Chapter 1: Introduction 

1.0 Introduction 

Tesco stands out as a global leader in the very competitive retail industry, not merely for its sales but also for its creative approach to employee engagement Practices . This study is based on the idea that employee engagement and satisfaction are crucial to a company's performance in the retail industry. The study seeks to understand the effects of Tesco's employee engagement practices on employee performance and, consequently, on customer satisfaction. The study questions, which aim to clarify Tesco's present practises, gauge levels of participation, and pinpoint the key One of the biggest retail chains in the world, Tesco, is a prime example of how staff engagement initiatives may influence both organisational outcomes and client experiences elements influencing this engagement, are crucial to this investigation. The design of this study will meticulously examine these topics and provide a cogent narrative that supports the need of coordinating employee and corporate goals in achieving superior organisational performance.

1.1 Project Background 

Over time, the retail sector has seen significant changes as a result of shifting consumer tastes, technological development, and market dynamics (Csiszárik-Kocsir et al., 2021). Among these changes, the significance of employee engagement Practices has risen to the fore, particularly when considered in light of the rising level of competition and the need for businesses to stand out. According to the company's most recent annual report, overall group sales, including Tesco Bank, totalled 65.76 billion British pounds (statista.com, 2023).

Figure 1:Tesco's sales worldwide

(Source: statista.com, 2023)

In the past, the retail industry placed a strong emphasis on transactional interactions, particularly focusing on the exchange of items for cash. More than 3,700 of the total Tesco outlets are located in the United Kingdom (statista.com, 2023). Relationships, with both consumers and staff, have, however, become more crucial in the modern retail ecosystem (Shankar et al., 2021). Tesco has taken a particularly prominent stance on this. The business is committed to integrating organisational objectives with those of its personnel. This implies that a committed employee is unable to distinguish between personal goals and organisational aims.

Figure 2:Tesco's number of stores worldwide

(Source: statista.com, 2023)

Organisations need a thorough understanding of both the subtleties of the retail environment and human motivation and behaviour (Zha et al., 2022). For Tesco, this entails putting in place policies and rules that boost employee efficiency and, as a result, customer satisfaction.

While these strategies may appear straightforward, they need a detailed grasp of both the nuances of the retail environment as well as human motivation and behaviour. For Tesco, this entails putting in place policies and rules that boost employee efficiency and, as a result, customer satisfaction survey. The reason for this is simple: a happy employee is more likely to give outstanding service to delighted clients.

1.2 Research Aim and Objectives

Aim

To investigate Tesco's instance to see how employee engagement Practices tactics affect customer happiness and employee performance in retail businesses.

Objectives

• To determine the current employee engagement techniques Tesco is using to boost customer happiness and employee performance.
• To figure out Tesco's employee engagement Practices level and how it affects both performance and customer satisfaction survey.
• To identify the primary factors that Tesco uses to motivate its employees and how they affect both performance and customer happiness.

1.3 Research Question

1. What are the current employee engagement Practices strategies Tesco is using to boost customer happiness and employee performance?
2. What is the level of employee engagement at Tesco, and how does it affect customer happiness and employee performance?
3. What are Tesco's main motivators for employee engagement Practices, and how do they affect customer happiness and employee performance?

1.4 Structure of Dissertation

Figure 3: Structure of Dissertation

(Source: self-developed)

For clarity and consistency, the dissertation is meticulously divided into separate sections. The paper begins with an Introduction that sets the scene by outlining the background, goals, and objectives of the study. The Literature Review, which follows the introduction, dives into prior academic work, theories, and concepts pertinent to the research to ensure a thorough comprehension of the subject. The research design, data-gathering methods, and analytical tools used are explained in the methodology section. The Empirical Study/Findings/Discussions part, where the collected data is presented, evaluated, and discussed, is where the research's core rests. The study's conclusion, which summarises the findings and offers potential future directions or uses, is called Findings and Suggestions.

1.5 Research Rationale

The crucial function of staff engagement and its subsequent impact on customer satisfaction survey is at the core of the difficulties and triumphs facing the modern retail sector (Sen and Bhattacharya, 2019.). There are several convincing reasons why this study of Tesco's engagement strategies is warranted.

First off, organisations stand out in the broad tapestry of retail chains not only for their market dominance but also for their innovative strategy for employee engagement best practices (Germonprez et al., 2020). This offers a rare chance to examine a retail industry example, perhaps providing priceless insights that can be applied to other similar businesses. Studying Tesco's methods can clarify how, when implemented well, employee engagement techniques can go beyond traditional rewards and promote organisational success.

