Pay framework and store management of Matalan Retail

The following paper is a report about the introduction of an innovative pay framework at the Matalan stores. The company is relatively new in the market since its inception in the year 1985. Though the progress has been staggering and the company has moved forward while imbibing some of the best management practices seen in corporate history, there is a slack in the current pay structure practised at Matalan.

Though they had a formal structure in the past, at the moment each store has its own recruitment policies and salary structures. This is causing problems within the human resource department at each store due to the discrepancy in maintaining similar levels of pay structure. The company would need to undergo change and create a new pay framework, which imbibes all the concepts of equal pay to avoid any legal proceedings in the future. At the same time the paper also takes into consideration factors, which are important while trying to create pay frameworks for organisations – motivation, communication channels, training and development, equal opportunities and similar non financial rewards which have proven to go a long way in improving performance at the work place. The report goes through a series of different headings which come together to weave a structure which best explains the problems, founding issues and a possible solution.

INTRODUCTION

Matalan is one of UK’s leading clothing and home furnishings retailer. The quality of clothes and home ware is relatively high with an affordable price tag. It was John Hargreaves who founded Matalan; he initially discovered the concept of out of town selling at lower prices in the US markets. The learning process was enough for him to know that this could turn out to be a very successful retail strategy in the UK markets. The first Matalan store was opened in Preston in the year 1985. By 1995, the company had made tremendous progress and had 50 stores to their credit across UK. The year 1997 was one with multiple changes in the business strategy and management practices, since the company was growing at a phenomenal pace; the head office was moved to Skelmersdale to be in a better position to oversee company growth and management issues. The success was reinstated in the market with company floatation in the year 1998, at the moment Matalan trades from 5 million square feet in over 170 stores. For the consumers the opportunity to shop at Matalan is very satisfying since they get unrivalled quality at unsurpassed prices. The strategy Matalan follows is to buy from the manufacturers and having out of town less costly stores, which enable them to pass on the cost benefit to the customers. Please refer appendix 2 for more information about Matalan’s position in the UK market in comparison to other clothing retailers.

A visit to a Matalan store reveals the complete family range the store has on offer, there is something for everybody. On an average the store size is an approximate 30,000 sq. ft. per store, the product range is a comprehensive combination of home ware, clothing line for men, women and children. Each clothing line has a further divide in range and styles – formal, informal, sporty, seasonal, modern basics to some very classical styling, other than having their own labels on display there are also other brands on offer – Wrangler, Falmer, Lee Cooper, Wonderbra and Wolsey, this gives the customers a more balanced profile to choose from. The head office provides immense functional support to all stores across UK – be it buying, merchandising, marketing, HRM, finance, operations or property management. To get a better understanding of what each store entails in terms of human resources, we have the following line up.

• Store Manager
• Deputy Manager
• Sales Manager Ladies wear
• Sales Manager Men swear
• Sales Manager Children's wear
• Sales Manager Home ware
• Full and part time General Sales Assistants

At the same time, there are flexible changes in the way roles might be managed in a store, in smaller stores the home ware and children’s wear departments are overlooked and managed by a one sales manager instead of two which is a norm in bigger sized stores. Matalan prides itself on some very progressive practices in all departments; the management believes that what they have on offer for employees is a fast track progressive career path, which is completely matched with one’s personal ambitions to succeed. [www.matalan.co.uk]
The pay framework at Matalan includes the following benefits and perks.

• Highly competitive Salary
• Bonus Scheme
• Discounted Share Save scheme
• Life assurance policy
• Private Health Care
• 10% discount at all stores
• Generous holiday entitlements

[http://www.inretail.co.uk/pages/content.asp?PageID=311]

The above is an insight into what Matalan Retail has to offer its employees and staff across the stores. There are problems with the current pay structure, some of the new recruits are paid with regards to market rates and this is not in sync with what is paid to the old recruits in similar roles. The local HR offices have been exercising autonomy in recruitment and salary structures, which might, create friction between employees, peers and draw inter store comparisons. There is no clear-cut strategy for assimilating information on employees, their satisfaction levels and ways to gauge their performance at work. All this and more in the long run can create some damaging effects to the organisations performance as a whole. The following report is to create an understanding and balance between problems, issues and executable solutions so that the company can align the employee/staff goals with the organisation objectives.

