Great I’ll look forward to it.

Have you read my other post about Tesco? You’ll find them here: http://www.businessopportunitiesandideas.co.uk/?s=tesco

Regards, John

Tesco are great at what they do and though not perfect there are plenty of their practises which could be used effectively by small businesses.

I’ll prepare something and post it tomorrow.

Regards,
Rob

I hope that this blog will help people start and run a successful business. Understanding what Tesco does that small businesses could emulate and adapt can will benefit my readers, so if you’ve got experience or expertise that you’re willing to share I and I believe the readers would love to hear it so we can learn from it.

If you’d prefer you’d be welcome to write it as a guest post.

Regards,
Rob

Thanks for sharing your opinion. The relevance of pay to motivation has been argued about by managers and academics for over a hundred years and will be argued for many years to come I’m sure.

Do you have any more examples of Tesco’s procedures, if so I’d be interested in details?

Regards, John

Personally, I dont believe paying more will make a deal of difference. If you take the example of a road sweeper, if you increased the hourly rate from £5.52 (Minimum wage) to £7.52, I don’t believe you will get cleaner roads. My experience tells me that applicants make a judgement about the job role and responsibilities and at the same time look at the salary.
By advertising for a road sweeper on a better salary, you will simply get other road sweepers applying for the job as opposed to a more skilled worker attracted to the extra pay.

For example, if a street cleaning supervisor saw the above job advertised offering the same money to be a cleaner rather than a street cleaners supervisor, do you think they would apply? I dont think they would.

I think the key is managing the productivity rather than paying more.

Finally, going back to Tesco for a moment. I dont think their staff are necassarily more productive, but i believe their procedures are. One small example, (you did ask for details!) next time you visit Tesco, look at the Heinz Beans - Tesco use dollies which hold about 100 tins a piece, and are rolled into place, whereas their competitors still put the tins on the shelf one at a time. The same goes for Coca Cola /Tea/ and other fast moving products. How many man hours a year do you think that saves them?

Finally, as you say ‘poor staff are hurting the business’ you are probably right, poor staff will hurt any business. However, poor recruitment and poor training and motivation are the root cause, if you get those three factors right, pay becomes much less important.

Regards,

Rob

I think you’ve rather missed the point of the article which is that overall cheap staff may cost a business more than more expensive staff.

I only mention Tesco as it’s easier to explain an issue such as this using an example or a story. As such the numbers are there to illustrate the point, not as a precise prescription for Tesco (or any other business) to follow.

I’d like to address a couple of your points however; I very much doubt that Tesco’s staff are more productive than those of Sainbury’s or Asda, but if they are I’d love to hear details.

Yes these are problems in a local store, but the point it not whether it’s a good or bad Tesco store, or even whether it’s a Tesco or local independant store, the point is that poor staff are hurting the business.

Regards, John

If you are proposing to increase the hourly rate of just checkout staff you will still be increasing labour costs hugely as I would suggest about half the staff in a typical store are checkout staff.

How would you sell the 66% pay rise for checkout staff to the rest of the store team? and how would it affect their morale? No doubt a checkout operator on £10 an hour (or £19500 a year pro rata) would be earning more than their supervisors and probably as much as some of their managers.

And do you believe that the pay increase would reduce errors through improved morale, or by eventually
attracting better candidates?

Additionally, I’m not sure how, other than failing to scan an item, your checkout errors are caused by the checkout staff, as reductions and offers are pre-loaded and the operator simply scans the product.

I’m not suggesting Tesco are perfect, and there are many smaller businesses competing with them very successfully.

I just felt that your solution to the problems you have encountered are based on your bad experience from one store and your argument assumes that all errors are in the customers favour, and I doubt that is the case!

Regards,
Rob

I’m not sure I follow your argument as you claim that Tesco pays well over the minimum wage but then claim they have a policy of very low staff costs. The two seem rather contradictory to me.

I was suggesting paying the checkout staff more, not all their staff. Even so I am suggesting that if more motivated staff would increase Tesco’s profit by £6 then they could possibly pay £4 per hour more giving a net increase on profits of £2 per hour per member of the checkout staff. The numbers are not necessarily precise and are used as an illustration.

To actually find precise numbers would require them to undertake the kind of studies that Fredrick Taylor proposed in his book Scientific Management.

While there is no doubt that Tesco is a highly successful retailer it would be naive to suggest that they are perfect, or even that a small dedicated retailer could not compete successfully against them.