ROLE OF CORPORATE GOVERNANCE IN OPTIMISING WORKFORCE PRODUCTIVITY

ROLE OF CORPORATE GOVERNANCE IN OPTIMISING
WORKFORCE PRODUCTIVITY

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Abstract:
The current study supplies detailed analysis and evidences of corporate governance
practices of Tesco and the process how effective governance can impact on the
workforce productivity. In order to research on this topic in a systematic way, the
researcher has divided the entire study into several interlinked parts. In the
introductory chapter, the author has mentioned the primary aims and objectives,
along with rationale of study to view the significance of the research in current
context. Tye past studies and evidences are analysed in second chapter to structure
a literature on the topic undertaken. According to theoretical evidences, corporate
governance is the set of rules or principles that firms employ in organizational
procedure to execute a fair and ethical trade practice. However, different factors
affect the employee performance as being present in the governance policies. Tesco
basically follows standard governance structure whereas there is space to widen the
area of improving workforce efficiency by upgrading governance. In the
methodology chapter, the author has mentioned the best possible approaches that
have been employed thorough selecting right blend of research paradigms. Besides
positivism, the researcher has selected deductive approach and descriptive design.
The data has been collected via survey from employees and interviews with
managers.
The gathered information has been processed in fourth chapter using analytical
tools for the purpose of a systematic representation. The analysis of the same has
been performed in this chapter targeting to link with the existing literature as
conclusions could be linked with initial objectives. The analysis has explored
potential options to improve the governance of the organization that better
employee productivity could be promoted. However, the stages of improving
corporate governance policies has been mentioned in chapter five based on the key
findings and analysis.

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Acknowledgement:
The current research helped me increasing my knowledge regarding the significance
of corporate governance in enhancing the productivity of employees. Focusing on
Tesco, the research has upgraded my knowledge and skills regarding the
effectiveness of the same in enhancing employee efficiency of the organization in
context of global platform. I would like to thank my academic guide to help me in
completing the project through sharing their knowledge and other relevant
information. Such guidance has led to produce source of inspiration. I would like to
thank personnel of Tesco being a great part of this project to provide such
recognition. They have shared valuable time and knowledge to complete tasks.
Finally, I wish to offer my gratitude to my parents and friends for being supportive
to me both financially and morally while collecting data from proimary and
secondary sources. After getting the support of all these people, I could successfully
complete the project.
Yours truly,

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Chapter 1
Introduction
1.0 Introduction:
Corporate governance plays a significant part behind the growth of a business
organisation particularly in the modern day context where organisations need to
constantly conduct business operations in a stiff competitive environment. The
board level leadership has gradually become the core of business functions and that
is the area that determines the level of competency an organisation is likely to
experience in order to thrive in the relevant sector. In the words of Metzger et al.
(2005), corporate governance aligning with the board leadership is directly linked
with the corporate reputation of a business organisation. With the appropriate sort
of leadership aspects, organisations can manage to introduce advanced core values
that could ultimately improve the chances of prospering in the industry.
Considering the proposition of Trevino et al. (2009), a successful corporate
governance framework would promote effective stakeholder contribution to the
respective business. Investors along with other stakeholders in the modern era
understand that addressing the social, environmental and governing responsibilities
are important in order to ensure long term business sustainability. Proper analysis
of the external business environmental factors generally helps in developing
contingent business models that would provide a flexible system to the
organisations to tackle adverse scenarios while conducting successful business
operations (Jacobs, 2004). From a financial perspective, proper assessment of the
business environmental factors would determine the accountability of the business
and profit margin and therefore the board members are responsible for dictating
the growth of the business through the strategic directions.
One of the contemporary management practices in the modern day context is the
involvement of the employees in management decision making process so that a
learning work culture can be integrated within the work environment. Dandino

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(2004) argued that in majority of the cases, corporate governance is limited to the
top management only while considering the perception of the organisational
employees can shed light on a number of concerned areas. The inclusion of the
organisational employees in the management decision making process would not
only mean greater dimension of thinking at the time of decision making but also
employee empowerment that could contribute to increase the workforce
productivity.
The prospect of stakeholder participation by means of inclusion of organisational
employees in the decision making process has been a major motivation behind the
choice of the research topic as the process could help in enhancing workforce
performance. In order to test the impact of such process, the case of Tesco would
be highlighted which is also the chose organisation for the dissertation. The
workforce of Tesco is found to be quite dynamic in nature mainly because of the
flexible management system of the organisation. Hence, the dissertation would aim
to evaluate the corporate governance policies and the probable impact of such
policies on the workforce performance of the enterprise.
1.1 Background of the study:
The corporate governance concept is associated with the practising of power for the
betterment of social and economic scenario, involving the stakeholders of business
organisations. In the words of Covin and Slevin (2009), employees are the most
important asset for business organisations nowadays and are needed to be
managed properly so that perceived workforce performance could be expected.
However, one of the major issues in the contemporary business organisations is
that modern business firms focus too much on the shareholder value neglecting the
perception of the workforce. Baron and Kenny (2006) argued that business
organisations often neglect the workforce motivation while prioritising getting
increased shareholder value. The approach however might impose a negative
impact on the organisational workforce as a result of which, workforce productivity
could be hampered.

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Corporate governance is considered to be the key foundation for business
organisations to be more productive while achieving a long term product life cycle.
Ross (2003) established the fact by proposing that corporate governance policies
are developed keeping in mind the aspects of business sustainability. Although the
accuracy of the corporate governance policies can be critical at times but the aim of
such policies is always achieving a continuous growth giving rise to sustainable
business development. Novikova (2004) mentioned that organisations in
contemporary business environments are particularly prioritising the corporate
governance policies in order to tackle the changes in business environment. The
adopted corporate governance policies can often dictate the level of firm’s
competency in the respective sector and therefore, the accuracy of the corporate
governance policies can influence the long term prospect of the business.
Previous researches in the similar domain established the fact that management
policies and firm’s competency level are associated with each other with a better
governance policy can push organisations towards higher market positions (Bolbol
et al. 2005). Considering the findings from the study of OECD, corporate
governance can be referred as a system that helps directing or controlling business
organisations. The corporate governance framework promotes the roles and
responsibilities for the associated stakeholders of a particular business organisation
so that the human participants can be aligned and engaged to fulfil a shared cost.
Despite corporate governance being limited to the top management only but
successful organisations consider the perception of organisational employees to
develop relevant governance policies. As mentioned by Brown and Caylor (2004),
the perceived corporate governance policies would always be a viable option to
optimise the organisational performance.
1.2 Background of the chosen organisation:
Tesco is currently enjoying the top spot in the UK’s retail sector and is considered
as one of the largest retail chain business in the world. The brand is operating in
more than 12 different international markets and a team of more than 530,000
people are engaged in operational activities. Considering Tesco’s operation in UK
alone, the brand is operating in more than 3,370 stores managing a workforce

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consisting of 310,000 employees (Tescoplc.com, 2014). A significant number of
scholars believe that the reason behind the success of Tesco has been due to the
approach of the brand in managing a vast workforce. The joint contribution of the
Audit committee, Corporate Responsibility Committee and Nominations Committee
helps the brand in following a sustainable workforce management scheme, resulting
in continuous workforceimprovement.
1.3 Research aim:
The current research aims to investigate the role of corporate governance in
effectively managing the organisational workforce and thus optimising the
workforce productivity. The research also aims to evaluate the case of Tesco and
judge whether Tesco’s corporate governance policies are helping in optimising the
workforce productivity.
1.4 Research objectives:
The following objectives serve as the guidance for the research study achieving
which, the problem area is going to be addressed:
 To assess the significance of corporate governance in enhancing workforce
productivity.
 To identify Tesco’s corporate governance policies in respect to workforce
management
 To determine whether Tesco’s corporate governance policies is contributing
towards improved workforce productivity.
 To evaluate strategic options for the betterment of corporate governance at
Tesco’s so that better workforce productivity can be experienced.
1.5 Research questions:
Following research questions are going to be addressed during the study to fulfil the
research purpose:
 Is effective corporate governance necessary for increasing workforce
productivity?