LITERATURE REVIEW

Michael Armstrong (2001), in his book, ‘New dimensions in pay management’ talks about new systems and processes in reward management and pay structures. It also talks in length about the factors, which need consideration when planning a new pay structure in an organisation. It also covers methods of developing; introducing and evaluating new pay structures. Organisations in towards era have to move at a fast pace while adjusting to the changes in the internal and external environment. These pressure make these organisations react in different manners, it could be delayering, project based, flexible or continuous. The emphasis is on continuous improvements in terms of performance management, reward management, personnel appraisal, quality control and customer service.  The quality of human resources within an organisation is considered a significant advantage and a differentiating factor. The focus should also be on business strategies and using systems like reward management and performance appraisal to bring about change in organisations. The reward concept is a focused effort of various forms of rewards, base pay, variable pay, benefits and non-financial rewards. The significance of pay revolves around motivational strategy, attracting and retaining employees in their job roles to build a more effective organisation. The non-financial rewards include more recognition, praise, and training options, responsibility and although more studies on organisational behaviour have revealed that it’s the non-financial rewards, which have more scope for retaining employees. It was in the year 1990 that Ed Lawler spoke about the limitations of using this approach, “The starting point for any reward system design process needs to be the strategic agenda of the organisation. Thus the first step in designing the reward system for an organisation is to focus on the individual and organisational behaviours that are needed in order for the organisation to be successful”. Lawler further enhanced and improvised on this belief to cover all organisations, “The business strategy, in particular, serves as a crucial guide in designing organisational systems because it specifies what the company wants to accomplish, how it wants to behave, and the kinds of performance and performance levels it must demonstrate to be effective”.
[Michael Armstrong (2001), p 1-15]   

Shaun Tyson and Alfred York (1989) in their books ‘Personnel Management’, talk about how most organisations design their pay and wage packages based on the hierarchy. Another big difference is that blue-collar jobs are usually at an hourly rate, the wages are paid weekly or monthly basis and the salary earners are the ones who are in a middle or senior management position. The differences are not limited to the salary; they also extend to the additional perks and benefits, which are offered to the employees. The objectives of a policy towards making a payment could be described as to ‘remain competitive for labour whilst rewarding good performance and adopting a position on pay which is felt to be fair by all employees.’ [Shaun Tyson and Alfred York (1989), p 210-211]
The distinction that companies enjoy while treating different job roles with different salary structures is a matter of internal personnel philosophy. There are certain important criterions, which needs to be considered while planning a salary and wages structure –

• If the company wishes to afford large salaries and pay packets to employees then they are working with the strategy of getting maximum output and high standards of quality and work from the employees. The effort to keep the standards high has to be sustained through time.

• If the company wishes to offer other benefits and perks like travel allowance, car, mobile phones, laptops, inflation proof pension etc, the other way of doing this could be by giving the flexibility to the employee to decide what structure would be most appealing to him or her in terms of salary spend.

• Another option is to trade off these benefits against wages. The most important factor to be seen by organisations remains retaining employees. They need to understand what appeals to the employees, what motivated them to work harder and perform better. Employee retention is a big problem and a lot of organisations are trying to tackle this through financial perks, raising salaries and other perks.

• There are options like profit share benefits and bonus schemes which also need to be worked through the system. This does not call for direct employee participation and might not prove to be a great motivational tool.

• There are policies on variation of pay frameworks, what needs consideration from management and organisations is whether pay is the main incentive and motivational tool for employees. They also need to understand the kind of employee evaluation scheme, which needs to be adopted and run.

• The organisations which operate from more than one location need to understand the repercussions of giving more autonomy to its line managers in terms of drafting salary structure and pay frameworks. The other option would be to draft a company wide policy and run it across all departments and locations irrespective of size, force and structure.

• The last step would be the pay reviews and how often one needs to undergo one at a certain location. The evidence, which is needed to corroborate what, the employee is saying and how the performance has been in the past. [Shaun Tyson and Alfred York (1989), p 210-215]

In the same way when one needs to approach the way wages are offered to the resources, the basic flat rate is what is paid to the employee based on the amount of work he or she has put in a specific time frame. Based on this principle the employee can actually generate more income by completing more pieces of work loads and assignments.

A differential piecework is what in other words means ‘time allowed’ system of piecework, other than the amount of bonus one earns, which is further shared between the company and the employee. There are then small group incentive schemes as well as long-term large group incentive schemes. Given that this paper is about a large sized retail organisation, a long term large group scheme should be a more worthwhile option to discuss although one does need to consider the number of revolving labour one is faced with at retail outlets. The big difference between these schemes is that they have a long-term goal to achieve, apply through the whole organisation/factory structure and try and involve the employees in the organisation structure and future objectives.
Given the large rotating base of employees at large retail outlets, we will consider the author’s views on small group incentive schemes. The advantages of these schemes are that they draw in the people and their tendency for bringing about a norm, which is acceptable and comfortable. This in turn leads to a team spirit, which does help while building a positive atmosphere at a store/outlet/organisation. In terms of paper work, these schemes are much easier to monitor and control. The cost savings in terms of money, manpower, effort is less considering the monitoring required, less inspection and savings on time study periods. There are indirect workers who can also participate in these schemes, the workers, cleaners; store assistants can enjoy the same benefits and perks. There is a larger amount of flexibility and teamwork amongst the work force; the people themselves are keen to get rid of hurdles and bottlenecks in the work process to help provide a better work environment.

