Transactional and Transformational Leadership in the Grocery Retail Industry of the United Kingdom - Essay Example

UK’s grocery retail industry is one of the leading contributors to GDP of the country and is also one of the largest employers in the country. Due toits sheer size and presence across the whole country makes the industry one of the important industries with lot of challenges to deal with. During the good economic times, organizations in retail industry often go through a period of change because they have to adapt to the good market conditions too rapidly. By adapting to the changing market conditions, retail grocery organizations actually develop the level of efficiency and flexibility to deal with the fast economic growth periods by upgrading and enhancing their capabilities. (Sadler and Craig, 2003). In such economic scenario when change is imminent and overall demand for skilled employees is high, it may become difficult to reduce the employee turnover and retain them because competitors may be willing to offer more financial incentives and other compensation packages which can motivate employees to leave and join other organizations.  (Dibble, 1999). Organizations such as Tesco, Sainsbury, ASDA and Morrison went through difficult as well as good economic times however, what remained as a challenge for all these organization was how their leadership responded to the good economic times and kept their followers motivated to perform and contribute towards growth of the organization. This paper will discuss and explore as to how leaders can actually motivate their employees in order to retain them during the periods of high economic growth in grocery retail industry during next five years. One of the key challenges during the good economic times is the fact that economy goes great and almost every company profits from the growing economic progress. In such a scenario, unemployment level is relatively low therefore employees have greater chances to actually find new jobs easily and without actually making much of the effort. The overall choices for employees increase because of an increased demand and low employment levels during the good economic times. (Jain, Giga and Cooper, 2009) UK’s grocery industry is expected to undergo some strategic changes during the next five years as new players in the market are emerging and trends are shifting in favor of discount stores such as Aldi. Apart from this, there is also a growing change in consumer preferences as consumers tend to buy online rather than walking into the stores to buy. It is because of this reason that many grocery retailers have been busy in opening smaller convenience stores at different locations in order to reach to their customers rather than customers reaching to them. (Kpmg.com, 2014) Viewing the situation from the perspective of Leader-Member Exchange theory, it is clear that the leaders in the grocery industry must be able to able to develop two-way relationships with their subordinates. When employees join the team, it becomes necessary for the leaders to actually create the environment where they share more responsibility and do bigger tasks on their own. This can help leaders to retain the employees during good economic times also. (Northouse, 2010) Transactional leadership during good economic times may not work as it focuses on both the rewards and punishment. Leaders with transactional leadership styles may not be best equipped to deal with such situations because during high economic growth, employees can easily leave the organization and find new work at their own terms. (Sadler, 2003). In such a situation, adapting the reward and punishment leadership style to retain the employees may not work as it may demotivate the employees and may cause ripple effect for the other employees to leave also.  (Boudrias et al., 2009). What is also important to understand that transactional leaders attempt to maintain the status quo therefore during times when change is necessary to profit from the growing economic progress, transactional leaders may have to focus more on increasing the rewards for their employees in order to retain them and deliver excellent customer satisfaction to their customers. In order to retain the employees, transactional leaders therefore may have to negotiate explicitly with the employees for a possible increase in the compensation, improvement in the work environment i.e. the hygiene factors as well as offering more autonomy and independence to the employees to take some of the decisions on their own. (Robertson and Cooper, 2010). Work and leadership ethics therefore may play a critical role in helping leaders with transactional leadership style to succeed because a lone focus on accomplishing the tasks may not be sufficient enough to achieve the required behavior from the employees during the times when unemployment is low and demand for skilled employees may be high.  (Klippert, 2014) Transformational leadership however, can be effective in retaining employees during the good economic times for the grocery sector. The next five years in the industry are going to witness a change due to the fact that employees, though may be working under growing economic progress, may have to work during difficult shifts and their work may be replicated by the machines as more and more customers are doing online shopping. In such a scenario, it is important to motivate the employees through strategies such as prioritizing the work shifts, increased rates for working at the odd locations and times as well as times. (Langan-Fox et al., 2002) Recognizing employees publically and highlighting their contribution towards the organization and the stores in which they work is another way to help motivate the employees and retain them. Apart from this, transformational leaders also listen to what employees say so that they feel important and recognized. Recognition without being heard within the organization may easily demotivate the employees to leave the organization. (Perko, Kinnunen and Feldt, 2014). What is also critical to note that transformational leaders have to deepen their connection with the employees so that both leaders and the followers are aligned on the tasks and tasks are delivered according to the requirements? Asking managers to work and contribute towards store functions can really help employees to remain motivated because not only work is shared but employees may be given a feeling that their work is important and is the key to the success of the organization during good times. (Phillips and Connell, 2003) Transformational leaders therefore need to be role models for their employees in terms of their work ethics, consideration for the employees and a genuine association for them. (Sharifirad, 2013). By idealizing their influence over the employees, transformational leaders can help employees to remain within the organization and deliver their best so that organization can grow and prosper during good economic times. (Der Foo et al., 2004) Since increasing number of women are doing the customer facing jobs in the grocery industry in UK therefore in terms of efforts and skills, they are required to demonstrate the same level of commitment towards the work. What is critical to note however, is the fact that despite increased expectations from the female employees, they are not being compensated fairly by the industry. (Phillips and Edwards, 2009) To retain high performing female employees within the organization during the good economic times, it is important to not only increasing the influence of female employees within the organization but also provide them equal and fair pay opportunities. (Sims, 2007). Removing gender gaps in terms of evaluating performance, deployment of women at jobs which are otherwise considered as purely men related jobs i.e. shelfing in stores, may further motivate both the male as well as the female employees in terms of equality and fairness. (Bond Baker, 2009) In order to reduce the gender gap and retain the female high performing employees within the organization, situational leadership can also help retain them. Leaders in the grocery industry may therefore encourage the stores to help build the influence of different employees and offer them leadership roles and challenges when faced with the situations which are difficult to handle. To improve customer services while at the same time retaining the employees, it is critical to help build leadership qualities of the employees at the store level.  (Hunt, 1999). Situational leadership theory suggests that best leadership comes from the task related functions therefore anyone can be a leader if he or she experiences a situation where leadership role is required. Leaders in the industry therefore must be able to develop a sense of situational leadership within the organizations by motivating the employees to participate and must be willing to assume leadership roles in stores as and when required. (Cheung and Wong, 2011) The above discussion therefore clearly suggests that ethical conduct of both the transactional and transformational leaders, their focus on reducing the gender gaps, explicitly negotiating with the employees for their pay related issues and allowing employees more autonomy and leadership roles can help industry to retain high performing employees during the next five years of economic growth. Leaders must focus on developing and idealizing the required level of influence on the employees to motivate them and keep them involved into the affairs of the stores and the overall organizations so that they can be retained within the organizations during the good economic times. 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