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 What are the corporate governance policies followed by Tesco to effectively
manage the organisational workforce?
 Are the corporate governance policies followed at Tesco useful in enhancing
workforce productivity?
 How can the corporate governance policies of Tesco be improved so that
better workforce productivity can be experienced?
1.6 Research purpose:
The purpose of the study is to assess the significance of corporate governance
policies and whether such policies enable business organisations to optimise
workforce performance. Corporate governance is an integral part in modern day
business environment and helps structuring the organisational framework with a
bundle of specific rules and responsibilities for the associated stakeholders. Hence,
the current research study would try attempting to evaluate whether corporate
governance enhances workforce performance. Tesco is following an effective
corporate governance policy to manage the workforce and the recent statistics
suggest that the brand has experienced a desired performance level from the
workforce. Hence, the study would try assessing the corporate governance policies
of Tesco and determine whether the followed policies at Tesco have some roles
behind enhancing workforce performance.
1.7 Research rationale:
Corporate governance policies have turned out to be a significant aspect of business
particularly in contemporary business environment. The variables involving the
business environment impact significantly on the organisational performance and
therefore modern day organisations try following a compatible governance policy so
that the business environmental factors can be tackled and sustainable business
growth can be experienced. The availability of resources and prospect might not
guarantee long term success and therefore organisations rely on particular
governance policies to utilise the resources and fulfil the potential. The motivation
behind the current study has been the importance of corporate governance policies
and the influence of such policies in enhancing the workforce performance. Tesco

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has been well renowned for respective corporate governance policies and therefore
the brand is the chosen organisation for the current research study. By analysing
the research context on the basis of Tesco’s scenario, conclusion can be made
whether effective corporate governance can enhance workforce productivity.
1.8 Structure of the dissertation:
The overall dissertation has been conducted using six chapters including
introduction, literature review, research methods, data analysis and conclusion. The
findings from each of the chapters contribute to the overall findings from the
research study and eventually the conclusion has been derived. A brief overview of
each of the chapters has been given below.
Chapter 1: Introduction
This is the introductory chapter briefing the context of the study. The chapter
introduces the aim and purpose of the research study along with the research
objectives and research questions. A background of the study has been provided
regarding the research domain and a rationale has been given highlighting the
justification for the choice of research.
Chapter 2: Literature review
A range of existing literatures along with theories have been discussed in the
chapter that relates to corporate governance and workforce performance. The
literatures have been critically reviewed considering the proposition of several
authors and scholars so that the gap within the existing literatures can be
identified. The chapter creates a theoretical platform for the research study and the
findings from the chapter have been used later during data triangulation.
Chapter 3: Research methods
The chapter covers the methods and strategies adopted by the researcher during
conducting the current research study. Methods such as philosophy, approach and
design relating to the research study have been highlighted in the chapter followed

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by data collection, data analysis and sampling method. A timescale concerning the
research study has also been highlighted at the end of the chapter.
Chapter 4: Data analysis and findings
The primary data collected during the study have been analysed in the chapter. The
overall data analysis have been categorised into two segments including
quantitative and qualitative data analysis. Quantitative data have been represented
using graphs and charts while qualitative analysis has been done considering the
responses of Tesco’s managers.
Chapter 5: Conclusion and recommendation
This is the final chapter that summarises the overall findings from the research
study. The research objectives have been linked with the research findings in order
to gauge the accuracy. On the basis of the findings, some recommendations have
been provided which can be followed by Tesco to improve workforce productivity.
1.9 Summary:
The chapter introduces the intention of the research study. Initially a background of
the study has been highlighted followed by the aim, objectives and research
questions that are meant to be addressed in the due course of the research.
Corporate governance is found to be a significant strategic option for business
organisations nowadays in order to improve workforce performance. Hence, the
study has been conducted on the basis of this aspect and wishes to evaluate the
role of corporate governance policies in enhancing workforce productivity.
Accordingly, the chapter promotes the purpose of the study along with the
rationale. At the end of the chapter, the structure of the dissertation has been
highlighted.

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Chapter 2
Literature Review
2.0 Introduction:
The chapter is all about the brief about the theories and evidences regarding the
topic. The key aim of this chapter is to provide detailed information regarding the
literature of topic under taken to support the entire research obtained desired
outcomes. However, this portion of the research is also helpful in conducting
appropriate data collection process that outcomes could assist the author reach at
optimum conclusion. Here, the chapter offers different dimensions of corporate
governance and its role in optimising workforce productivity. It also enlightens the
factors affecting workforce performance policies of Tesco. Therefore, how Tesco
executes its governance policies in workforce management to improve productivity
has been proven throughout the entire research. The current section also highlights
the standard action plans that Tesco, being an international retailer can employ into
its governance policies Moreover, undertaken literatures also help in analysing the
outcomesin context of the objectives and existing evidences.
2.1 Corporate governance:
Corporate governance is the collection of rules and practices through which the
organisational activities in different sections are monitored. However, the term has
been defined by Bathala and Rao (2005) as the sum of process and norms that an
organisation develops to address the interest of different stakeholders of the
company. On the other words, corporate governance policies value to its stakes
including shareholders, management, customers, creditors, financiers, government
and communities. Therefore, as opined by Ross (2003), the corporate governance
offers a clear frame to attain primary objectives of the company. In context, the
governance policies encompasses each corner of the management activities
involving action plans, intra-organisational monitoring process, corporate activities
and performance measurement.

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Novikova (2004) has acknowledged that corporate governance structure of the
organisation is based on the principles of conducting the entire business strategies
with integrity and sufficient clarification. Supporting to this statement, Bolbol et al.
(2005) has stated governance process of an organisation ensures that management
processes in every sphere of the organisation are executed in a proper manner to
meet societal expectations through resource optimisation. However, governance
policies vary over the organisations depending on business type and mode of
operation, determined via setting objectives.
2.2 Significance of corporate governance:
Most of the companies currently have endeavoured to have a high standard of
corporate governance to demonstrate effective corporate citizenship rather just
focusing on profitability through environmental awareness, ethical aspects and
social activities based on governance practices. As stated by Baron and Kenny
(2006), good corporate governance bases effective decision making process by
sketching out a well balanced accountability on a clear understanding regarding the
roles and responsibilities of the organisation under certain circumstances.
On the other side, Novikova (2004) has mentioned that an effective corporate
governance enables the organisation to deliver improves and effective services
meeting customers’ requirements. In addition, Ross (2003) has depicted that good
governance structure frame the internal system of the organisation through
detecting service requirements and maintaining required quality. Consequently,
poor governance fails to meet the requirements of the stakeholders and thus result
financial failure.
Corporate governance is effective while ownership structure is on changing mode to
cater a transparent view of the business activities. However, key importance of
corporate governance has been demonstrated by Brewster (2009) as the risk
mitigation tools where it prevents various corporate scandals, fraud and offensive
liability of the firm. Therefore, it enhances the positivity in mind of the
stakeholders. Additionally, Bolbol et al. (2005) has mentioned corporate
governance as a blend of shared philosophy, practices and culture of the

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organisation whereas employees could be benefitted from such internal structure to
continue the fain business activities towards a sustainable future.
The governance policies enable the organisation to promote a transparent and
effective market structure whereas Ross (2003) has stated it as law, articulating
the segmentations of responsibilities among several organisational or departmental
bodies like supervisor, regulations and empowered authorities. Corporate
governance promotes equitable treatment of the shareholders that also includes the
minors and foreign investors. It has also been evidenced that corporate governance
ensures that the corporate disclosures are made on time and in an accurate fashion
on all the materials available in organisation such as financial provision, workforce
performance and ownership structure of the company.
However, Novikova (2004) has observed that there are some attributes affecting
the corporate governance of the company. In context, Bolbol et al. (2005) has
mentioned basic four attributes, skills and knowledge, process, relevant information
and organisational behaviour to be effective in developing effective and interactive
governance within the organisation. In case of the current study, corporate
governance is one of the crucial part of Tesco to pursue consistent and fair business
practices globally to ensure better productivity and quality performance.
2.3 Workforce productivity:
Workforce productivity can be defined as effective measurement of economic
growth of the country. In this context, Datta et al. (2005) has stated that workforce
productivity measures the real GDP produced by the workforce during certain time
interval. Generally, the workforce productivity determines the amount of goods and
services produced within an hour of production. Improvement of workforce
productivity is based on some basic factors like, investment and savings,
technological advancement and enrichment of human capital. Therefore, as opined
by Bolbol et al. (2005), workforce productivity can be recognised as one of the key
determinants of measuring sustainability of the organisation. However, Brewster
(2009) has argued that productivity itself is dependent on certain range of factors
and thus varies over a little change in situational demand including those concerned

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factors. On the other hand, Beaumont et al. (2000) has opposed that workforce
productivity could be enhanced under a strong framework of the rules and fair
practices. Therefore, each organisation in current context needs to employ a
potential governance structure in business to obtain desired outcomes within a
certain projected time interval.
2.4 Factors affecting workforce productivity:
The following factors have a great impact on the productivity of concerned
workforce.
Time:
Time is one of the crucial factors affecting productivity in the form of working
schedule and total time span of the project. As derived by Baron and Kenny (2006),
from the previous researches, the most frequent reason for lower productivity is
fatigue, absenteeism, low morale, lack of proper supervision and no of reworks.
Type of project:
As mentioned by Covin and Slevin (2009), effective productivity is highly influenced
by adequate space required by the employees to perform without any interruption
from the other employees. It has been evidenced that involvement of too many
employees within a limited space could create conceptual conflicts and decrease
productivity.
Health and Safety:
Health and safety is now the current issue in every organisation determining the
productivity. However, Brewster (2009) has shaded that frequent accident could
decrease the workforce productivity. In this context, accident in various zones could
result a long term interruption in continuation of the project. Thus, employment of
safety regulation could help the workforce to reduce frequency of accidents
significantly, in order to increase productivity.
Quality:

