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Tesco is expanding rapidly, it is opening more stores, using different store formats, and operating overseas. The retailer found that its 22-grade pay structure and job evaluation processes were inflexible and did not provide a sufficient link between pay and performance. They also inhibited the career development and horizontal movement the organisation needs to manage in a period of expansion and change.
The company's response has been to introduce a six-level broadbanded structure which gives line managers more discretion over how they develop and pay their staff. Tesco is also moving towards total reward, introducing some flexibility in its benefit provision and underpinning its "values" with a company-wide recognition scheme.
For more details see our review, published in the 'News' section of e-reward.co.uk, 9 January 2003.