Executive Summary

Luxe Mart is an Australian retail giant with a staff capacity of about two million people. The store is renowned for its quality but cheap products and exceptional customer service. It is also endeared because of its elaborate CSR activities. Regardless of the positive reputation, its growth has stalled, and sales are decreasing. This report aims to establish the problems causing this turn of fortunes and ground them in management theory. The two major issues identified included poor employee motivation and lack of focus on employee wellbeing and capacity development. They were analyzed using Abraham Maslow’s theory of needs as a basis of motivation, and Frederick Taylor’s scientific theory of management. These problems must be solved to get Luxe Mart back on a path of prosperity and retain its reputation as a retail giant in the Australian industry.

MCP Report

Problem 1: Identification and Analysis

The most glaring management problem Luxe Mart is currently facing involves poor employee motivation. The issue of motivation in Luxe Mart’s case can be explained through Maslow’s theory of needs. The model has five levels, including physiological, safety, love/belonging, esteem, and self-actualization, in descending order of importance (Cherry, 2019). Employees are motivated when most or all of these needs are met. Lack of various elements of the needs theory has manifested itself extensively in the case of Luxe Mart. The company’s motto, “Stay Alert, Don’t Get Hurt,” already shows that the organization has left the responsibility of safety to the employees themselves. In particular, while a company should be playing a role in the protection of its workers, Luxe Mart views occupational health and safety as the sole responsibility of individual employees. Shelves are stocked too carelessly and high. Even the Fair Work Ombudsman has confirmed that the company does not take the safety of its workers seriously. Safety and security needs form the second most crucial element of human needs, according to Abraham Maslow (HealthKnowledge, 2017). These needs comprise of health and wellness, financial security, and even safety from accidents and injury (HealthKnowledge, 2017). In an engagement survey, over 60% of the staff members expressed their worry about getting injured, with another 37% noting that they could neither understand nor implement the safety guidelines that their managers provided. None of Maslow’s safety needs seem to be met in Luxe Mart, and the impact includes a potential closure of the stores by the Fair Work Ombudsman in two months.

Lack of motivation is also reflected in the level of boredom or employee disengagement evident in the company. The second and third tiers of Maslow’s theory of needs base motivation in the sense of love or belonging and self-esteem. Humans, as social beings, need to forge meaningful friendships, romantic attachments, social, and community groups to avoid problems such as loneliness and anxiety (Cherry, 2019). In Luxe Mart, there is no synergy, not only between employees themselves but also between them and their managers. The disconnect between workers and managers is manifested in the fact that the superiors do not understand their problems, and describe the sheer lack of employee engagement as mere boredom. Employees have also decried the presence of inexperienced supervisors. The lack of synergy and collaboration can be seen when day-shift employees complain that their nightshift counterparts do not bother to vacuum or clean the stores. Managers are also discriminating against employees, with favorable task allocation given to those who have a good relationship with the particular superiors. Ethnicity and favoritism have taken center stage in the organization. The impact is complete employee disengagement because they do not feel a sense of love and belonging to the company. Employees are no longer passionate about their jobs and have a shallow commitment to the organization.

Luxe Mart has also created an environment that does not encourage intrinsic motivation. Such type of motivation is derived from the fulfillment of self-actualization needs in Maslow’s theory. Intrinsic motivation is driven by internal rewards such as feelings of being on the right career path, appropriately overcoming challenges, and actualizing personal growth objectives. In Luxe Mart, employees have reported not feeling challenged to self-actualize. Some have noted that the goals are extremely simplistic to the extent that they meet all their requirements barely 50 minutes into their 8-hour work schedule. It is not even clear if the young managers and supervisors are competent in setting goals because of their nonchalance in performing their duties. The lack of intrinsic motivation stemming from low feelings of self-actualization continues to affect the organization negatively in various capacities. It has created employees who are not willing to do more than they should. For instance, some of them wondered why they should do more when they are neither challenged nor recognized for excess effort.

Problem 2: Identification and Analysis

The second problem is the lack of visionary leadership that focuses on the welfare and capacity development of the employees. The problem is illustrated in Fredrick Taylor’s scientific management theory. Notably, the four principles of this model include determination and allocation of tasks based on scientific evidence, proper understanding and selection of workers in a manner that each of them performs a job in which they exhibit utmost competence, frequent and scientific capacity development, as well as friendliness and sustained cooperation between top management and employees (Paramboor, Musah, & Al-Hudawi, 2016). All these four principles are violated in Luxe Mart. As an austerity measure, the company has put younger and inexperienced staff at night. Task allocation and selection of workers is done solely based on cost-saving rather than competence or proficiency. As a result, one staff member complained that managers and workers constantly spend time on their phones, leaving work undone.