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Ineffective machineries and equipments could result poor quality of products and
services. However, in addition, Brewster (2009) has mentioned poor quality of raw
material to be responsible for lowering productivity. It is generally known that old
machineries are leads to a greater number of breakdowns resulting relatively longer
hours for completion of the entire tasks.
Management factors:
Effective productivity requires potential managerial skills and attitudes to conduct
skilful supervision of every step of the project. It has been experienced that the
labour productivity could be lower in organisation instead of having improved
technology and well-trained manpower. As opined by Covin and Slevin (2009),
management works as a catalyst for creating both the capability and willingness for
greater productivity as potential and skilled managers can derive high quality
outcomes from average or below average workforce.
Motivation:
As opined by Baron and Kenny (2006), motivation is the basic factors affecting
workforce productivity through influencing willingness and urge of commitments
towards the tasks allocated. However, it is the responsibility of managers to provide
effective offerings based on requirements of employees.
Apart from the above mentioned factors periodic supervision, natural factors and
political variation highly impacts of employee productivity. In this context, Baron
and Kenny (2006) have opined that every project comes across some specific
designs, way of conduction and other relative specifications where proper
supervision on these areas could enhance the quality of outcomes in the form of
goods and services. On the other hand, Brewster (2009) has mentioned natural
factors to be also responsible for reducing productivity. However, labour
productivity due to natural factors like calamities depends on the weather condition
and specific geographical locations.
Therefore, Tesco needs to undertake the above mentioned factors through aligning
those with the governance policies that a motivated and highly capable workforce

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could be produced. Thus, going through this way workforce productivity could be
effectively enhanced through potential implementation of governance principles into
project planning.
2.5 Alignment of corporate governance and workforce productivity:
In the opinion of Becht et. al. (2007), effective and good corporate governance is
successful only when it is aligned with the workforce productivity because corporate
governance has a direct impact on the efficiency and effectiveness of the production
process. However, Bebchuk and Hamdani (2009) argued that workforce
productivity not only includes employees engaged in the main business operations
or production process of the firm but it also includes employees of other
departments that supports the principle operation or production process like Human
resource, Finance, Sales and marketing, and Administration. Hence, the policies,
principles, rules and regulations incorporated in the corporate governance have to
increase productivity of the production teams and supporting departments.
Corporate governance and workforce productivity can be aligned by collecting
feedback from all the departments, analysing those feedbacks, incorporate the
inputs of feedback in the decision making process. In addition to this, the company
can conduct brainstorming with the workers to generate more creative solutions to
the existing problems. Allen (2006) opined that conducting monthly meetings with
the different departments can help in better alignment of corporate governance
with the workforce productivity. Monthly meetings would further help to identify the
problems faced by the employees. However, it is essential to maintain the
confidentiality of the feedbacks or complaints so received.
Brav et. al. (2008) stated that mere formulation of sound corporate governance
policies would not help an organisation unless the same is followed by proper
monitoring and evaluation. The success of corporate governance depends to a great
extent on the practical application of the strategies. Identifying problems,
conducting brainstorming and other methods of employee engagement to generate
alternative solutions, selecting the best solution, implementing the solution,
monitoring performance, periodical review, and taking corrective measures if

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needed can be considered as the sequential step of developing corporate
governance policies. This increases productivity to a great extent as employees feel
important and are aware of the implications of the decision taken.
In addition to this, the company can resort to 360o
feedback mechanism for a fair
performance appraisal. As there exists a positive relationship between corporate
governance and workforce productivity hence improved corporate governance
would ensure better workforce productivity, both quantitative and qualitative.
Enhanced workforce productivity would ensure increased profits to the organisation
and better returns to the shareholder. In other words, corporate governance if
aligned with the workforce productivity can directly or indirectly benefit all the
stakeholders of an enterprise. However, Driver and Guedes (2012) opined that
alignment of workforce productivity with the corporate governance is effective
unless it adversely affects the long-term sustainability and profitability of the firm.
2.6 Perceived corporate governance policies:
Anderson (2004) stated that the advent of globalization and increase in trade and
complexity of operations have resulted in development of a perception of following
effective corporate governance in order to control any kind of bureaucracies. As
several untoward incidents are quite common in the operations in the sector, it is
required to follow certain strategic policies that would prevent any occasion of
malpractice and even satisfy the stakeholder’s interest. However, the practise o f
corporate requires necessitates the practise of the following four aspects at
workplace: integrity, bonus culture, regulatory framework and director’s training.
Westphal and Khanna (2012) mentioned that ethical practise of latter four
corporate governance aspects would help a specific business in operating as per the
stakeholder’s satisfaction, bring about workplace satisfaction and even be able to
attain the desired stakeholders (customers) expectation. However, often there is a
clash of ideas with regards to denotion of a specific work process to be ethical or
not. In the event of being solely profit centric or increasing the shareholder’s
value, the top management follows policies that might not be actual form of

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corporate governance. There is thus a lack of integrity between the top and lower
management level.
Fay and James (2008) criticized that the current practise of corporate governance
in several workplace is still not an integral part of management. It is rather a ‘box
ticking exercise’ and is rather followed by introducing more regulation. However,
the management’s perspective of merely developing fresh policies is just a minor
part of corporate governance. It success can only be measured at the time of its
successful implementation at work.
Internal stakeholder’s (staffs) derive satisfaction on the availability of bonus culture
at work culture. Although the current remuneration policies that are being practised
at the workplace is perceived to be apt by top management level, often the lower
level staffs feel that the same is not effective in nature. Boselie et al. (2007) stated
that although the current remuneration policies that are practised at workplace are
focussed to prevent credit crunch or resulting financial crisis, its actual worth is
often doubted.
Datta et al. (2009) even stated the essentiality of maintaining a proper Director’s
Training in order to be sure of abiding to a good governance practise at workplace.
However, often the Director does not acknowledge such importance and consider
them to be enough to solely practise the concept at work. It thus often results in
improper performance and stakeholder dissatisfaction. Recent reports have also pin
pointed that the employees’ perception to corporate governance is limited to the
current use of social media for communication and maintaining external contact.
However, corporate governance has more to do than merely communicating with
different stakeholders via the virtual media.
2.7 Role of corporate governance in workforce performance:
Guerrero and Barraud (2010) pin pointed that corporate governance positively
impacts workforce performance by developing a integrative performance and
operational attitude between the shareholder’s, board of directors and the
management of the company. Often organizations fail to practice effective
corporate governance as a result of not being able to maintain healthy corporate

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relationship or reduce any form of conflict between the two. Thus, in order to
ensure the practice of better workforce performance, the need is to take effective
strategic decisions. The undertaken decisions are all focused on developing the skill
set and make the staffs even more motivated towards developing even better
performance (Tescoplc.com, 2014). The following are the process by which
corporate governance assists in developing the workforce performance of an
organization:
 Develop a clear structure decision making and accountability:
Westphal and Khanna (2012) stated that corporate governance ensures that staffs
maintain accountability at work and practise transparent decision making. This
practice of transparent decision making develops a sense of being responsible
towards own work and prevent from being involved in any issuers such as scam or
bureaucracy. Also by developing a sense of accountability at workplace, the staff
develops sense of being motivated towards delivery of quality service and be wholly
involved in decision making for customer satisfaction and attaining organizational
benefit.
 Creates a framework of gaols and policies for personal and
organizational progress:
Fay and James (2008) highlighted that corporate governance necessitates the
development of framework of goals and policies to guide organizational progress.
However, it even follows a strategic process to build the skill set and performance
of the staff. As in one hand, skill development helps in building the capability of the
workforce, performance management ensures that they do not deviate from the
required standard and instead are wholly focused towards even better performance.
 Lowers wastages, risk and mismanagement:
Fay and James (2008) acknowledged that the corporate governance benefits by
practise of total quality management to reduce any wastage, risk and
mismanagement. Any event of wastage could increase the possibility of rising
operational cost and customer dissatisfaction. Instead, the present concepts ensure

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developing products and offering services as per customer preferences and thus
meet the desired stakeholders’ performance. Thus, on the whole the practise of
effective corporate governance is beneficial to build the performance metrics from
the current level to even better standards.
2.8 Employee participation in corporate governance policy making:
Corporate governance can be defined in different ways. Fundamentally corporate
governance refers to the system of structure, right, duties and obligations through
which corporations controlled and directed (Bebchuk and Hamdani, 2009). The
structure specifies the distribution of rights and responsibilities among different
participants such as board of directors, shareholders, managers, auditor, creditor,
regulator and other stakeholders. Basically governance is a mechanism for
monitoring the actions, policies and decisions of corporate.
According to Brav et. al. (2008), employee participation is very necessary in
corporate decision making. It is necessary to refer to several dimensions of
participation method. One issue is the extent to which participation centres on
direct involvement by an employee. Second issue is whether the participation is
based on task related issues of immediate relevance to individual employees as the
performance of duties or it is concerned with the wider view of company policy.
Third dimension of employee participation describing the nature of involvement
formally accorded to employees (Telegraph.co.uk, 2008).
The philosophy of ownership which emphasises the importance of employee control
and employees involvement is decision making is seen in workers’ cooperatives
(Allen, 2006).
Participation is necessary for individual self development. Kim and Nofsinger (2007)
opines that, it is seen that right emanating from both employment and ownership is
the main vehicle for self development and expression. Participation generally takes
a direct form and ranges from coffee and hygiene issues to the business strategy.
Participation has two characteristics:

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Individualistic characteristics: Here individual employee gives opinion regarding
the work flow, work force dynamics, the strategies etc.
Collectivist characteristics: In this method corporate policy is often determined
collectively in regular, or may be weekly meetings of all employees, but equal
emphasis is normally placed on individual control to perform a task without
maintaining any formal hierarchy (Ferreira et. al. 2007)
Generally in larger co-operatives participation takes more indirect form. DeNisi and
Kluger (2006) argued that there are clear management special norms and
hierarchies which can limit the extent to which the workforce can participate in
management decision making policy on a day-to-day basis.
2.8.1 Advantages of employee participation:
Harnessing employee skill: By active participation employee skill can be
enhanced in terms of variety of work type and structure.
Commitment enhancement: According to the author, employee participation
makes employee to feel very important entity in organization. As a result employee
shows strong commitment to job responsibility and to the organizational
development also.
Apart from this the distance of some employees from direct observation could
encourage the use of some forms of direct participation such as autonomous
decision making to secure control of task performance (Mason et al. 2008).
2.9 Corporate governance policies of Tesco:
From the Tesco’s annual report, Tesco has a number of strong strategies and plans
in place to optimize shareholders value over a proper time period. Cawley et. al.
(2008) opined that, Tesco’s corporate governance begins with the recognition that
it is supporting the core values and that is not a set of rules. Core values are
depicting what is acceptable and what is not acceptable.
As per the governance structure of Tesco two parts are there-one is board and
another is executive committee. Board exists of Nomination committee, Audit

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committee, Remuneration committee and corporate responsibility committee.
Executive committee consists of commercial committee, compliance committee,
digital retailing committee, people matters group, property strategy committee,
social responsibility committee and technology committee (Tesco.com, 2014).
Figure 1: Board Structure
(Source: Files.the-group.net, 2014)
Board: The work of the committees under the board is essential to the effective
operations of the board (Rousseau and Mccarthy, 2007).The committees under the
board consider in greater depth on behalf of the board, the issues which are
relevant to the terms of reference and report to the board after every meeting.
Executive committee: Denis (2010) opined that board delegate’s responsibility
for formulating and implementing the strategic plans of the day-to-day operation of
Chairman
PLC board
Nominations
committee
Auditcommittee Remuneration
committee
Corporate
responsibility
committee

25 | P a g e
the group to the CEO. Group executive committee has a number of sub-committees
which assist in its work and ensure that:
1. Strategic choices are considered properly.
2. Growth opportunities are fully discussed.
3. Progression against the priorities is reviewed
Figure 2: Group Executive committee
(Source: Files.the-group.net, 2014)
Nomination committee’s role:
Reviewing the board structure, size and compositions are key functional areas of
nomination committee.
Audit committee’s role:
Executive
Committee
Commercial
committee
Compliance
committee
Technology
Committee
Digital retailing
committee
People mattersgroup
Propertystrategy
committee
Social responsibility
committee

26 | P a g e
Aggarwal (2010) opined that the key responsibility of audit committee is to appoint
external auditors, reporting to the committee and review the financial statements
relating to the financial performance of the company.
Corporate responsibility committee’s role:
It defines the group’s corporate and social obligations as a responsible citizen and
approves a strategy for discharging the group’s corporate and social responsibilities
(Ertugrul and Hedge, 2009).
Apart from these corporate governance policies of Group, Tesco include:
Code of business conduct:
It depicts the most important responsibilities towards the organization and
obligations while working for Tesco.
Whistle blowing:
The policy is being operated by the groups and reviewed annually.
Anti corruption:
Wallace and Zinkin (2005) opined that any act of bribery, corruption, fraud is
treated in Tesco with extreme seriousness and the Group CEO has communicated
zero-tolerance approach to all forms of bribery to all colleagues.
Risk and uncertainty management:
A successful risk management process can balance risks and reward roles on sound
judgement of likelihood and impact (Ferreira et. al. 2007). Risk management
process is designed to encourage entrepreneurial spirit and it provides assurance
that risk is totally understood and managed.
2.10 Contribution of Tesco’s corporate governance policies towards
workforce productivity:
Lot of contribution of Tesco’s corporate governance policies toward workforce
productivity can be seen:

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2.10.1 Clear picture of new growth opportunities and strategic choices:
According to the annual report, Tesco is offering new growth opportunities to the
employees. According to Allen (2006), proper growth opportunity is required to
motivate employees and to enhance employee performance. On the contrary Driver
and Guedes (2012) opined that proper growth opportunities can be derived by
drawing a proper strategic choice. Tesco is maintaining a strong corporate strategy
which is enabling Tesco to give a clear picture of growth opportunities to
employees.
2.10.2 Code of conduct and workforce productivity:
Code of business explains the colleagues about the most important individual
responsibilities and obligations and all colleagues need to comply with it (Becht et.
al. 2007).To enhance workforce productivity proper code of conduct is necessary
which is being strictly followed by the management of Tesco.
2.10.3 Whistle blowing and workforce productivity: Today, in each and every
business operation of confidential phone and email service is required highly. It
enables the colleagues to report anonymously any instances of malpractices within
the business. Such issues include corruption, fraud, dishonesty and any bad
practices which may prejudice the colleagues, customers or the environment.
According to Brav et. al. (2008), this policy of Tesco made the employees bound
not to make any unfair practice and corruption. Again Allen (2006) opined that
productivity and employee’s security is directly proportional and employee security
is also depends on fair practices of codes. Due to the fair practice code employees
are bound to go through a set of fair code of conduct thus increasing in productivity
(Tescoplc.com, 2014).
2.10.4 Risk management and internal control towards the increase of
workforce productivity:
According to Driver and Guedes (2012), a key part of an risk management process
ensures that colleagues have a good understanding of group’s strategy and the
policies, procedures, values and expected performance. The company has a

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structured communication program that enhances the employees understanding
and results in a better productivity from employees end towards the company.
2.10.5 Clear framework of goals and policies for both employee’s and
organizational progress:
Driver and Guedes (2012) opined that corporate governance necessitates the
development of frame work for policies and goals to guide personal as well as
organizational progress also. Fundamentally skill development helps in forming and
increasing the capacity of workforce while performance management ensures that it
cannot deviate from the standards and need to follow the guideline to enhance the
productivity for the betterment of the organization as well as for personal
development also.
2.11 Optimizing workforce performance through employee engagement in
corporate decision making:
In the view of Allen (2006), employee engagement has a direct effect on the
productivity of the organisation. Put it differently, employee engagement leads to
increase in productivity. Granting adequate independence in performing tasks make
employees efficient during the course of time because they learn to complete the
tasks with minimal interference of the management. This offers two major benefits
to the organisation; firstly, this practice saves time of the managers that can be
utilised in a better way and secondly, self-sufficient employees help an enterprise to
create better leader or managers in the future. However, Bebchuk et. al. (2006)
argued that employee engagement is effective only for job that involves repetition
of same tasks time and again. For jobs involving variety of tasks, employee
engagement is not much effective.
Furthermore, involving employees in the decision-making process reduces
resistance and other negative impact from employees at the introduction of new
policies or decisions because employees know that the decisions were taken jointly
by the managers and employees. In contrast DeNisi and Kluger (2006) argued that
employee engagement in the decision making process can make the employees put

29 | P a g e
personal preferences over the organisational interests. This reduces the
effectiveness of such decisions.
However, Ferreira et. al. (2007) stated that employee engagement increases
confidence in employees which is crucial for the success of any organisation. In
addition to this, engagement and empowerment of employees creates loyalty
among employees and this positively affects new employees in the firm.
Employee engagement and empowerment encourage creativity and innovation
which helps the firm to gain a sustainable competitive advantage over its rivals in
the market. More the number of perspectives involved in the decision making
process more sound would be the decision (Bebchuk et. al. 2006). An organisation
can offer prizes or additional variable pay to the workers who provide the best
creative ideas to the organisation. In contrast, Ferreira et. al. (2007) argued that
involving employees in the decision making process reduces the confidentiality of
the ideas and decisions that an organisation tends to implement in future. This
indeed negatively affects the competitive advantage of the company.
2.12 Strategic options for improving workforce performance through
effective corporate governance policies:
Encourage employee participation and feedback:
In the opinion of Cawley et. al. (2008), involving employees in the daily operations
and decision making process motivates employees to perform better. However, this
needs commitment from all level of management. Ferreira et. al. (2007) opined
that employee engagement creates loyal employees and this helps the organisation
to reduce the cost of employee turnover. In addition, vintage employees are
capable to perform the job more efficiently as the speed of performing the job by
an experienced worker would be more than a new employee. However, Rousseau
and Mccarthy (2007) argued that doing same task repeatedly for a long time makes
the job monotonous and reduce the level of job satisfaction. In the view of DeNisi
and Kluger (2006), a good corporate governance need to focus on obtaining
feedback from employees as this can provide crucial input to the decision making
process.