There are disadvantages to these schemes too; there might be impacts of group pressures on workers who are not as efficient as the others. The holidays and sickness leaves will easily upset the system; there would be a need to carve out special arrangements to tackle the holidays. There could be problems with production, supply chain management that could in turn affect the performance of the employees. In retrospect this could create a substantial amount of disillusionment with the scheme.

Coming back to the long-term schemes, there are many variations, which might apply to these. The Scanlon plan (1947) was a suggestion plan as well as a collective incentive scheme. The suggestion scheme is what one comes across in a lot of production and manufacturing environments. The employees are asked to come up with suggestions on how to improve the efficiency levels and reduce time at work; these ideas are then enhanced and improvised by the management and the union. The bonus calculation in these cases is then based on the improvements shown in reducing the cost of good produced as well as improvements in the actual output, manpower per hour. Another set of work rules would be if there is a reduction in the sales revenue then the e employees would be deprived of a bonus irrespective of how hard they have worked. In long term view there is absolutely no motivational quality attached to this variation in pay structure. The other plan was introduced by Rucker (1955), which entailed the use of ‘productive value’ or added value. This was based on a collective bonus scheme. The value in this variation is the difference between the sales revenue and the cost of raw materials and supplies. This approach is very fragile with regards to the effects market forces might have on this scheme. The advantage of these long-term large group schemes is that it will provide the incentive for long-term earnings. The employee participation helps overcome the most frequently seen sentiment to them versus us. The level of involvement with the management and production base is stronger than in other cases. This helps build trust and stability. There is more scope of a wider base of applications, which can be used in the business, and the working of the organisation. The value added schemes are being adjusted to the changing conditions the company might be undergoing. [Shaun Tyson and Alfred York (1989), p 210-220]

There is however disadvantages to this long term, large group schemes. If these are actually applied across the whole production line, it might dissolve the sentiment of teamwork. These schemes need to have some form of bonus for the employees else it will have no incentive for them to perform better or to increase productivity. The larger the number of employees covered through this scheme the less the percentage which goes to each employee, hence in the final turn of events it reduces the usefulness. Another question rather doubt which arises is whether the individuals see their own efforts helping towards the final cause and long term goals of the scheme and production value. There is a list of variables which can cause damage to the production process – change in personnel, supervision, customer requirements, machinery, external environment changes.

Michael H. Bottomley (1983), in his book, Personnel Management, talks about job satisfaction, motivational tools, compensation packages and benefits which are all integral factors affecting the performance of an organisation. The writer brings an interesting fact to the forefront; the compensation package for employees had grown more complex in the past years. A simple break down of the framework seems like a complex thing to do. It is now important to design frameworks, which suit the individual requirements and needs of the employees. Any organisation has to get the mix right for them to address issues like retention, attrition, motivation and performance. While designing the pay framework for an organisation, it is important to note the background of the corporation, individuals job roles and what they entail, individual pay systems and the after effects on the performance and reaction of the employees. The external factors, which affect the way organisations can design pay packages, is because of government taxation rules and pay restraints. A lot of writers have written on the total compensation package, perks and inducements. “Simon (1958) refers to inducements as payments made by the organisation to its participants in return for contributions. Thomason (1981) identifies a level of consideration necessary to attract labour. Lupton (1975) suggests that the rules of a pay system say how effort is to be related to reward.” [Michael H. Bottomley (1983), p 80 – 90]
An interesting factor, which needs consideration, is the effect of compensation on behaviours. Two of these theories, which have surfaced, are those of expectancy and reinforcement. The critical component of the expectancy theory is the way people relate to compensation with the reward package offered as a result of providing a service. In an important study conducted by Schwab and Heneman (1975), this form of sentiment and perception was found strongest in workers with individual incentives schemes. The reinforcement model finds its origins in Skinner’s (1969) writings. The process defines and develops the patterns, which are experienced while pairing good behaviour with rewards and bad behaviour with punishment. The way this sort of conditioning takes place is through a learning process. The conditioning in this case is so deep and inherent that when an individual is faced with a similar situation, he/she reacts in a similar manner as they have done before. [Michael H. Bottomley (1983), p 80 – 95]