Second, there is a clear gap in the literature discussing the relationship between big retail chains' employee engagement best practices and their dual effects on staff performance and customer satisfaction. Moreover, there is an urgent need to continuously reevaluate and recalibrate engagement methods given that the retail market is constantly evolving, particularly with the advent of technology and shifting customer behaviours (Sakas et al., 2022). This study not only evaluates the status quo but also provides a lens through which to see prospective future trajectories, assuring its applicability to both the present and the future. The research's potential to affect practice and policy makes it important. The study's overall impact can be increased by analysing the tactics of a major worldwide retailer like Tesco to produce insights and suggestions that other retailers can put into practice.

Chapter 2: Literature Review 

2.0 Introduction 

Academic circles have intensively studied the area of employee engagement best practices, its direct impact on performance, and the ripple effects on customer satisfaction survey. This chapter examines the body of prior research intending to place Tesco's activities into more comprehensive theoretical frameworks. The research intends to provide a solid foundation for the study by examining known ideas and models on engagement methods, performance determinants, and the nuances of customer happiness. The empirical analysis will then be informed by the conclusions from this body of literature, ensuring that the research is grounded in reliable academic theories and viewpoints.

2.1 Conceptual Framework 

Figure 4: Conceptual Framework

(Source: Self-Developed)

2.2 Employee engagement best practices strategies, characteristics and importance 

Many studies have highlighted the importance of employee engagement best practices in influencing both employee performance and customer happiness, which is why it is increasingly acknowledged as a critical component of corporate success. Understanding the nuances of engagement becomes essential as businesses struggle with shifting market realities. While there is agreement on the significance of employee engagement best practices, disagreements still exist over its tactics, traits, and guiding theories or models.

On one side of the argument, newer theories stress a holistic approach to employee engagement, where the emphasis isn't just on productivity or commitment but also on the well-being and fulfilment of the employee. Pattnaik and Jena (2020), argue that modern engagement strategies should concentrate on creating a work environment where employees feel a real sense of connection and purpose. According to them, it is insufficient to simply connect personal aspirations with company objectives. To increase total participation, businesses should promote a culture of ongoing learning, constructive criticism, and open dialogue.

On the other hand, Hammedi et al., (2021), argue that whilst boosting employee performance should remain the main goal of engagement initiatives notwithstanding the importance of holistic well-being. They claim that if businesses stretch their resources too thinly by attempting to address every area of an employee's well-being, they run the risk of compromising their fundamental objectives. They emphasise that employees are primarily motivated by the immediate results of their efforts by drawing on the Expectancy Theory [Refer to Appendix 1]. Clear performance indicators and concrete incentives are therefore crucial for increasing involvement.

The debate on the qualities of effective engagement tactics further complicates the situation. Some academics support a top-down strategy in which organisational leaders are essential in fostering involvement. Decuypere and Schaufeli (2020), assert that the leadership's tone affects the workforce's engagement levels via trickling down. The transformational leadership approach, which emphasises the importance of leaders in inspiring and motivating their subordinates, lends weight to Williams' contention.

In contrast to this viewpoint, a bottom-up strategy contends that genuine engagement results from grassroots initiatives. Peiró et al., (2020), emphasise the importance of task importance, autonomy, and feedback at a job level, citing the Job Characteristics Model, in promoting overall engagement. While leadership is crucial, engagement is more significantly shaped by micro-level job design and direct managerial interactions.

There is no denying the significance of employee engagement best practices. Nonetheless, its assessment and impact are still a source of debate. Traditional indicators like productivity and retention rates, according to some academics, only provide a partial picture. Mgammal et al. (2022), for example, highlight the potential drawbacks of annual engagement surveys, which might not capture real-time shifts in employee sentiment. In favour of more nuanced metrics like employee Net Promoter Scores (eNPS) or regular pulse surveys, which offer a more immediate and honest view of engagement levels.

Nonetheless, despite these different viewpoints, there appears to be a broad consensus regarding the significance of adapting engagement tactics to the unique demands and settings of businesses. Bringing the conversation back to the retail industry, Tesco, a pioneer in global retail, is at the centre of these discussions. Menghwar and Daood (2021), stated that the corporation faces the difficulty of developing and putting into practice engagement methods that not only adhere to current theories. They also take into account the particular requirements of the retail industry given its sizable employee and consumer base. Tesco's experience offers a useful viewpoint on managing the complexity of employee engagement best practices in today's dynamic corporate climate, even though the larger academic discourse also offers insightful ideas. The literature lacks a comprehensive study that empirically compares the effectiveness of top-down versus bottom-up employee engagement best practices strategies in diverse organizational contexts, considering both holistic well-being and immediate performance outcomes.