30 | P a g e
Setting real-time targets and continuous monitoring:
Improving workforce performance or productivity is the top-most concern for every
organisation as the profitability of the firm is directly dependant on this. However,
this can be achieved through effective corporate governance. In the opinion of
(Ertugrul and Hedge, 2009), performance of the workforce can be enhanced by
proving production targets on real time basis. This is important as there is often a
delay in informing the workers about the production goals which leads to failure in
meeting production deadlines. Here, the strategy would be to set real-time goals
and informing employees’ before-hand and display the goals or targets in the
production floor. The actual performance of the workers on a real time basis needs
to be shown on the display board as this would help to measure actual performance
against the targets on a real time basis. In contrast Denis (2010) opined that
measuring performance of workers on a continuous basis can make the supervisors
to focus more on quantity rather than quality.
Introducing Balance Score Card (BSC):
Usually, organisations are more concerned with controlling major downtimes and
idle-time. However, inspite of effective control the organisation often fails to meet
production deadlines. This is due to the fact the small stoppage time in the
production process are not taken seriously by the firms. In addition to this,
organisations fail to record the details of minor idle-time and downtime correctly.
This resist the organisation from making proper analysis of the situation and taking
corrective steps often become a challenge. This problem can be overcome by
introducing a balanced score card on a monthly basis, showing the individual
targets of the employees along with other qualitative metrics. These parameters
are called Key performance indicator (Driver and Thompson, 2009). Proper weights
have to be assigned to the respective performance indicators. In the view of
Aggarwal (2010), a balanced score card approach ensures unbiased performance
appraisal of the employees which in turn increase job satisfaction of the employees
and this has a positive effect on the performance of employees from both
production and service departments.

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Chapter 3
Research methodology
3.0 Introduction:
The chapter deals with the methods on conducting the research while making sound
decisions regarding the potential strategic choices. As mentioned by Brannen
(2009), research methodology provides a strong base on which the entire study is
conducted through following such systematic way that the research could be
steered towards successful completion. The primary objective of this chapter in this
research is to enlighten the approaches the researcher needs to incorporate at each
stage while performing various tasks relating to the study. In this context, Aldag
and Steams (2008) has acknowledged that research methodology needs designing
with appropriate blend of its crucial elements that primary objectives could
successfully be met at its actual means.
3.1 Research outline:
The components of research methodology are selected on the basis of two aspects.
The broader concept deals with the strategic and tactical sections including
philosophy, approach, designs etc., latter integrated with the applications of such
thoughts briefing the type of data to be collected and the process of collecting such
information along with the tools to be used for an appropriate representation of
such information. However, Gummesson (2006) has opposed that most of the
researches fails due to inappropriate choice of methods based on primary
objectives. Here, the author has selected positivism philosophy at initial stage of
the concerned research. Simultaneously, deductive approach and descriptive
design has been chosen to perform tasks maintaining required flow of this study.
Data are collected from both primary and secondary sources where mixed
method has been considered involving quantitative and qualitative data. Simple
random sampling has helped in choosing sample size for quantitative whereas
qualitative data collection involves purposive sampling process.
3.2 Research philosophy:

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Research philosophy helps determining mentality of the research at initial stage of
the study that entire research could be directed towards right way. In opinion of
Toloie-Eshlaghy et al. (2011), researcher undertakes the research philosophy to
establish potential nature of the research method. Among the three basic research
philosophy, epistemology deals with the origin and nature of the concerned facts by
shading lights on relative procedure and margins of human knowledge. However,
Johnson and Onwuegbuzie (2006) has demonstrated ontology as the section of
philosophy that embarks on the metaphysical studies investigating nature of
existence. Axiology has been cited by Bernard (2011) to be the branch of
philosophy dealing with traditional values, ethics and aesthetics to a little extent.
Epistemology can further be classified into positivism, Interpretivism and realism.
In context of positivism Saunders et al. (2009) has stated that it concerns the
positive facts and phenomena without any speculative research whereas it helps
gathering facts through logical and natural scientific way. Interpretivism basically
interprets the human responses whereas realism undertakes initiates in maintaining
authenticity.
3.2.1 Justification of choosing positivism:
Here, the researcher has selected positivism to direct the research towards its
desired destination. As it has been mentioned that positivism undertakes the real
time information through a natural scientific approach, it could help the researcher
to conduct the research towards producing real outcomes and thus draw suitable
conclusions based on its objectives. As the current research has undertaken the
corporate governance of Tesco to highlight the projection of such governance on
employee productivity, positivism philosophy could encourage in gathering facts
regarding governance in context of Tesco. Here the researcher has used the
mathematical tools to process and analyse the collected information. Thus, it could
help to create positive understanding about applicability of corporate governance on
employee performance. Hence, positivism is appropriate for the research.
3.3 Research approach:

34 | P a g e
Research approach creates the platform to formulate and clarify the phases of the
entire research with sequence to execute the planning in a proper way. However,
Podsakoff and Dalton (2007) criticised that major portion of the study is dependent
on the research approach as it dictates the mechanism to sequence the activities.
As opined by Sale et al. (2002) two basic approaches are used in most of the
researches based on the nature and key goals to be derived. Inductive approach
bases the theory development following data collection observation and testing
mechanism. However, deductive approach is based on the existing theories where
data are collected to examine the theories whether it is applicable for all aspects or
based on certain situational demand. Amitabh and Gupta (2010) stated inductive
approach as the method of developing new theories whereas deductive approach is
the method of examining the existing literature.
3.3.1 Justification of choosing deductive approach:
The author has considered deductive approach for the current research as the study
is based on the existing evidences of corporate governance and employee
productivity. Workforce productivity management is one of the basic elements
ensuring sustainable development via competitive potentiality and thus a number of
theories have already existed on this topic. Potential workforce productivity has
been achieved by significant number of organisations whereas different scholars
have conducted researches on this area. Since, the existing evidences and
researches have been tested using relevant data, deductive approach is appropriate
for the current research to turn the study towards right destinations.
3.4 Research design:
As opined by Dubois (2002), research design frames the basis of the primary
objectives to set the target to be achieved through the entire study. In context of
the design, Ellis and Levy (2009) stated that potential research design assists the
author finding out the suitable answers to the questions arisen while performing
various tasks in thi9s research. Among the broader concept of the research design,
three basic options are exploratory, explanatory and descriptive. Exploratory refers
to the section offering background information of the study on which the problem

35 | P a g e
statements are addressed. On other side, Cameron (2009) has defined explanatory
as the process of enlightening the internal issues that the reasons could be
explained. However, descriptive design enables the researcher to find answers to
the questions starting with what, when, where, why and how.
3.4.1 Justification of choosing descriptive design:
The current research is based on the existing corporate governance practices of
Tesco and its impact on the workforce productivity of the organisation where
differentiated data from various potential sources have been gathered to analyse
the applicability of the governance structure in workforce performance. The current
study has aimed to focus on the governance of Tesco in performance enhancement
program where the research needs to cover every sphere of the governance
practices. Therefore, each factor in corporate governance in detail without
descriptive design is quite troublesome in presence of the factual information.
Therefore, concerning to the above issues, descriptive research design is
appropriate for the study.
3.5 Data type:
Data are the critical elements of the research to reach at desired conclusion.
However, Bernard (2011) defined data as the base of the study chosen on the basis
of the nature of study and resources available. Thus, concerning the resources data
can be classified into two sections, primary and secondary data. Primary data can
be defined as the first hand information, gathered direct from the sources where
secondary data are collected from the structured resources. As opined by Sale et al.
(2002), secondary data are more structured in nature than the primary as it
supplies all possible information regarding organisation. However, Gummesson
(2006) argued that primary data are more reliable as being unbiased in nature due
to its mode of collection. Thus, primary or secondary data alone cannot be able to
spot the facts in real where a right mixture of both could enable the research to
achieve its desired target.
Moreover focusing on the target outcomes, primary data can further be classified
into qualitative and quantitative data. As depicted by Dubois (2002), mixed method

36 | P a g e
involving both qualitative and quantitative data enables the author gathering wider
range of potential information from several groups of respondents. The quantitative
data has been gathered from the employees of Tesco via survey where qualitative
information has been gathered through a structure interview session with
managers.
3.6 Data collection process:
Since the research work has been conducted using both primary and secondary
data, the overall data collection process can be classified into a number of
segments. Initially, a range of secondary data has been gathered from a secondary
source of information, mainly from books, journals and some informative websites.
The journal articles have helped getting some valuable theories in the context of
corporate governance and the significance of corporate governance policies on the
workforce performance. Primary data collection process can further be classified
into two different segments including quantitative data collection and qualitative
data collection.
3.6.1 Quantitative data collection:
The required quantitative data have been collected by initiating a survey
questionnaire approach. According to Ellis and Levy (2009), survey questionnaire
approach can be an effective option for collecting quantitative data as it can be
applied while for a wider range of population. Initially, the permission from the
Tesco management team has been granted along with the mutual consent of the
chosen sample. On a specific date and time, the survey had been conducted during
which each of the employees had been provided with a questionnaire each and 15
minute time allocation has been given for filling up the questionnaire. The filled up
questionnaire forms gave rise to quantitative data.
3.6.2 Qualitative data collection:
Qualitative data have been collected from the verbal opinions of the managers of
Tesco. The researcher has taken appointment of the managers of the organisation
who were found to be available for face-to-face interview sessions. On a given date,

