory. If the employee is motivated to intrinsically a ccept the goals assigned by taking ownership of the goal, he can be a very good contributor to the company. From the primary and secondary research, it is evide nt that ASDA is not the best in the industry in this parameter. From the case study developed on the genesis and the human resource practices at ASDA, it is clear that after the takeover by Wal-Mart, employee welfare and the original culture of the company have been threatened. This is attributed to the rapid scale up of operations by the company and also the efforts to bring in a unified Wal-Mart culture across all global ventures. The stand of ASDA towards u nions is a case in point. Its attitude to unions is very similar to that of its parent in the USA.

Conclusion Motivation of workers has been a critical factor in ensuring employee well being , and it has also been a factor which has been least understood. Mere increases in remuneration may not be always the right approach to in motivation because it forms the motivating employees, because the needs from the job of every individ ual vary. Hence, it is important to know how to motivate an employee. The concep t of employee satisfaction is relevant job related attitudes of the employee. Th us, the employee perceives and reacts to the environment he is surrounded by thr ough the job satisfaction he has from his job and also the overall satisfaction he has with the organization. When employee satisfaction is studied empirically, it is very clear that it is d irectly related to employee productivity, and thus very important to be understo od. Productivity ultimately determines the overall organizational effectiveness in the long run. The study of productivity has been always with respect to how m

uch an individual can do of a particular job. In recent times, the focus has als o been on understanding productivity at the level of employee effectiveness. Emp loyee effectives determines the overall contribution to the organization by the employee throughout the term of the employment and not only in the particular da y or even the weekly production or service schedules. Thus, when employee satisfaction is a factor for productivity of an employee, th e understanding of employee satisfaction and how it is defined by theory is impo rtant as this will translate into action by managers in the industry. The defini tion which is most relevant and appealing to the time is the attitudinal definit ion, which states that satisfaction from a job for an employee is an attitude of the employee towards the work he does. This has significance because of the fac t that attitudes can be measured in relativity and hence employee satisfaction c an be measured on a continuous scale for many employees, whose scores can be com pared and relevant action taken. this ensures that managers in human resources c an measure and take corrective measures or encourage to ensure that employees ar e satisfied. The researcher has tried to form a correlation between employee satisfaction and productivity in an organizational context through the theoretical body of knowl edge available on the subject matter. The main correlations lie in the fact that an employee s satisfaction is an attitude and hence can be measured and therefore can be compared with the actual productivity of the employee. The perception of the employee on his productivity and his feeling of worth within the organizati onal context can be understood through this. The researcher has tried to corroborate the theoretical linkage between employee satisfaction and productivity through primary research. The result is that, the theoretical linkage is confirmed to be existent and the two factors go hand in hand in the long term. Even if an unsatisfied employee is productive, he cannot contribute to organizational effectiveness in the long run. It has been made clear from the combination of the primary and secondary researc h that ASDA has slid from its position as the best employer in the industry in t he UK for some time and this slide coincides with the takeover by Wal-Mart. The parent company may be imposing its way of working and culture on its subsidiary in the UK ASDA. The company has to look for ways to develop the trust of its emp loyees and also to ensure that it is the industry leader in best human resource practices. The ideal way ahead for the company would be to ensure that it is able to engage the employees and the society at large in many more social initiatives and thus to ensure that it has the right perception in the minds of its employees and th e society. The Americanization of the company would only result in employees fee ling outside the culture of the company which has been till now based on opennes s, respect and dignity. This must not be compromised on any account by Wal-Mart and ASDA.

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