There are various types of payments and rewards, which can be introduced as part of the main structure. One the popular schemes are the bonus scheme, in effect the system of payments is through a bonus. There is a need to create a specific background before introducing this scheme; the management needs to be committed to the scheme. A big factor towards failure of most of these payment frameworks is the lack of ownership on part of the management. If the cost attached to the transition is not going their way, the management finds it easy to stop the process midway. The employees need to be part of any new scheme, which is in the offing; they need to know the implications, benefits, disadvantages and time frame needed for a successful introduction. The measures, which define productivity, are always a contentious issue and so the management and employees need to be on the same page. A feedback system needs to be in place through which all are informed of the progress made and how the employee stands in terms of rewards towards work input. Communication is essential while implementing any new system or process, the best route would be to discuss the progress, the ways the productivity can be increased and how can all gain the most.

The work productivity measure is more or less decided based on the following methodologies –

• The job role of the employee and the time input needed to complete the job at a satisfactory level
• The actual physical production of goods/commodities and the time taken to do so
• The actual physical production of goods/commodities and the cost of production
• An additional value achieved or the cost of labour

The cost of materials used for production, cost needed to get a production going
Another way of sharing benefits is through the profit sharing scheme. A good example for this would be Natwest, which introduced this scheme. The staff does reach a point of identification and self-achievement when the results are grouped. The employees feel a greater sense of loyalty and commitment towards the job and the organisation. The performance is not in isolation and with regards to personal achievements; the employees also begin to see the bigger picture and what it means to have greater financial success. At the end all businesses are about profit, the biggest sense of achievement is to derive a balance between employee cost and the profitability.

The three common ways to determine how much to pay in the profit sharing scheme are as follows –

• The amount of profits before tax
• The directors at their own discretion decide how much to pay the employees under this scheme
• The amount of profits accumulated after a certain limit has been reached

Andrews (1975) talks about reasons, which are critical to the introduction of compensation and pay benefits. As mentioned before by many other writers, the employee base and staff are important resources, it is important for any business/organisation to retain and attract staff to meet the current and future objectives of the company. The staff at all times needs to feel that their efforts in the organisation are noticed and rewarded accordingly. There has to be encouragement and identification of interests, which match those of the employees with regards to reward management. The employees and staff need to be motivated and propelled to perform better and take on more responsibility during the course of their work. There is a need for a set criterion for differentiating between different job roles and titles, each one has it own set of complexities and leverage, this needs to be considered while preparing a compensation package. The company also needs to see some value in the amount of remuneration and rewards being given to the employee. All organisations need to have a clear structure for career progression for all employees; they need to know what the future holds for them in the organisation hierarchy. All employees need to have some stability and ways to maintain their standard of living. [Michael H. Bottomley (1983), p 80 – 100]

Clive Fletcher and Richard Williams (1992) in their book Performance appraisal and career development talk about appraisal schemes, equal opportunity employment, future challenges and opportunities in this sphere, persisting issues, maintenance and evaluation. The appraisal systems are an effective tool, which has helped a lot of organisations to collect information from the staff and employees about pays and promotions. An increase in the bonus scheme and other incentives, this was a motivating mechanism as well as a productivity enhancer. The management to further develop and plan the welfare of the personnel used the information collected. The appraisal system also acts as a process line up for re visiting the initial recruitment decisions also a place to decide the promotion schemes and incentives on offer. This can also be an effective communication channel, for introducing new training and development schemes for the personnel; the same can also be used for succession planning. There is an inherent change in the way managers think in current times, pay and rewards are important but appraisal systems will also show that family and time off work is as crucial, else there is bound to be high stress levels and chances of complete burn out.
Guerrier and Philpot (1978, p 2-5) in their paper point out the following, “Whilst managers are concerned about their careers, they are equally concerned about their home and family life. Numerous comments on the difficulties of finding time for family and leisure activities whilst coping with a demanding job indicate the potential for conflict between these two areas of their life”.

The career concept has undergone an immense amount of change and managers are realising this while planning their internal performance management schemes. Work is no more in isolation, it involves the family and home life as well, else there will always be a carry over load syndrome from home to work and vice versa. An interesting quote in this direction of thought comes from Evans and Bartolome (1980, p 7-10), “Professional life affects the quality of private life on a day to day basis. But the reverse is not true; private life only affects the quality of professional life in extreme situations. The effect of private life on professional life is through its influence on major career and life decisions”.

