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I was reading about Sam's Club and Chicken Out and they said that company leaders have determined that even though most of the jobs at these retail locations are unskilled they would make it more difficult to get hired and pay about 25% more than what other similar employers are paying for the same job. They believe by paying more and having a more drawn out interview process, the quality of workers will be better. Do you agree?
If you created a small business would you consider paying more than market to get the best workers? Or maybe just because you pay more this will have no impact on the quality of the work, because the employers will still be bored low skilled workers doing boring jobs.
What may seem 'boring' to you may turn out to be someone else's life's work and source of joy. When Wal Mart first opened up in an area, they stated that they were offering $10 an hour to start. I knew several folks personally who went there with experience, knowledge, and training to make a real difference in their workforce - but when they were offered minimum wage, they laughed heartily and walked out the door. What Wal Mart got, in the main, was a bunch of folks who HAD to work, not who wanted to work; service was awful and thievery was rampant - they actually had two thieves' gangs working in the store at the same time!
Some folks actually enjoy warehouse work and retail work; take business management courses, and like the challenges of dealing with the public. Many - do not, they take what they can get and remain at the bottom of the totem pole by their choices in life. The former group will shine wherever you put them, and they can even lead a crew of the latter to more and better service if they are given the opportunity to do so. But if Sam's Club refuses to pay anyone a higher wage and benefit for their abilities, then all they will get is the latter. I'm glad they've finally realized that. Maybe their service and their workforce teams will improve.
While I agree with SCGranny that low wages and substandard benefits generally brings a lower class of worker, higher wages and benefits don't necessarily bring a better class of worker overall.
For example, I get better service (when I can find someone) at Wal Mart than Safeway. And Safeway is union and pays much better.
But here's a thought... restaurants in Oregon have servers that all get paid minimum wage + tips. I can go into one chain restaurant and the service stinks from head to toe. I can go to the same chain restaurant across town and the dinner experience is A+. Why? Leadership & management.
It's the same in retail. Good store leadership & management is key. I am a medical/dental malpractice risk manager. I have worked for about 6 different insurance companies. The one I am at currently pays 25% less than the others, yet we offer hands down premier customer service- much more so than any other company I've worked at or even heard of. Our employees are much happier and we have people, literally, breaking our doors down to work for us. Why? We have great management and leadership.
If you created a small business would you consider paying more than market to get the best workers? Or maybe just because you pay more this will have no impact on the quality of the work, because the employers will still be bored low skilled workers doing boring jobs.
Maybe the "physics" are different for a small business but paying more than market salaries in the American automaker business has worked in reverse. Paying over market salaries in their case just allowed for more effective law suits against the companies and the production of some of the world's worse vehicles.
Also, I might mention that in a similar vein, I keep my rental rates for two commercial buildings way below market value and I regularly have broken agreements for rental adjustments for things the renter wants and very often have to write letters regarding late rent. One letter for late rent is going out Monday.
Anecdotal information tells you little though. I do believe in the old adage of "you get what you pay for" but would add "but sometimes you don't." The quality of the worker, or renter, can vary significantly at any price and its up to you the owner to decide.
The best general advice in business probably is to use your brain and not your heart. And lastly I will add that I am not a businessman nor did I ever want to be. The rentals were inherited.
I can speak to this from experience, not so much about actually getting "better workers", but about the relative costs of having them as employees. This may not apply so much to "strictly production types, but to jobs (as almost all jobs in the US economy are today) described as "knowledge workers".
A "smarter" person may not be able to stock shelves, run a cash register or do anything else "mechanical" faster than a less smart one. The productivity is somewhat constrained by simple physics. However, the smarter one may be better a spotting ways to improve productivity, customer service or any of the other desired "outputs" of that job.
OTOH, a job that is "knowledge" based and requires some creativity, reasoning and thought is almost always going to be performed better by a smarter (higher paid) worker. I'm equating "smarter" and higer paid and "better" even though 2 of the three are subjective measures, because I am a capitalist and believe that more money (almost always) will get you a better class of employee.
I once took a job at a company where the standard was to hire the cheapest "know nothings" that they could find. This idea kind of started with the warehouse manager who had 65 people doing the work that the new warehouse manager (hired at same time as me) had 40 doing a year later and 35 doing after the second year. I took over a department with 25 people and within a year I had 20 and after the second year I had 16.
The funny thing was that the comptroller even fell into this stupidity. He felt more justified in having 10 people each making $10 per hour, than in having 6 people making $15/hour. Despite the fact that he had two people doing payroll entirely by hand instead of computerizing it and only using one fourth of one person.
I did make a nice bonus for a few years for improving the productivity (I knew when I interviewed that I was better off asking for a smaller salary and a big performance bonus) but after a few years I got bored to tears with the routine of "administration" and moved back into sales where creativity is a constant and the rewards for having it are som much better.
While I agree with what has been said by others here, I would like to add that maybe the additional compensation should be viewed as making the employees happy, and happy employees make better employees.
If you're lucky enough to have a Sams/BJ's etc and a Costco near you, try going to both (if you don't have membership, go with someone who does). Compare how the employees (in general) act and their general demeanor.
Costco has been reviewed by many external reviewing organization and has always been judged as one of the best in terms of employee satisfaction. They pay their employees more, they give better benefits, they have a better overall training, and a better upward mobility structure.
I think you will find that the employees at Costco seem that much more happy to help, that much more knowledgeable about the warehouse, and in general that much more happy to be there in the first place.
I don't know if that is directly related to how much they are paid or how Costco finds its employees, but it seems to me, the only variable between Costco and the other warehouse stores. So the level of compensation is a factor in getting better, more loyal, employees.
*I am not and have never been associated with Costco.
I agree with their idea with the key being a longer drawn out interview process. If blantently bad workers are weeded out during the interviews and high wages are given to good workers as to keep them content along with a rational management staff the quality of work would greatly increase. If I had a buisness I would create bonus incentives that would bring their overall pay above the norm for their job. Workers will work better if they get paid extra for doing so. If it's set most will work as hard as the worst worker you have getting paid the same. I think so anyways. works for me as a worker.
I agree with their idea with the key being a longer drawn out interview process. If blantently bad workers are weeded out during the interviews and high wages are given to good workers as to keep them content along with a rational management staff the quality of work would greatly increase. If I had a buisness I would create bonus incentives that would bring their overall pay above the norm for their job. Workers will work better if they get paid extra for doing so. If it's set most will work as hard as the worst worker you have getting paid the same. I think so anyways. works for me as a worker.
The only drawback is that many good employees will get a different job during an extended hiring process. I know a couple of companies that take 3-4 months to make a hire. They continually lose good people they need and often end up with what they can get as a result.
I definely think that they will get different better work ethics people applying.They also can cut the number of workers needed in many insatnces.
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