2.3 Drivers of case study employee engagement practices

The factors of case study employee engagement practices performance have long been a source of debate and interest in the field of organisational studies. Understanding these dynamics becomes critical as firms attempt to optimise results and drive growth. The previous several years have seen the emergence of a multiplicity of ideas, each presenting nuanced insights on what catalyses optimal employee performance.

Figure 5: Self-Determination Theory

(Source: Self-Developed)

One school of thinking underlines the importance of intrinsic motivators. Based on Self-Determination Theory, Brunelle and Fortin (2021), contend that employees perform better when they have a sense of autonomy, competence, and relatedness in their positions. According to this viewpoint, it is the responsibility of businesses to design jobs that naturally inspire workers, making the activity itself the reward. Companies are urged to decentralise decision-making processes, give chances for skill development, and build a feeling of community among employees following this.

A counter-argument, based on Reinforcement Theory, emphasises the role of external motivators [Refer to Appendix 2]. While the intrinsic drive may be a powerful force, it frequently requires the correct external cues to be directed efficiently. Asaari et al. (2019), argue for a performance management system that is heavily reliant on monetary incentives, promotions, or public recognition. Unambiguous, consistent reward systems can greatly improve case study employee engagement practices performance, particularly in occupations with well-defined deliverables.

Recent studies have also focused on the role that job design plays in performance, in addition to motivation. Faeq (2022), a supporter of the Work Characteristics Model, emphasises that roles with distinct task identities, significant tasks, a diversity of skills, autonomy, and feedback achieve their highest levels of performance. He contends that if the job design is poor or doesn't fit an employee's talents and objectives, performance will inevitably decline, even amid strong motivation.

Figure 6: Goal-Setting Theory

(Source: Self-Developed)

In opposition to this idea, a different perspective based on the goal-setting theory is crucial to consider. Yücel et al. (2021), argue that while work design is important, performance is more decisively influenced by the clarity and difficulty of individual goals. Her findings suggest that even roles that appear repetitive or dull can produce high performance if workers are given goals that are precise, hard, and still attainable.

According to the Organisational Support Theory, Peters et al., (2022), stated employees typically perform better in settings where they perceive significant organisational support, whether it be in the form of resources, training, or emotional support. According to Mulang (2021), this sense of support and value is a strong motivator that frequently takes precedence over specific job requirements or individual motives [Refer to Appendix 3].

Nonetheless, Malik et al. (2022), cited that as ideas and models proliferate, contextual adaptation and practical application become increasingly important. Tesco, a giant in the retail industry, is tasked with the job of modifying and putting these theories into practice to improve worker performance. The size and diversity of Tesco's staff call for a careful balancing act between individual performance drivers and overarching organisational initiatives. The company provides a window into the actual struggles and successes of turning academic discourse into workable solutions as it struggles with the realities of the retail environment. Tesco's path serves as both a case study and a monument to the ever-evolving nature of organisational best practices in the vast tapestry of factors that influence case study employee engagement practices performance. Existing research lacks comprehensive empirical studies that analyse the interplay between various employee performance drivers, such as intrinsic and extrinsic motivators, job design, goal-setting, and organizational support, in real-world contexts like the retail industry.

2.4 Drivers and barriers to customer satisfaction 

Consumer happiness, which is essential for long-lasting businesses, has been the subject of heated discussion and analysis in contemporary literature. This discussion centres on the contrast between factors that increase contentment and ones that hinder it. The theoretical foundations that support these initiatives have developed, igniting both consensus and contradiction as businesses pivot and recalibrate their strategies to pleasure their customers.

Figure 7: Expectancy Disconfirmation Theory

(Source: Self-Developed)

According to a widely accepted narrative based on the Expectancy Disconfirmation Theory, customer happiness is determined by how well expectations and perceived performance line up or don't line up. Aburayya et al. (2020), argue that companies with high satisfaction ratings are those that accurately predict and then surpass customer expectations. This paradigm holds that those first assumptions are significantly shaped by marketing communications, brand positioning, and initial touchpoints.

