Organisational behaviour for Woolworths

Introduction

Woolworths

Woolworths was a high-street retail chain, which at its height operated more than 800 stores nationwide, and employed more than 30,000 staff. In late 2008, Woolworths entered administration, and subsequently closed in 2009.

Each branch employed a mixture of full time and part time employees, and there was a distinct hierarchy apparent.

At the top of the hierarchy was the head of branch – responsible for the overall performance of the store. Then there were senior managers usually two present each day, they were responsible for the management of the general day to day operations of the branch. This included stock control, staff rotas, and the cashing of money at the end of the day. Full -time employees were next, and they tended to be middle aged, who worked week days. They were regularly delegated tasks by the management. At the bottom of the hierarchy were the part -time employees. They were often students, who worked during the evenings when the store was closed and at the weekends when the shop was busier. They were given little responsibility, as the majority of them were apathetic to the performance of the organisation. They were mainly there for financial reasons, rather than to pursue a career in retail. As the majority were students, the staff turnover was very high and this resulted in the management giving these employees few opportunities. This hierarchy was on the whole effective, as part time employees were happy to follow orders from full time employees and senior managers.

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Management at Woolworths were somewhat removed from their staff. Because of the informal hierarchical system in place, head of branch had little communication with part time employees. This meant that the management didn’t know many of their staff on a personal level, which in turn resulted in a poor application of motivational methods.

This report will look at the effects that management has on employee motivation at a particular branch of Woolworths. It will assess the different techniques used by the organisation as a whole, and by the branch managers, to motivate the employees. This report will also make a number of recommendations for ways in which management can motivate these employees more effectively in Woolworth’s future enterprises.

HR/Organisational Behaviour – Motivation

In times of recession, the need to motivate staff is probably as strong as ever. As many employers won’t have a large budget for recruiting and training staff, they will want to hang on to their most talented and skilled workers to ensure their business survives the recession and remains competitive in the upturn (Sullivan, 2009).

Employees in any organisation need something to keep them working to the best of their ability. In most cases employees are driven by money. However, sometimes just a salary is not enough to stay at an organisation. An employee must be motivated to work for a company or organization. If an organisation fails to motivate its staff effectively, then productivity and quality of work will deteriorate.

Keeping someone working to the best of their ability is the ultimate goal of employee motivation. There are many methods to help keep employees motivated, this report will look at a number of theories involving the effect that management has on employee motivation, and will aim to apply these to a branch of Woolworths.

Motivating staff is one of the most important responsibilities for a leader in an organisation; however it is also one of the most difficult. Doing so goes a long way toward ensuring a professionally healthy and productive work environment (Staren, 2009).

Because there were a large number of part-time student employees working at the branch of Woolworths, management’s biggest challenge was to keep these particular staff motivated. It is common for younger employees to see this kind of job as simply a means to make money. As they have few financial responsibilities, they are less likely to feel the need to impress management and work to the best of their ability to keep their job.

It is of the opinion that a low quality of service was a key factor in the ultimate failure of Woolworths. Because many staff were not motivated by their work, there was a knock-on effect on the quality of work carried out. This resulted in a poor customer feedback and most importantly a poor reputation.

The emphasis was therefore on the management to try and change this impression.

The following is a literature review of motivational theory. It will begin by looking at the factors of an employee’s job that most motivate them, followed by an in depth analysis of the effect of management on motivation.

Literature Review

What motivates an employee?

In the early part of the 20th Century, employees were considered just another input in the production of goods and services. When Henry Ford first developed his assembly line for the Model-T, workers were treated as though they were another machine in the process, their skills reduced to a single task out of the 84 steps Ford had divided Model T production into.

However this view of thinking changed after the publication of the Hawthorne Studies. Professor Elton Mayo examined the impact of work conditions in employee productivity, and following experiments conducted over six years, came to the conclusion that employees are motivated not only by money, and that employee behaviour is related to other behaviour.