37 | P a g e
the face-to-face interview process had been initiated with the managers of Tesco
separately. The opinions of the managers had been recorded using a traditional
voice recorder. The verbal responses of the managers were evaluated later to get
the qualitative data.
3.7 Sampling:
In order to maintain the relevancy of the collected quantitative and qualitative data,
particular emphasis has been given on the sampling mechanism. As mentioned by
Dubois (2002), sampling method plays a significant role at the time of primary
research as the relevancy and accuracy of the research findings would be influenced
by the nature of collected data. The simple random probability sampling process
has been followed during quantitative data collection as the research considers a
larger population. Toloie-Eshlaghy et al. (2011) discussed that simple random
sampling process can be followed while the population is higher. On the other hand,
non probability purposive sampling process has been focused during qualitative
data collection to obtain precise data from a fewer population. As cited by Cameron
(2009), purposive sampling process can help in gathering experts’ opinions from
minimal respondents.
3.7.1 Sample size:
Quantitative data have been collected from 50 employees of Tesco and therefore,
the sample size for quantitative data becomes 50. Johnson and Onwuegbuzie
(2006) acknowledged that greater number of sample would help addressing the
scenario more accurately. By considering 50 employees of Tesco as sample size,
the researcher has tried to analyse the research context more precisely. On the
other hand, qualitative data have been collected from 4 managers of Tesco. As a
result, the population for qualitative data is 4.
3.8 Data analysis:
The information, collected from diversified sources are analysed in a effective
manner to ensure its validity and reliability. Concerning to the descriptive research
techniques, the quantitative data are transformed into percentage, in order to

38 | P a g e
identify the exact factors involving into corporate governance impacting workforce
productivity through derivation of exact frequency of potential options. However,
qualitative data are analysed lighting the opinions of the managers. Therefore, the
processed data are represented through graphical format using excel application.
3.9 Limitations of the research:
The key limitations of the research are its sample size as larger sampl size could
provide relatively larger information regarding the governance practices and current
workforce productivity. The number of managers in interview is few in number that
could hinder suitable potential options for better governance structure towards
greater workforce productivity. However, involvement of management staffs for
interview could cater more critical view enabling effective assessment to reach at
neutral outcomes.
3.10 Ethical consideration:
The proposed research has conducted through maintaining an appropriate code of
conduct. The survey has been arranged with voluntary participation of each
respondents where questions, asked to the participants are excluded personal
information. A strict code of conduct has been maintained by the researcher
regarding confidentiality of collected data. Secondary data are collected from valid
sources ensuring reliability on the outcomes.
3.11 Time frame:
Tasks Month 1 Month 2 Month 3 Month 4 Month 5
Topic selection and
proposal approval
Literature review and
secondary data
collection
Identifying research
methodology
Data collection

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Data analysis
Findings
Conclusions and
recommendations and
final proofreading
Final submission and
Celebration

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Chapter 4
Data analysis and findings
4.0 Introduction:
This chapter enables the researcher to produce the results derived while conducting
the study. The key aim of this chapter is to present the information in such a way
that current situation regarding the topic undertaken. This part of the study also
aligns the existing literature with the findings that reaching at the desired
conclusion could be easier. In that case, the data are represented using application
tools (graphs, charts, tables etc.) that a clear view of the existing governance of
Tesco could be produced.
4.1 Quantitative data analysis:
Question 1: Would you agree with the fact that workforce performance can
be improved in the presence of sound corporate governance policies
(CGP)?
Table 1: Improved workforce performance through effective CGP
Options Responses Total Response Percentage
response (%)
Strongly agree 13 50 26%
Agree 27 50 54%
Neutral 6 50 12%
Disagree 2 50 4%
Strongly disagree 2 50 4%

41 | P a g e
Figure 3: Improved workforce performance through effective CGP
Findings and analysis:
The above data shows that the majority of the respondents agree to the fact sound
corporate governance policies are essential to the improvement of workforce
performance. Corporate governance policies guides not only improve the workforce
performance but also guides the overall functioning of the organisation. However, it
is important that the employees understand the significance of the corporate
governance towards improvement of performance that would further result in
higher profitability. This would ensure better increments and appraisal to the
employees. Bebchuk and Hamdani (2009) in section 2.5 argued that
workforce includes employees working in the operations department as well as
those working in the supporting department. Hence, it is necessary that the
corporate governance policies of the company are directed towards improvement of
performance of all the departments.
Question 2: Have you experienced improved self performance after
alteration of the corporate governance policies?
Table 2: Improved self performance after alteration of CGP
0%
10%
20%
30%
40%
50%
60%
Strongly
agree
Agree Neutral Disagree Strongly
disagree
26%
54%
12%
4% 4%
Improved workforceperformancethrough
effective CGP

42 | P a g e
response (%)
Agree 22 50 44%
Neutral 0 50 0%
Disagree 10 50 20%
Figure 4: Improved self performance after alteration of CGP
Though majority of the respondents have experienced improvement in self
performance after alteration of corporate governance policies but disagreement
from 30% of the respondents on this is a concern here. This is due to the fact that
unless improvement in self performance is experienced by all employees the
performance of the organisation cannot get improved to a great extent.
Improvement in self performance would improve departmental performance. This
would improve the overall performance of the organisation. However, Beaumont
et al. (2000) in section 2.3 opined that workforce performance can be increased
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Strongly
agree
disagree
26%
44%
0%
20%
10%
Improved self performanceafter
alteration of CGP

43 | P a g e
by strong framework of rules and fair practices. This can be achieved by introducing
both rewards and penalties related to the employee performance. In addition, fair
and equitable pay and appraisal would motivate the workforce in performing better.
Question 3: Have you experienced improved team performance after
alteration of the corporate governance policies?
Table 3: Improved team performance after alteration of CGP
response (%)
Agree 26 50 52%
Neutral 3 50 6%
Disagree 10 50 20%
Figure 5: Improved team performance after alteration of CGP
0%
10%
20%
30%
40%
50%
60%
Strongly agree Agree Neutral Disagree Strongly
disagree
22%
52%
6%
20%
0%
Improved team performanceafter
alteration of CGP

44 | P a g e
As improved team performance is not experienced by all the employees, hence it is
essential to review the corporate governance policies. To be more specific, the
company needs to identify the extent to which the corporate governance policies
are implemented across the organisation because there often remains a gap
between written policies and its practical applications. In the view of Ertugrul and
Hedge (2009) in section 2.12, workforce performance can be improved by
setting real time goals and continuous monitoring. In spite of improvement of
performance among individual team members, the team performance might not get
improved considerably. Improper recording of the performance and overlooking
small loopholes in the workflow could be the reason behind this. This can be
overcome by setting and monitoring targets on real time basis.
Question 4: Among the following, what according to you is/are impacted
through effective corporate governance policies?
Table 4: Factors influenced by CGP
response (%)
Employee
participation
15 50 30%
Workforce
commitment
17 50 34%
Teamwork 13 50 26%
Employee retention 5 50 10%

45 | P a g e
Figure 6: Factors influenced by CGP
The above figures show that employee participation, workforce commitment, and
teamwork are most affected by corporate governance policies. This is because that
the modern corporate governance policies lay stress on employee participation
which in turn enhances workforce commitment, and these together affects the team
work. While, employees retention is a result of sound corporate governance
policies. Cawley et. al. (2008) in section 2.12 opined that employee
engagement in the daily operations and decision making process motivates
employees to perform better. Workforce commitment and team work is achieved
automatically if workers are happy. However, collection of employees’ feedback,
one-on-one discussion between individual employees and respective managers, and
conducting exit interviews can help the company to keep the attrition rate at the
minimum.
Question 5: Does your organisation stress on corporate governance
policies focused on improved workforce management?
Table 5: Tesco’s CGP approaches focusing on workforce management
0%
5%
10%
15%
20%
25%
30%
35%
Employee
participation
Workforce
commitment
Teamwork Employee
retention
30%
34%
26%
10%
Factors influenced by CGP

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response (%)
Agree 20 50 40%
Neutral 11 50 22%
Disagree 6 50 12%
Figure 7: Tesco’s CGP approaches focusing on workforce management
From the above responses it is clear that majority of the respondents agree that
Tesco’s governance policies are focused on improved workforce performance. Allen
(2006) in section 2.10.1 opined that growth opportunities are essential for the
motivation and improved performance of the workforce. Tesco’s corporate
governance policies are aimed at increasing workforce productivity by offering
growth opportunities to its employees. In fact, the company has been successful in
providing new growth opportunities to its employees on a consistent basis. This has
motivated its employees to work harder and better which in turn has improved the
0%
5%
10%
15%
20%
25%
30%
35%
40%
#VALUE! Agree Neutral Disagree Strongly
disagree
26%
40%
22%
12%
0%
Tesco’s CGP approaches focusingon
workforcemanagement

47 | P a g e
overall organisational performance. In addition, the company encourages active
participation of its employees which has resulted in these positive responses.
Question 6: Have your supervisors encouraged you to focus on
collaborative work to team play?
Table 6: Encouragement from the supervisors regarding team play
activities
response (%)
Agree 32 50 64%
Neutral 0 50 0%
Disagree 8 50 16%
Figure 8: Encouragement from the supervisors regarding team play
activities
0%
10%
20%
30%
40%
50%
60%
70%
Strongly
agree
disagree
16%
64%
0%
16%
4%
Encouragement from the supervisors
regarding team play activities