The ServQual paradigm, outlined by Shyam et al. (2023), contrasts this viewpoint by emphasising the concrete and intangible dimensions of service quality as predictors of satisfaction. This model proposes that a customer's view of service quality is influenced by a combination of tangibles (such as physical facilities and equipment), reliability, responsiveness, assurance, and empathy. Morales contends that a weakness in any of these five areas can considerably reduce total happiness, even if a corporation can match original expectations.

Figure 8: Equity Theory

(Source: Self-Developed)

Rifi and Mostafa (2022), stated that the Equity Theory which emphasises that perceived justice in a customer's engagement with a firm can be a powerful driver of satisfaction, is another lens through which customer satisfaction survey is analysed. Consumers assess the results they receive in exchange for their inputs such as cash, time, or effort. Levels of satisfaction can be impacted by any perceived imbalance, whether it is skewed in favour of the business or the client.

Figure 9: Attribution Theory

(Source: Self-Developed)

Not every conversation focuses on driving. There is some attention paid to satisfaction barriers. Fouroudi et al. (2020), utilising the Attribution Theory emphasises that customers' satisfaction is substantially impacted by the causes they give for service failures. Failures that can be controlled such as staff negligence are more detrimental than failures that cannot be controlled like a natural disaster affecting deliveries.

Adams et al. (2023), stated that as the subject of drivers and barriers to pleasure is discussed more and more, it becomes clear that each industry has its own set of contextual complications. Tesco's efforts to ensure customer satisfaction survey offer insightful data in this extensive discussion. Tesco, a major retailer, struggles with the challenges of concurrently regulating the quality of its physical products, customer interactions, and overall brand perception. The company's initiatives, including its after-sales services and loyalty programmes, are a synthesis of theories targeted at increasing customer happiness. But, it also encounters obstacles that are both general and specific to the retail industry. Tesco's path demonstrates the opportunities and challenges organisations confront in their pursuit of customer happiness by navigating these motivations and impediments. It emphasises how crucial it is to effectively adapt theoretical frameworks to the specific peculiarities of the business environment, ensuring that customer satisfaction stays at the forefront of organisational endeavours. The literature lacks comprehensive empirical studies that explore the combined impact of multiple customer satisfaction drivers, barriers, and their contextual intricacies, particularly within the retail industry, using real-world data like that from Tesco.

2.5 The Synergy between Organisational Culture and companies with best employee engagement practices

Business strategists have been particularly interested in the relationship between organisational culture and companies with best employee engagement practices

recently. Scholars debate the degree to which one impacts the other and the results of such interactions in this relationship, which is frequently defined as symbiotic.

On one end of the spectrum, there is the perspective that a strong organisational culture serves as the foundation for thriving companies with best employee engagement practices. According to Leroy et al. (2022), an organisation that has a distinct set of values, beliefs, and practices fosters a sense of belonging among its workforce. An increased degree of involvement results organically from this connection to a company's ethos. According to this viewpoint, engagement is fostered through culture, making it crucial for businesses to create and maintain a strong sense of cultural identity to profit from an engaged workforce.

Urrutia Pereira et al. (2022), contends that companies with best employee engagement practices levels can influence and even reinvent organisational culture, and offers a contrary viewpoint. According to Rivera, motivated individuals have the power to change an organisation's culture through their actions, interactions, and feedback. Even while culture may give the initial background, it is ultimately the engaged workforce that has the power to hone and develop a culture through time.

Cartwright et al. (2021), introduce the notion that the relationship between organisational culture and employee engagement is not linear but rather somewhat cyclical, adding still another level of complexity. Liu et al. (2022), argue that while a strong organisational culture can increase companies with best employee engagement practices, that culture itself can be strengthened and reinforced by input and enthusiasm of engaged workers. This reciprocal link produces a positive feedback loop where engagement and culture reinforce and amplify one another.

Nevertheless, not all points where culture and engagement converge are amicable. Chatterjee et al. (2021), emphasise possible dissonance that can develop if two are not in harmony. For example, a company with a culture that values rigid hierarchies and formal communication may restrict the levels of involvement of workers who thrive in more laid-back, collaborative settings. Such inconsistencies can result in cultural fragmentation when subcultures develop in specific areas of the organisation, as well as lower involvement.

Amid these academic discussions, real-world examples and case studies offer complex insights. Tesco offers an excellent example of relationship between organisational culture and employee engagement thanks to its extensive operations and diversified workforce. companies with best employee engagement practices plays a crucial part in either reinforcing or challenging the company's culture as it works to keep it consistent throughout all of its branches and areas.

