Motivation and employee engagement

The success of a firm’s employee engagement may be shown through all of the following outcomes except:

Read the information below and then answer the questions that follow.

Seebus plc

Seebus plc is a food retailer that has used organic growth to expand. It now has 110 stores spread across the UK. The company competes with larger supermarkets by positioning itself as offering higher quality products and better customer service.

To differentiate itself, Seebus plc offers:

• a luxury range of ‘own-brand’ goods

• some branded goods which are market leaders in their particular categories.

The company focuses on a smaller range of products than its largest rivals and relies on being able to achieve higher gross profit margins. Seebus plc is aware that it cannot compete purely on price with much larger rivals in the mass market. Seebus plc operates a ‘Just in Time’ system of inventory management, as do all major competitors in the market. It recently introduced software which integrates inventory management with marketing, production, transport logistics and the supply chain.

Recently, the results of employee satisfaction surveys have shown rising levels of unhappiness with pay and working conditions. Labour turnover has also increased dramatically. In 2023, Seebus plc employed an average of 6000 employees. During 2023, 960 employees left Seebus plc, whilst only 720 new employees joined the company. Seebus plc had always taken pride in its excellent relationships with employees, paying wages well above those of its main rivals. Recently, competitors have significantly increased employee pay rates. Employees are also unhappy about changes to shift patterns and the way they are supervised. Ajinder, the Chief Executive, plans to address the findings of the employee surveys. The plans include implementing a new package including:

• personalised career development plans

• improved training.

Calculate the rate of labour turnover for Seebus plc in 2023.

Explain one reason why Seebus plc uses a ‘Just in Time’ system of inventory management.

Use Herzberg’s theory to analyse why Ajinder’s plan may not improve motivation levels at Seebus plc.

Seebus plc targets its marketing towards higher income customers.

Should all businesses segment their markets based on income?

Justify your view.

A business changes its human resource management (HRM) approach from hard HRM to soft HRM.

To what extent is this change guaranteed to increase the motivation of all employees?

A business has recently experienced a decline in its level of sales. This led to some redundancies.

Analyse how an understanding of Maslow’s hierarchy of needs might help this business to motivate its remaining employees.

Read the information below and then answer the questions that follow.

What is meant by the term shareholder dividend?

Explain why the Ocado share price rose following the announcement of the venture.

With reference to Maslow’s theory, analyse the possible impact of this venture on the motivation of senior managers of the two businesses.

Are ventures a good way for all businesses to grow?

Justify your view.

Read the information below and then answer the questions that follow.

Chillax Ltd

Chillax Ltd runs six luxury health spas in southern England. Health spas offer health and beauty treatments such as steam baths, exercise and massage. Chillax Ltd’s customers expect high levels of service.

The business focuses on quality. It emphasises the importance of getting the customer experience right. It feels this is more about how employees interact with customers than the facilities in each health spa. The quality of customer experience is monitored through frequent customer surveys using the Chillax App. The business regularly has positive reviews online.

Chillax Ltd invests heavily in training, consults regularly and provides frequent feedback to staff. It feels that its high level of employee engagement has many benefits and ultimately ensures happy customers.

Chillax Ltd is unusual in the Health and Beauty sector in that many businesses in that sector have very high rates of labour turnover averaging over 30%.

Table 2 Selected employee data for Chillax Ltd for 2020 (31 December 2020)

Using Table 2 calculate the employee retention rate for Chillax Ltd in 2020.

Analyse how Chillax Ltd benefits from its focus on quality.

Analyse why employee engagement at Chillax Ltd is high.

To what extent should all businesses be concerned if they have high rates of labour turnover?