48 | P a g e
The above figures suggest that the company has been successful in encouraging
teamwork through its managers. This is crucial to the success of any organisation.
However, disagreement from 20% of the respondents need due attention. These
can be employees who are shy in nature and are not much comfortable in team
meetings or group discussions. Such employees need personal attention by the
managers. Covin and Slevin (2009) in section 2.4 opined, management works
as a catalyst for creating both the capability and willingness for greater productivity
as potential and skilled managers can derive high quality outcomes from average or
below average workforce. Hence, it is of immense importance that the managers
are able to create that comfort zone for shy employees. This would in fact build
confidence among these employees leading to better performance and team work.
Question 7: Are you being rewarded frequently for superior performance?
Table 7: Rewarding for superior performance
response (%)
Agree 29 50 58%
Neutral 0 50 0%
Disagree 11 50 22%

49 | P a g e
Figure 9: Rewarding for superior performance
The above responses reflect that the reward and recognition system are not
successful to the fullest extent. In the view of Ross (2003) in section 2.4 has
opined that good governance structure frame the internal system of the
organisation through detecting service requirements and maintaining required
quality. Hence, the company needs to review the parameters set for rewarding
employees. Often, it is found that the parameters lack relevance to the real
situation. In addition, managers might not be able to recognise the performance
and contribution of the team members. These issues need to be addressed.
Question 8: Among the following, tick the policies that have been followed
at Tesco.
Table 8: Governance policies followed at Tesco
0%
10%
20%
30%
40%
50%
60%
disagree
18%
58%
0%
22%
2%
Rewardingfor superior performance

50 | P a g e
response (%)
Improved reward
policy compared to
competitors
10 50 20%
Motivating staffs
for improving
retention scenario
8 50 16%
Following of a
teamwork culture
15 50 30%
Prioritising a
learning work
culture
17 50 34%
Figure 10: Governance policies followed at Tesco
Referring to the above result, it could be found that corporate governance in Tesco
has highest priority for learning work culture to enhance the efficiency of workforce.
However, teamwork culture and the improved reward policy needs to be employ in
0%
5%
10%
15%
20%
25%
30%
35%
Improved reward
policy compared
to competitors
Motivating staffs
for improving
retention
scenario
Following of a
teamwork
culture
Prioritising a
learning work
culture
20%
16%
30%
34%
Governance policies followedat Tesco

51 | P a g e
policies to motivate the employees contributing efforts towards the responsibilities.
In this context, Cawley et. al. (2008) opined in section 2.9 that corporate
governance of Tesco is focused on core value of employees rather just setting the
rules. In support, Denis (2010) opined that the board and the executive
committee are responsible to delegate tasks among employees based on capability
to encourage the workforce towards significant contribution towards organisational
goal (referred to section 2.9). However, retention scenario also matters in
motivating staffs to enhance performance and thus governance in Tesco has almost
equal contribution to these policies, in order to promote better workforce efficiency.
Question 9: Do your supervisors consider your feedback prior to specific
strategic measurement?
Table 9: Feedback consideration by the supervisors
response (%)
Agree 23 50 46%
Neutral 0 50 0%
Disagree 12 50 24%

52 | P a g e
Figure 11: Feedback consideration by the supervisors
From the above outcomes, it could be inferred that most of the employees have
contributed feedbacks in measuring strategies while the organisation makes sound
strategic decisions. However, some have opined that feedbacks are not considered
for measuring effectiveness of strategies. This infers that Tesco considers potential
and skilled employees to gather innovative ideas that better strategic development
could be employed. In this context, Kim and Nofsinger (2007) in section 2.8
has opined that participation of individual is necessary in strategic decision making
process for self development process. Therefore, employee participation in strategic
measurement could enhance the effectiveness and applicability of strategic choices
through developing workforce potentiality individually. The respondents, disagreed
with the statement might be the base level staffs having hardly knowledge
regarding the strategic measurement and implementations.
Question 10: Have you managed to improve self performance within the
last two years?
Table 10: Improvement of self performance within the last two years
0%
10%
20%
30%
40%
50%
Strongly
agree
disagree
20%
46%
0%
24%
10%
Feedback consideration by the
supervisors

53 | P a g e
response (%)
Agree 31 50 62%
Neutral 3 50 6%
Disagree 2 50 4%
Figure 12: Improvement of self performance within the last two years
From the above outcomes, it could be inferred that most of the employees have
agreed that self performance has been improved within last two years following the
governance structure of the organisation. Being involved into the decision making
process, staffs have come to know about the new policies where considering those
policies and challenges, employees of Tesco have been upgraded that enhances
skills and efficiency of performing tasks. Addressing this fact, DeNisi and Kluger
(2006) in section 2.11 has observed that employee engagement enables the
staffs putting individual opinion and personal preferences keeping the overall
0%
10%
20%
30%
40%
50%
60%
70%
Strongly
agree
disagree
28%
62%
6% 4%
0%
Improvement of self performancewithin
the last two years

54 | P a g e
organisational goal in mind. Therefore, an effective set of principle could be
developed resulting better governance and productivity level.
Question 11: Would you agree that effective corporate governance policies
followed at Tesco have helped you to produce improved productivity?
Table 11: Positive influence of Tesco’s CGP on improved productivity
response (%)
Agree 27 50 54%
Neutral 2 50 4%
Disagree 2 50 4%
Figure 13: Effective corporate governance policies followed at Tesco have
helped you to produce improved productivity
0%
10%
20%
30%
40%
50%
60%
disagree
32%
54%
4% 4% 6%
Effective corporate governance policies
followed at Tesco have helped you to
produce improved productivity

55 | P a g e
Referring to the above results, it could be inferred that employees are highly
supportive to corporate governance policies, followed by Tesco in enhancing
productivity of the staffs. Therefore, the corporate governance policies involve such
norms that motivate the employees to encourage self development process. In this
context, Allen (2006) in section 2.10.1 has observed that the corporate
governance policies incorporate growth opportunity to the employees, influencing
staffs to enhance productivity. On the other side, Driver and Guedes (2012) in
2.10.1 has opined that right strategic choice assists the organisation to offer
suitable growth opportunities to the employees that could affect the perception of
staffs contributing towards organisational goals. Very few people disagreed as this
part of respondents think that governance influences the strategic choices of the
organisation focusing more on the sustainability and fairness in trading practices
rather emphasising on individual interest.
Question 12: Do you think that you and your peers have managed to
produce performance as per the expectation of the management?
Table 12: Performance as per the expectation of management
response (%)
Agree 19 50 38%
Neutral 7 50 14%
Disagree 6 50 12%

56 | P a g e
Figure 14: Performance as per the expectation of management
Concerning to the above result, it could be inferred that employees have produced
the performance as expected from the management of the organisation. Referring
to the above result, it has been derived that employees are confident about their
contribution towards the organisation through performing tasks with full potentiality
and skills. Therefore, it could be predicted that there are such factors present in the
organisational policies increasing confidence of staffs towards performing tasks. In
context, Ferreira et. al. (2007) has stated in section 2.11 that active employee
engagement into decision making process enhances the confidence that is crucial
for the organisation to increase productivity as well as successful execution of
different planning like governance frameworks and rules. However, not all staffs are
confident as performance evaluation is completely performed by the strategic level
of organisation depending on several parameters.
Question 13: Would you agree that the employees have managed to
increase the work efficiency by means of producing similar performance
within prompt timing?
0%
5%
10%
15%
20%
25%
30%
35%
40%
disagree
30%
38%
14%
12%
6%
Performanceas per the expectation of
management

57 | P a g e
Table 13: Producing desired performance within prompt timing
response (%)
Agree 16 50 32%
Neutral 9 50 18%
Disagree 4 50 8%
Figure 15: Producing desired performance within prompt timing
Staffs of Tesco have opined that the efficiency level of the performance has been
enhanced in the due course to produce desired performance level within the prompt
timing. it is evidenced that time of the crucial factors affecting workforce
productivity as depending on individual capability and skills. Therefore, time
consumption for a projection could be reduced through enhancing efficiency level
that tasks could be performed tactfully. As opined by Baron and Kenny (2006) in
0%
5%
10%
15%
20%
25%
30%
35%
disagree
30%
32%
18%
8%
12%
Producing desired performancewithin
prompt timing

58 | P a g e
section 2.4 that most frequent reason for lower productivity is fatigue,
absenteeism and low morale where, tasks are perceived as burden to execute in a
proper manner by the staffs. However, a part of respondents have no such
knowledge regarding the fact whereas some staffs, disagreed might have little
information regarding performance level Tesco has achieved in terms of efficient
workforce.
Question 14: Do you think more frequent audit mechanism could help in
developing more accurate corporate governance policies and improve
workforce performance?
Table 14: Developing more accurate CGP with frequent audit process
response (%)
Agree 17 50 34%
Neutral 4 50 8%
Disagree 8 50 16%