Tesco's initiatives show an awareness of the complex dance between culture and engagement, from its training programmes to its feedback mechanisms. In such context, Colleoni et al. (2021), articulated that variable degrees of engagement are frequently seen despite the company's efforts to promote a culture of excellence, customer-centricity, and innovation. This is due to both internal such as leadership styles and team dynamics and external such as market conditions variables like regional cultural nuances and market pressures. The literature lacks comprehensive empirical research that investigates the nuanced and dynamic interplay between organizational culture and companies with best employee engagement practices, considering factors like cultural dissonance and the cyclical nature of their relationship, using diverse real-world case studies.

2.6 The Role of Internal and External Environments in Shaping Customer and Employee Experiences

In modern business literature, the discussion of how internal and external environments affect both the experiences of customers and employees has taken centre stage. While there is general agreement regarding the importance of these environments.

According to one perspective, the internal environment which includes factors like organisational culture, leadership style, and resource distribution is the main influencer of employee experience. According to Madhani (2021), this internal dynamic directly translates to improved client experiences because happy staff are more inclined to provide top-notch service.

Diaz et al., (2020), make the case that these outside forces create the environment in which firms function by highlighting elements like market competition, legislative frameworks, and broader socio-cultural tendencies. Regardless of how vibrant a company's internal environment may be, an unfavourable external environment can apply forces that erode staff morale and customer satisfaction. For instance, resource shortages brought on by strict laws or economic downturns may have an impact on employee welfare and, consequently, consumer experiences.

However, Elf et al. (2020), contend that neither the internal nor the exterior environments can be seen in isolation. the two are connected; external stimuli affect internal dynamics, and vice versa. According to Lu et al. (2023), a company's internal morale can be boosted by successfully managing its exterior issues, while a strong internal culture can provide resilience against external instability.

Potential conflicts between internal and external factors are also obvious, notwithstanding how interconnected they may be. Pillai et al. (2022), highlights the dilemma that firms frequently encounter: balancing an internal culture that is strong and employee-focused with external pressures like shareholder demands or market competition. Sometimes, focusing on the needs of external stakeholders may come at the expense of employee satisfaction, upsetting the delicate balance between employee and customer experiences.

Tesco's expansive operations offer a real-world reflection of these academic discussions. As one of the largest retail chains, Tesco grapples with an intricate web of internal and external influences daily. Internally, its efforts to foster a cohesive culture and maintain employee satisfaction are evident in its training programs, feedback mechanisms, and welfare initiatives. However, externally, a company faces the challenges of a competitive retail market, shifting consumer preferences, and varied regional regulations. Tesco's initiatives frequently need to achieve a balance when negotiating various settings. For instance, Brower and Dacin (2020), stated that while the business may want to give employee perks priority, it still needs to take market expectations and financial pressures into consideration. Similar to how its dedication to offering top-notch customer service may occasionally be put to the test by outside supply chain interruptions or geopolitical crises. The literature lacks comprehensive empirical studies that holistically examine the complex interplay between internal and external environments and their combined impact on both customer and employee experiences, especially within the context of large-scale organizations like Tesco.

There has been a lot of research on how internal and external environments affect the experiences of customers and employees, but there are still certain holes that need to be filled in.

One is that, while several researchers explored the distinct effects of internal and external influences, a thorough analysis of their symbiotic interaction in practical situations appears to be lacking. Understanding how these two environments interact and affect a company's operations is important, especially in trying times.

Another apparent discrepancy is the predominant focus on larger businesses, which frequently ignores the distinctive experiences and difficulties experienced by small and medium-sized businesses (SMEs). SMEs may negotiate the complexity of these environments differently because of their unique problems and constrained resources. These experiences can provide insightful knowledge on resilience and adaptive techniques.

On the temporal front, debates from the present day provide insightful analyses of current dynamics, but there doesn't seem to be much literature that predicts potential future developments. It is crucial to predict how these changes will affect the delicate balance between internal and external surroundings when the corporate landscape experiences significant transitions.

2.7 Summary 

The second chapter concentrated on the review of the literature, going in-depth on the complex interactions between internal and external surroundings and how they affect the experiences of customers and employees. The conversations emphasised how crucial it is to comprehend these two ecosystems not as separate entities but rather in the context of their linked, mutually beneficial interaction. Although substantial lessons can be learned from studying larger firms, there are notably few comprehensive studies on small and medium-sized businesses. In light of the swift technical and sustainable changes the corporate world is facing, the study also underscored the necessity for forward-looking research.