Studies in this area showed that “interesting work” has been the most important motivational factor. It is maintained by Hackman (1975) that interesting and challenging work inspires people to perform better than required, exerting additional effort in order to experience a sense of fulfilling their potential and accomplishing worthwhile ends. Creating interesting work might be a challenge for organisations however. According to Kovach (1989), it’s hard to make all work in an organisation interesting, as it’s on a personal level, and what may be interesting to one person may not be interesting to another.

Situation plays an important role and motivation varies over time and situation as well. Kovach’s study shows that younger workers with low incomes in non-supervisory positions were most concerned with money, job security and prospects of promotion while older workers with higher incomes and higher organisational positions were motivated more by the work and its quality.

There have been many surveys conducted on the factors for employee motivation. The first of which was by the Labour Relations Institute of New York in 1946, on industrial employees. Appreciation of work done was most important motivating factor in the first survey, as well as in 1997. But in the last decade, good wages became the most common factor. Demographics, such as income and location, should be considered when analysing these attitudes, according to Wiley (1977).

One of the key factors of a motivated workforce is the leadership they are given. Good management of staff can ensure an organisations employees work to the best of their ability.

The role of leadership when motivating staff

McGregor (1960) maintained that there are two fundamental approaches to managing people. Many managers tend towards theory X, and generally get poor results. Enlightened managers use theory y, which produces better performance and results, and allows people to grow and develop.

With theory X, a manager has little respect for their employees skills and considers that they need to be closely supervised and that comprehensive systems of controls developed. A hierarchical structure is needed with narrow span of control at each and every level. They assume that the average person dislikes work and will avoid it they can, therefore employees must be forced towards organisational objectives, with the threat of punishment. They also assume that employees prefer to be directed, to avoid responsibility and wants security above all else. Beliefs of this theory lead to mistrust, highly restrictive supervision, and a punitive atmosphere.

With theory Y, management believes employees to be ambitious, self-motivated and exercise self-control. It is believed that employees enjoy their mental and physical work duties. Theory Y managers believe that employees will learn to seek out and accept responsibility and to exercise self-control and self-direction in accomplishing objectives to which they are committed.

An additional theory, Theory Z, was developed by William Ouchi, in his book 1981 ‘Theory Z: How American management can Meet the Japanese Challenge’. It promotes a combination of theory Y and modern Japanese management, which places a large amount of freedom and trust with workers, and assumes that workers have a strong loyalty and interest in team-working and the organisation.

McGregor’s work can be related to McClelland’s achievement model. Due to their high task focus, achievement-motivated people have a tendency towards X-Theory style; however an nAch manager can be trained to see the value of employing Theory Y style. NPow managers are almost definitely Theory X and nAffil are typically Theory Y and if not can relatively easily be trained to be so.

McGregor’s work was based on Maslow’s hierarchy of needs. This theory is one of the most widely discussed theories of motivation. The original Hierarchy of Needs model was developed between 1943 and 1954, and first widely published in Motivation and Personality in 1954. It concerned the responsibility of employers to provide a workplace environment that encourages and enables employees to fulfil their own unique potential (self-actualization). He proposed that each of us is motivated by needs, and that these most basic needs are inborn. Maslow’s Hierarchy of Needs states that we must satisfy each need in turn, starting with the first, which deals with the most obvious needs for survival itself. Only when the lower order needs of physical and emotional well-being are satisfied are we concerned with the higher order needs of influence and personal development. Conversely, if the things that satisfy our lower order needs are swept away, we are no longer concerned about the maintenance of our higher order needs.

McGregor suggested that management could use either set of needs to motivate employees. As management theorists became familiar with Maslow’s work, they soon realized the possibility of connecting higher level needs to worker motivation. If organizational goals and individual needs could be integrated so that people would acquire self-esteem and, ultimately, self-actualization through work, then motivation would be self-sustaining. Today, his Theory Y principle influences the design of personnel policies, affects the way companies conduct performance reviews, and shapes the idea of pay for performance.

David McClelland proposed that an individual’s specific needs are developed over time and are fashioned by one’s life experiences. The majority of these needs can be classed as either achievement (nAch – seek to excel), affiliation (nAff – need harmonious relationships with other people and need to feel accepted by others), or power (nPow – seek to benefit either themselves or the organisation). An employee’s motivation and effectiveness in certain job functions are influenced by these needs. Management should seek to understand their employee’s needs in order to achieve maximum motivation.

