Photo AI
Evaluate these two options and recommend which one is most suitable for Sports Direct to achieve its aim of reducing labour turnover. - Edexcel - A-Level Business - Question 2 - 2022 - Paper 2
Question 2
Evaluate these two options and recommend which one is most suitable for Sports Direct to achieve its aim of reducing labour turnover.
Worked Solution & Example Answer:Evaluate these two options and recommend which one is most suitable for Sports Direct to achieve its aim of reducing labour turnover. - Edexcel - A-Level Business - Question 2 - 2022 - Paper 2
Step 1
Arguments for an employee share ownership scheme
Answer
Employee share ownership is a financial incentive whereby companies give shares to their employees or sell them at rates below the market price.
Sports Direct is changing its Human Resource strategies to incorporate this scheme, which can motivate employees as they will have a direct interest in the success of the business. This could lead to improved financial commitment, as employees are likely to be more invested in the company's performance.
Furthermore, the company has shown profitability—generating an operating profit of £179 million in 2018—which means it can afford to implement such a scheme without jeopardizing its financial stability.
Step 2
Arguments for empowerment
Answer
Empowerment as a non-financial method of motivation gives employees more control over their daily work, potentially improving morale. For example, employees at the Shirebrook warehouse, who have reported poor working conditions, may find greater job satisfaction and engagement through empowerment initiatives.
This approach does not involve financial costs and may foster a culture of loyalty and commitment, further reducing labour turnover. However, some staff may be resistant to this change, preferring the structure of being told what to do rather than having added responsibility.
Step 3
Potential recommendation
Answer
Given that Sports Direct aims to become the 'Selfridges of Sport,' implementing an employee share ownership scheme might be the most beneficial strategy to reduce labour turnover. This approach not only aligns with the company's mission but also directly ties employee performance to business outcomes, creating a win-win situation.
While empowerment can also lead to improved morale, the financial commitment from share ownership is likely to result in stronger employee engagement and loyalty, helping Sports Direct achieve its long-term objectives more effectively.