For years, Walmart has had tough labor practices and been heavily criticized for them. For example, it has been sued by many women for unequal pay and promotion opportunities, fought hard against employees unionizing, paid low wages, etc. But, now Walmart is loosening up; and it realizes that happier employees can mean happier customers due to better customer service. It has even brought back store greeters in many locales where they had been eliminated to reduce costs. Yes, this comes at a time when U.S. revenues have been weak.
“A couple of years ago, Walmart, which once built its entire branding around a big yellow smiley face, was creating more than its share of frowns. Shoppers were fed up. They complained of dirty bathrooms, empty shelves, endless checkout lines, and impossible-to-find employees. Only 16 percent of stores were meeting the company’s customer service goals. The dissatisfaction showed up where it counts. Sales at stores open at least a year fell for five straight quarters; the company’s revenue fell for the first time in Walmart’s 45-year run as a public company in 2015 (currency fluctuations were a big factor, too).”
“To fix the situation, executives came up with what, for Walmart, counted as a revolutionary idea. As an efficient, multinational selling machine, the company had a reputation for treating employee pay as a cost to be minimized. In 2015, Walmart announced it would pay its workers more. Executives sketched out a plan to spend more money on increased wages and training, and offer more predictable scheduling. The results are promising. By early 2016, the proportion of stores hitting their targeted customer-service ratings had rebounded to 75 percent. Sales are rising again.”
“An employee making more than the market rate, after all, is likely to work harder and show greater loyalty. Workers who see opportunities to get promoted have an incentive not to mess up, compared with people who feel they are in a dead-end job. A person has more incentive to work hard, even when the boss isn’t watching, when the job pays better than what you could make down the street.”
Click the image to read a lot more from Irwin.