The importance of each of these needs will vary from one person to another. If management can determine the importance of each of these needs to an individual, it will help them decide how to influence that individual.

By using these theories to address an individual employees needs, management could increase motivation by utilising Management by objectives (MBO). MBO is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources.

It was first outlined by Peter Drucker in 1954 in his book ‘The Practice of Management’. It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. Ideally, employees get strong input to identify their objectives, time lines for completion, etc. MBO includes ongoing tracking and feedback in the process to reach objectives.

With MBO, managers focus on the result, not the activity. They delegate tasks by “negotiating a contract of goals” with their subordinates without dictating a detailed roadmap for implementation. Management by Objectives (MBO) is about setting objectives and then breaking these down into more specific goals or key results.

Application of OB theory to its organisational practice

This review of management practise has a number of implications for Woolworth’s management.

Recognising the needs of individuals within the workforce can help management develop their methods and will enable them to get the best out of each individual employee. By using Maslow’s Hierarchy of needs, management might be able to profile their full time and part time employees effectively.

By applying McClelland’s principle at the beginning of an employee’s career, management can get a deeper understanding of the profile of their employees. In the past, it could be assumed that all part-time staff have the same desires and needs from their job. It is fair to assume that they are all there for financial reasons only. However by applying this theory, it might be found that there are employees who wish to pursue the job and turn it into a career. They would fit into the nAch group of McClelland’s theory. Recognising this will give the management the opportunity to develop this employee and to hand them more responsibility in their work. This will motivate the employees which in turn will benefit the organisation.

The majority of the part time workforce would fit into the nAff character, as they seek to have harmonious experiences and would seek to make their job as straightforward as possible by forming friendly relationships. It is the management’s responsibility to ensure that the working environment is suitable for these employees, as they make up the majority.

It is vital that the management recognises McGregor’s X and Y theory. At the branch of Woolworths in question, there were a number of managers who would fit the theory X character. In this particular field, where one of the key roles of management is communicating with their staff, this had a very negative effect. Although it would be fair for a manager to assume that many of their part time staff are apathetic to the organisation’s success, this is not the case. By not offering them any responsibility would not be a pragmatic decision, as it would simply deter staff further from reaching their potential ability at work.

A theory Y character on the other hand may not be suitable for this type of work force as well. As accepted in this report, the majority of the part time workforce is there simply for financial reasons. Giving them too much responsibility may result in a lack of effectiveness, as they feel they can get away with doing a lacklustre job without being held responsible.

Instead a mixture of theories X and Y might be the most suitable to manage a retail workforce, where the management might delegate responsibility to employees and give them some independence at work, whilst still keeping a close eye on their progress.

The MBO style is appropriate for knowledge-based enterprises when your workforce are competent. It is appropriate in situations where you wish to build employees’ management and self-leadership skills and tap their creativity, tacit knowledge and initiative. Therefore it may not be suitable for the majority of employees at Woolworths. However the head of branch should have used this style to set regular objectives for their senior managers. This would have a positive effect on all employees in the hierarchy, as the senior managers will become more motivated and will in turn motivate the staff more effectively.

Conclusion – Lessons for management

Successful work environments are characterized by open communication at all levels. The effective manager realizes that identifying positive motivators requires knowing his staff on an individual basis. He recognizes that what motivates one member, even in the same role, may not be the same for another (Staren, 2009). Woolworth’s management should have considered indentifying each of their employees needs and motivating factors early on in their role and ensured that they treated their workforce as individuals.

Woolworth’s management should take advantage of incentive based motivational methods in which performance is guided by objectives. By meeting regularly with staff to determine mutually agreed upon goals and objectives, this could have considerable motivational effects on its workforce.

The managers should have ensured that the staff members’ had appropriate authority or are otherwise empowered to proceed as they deem necessary to accomplish their jobs. Giving staff more responsibility will only have a positive effect on their motivation. The key is understanding the type of responsibility they desire.