59 | P a g e
Figure 16: Developing more accurate CGP with frequent audit process
As responded by the participants, frequent audit could enhance the accuracy level
of corporate governance policies. In the current context of changing mechanism of
business practices globally, the international organisation like Tesco needs to
update its policies based of current situational demands. Therefore, periodic
auditory activity could enable the firm whether any improvement needed and the
area to be updated. Supporting to this idea, DeNisi and Kluger (2006) has
suggested in 2.11 section, involving staffs in auditory process to introduce
brainstorming process for better outcomes. In contrast, Denis (2010) has
mentioned in section 2.12 that performance measurement on continuous basis
enables the supervisors focusing more on quantity rather quality as supported by
the responses in terms of disagree.
Question 15: Are you convinced with the fact that considering employee
feedback evaluation could be an effective option to deploy more relevant
corporate governance policies for the workforce?
Table 15: Developing relevant CGP through employee feedback evaluation
0%
5%
10%
15%
20%
25%
30%
35%
40%
disagree
36%
34%
8%
16%
6%
Developing more accurate CGP with frequent
audit process

60 | P a g e
response (%)
Agree 20 50 40%
Neutral 6 50 12%
Disagree 5 50 10%
Figure 17: Developing relevant CGP through employee feedback evaluation
According to the result, obtained from the survey, it is clear that employee
feedback evaluation is one of the effective initiatives to deploy more relevant CGP
for better internal structure and productivity. As a reason, various opinions from
staffs enable Tesco highlighting critical elements, to be incorporated in governance
structure that a fair and ethical practice could be maintained in operation.
Concerning to this issue, Cawley et. al. (2008) in section 2.12 has dictated that
staffs’ engagement in operational procedure motivates employees performing
0%
5%
10%
15%
20%
25%
30%
35%
40%
disagree
34%
40%
12%
10%
4%
Developing relevant CGP through employee
feedback evaluation

61 | P a g e
better. However, the initiatives of employee participation are responsibility of
management through which potential governance could be achieved. in context,
staffs’ involvement in management procedure could diversify tasks of employees as
Rousseau and Mccarthy (2007) has stated in 2.12 section that performing
same task repeatedly longer makes the job monotonous and tiresome, resulting
lower job satisfaction.
Question 16: Rate from the following the viable options for Tesco to
develop more effective corporate governance policies so that workforce
productivity can be improved.
Table 16: Options for developing more effective CGP
response (%)
Clarification of
board’s expectation
to the workforce
11 50 22%
Ensuring employee
awareness
regarding
organisational
goals
15 50 30%
Prioritising
workforce
perception
10 50 20%
Evaluating the
approaches of the
rivals
14 50 28%

62 | P a g e
Figure 18: Options for developing more effective CGP
Based on the above outcomes, necessity of all the options mentioned above for
better CGP are more or less same for Tesco. However, employee awareness and
evaluation of approaches of the rivals have gained relatively higher preferences
over the other two. Thus, employees are more concerned about being aware of
importance of corporate governance to deploy relatively higher productivity through
an execution of set of principles mentioned under CGP. On the other side, it is
management’s perception to aware staffs regarding goals. In this context, Allen
(2006) has suggested in section 2.5 arranging monthly meetings that an
effective alignment of corporate governance policies and workforce productivity
could be executed through clarifying organisational goals to be achieved with
efficiency and skills. However, approaches of rivals are also important to identify
uniqueness to be developed at generating policies to achieve competitive edge.
Question 17: Would you agree that effective delegation of authority could
help in achieving improved workforce productivity?
0%
5%
10%
15%
20%
25%
30%
Clarification of
board’s
expectation to the
workforce
Ensuring
employee
awareness
regarding
organisational
goals
Prioritising
workforce
perception
Evaluating the
approaches of the
rivals
22%
30%
20%
28%
Options for developing more effective CGP

63 | P a g e
Table 17: Improved workforce productivity by effective delegation of
authority
response (%)
Agree 22 50 44%
Neutral 1 50 2%
Disagree 2 50 4%
Figure 19: Improved workforce productivity by effective delegation of
authority
Referring to the above outcomes, it could be derived that effective delegation of
authority can improve the workforce productivity as the focuses in such delegation
are narrowed down. Therefore, potential distribution of empowerment among the
each corner of the authority of Tesco could enable each department of regulatory
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
disagree
50%
44%
2%
4%
0%
Improved workforceproductivity by effective
delegation of authority

64 | P a g e
body handling the task efficiently as having little diversification in tasks. As opined
by Driver and Guedes (2012) in section 2.10.5, employee productivity can be
enhanced through framing the tasks of authority that potential initiatives could be
taken for better workforce efficiency.
Question 18: Do you think Tesco needs to focus on a contingent Code of
Conduct addressing external business environmental factors?
Table 18: Contingent Code of Conduct focusing on external business
environmental factors
response (%)
Agree 12 50 24%
Neutral 2 50 4%
Disagree 3 50 6%
0%
10%
20%
30%
40%
50%
60%
70%
disagree
64%
24%
4% 6%
2%
Contingent Code of Conduct focusingon
external business environmental factors

65 | P a g e
Figure 20: Contingent Code of Conduct focusing on external business
environmental factors
Looking at the above result, it could be perceived that contingent code of conduct
necessitates having in governance policies that better and transparent trade
practices could be achieved. In that case, the external business environment could
assists the management to identify the strengths and flaws in norms, being
currently followed by the each department of Tesco. As mentioned by Becht et. al.
(2007) in section 2.10.2, the code of conduct describes the responsibilities and
obligations that staffs needs to comply with it. Therefore, such information
regarding standardised code of conduct could be gained through external
environmental evaluation, specifically the current trend and activities of rivals on
governance that competitive governance structure could be achieved through
incorporating effective and suitable policies towards a fair and unbiased trade
practice globally.

66 | P a g e
4.2 Qualitative data analysis:
The verbal responses of the managers of Tesco has given rise to the qualitative
data concerning the current research study and the current segment analyses the
qualitative data to address the significance of the governance policies of Tesco on
the workforce productivity. All the managers of Tesco have been asked four similar
questions in relation with the research objectives and the responses gathered have
been as followed.
1. Do you believe that effective corporate governance policies could help in
enhancing workforce productivity? Why do you think so?
Assessing the responses of the managers, it seems that all the respondents agree
with the positive influence of effective corporate governance policies on the
workforce productivity. Two managers emphasised on improved employee
engagement after successful deployment of effective corporate governance policies.
The managers believe that if appropriate corporate governance policies can be
measured, improved participation and commitment level can be expected from the
employees that could lead to better engagement. Bebchuk and Hamdani (2009)
also mentioned that workforce productivity can be improved if better engagement
from the employees is experienced and the adopted governance policies can play
crucial role in this context (refer to section 2.5 in chapter 2). Another two
managers are also agreed with the fact that workforce productivity can be
enhanced with proper governance policies. The managers acknowledged that with
proper governance policies and stipulations, the management can set specific
benchmark for the workforce and by this way, improved performance can be
achieved. Such responses are found to be similar with the proposition of Brav et.
al. (2008) as the author mentioned that proper formulation of governance policies
can help maintaining the relevancy and accuracy of the operations resulting in
better productivity (refer to section 2.5 in chapter 2).
2. What are the corporate governance policies followed at Tesco so that
the workforce performance could be improved?

67 | P a g e
When it comes to improving the productivity of the workforce, Tesco has been
following a range of corporate governance policies for the improvement of the
workforce performance. One of the managers has highlighted the reward policies
followed by the management to improve the motivation level of the workforce.
Tesco has been prioritising a reward policy in order to motivate the employees and
bring out optimum output from the organisational workforce. Boselie et al.
(2007) also proposed that business organisations can focus on an appropriate
reward policy to ensure employee satisfaction and generate improved productivity
from the workforce. Two of the managers highlighted a decentralised organisational
structure comprising of audit committee, remuneration committee nominations
committee and corporate responsibility committee. According to the managers,
theses committees ensure a stable workforce and continuous improvement of the
workforce so that constant competency can be maintained in the respective
business sector. Similar findings have been addressed by Cawley et. al. (2008) as
the author highlighted that Tesco has been successful in developing a dynamic
workforce following a sound organisational framework (refer to section 2.9 in
chapter 2). One of the managers promoted the significance of the Code of Conduct
that is comprised of specific rules and disciplines required to follow by the
employees to meet the standards.
3. Do you think that Tesco’s corporate governance policies have been
generating positive results in terms of workforce productivity?
While majority of the managers of Tesco are convinced that the adopted corporate
governance policies have been contributing towards positive workforce productivity,
one of the respondents believes there are areas for improvement. Two of the
managers highlighted the organisational success in generating increased revenue
and improved operating profit within the last five years. It seems the corporate
governance policies deployed within the workforce has enabled the employees to
thrive for new benchmark and as a result, the organisation has managed to
generate better productivity resulting in improved profitability. In reference to the
proposition of Driver and Guedes (2012), the clarity of business goals and
objectives facilitates organisational workforce to maintain relevancy and improve

ROLE OF CORPORATE GOVERNANCE IN OPTIMISING WORKFORCE PRODUCTIVITY

ROLE OF CORPORATE GOVERNANCE IN OPTIMISING WORKFORCE PRODUCTIVITY

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