Another issues which organisations now need to consider with stringent measures is that of equal employment opportunities. Equal opportunities could be based on gender, skills, nationality or religion among other factors. Organisations need to revisit their policies and regulations to ensure that they are not breeding grounds for lawsuits on various discriminatory grounds. A big reason why women have not moved too far with context to organisational skills is due to systematic barriers imposed by organisations, the attitude of the management and also partially due to their own behaviour and attitude towards career progression. If we consider the implications of the above issues with regards to retail stores like Matalan, there is a lot of temporary staff and permanent staff; a majority of the temporary staff comprise women. Organisations like Matalan need to consider the implications of treating the part timers and temporary employees as part of the larger picture, one that manages the day-to-day operations at the stores. These employees and staff need to be made part of an appraisal system too to ensure that there can be room for career development opportunities along with the full timers. Much of what has been said about women applies to members of different ethnic backgrounds and racial groups too. Their representation in management and as part of the professional roles is discriminatorily low. Although there have been steps taken to curb this partial reaction, there are still large gaps in the way these people have been treated by line managers. The performance appraisal training needs to consider the attitude and aptitude of these minority groups so that they can be pushed towards a better role when an opportunity arises.
All the authors in the literature review have managed to cast important information regarding pay structures, motivation, career development, training and development, equal opportunity, discriminatory pay, appraisal systems to counter balance the changes organisations need to make in personnel management. This will help one understand better in terms of the changes Matalan needs to introduce to mitigate the problems they are currently facing.     

METHODOLOGY

The Techniques used for data collection are both qualitative and quantitative. Qualitative research is exploratory; Quantitative research on the other hand involves statistical surveys to quantify factors previously exposed in qualitative research. Van Maanen (1983, p 9) defines qualitative techniques as ‘an array of interpretative techniques which seek to describe, decode, translate and otherwise come to terms with the meaning, not the frequency, of certain more or less naturally occurring phenomena in the social world’.

The data collated for this paper has been primarily through desk research using the internet, online journals, books, reports and the Matalan website. Given the time frame and the confidentiality regarding information on the existing pay framework being used by the Matalan stores did not leave much room for secondary research. The data collated was ample to find out patterns in changes, which had taken place at the stores and the way the staff had reacted to them. It is also reflective of the management involvement and how prompt they are to react when a problem arises at the stores. The organisation culture also came in play while researching this paper, though there is autonomy in job roles, they need to curtail that freedom to ensure that a uniform pay framework exists at all stores across job levels. Pay frameworks don’t need to be dictated only by the internal conditions prevailing in the organisation, the existing market structure would also have some bearing to what is being offered to the employees and staff.

Some authors have validated the authenticity and importance of personal interviews even though it is a more time consuming tool for data collection. The importance of interviews is summarised by Burgess (1982, p 107): ‘the interview is the opportunity for the researcher to probe deeply to uncover new clues, open up new dimensions of a problem and to secure vivid, accurate inclusive accounts that are based on personal experience’. Jones (1985, p 45) comments that, ‘between these two extremes is an abyss of practice and therefore theory about the purpose and nature of the qualitative interview’. In her view the main reason for conducting qualitative interviews is to understand, ‘how individuals construct the reality of their situation formed from the complex personal framework of beliefs and values, which they developed over their lives in order to help explain and predict events in their world.’ Though due to time constraints and confidentiality factors, interviews were not possible, we have take information from testimonials and case studies presented by employees at Matalan about the existing framework. Through the course of the research, there was some data collated from testimonials and case studies published on the Matalan corporate website. Though each shows Matalan in a very positive frame, there is no doubt that the company website wont carry information on grudges the employees and staff might have with the way the organisation operates, the management issues and the unsatisfactory pay frameworks.
The grounded analysis by Glaser and Strauss (1967) provided major benefits while understanding how the data collected from the testimonials and information from desk research had been analysed. It needs feel and intuition, there is no logical sequence one needs to follow to decipher results, there is constant sifting through, comparison with what has been found, and eventually there are some patterns, themes and categories, which emerge giving way to concepts. [Smith Easter-by Mark, Thorpe Richard and Lowe Andy (2003), p 100 – 130]

DATA COLLECTION AND FINDINGS

A report into the Matalan Store Pay framework shows that there are issues and ample grounds for legal proceedings. The way the pay structure is as of now can be the cause for a potential equal pay claims or a sex discrimination pay. The management considers the progress more through the level of jobs instead of the level of responsibility. There is no clear strategy for internal recruitment at the moment. There are reasons for dissatisfied managers due to lack of transparency in the pay structure. The new recruits are being paid at the level of market salaries whereas the internal managers are still at the old pay roll system. The HR Managers involvement and management is not up to the mark and so a lot of decisions are being taken in isolation. This is resulting in greater instability and inconsistency. All over the staff is not very motivated to perform better and the morale is low. The area managers are taking the liberty to spend from recruitment budgets, as they like instead of focusing on performance appraisals and assigning Key performance indicators. There is no clear-cut strategy for staff and employees to know they career progression and reward management system for work input. There is no room for any additional training or communication between staff and management, this will eventually lead to a downfall in performance and inability to meet company objectives.