Similarly, shift scheduling is done based on unethical practices such as favoritism and whether the relevant executive staff shares religious beliefs or culture with particular employees. The complete violation of the first and second principles of the theory has created a situation where some workers have to do more as the rest accomplish nothing. Such an imbalance is detrimental as it could cause fatigue and ruin the relationship between employees as others feel they are overburdened. This aspect is seen in lack of performance of simple tasks such as confirmation of pricing, which has cost Luxe Mart $1 million in one financial year.

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Luxe Mart’s leadership does not have any wellbeing or capacity development programs. The scientific theory recommends the education and development of employees, which involves occasional training and financial incentives as a means of boosting productivity (Turan, 2015). The company has not trained its staff on the intricacies of customer service. One customer complained that staff members just stood around, laughing and conversing with each other as they ignored the plight of one older woman who needed help with a price confirmation. In a complete show of recklessness, one staff member even hit a customer’s leg as they pushed a trolley while talking to each other. Yet, the scientific management theory recommends that supervisors should closely monitor staff to ensure that they uphold business best practices (Conlin, 2019). However, as other staff members already indicated, the night shift managers are too young and inexperienced.

Similarly, the staff members do not seem to have got any training in in-store look and feel, or probably did not just care. Customers complained of huge rats terrorizing them in the store and, even when they reported to the supervisors, they got nothing more than just a meaningless ‘sorry’ without a promising solution. Spilled drink stayed on the floor for one hour with no staff seeming concerned enough to clean it up. As a consequence of lack of training or capacity development, the workers do not perform their responsibilities properly and do not seem to understand simple safety concepts. The scientific management theory suggests that managers must take time to understand the challenges of their employees, frequently train them, and plan for the future together (Conlin, 2019). Lack of knowledge not only inhibits creativity but jeopardizes productivity, as can be seen when Luxe Mart’s employees show a complete lack of enthusiasm in performing their tasks.

Additionally, there is no friendly cooperation among the employees (Paramboor, Musah, & Al-Hudawi, 2016). Junior employees badmouth their seniors who do not seem to be bothered. An evaluation of the relationship reveals profound issues that no one seems to be willing to solve. The executives who should initiate a conversation are busy discriminating their juniors in an epic show of the most mediocre leadership skills and unscientific management, as recommended by Taylor’s theory (Uddin & Hossain, 2015: HealthKnowledge, 2017). They do not even recognize the effort of employees who do more than they should. One hardworking employee states that even after achieving 200% of their target, they get no form of recognition, not even a simple verbal appreciation. Worse yet, the executives are quick to punish any wrongdoing in the most stringent way possible. These problems have compounded into a human resource crisis for the company. Notably, 80% of the workers plan to leave in the next two years, while 62% are already on their way out. Without employees, the company will most likely shut down or incur considerable expenses in recruiting new staff.

References

Cherry, K. (2019). The Five Levels of Maslow’s Hierarchy of Needs. Retrieved from Verywell Mind website: https://www.verywellmind.com/what-is-maslows-hierarchy-of-needs-4136760

Conlin, B. (2019). Popular Management Theories Decoded. Retrieved February 13, 2020, from business.com website: https://www.business.com/articles/popular-management-theories-decoded/

HealthKnowledge. (2017, July 25). Management models and theories associated with motivation, leadership and change management, and their application to practical situations and problems. Retrieved from Health Knowledge website: https://www.healthknowledge.org.uk/public-health-textbook/organisation-management/5c-management-change/basic-management-models

Paramboor, J., Musah, M. B., & Al-Hudawi, S. H. V. (2016). Scientific Management Theory: a Critical Review from Islamic Theories of Administration. International Journal of Economics, Business, and Applications, 1(1), 8-16.

Turan, H. (2015). Taylor’s “Scientific Management Principles”: Contemporary Issues in Personnel Selection Period. Journal of Economics, Business, and Management, 3(11). https://doi.org/10.7763/joebm.2015.v3.342

Uddin, N., & Hossain, F. (2015). Evolution of Modern Management through Taylorism: An Adjustment of Scientific Management Comprising Behavioral Science. Procedia Computer Science, 62, 578–584. https://doi.org/10.1016/j.procs.2015.08.537