Question

Julian Richer (born 1959) is the Managing Director and founder of Richer Sounds, a hi-fi and home cinema retailer specialising in audio equipment such as LCD televisions, DVD players and amplifiers. In 1978, aged just nineteen, Richer opened his first store in London Bridge. The company has 53 retail outlets throughout UK. In 1994, his flagship store in London Bridge set a new Guinness World Record for the highest sales per square meter of any retail outlets in the world- a staggering £195426 ($322450) per square meter- a record held for over two decades. Richer Sounds has also won many awards, including Which? magazine’s Best Retailer Award and Sunday Times award for Britain best employer. The company is also one of the UKs most generous donors, allocating 15% of its annual profits to charitable organisations. Richer believes it is vital that his staff have fun and enjoy their work. He is renowned for empowering staff to make a difference to the company. Each week, he looks at employee suggestions and awards up to £ 20,000 ($ 33,000) for an idea. Each month, the top three sales people get to use his personal Bentley or Rolls-Royce for a weekend. He only promotes people internally. Richer argues that businesses with demotivated staff face lower productivity due to higher absenteeism, labour turnover, theft and customer complaints.

With reference to above case study answer the following questions:

1. Examine how motivation can lead to improved productivity of his Organisation.
2. With reference to features of Human Resource Management, explain:
   1. Staff function
   2. Pervasive function.
3. What are the advantages of internal sources of recruitment?

Answer 1

(i) Motivation can significantly lead to improved productivity in Richer Sounds in the following ways:

1. Increased Effort and Performance: Motivated employees work harder and complete their responsibilities with dedication. Awards of up to £20,000 for employee proposals and the use of luxury cars motivate top salesmen to perform better.
2. Reduced Absenteeism and Turnover: Demotivated employees have a higher absenteeism and labour turnover. Richer Sounds ensures workforce stability by motivating staff with prizes and recognition.
3. Improved Quality of Work: Motivated employees are committed to providing high-quality service, which results in happier clients and fewer complaints.
4. Encouragement of Innovation: Recognising employee suggestions encourages an environment of innovation and constant development, which immediately increases productivity.
5. Reduced Theft and Wastage: Motivated employees who feel valued are less inclined to steal or waste resources, resulting in more efficient use of firm assets.

(ii) Features of Human Resource Management:

1. Staff Function: Human Resource Management is a staff function, which means it provides advice and assistance to the line departments (production, marketing, and sales). The human resources department does not directly create or sell goods or services, but rather provides expertise in recruiting, training, and managing people who carry out line tasks. In Richer Sounds, the HR department advised managers on how to encourage employees, create reward systems, and handle employee suggestions.
2. Pervasive Function: Human Resource Management is a general function, meaning it is conducted at every level of the organisation – from the top management to the lowest supervisory level. Every manager that oversees subordinates carries out HR functions such as task assignment, motivation, performance evaluation, and employee development. Every week, Julian Richer of Richer Sounds reviews employee proposals, proving that HRM pervades all levels of the organisation.

(iii) Advantages of Internal Sources of Recruitment:

1. Employee Morale: Promotions within the organisation enhance Employee enthusiasm and morale. Their loyalty and commitment to the organisation grow. (Richer Sounds promotes staff only internally to keep them motivated.)
2. Economical: Internal recruitment saves money by eliminating the need to advertise and vet external candidates.
3. Familiarity: Employees are already familiar with the enterprise's policies, rules, and working circumstances.
4. Experienced Staff: Employees that are transferred or promoted have prior expertise, thus the organisation does not need to undertake additional training.
5. Easy Evaluation: Management may quickly evaluate the performance of current personnel based on their service records.
6. Upgrading: When an employee is promoted, numerous people below him are automatically promoted.
7. Reduced Turnover: Internal recruitment reduces labour turnover and absenteeism by allowing employees to identify prospects for growth within the organisation.