The flip side to this information comes from some of the employee testimonials pasted on the Matalan website, all employees seem very satisfied with the response they garnered from the management when each one applied for a job. The work environment seems conducive, the management has made efforts to ensure that the employees are comfortable with facilities like diners, there are rotating job shifts when one person has to put in extra hours once a week, but this is an understood requirement. The employees are also paid company bonus as well as production bonus, which should keep them satisfied. The people are cross-trained so that teams can offer help when there is additional pressure at the stores. The work atmosphere is relaxed and comfortable to work in; it’s ok to have a laugh if the work is being done. There is always additional support from team leaders and line managers who are there to lend a helping hand or offer a solution to a problem. The employees seem content with the way the business is progressing; they all think that the organisation is headed towards an expansion and more profitability. All this brings them together to pull through and perform better so each one can benefit in the final round. One important issue which needs consideration is that these were testimonials and case studies published on the Matalan website and so even if there are contradictory issues regarding pay structures and reward management, they would not be brought up. Most of the staff, which has contributed to this effort, are mostly employees and not so much the temporary staff which is easy to find but difficult to retain. Please refer the appendices for more information on what the employees at Matalan have to say about the pay stricture, work environment and bonus schemes.

ANALYSIS AND IMPLICATIONS

As we have seen before, pay and rewards management are integral to a happier employee base and a great tool for motivation and increasing productivity. The two cannot work in isolation, pay and rewards still need a helping hand from a line manager or management efforts, which are reflective of their involvement while overseeing the welfare of the employees and the staff. Communication goes a long way in opening up channels for improvisation, increased efficiency and involvement. In the long run the after effects of human resource management, performance appraisals do not seem like problematic issues but if not tackled at the right time with sensitivity, they can affect the overall performance of the organisation. The Matalan pay framework has immense scope for improvement and changes, which will not only benefit the organisation but also make a difference to employee performance.

CONCLUSION

Organisations are now cutting down on their structure and employee base to keep the momentum going while moving into future stages of advancement. There is actually a great amount of discrimination in the junior and middle management job roles. Since the advent of technology and greater input of the same in business and organisations, there is a need for more specialist positions. Companies now seek more flexibility in job rotation and employee commitment towards changes, which might be internal or external. A core aspect of this flexibility is to have a staff, which is trained for their respective job roles, and have the skill to work on a variety of other roles as well. For this group of people, promotion is not in the line of a career graph since the need for more flexibility and room to perform. To keep the motivational levels going, the organisations need to use pay as a tool for getting optimum performance levels. Along with all these changes, there is also a need for new ways to reward and pay the employee base. More attention needs to be paid to appraisal systems to get a higher performance from the staff. There is a continuous argument about the relation between pay and performance, as much as people would like to break the two, there is a parallel relationship. There are other means of ensuring that the employees are satisfied and willing to perform harder at their job roles. Yet all motivational tools do finally lead to pay, rewards and monetary benefits.

In conclusion, it had been more than apparent that although cash as a pay and reward tool is very important in terms of motivation, it is not the be all and end all for employee satisfaction and organisation performance. A complete package is something which adds value to the lifestyle of the employee/staff and that cannot be done solely on monetary terms. There has to be a balance and creation of better opportunities for growth and development, only then will the organisations be able to create a level of commitment and loyalty towards the job role and the organisation objectives. The commitment from the employees has to be whole hearted and inspired by the efforts the management puts in to gain the maximum in terms of productivity and efficiency. For this there is an increased need for fuller communication and familiarity with the work force. The organisation and management need to listen to the employees and their beliefs since they are the ones who run the daily operations and would be at a greater advantage point to know the advantages and places for improvement. To do so the overall organisation philosophy towards the work force needs to remain simple and compact, this will stream line the process and engage in a more complete relationship between the organisation and employees. 

RECOMMENDATIONS

The Company has acted on the implications of introducing a clear-cut pay framework at all Matalan stores. The Chairman in his review divulged that an employee benefit trust was introduced to offer more incentives and a way to retain Matalan key management by offering company shares. An additional retention bonus is being offered to the key senior management and staff during the same period. This will be offered in the form of share options, this scheme was introduced and executed in the years 2003-2004.

