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\u201cWhen employees are happy, they are your very best ambassadors.\u201d-\u00a0Jim Sinegal, CEO, Costco.<\/strong><\/p>\n In 2008,\u00a0Ethisphere\u00a0named Sinegal to their list of the\u00a0100 Most Influential People in Business Ethics- he was ranked #37. The\u00a0emphasis on employees\u00a0at\u00a0Costco <\/a>is the key to the company\u2019s success and ability to consistently provide a better shopping experience for its members.\u00a0Jim Sinegal is the perfect example of how the tone at the top sets the tone for the entire company. Costco has developed a reputation as\u00a0an employer of choice and has maintained a positive public image,\u00a0all thanks to their brand ambassadors- their employees.<\/p>\n There a many lessons learned when looking at\u00a0the Costco story. Many executives once believed that it would be impossible to keep prices low if a company was paying employees high wages and paying for majority of the employee benefits package-\u00a0Costco is proof that\u00a0this isn\u2019t always the case.\u00a0Costco executives\u00a0understand the impact and importance that good employees can have\u00a0in an organization. In the\u00a0Fast Company\u00a0CEO\u00a0Interview\u00a0with Sinegal, they stated that:<\/p>\n \u201cWall Street grumbles that Costco cares more about its customers and employees than its shareholders; it pays workers an average of $17 an hour<\/strong> and covers 90% of health-insurance costs<\/strong> for both full-timers and part-timers. Yet revenues have grown by 70% in the past five years, and its stock has doubled.\u201d<\/p><\/blockquote>\n At Costco, there is a desire to always perform better.\u00a0Perks such as higher wages, benefits and opportunity for growth allow\u00a0Costco to attract a large pool of candidates that are of higher quality and are more committed to their job. In the Workforce article, \u201cWelcome to the Club\u201c, they reported that:<\/p>\n \u201cIn addition to offering some of the best wages and benefits in the retail industry, Costco rewards employees with bonuses and other incentives. It promotes from within, encourages workers to make suggestions and to air grievances and gives managers autonomy to experiment with their departments or stores to boost sales or shave expenses as they see fit.\u201d<\/p><\/blockquote>\n Much of the emphasis on culture and values at Costco is attributed to the personal interests of Sinegal, their CEO. During the\u00a0Fast Company interview, they asked Sinegal for his opinion on the rising gas prices- his response:<\/p>\n \u201cEven employees who work at Costco- who make the type of wages that we pay- are being hit at the gas pump. We\u2019re working very hard to schedule people from the same part of town so they can drive together. We\u2019re encouraging van pools. We\u2019re even testing 10-hour days, something we\u2019ve never done in the past. If we can schedule some employees for four 10-hour days, that\u2019s one day they don\u2019t have to drive to work. They\u2019ve got a 20% savings in their gas right there.\u201d<\/p><\/blockquote>\n His response to the question really shouldn\u2019t be surprising- I think the shock factor\u00a0is the fact that a CEO actually takes these types of external factors into consideration\u00a0when planning for their business.\u00a0These types of responses\u00a0paint a clear picture of\u00a0the culture at Costco. Costco focuses on putting their employees first, which has lead to low employee turnover rates. In the long run,\u00a0this\u00a0increased rate of retention\u00a0has allowed Costco to save on labour costs while continuing to\u00a0provide\u00a0employees with significant wages and benefit packages.<\/p>\n When employees feel important and that there is value in the work that they do, it makes it harder to leave their current position and seek out new work. Front-line employees are the ones that interact with your company\u2019s customers each day and are\u00a0ultimately the ones that\u00a0communicate the values and culture of your brand to the public. When employees are not passionate about their work or their brand, their attitudes have the ability to influence the customer\u2019s shopping experience. Sinegal started out his retail career as a bagger, working through the ranks to\u00a0VP Merchandising and Operations at FedMart- eventually co-founding Costco in 1983. Since he has worked in a variety of retail positions\u00a0throughout his career, Sinegal understands the\u00a0motivators and impact\u00a0that every\u00a0position has on the overall success of Costco.<\/p>\n Tech Crunch\u00a0discusses the factors of success at Costco in the article \u201cIntegrating Ethics Into The Core Of Your Startups: Why And\u00a0How\u201c, stating that:<\/p>\n \u201cThe company\u2019s per-employee sales are considerably higher than those of key rivals such as Target and Wal-Mart; customer service at the stores is phenomenal and fast; and Costco continues to expand, both in number of warehouses and in products and services for business and consumer customers.\u201d<\/p><\/blockquote>\n The Costco story teaches us all a few lessons that can be applied to our own workplaces: think of the long-term impact of your actions, reduce employee turnover and at all times- let your employees know they matter.<\/p>\n source: <\/em>i-sight<\/a><\/strong><\/p>\nThe Costco Way<\/h2>\n
All About the Employees<\/h2>\n