Organisations are now working in highly competitive environment among other resources the most important are the employees. They are the biggest assets for any company/enterprise. The biggest threat that companies now face is the attrition rate at which employees are leaving and moving jobs, a big reason identified for this problem is better pay. As much as this would stand true in most situations, the senior management needs to become more involved in the tackling f this critical issue. Exit interviews with employees will reveal that though Pay is instrumental in their moves and performance management, there are other factors at play too. These are the non financial rewards and perks in the form of avenues of training and skill development, appreciation tokens from senior management, communication from line managers about god performance, timely talks to boost morale and commitment. All these are factors which make the employees feel that they are part of the organisation, this is when they can start focusing on the bigger company objectives rather than focusing on their individual roles and tasks. Matalan has shown their commitment towards employee retainer ship programs but they need to work further to ensure that staff in stores is also part of this bigger objective. The store staff is the one, which is responsible for the day-to-day management of the sales and revenues. The following are some ways to increase the involvement of the staff and boost their morale through non-financial rewards.

• Introduce an employee suggestion box, the best suggestion would be implemented across the store and if successful, the execution would then be carried out across all stores.
• Introduce a store news letter which provides a platform for showing recognition to staff and employees for achieving their targets
• Training and development programs which give an insight into a career progression plan within the store design
• A special discount scheme for the best employee/staff for achieving their assigned targets and performance indicators
• Room for promotion if one is constantly showing a success rate at all that they have been assigned in the job role
• Constant reviews and communication between the management and the staff
• Timely informal meeting of the store management and staff during non official hours to display the commitment of the organisation towards staff management
• A more transparent pay scale, which offers timely rewards to employees/staff who are performing well. Incentive scheme for the old and new based on performance.

On the financial side of the pay system for store population, there is a need for reforms too. The management needs to give consideration to the fact that the employee base is constantly changing giving the assistants who are constantly in and out of the role.

• A different pay scale for the temporary and permanent staff
• The permanent staff needs to see the commitment of the management towards their welfare and benefits
• The temporary staff needs to see incentives and perks too so that they can aim to convert into permanent staff
• The career progression path needs to have simplicity and transparency, an equal platform for all staff if they want to achieve more in their respective area of work

• Benefits and perks for all those who meet the key performance indicators
• A certain amount of autonomy is always good for the store managers or the area managers and yet there needs to be a set guideline towards recruitment and pay structures from the head office. This will help create a uniform and consistent plan regarding recruitment and pay structures.
• A monthly Appraisal system for both permanent, temporary and part time employees and staff

IMPLEMENTATION PLAN

All the information we have collated and discussed above seems to charter out an implementation plan for the work force at Matalan. To briefly summarise what will need to be accomplished at the stores would be easier done with cost analysis and time schedules. Though the recommendations have been towards both financial and non-financial rewards and pay structures, there is only so much, which the organisation can execute given the expenditure, resources and time needed. For these reasons the objectives have been grouped to enable easier execution.
There is a need for a well-being program which might offer free health advice and regular check ups. The organisation could also offer insurance, give out regular seminars about work health related problems. A current favourite with a lot of organisations is a subsidised membership to a gym unless they have the capacity to provide one on their own premises.

Like other retail organisations it would also help to provide some sort of cover for death and disability for employees who have been with the company over a significant period of time. Retirement and Pensions options are proven methods to combine long term employment plans, since more and more people are now concerned about the future and monetary savings. Car parking facilities near the work premises might seem trivial but it goes a long way in providing that much needed comfort when people struggle with parking lots during peak hours. An appraisal system to ensures that employees who perform well are given special assignments to prove their full potential; this also makes the employees feel more appreciated. Stock options and more creative opportunities are great ways of fostering empowerment amongst the employees; the feeling of ownership in the company makes one feel more responsible towards higher productivity and greater efficiency.

The first step would be to introduce a charter covering all the above and recommendations which can be implemented by the human resource personnel at Matalan within specific time schedules and costing. Then the charter will be introduced across all Matalan stores; there is a need to be sensitive towards employees and staff in times when there will be structural changes within the organisation. Bringing all employees on one platform and level will need time and patience. Once the issues are formally on the forefront there is a need to plan time sheets and costs needed for additional training and integration process. All these efforts will need process mapping to get from point A to point B successfully. If the organisation works in arms with the employees and staff, this implementation plan can get major headway in less time then implied. Communication channels would need to open at all times to ensure the smooth transition from old to new pay structures.

LEARNING REVIEW

There was an immense amount of learning while writing this paper and doing the background research into facts and figures. Organisational behaviour and human resource management are very integral aspects of any company. The management perspective on both these aspects has changed, more and more time effort and resources are being allocated to ensure that the company objectives are met while keeping a balance between the management and employees. As an employee all one expects is a clear path towards progress and appreciation while achieving targets set by the management and on a personal level. Pay structures are important to bringing some amount of stability and transparency in the way the organisation operates. Rewards and Pay are seen as major forces for motivating the employees to perform better. At the same time a lot of stress has been laid on the non-financial aspects like skill development and training, value added perks like family holidays, appreciation on part of the management, open channels for communication between management, employees and staff. This paper brings to light a lot of factors, which are misguided efforts towards failure. The organisation goals and objectives have to be in line with the individual job roles and performance indicators. Only when employees will perform in their individual job spec would the company progress towards their pre determined targets. The internal base and resources need to be strong to contend with external forces in the environment like competition, changes, market structures, target audience, customer reactions and legislative rules. An individual needs to be motivated and appreciated for the efforts they put in, it is not pay which always drives a person to enhance performance. If some more research were put in understanding reasons why employees feel a need to change jobs, pay would probably be among the lower rung of reasons provided.

REFERENCES AND BIBLIOGRAPHY

• Y Guerrier and N. Philpot (1978), The British Manager: Career and Mobility, Management survey report No. 39, British Institute of Management
• P. Evans and F. Bartoleme, Must success cost so much? (Grant McIntyre 1980)
• Armstrong Michael and Brown Duncan (2001), New Dimensions in Pay Management, London, Chartered Institute of Personnel and Development
• Bottomley H. Michael (1983), Personnel Management, Great Britain, Pitman Publishing
• Fletcher Clive and Williams Richard (1992), Performance Appraisal and Career Development, Cheltenham, Stanley Thornes Publishers Ltd
• Holloway Jacky, Lewis Jenny and Mallory Geoff (1995), Performance Measurement and Evaluation, London, Sage Publications
• Tyson Shaun and York Alfred (1989), Personnel Management, Oxford, Butterworth Heinemann Ltd
• Fletcher Clive and Williams Richard (1985), Performance Appraisal and Career Development – The personnel management series, Melbourne, Century Hutchinson Publishing Group
• Smith – Easterby Mark, Thorpe Richard & Lowe Andy (2003), Management Research – An Introduction, Great Britain, The Cromwell press Ltd.
• Burns C. Alvin and Bush F. Ronald (2000), Marketing Research, USA, Prentice Hall International
• From the Internet - http://www.matalan.co.uk/careers/testitxt.htm

APPENDICES

Clerks & Administrators Ray Fryer – Distribution Clerk

Paul Copplestone (Age 27) Administrator

Testimonials-Team Members

Dave Bradbury – Team Member – Hanging Team.

Colin Eadie (age 38) – Team Member – Assembly

Paul Gallagher (Age 19) Team Member – Returns Team

Testimonials Team Trainer Andrea Jenkins – Team Trainer

Testimonials Supervisor Jamie Hulme (Age 28) – Supervisor, Assembly Department

Testimonials Shift Manager Tom Lowther (Age 40) – Shift Manager

I was made redundant by a retailer, which closed down a part of its business. Being in the retail industry for a while I knew about Matalan Retail Limited – that is, when it started, how it started, the growth it was experiencing. The ‘word on the street’ was that Matalan Retail Limited was growing – and seen by other retailers to be taking a slice of the market. I decided to have a look at Matalan’s web site to see if there were any jobs available. There was and I applied immediately. I’ve been here for 18 months now and have seen so many improvements in this short time. Communication cascades from management down and from the shop floor up and there’s more forward planning. We used to experience peaks and troughs in work scheduling but this has smoothed out now which means we don’t have as much down time. All these changes mean we’re nearly always working up to maximum capacities. Staff is managed better, which improves productivity. People are cross-trained for different teams, which provide them with variety and ensures areas, which are busier have a large enough team to meet targets. We’ve also introduced an NVQ training scheme so people benefit from career progression. Matalan Retail Limited and the positive change it is experiencing means my role is very hands-on and diverse. Because systems are not cast in stone I have the flexibility to do things differently and this gives me more control. No two days are the same and this is what I really enjoy. I don’t have time to sit and wonder what to do next. The people also make the job fun. The people, the volumes, and the atmosphere - each day we have a different target to meet. The team makes sure that each and every store throughout the country has the products it needs, when they need it. And we do all this in a busy relaxed environment.