Walmart finds it pays to pay workers better
You do get what you pay for. That appears to be the simple conclusion when looking at Walmart’s results since management made the decision to raise the pay of hourly workers beginning last year while investing more in training and offering more transparent paths to advancement.
All workers hired by Walmart before Jan. 1 of this year earn a minimum of $10 an hour. Those who have come on since the beginning of the year start at $9 an hour and get bumped up to $10 once they successfully complete the chain’s entry-level skills and training program known as Pathways. The increased wages and training were all part of a $2.7 billion investment made by the company.
According to a New York Times article, Walmart has seen a significant improvement in store cleanliness and a substantial drop in out-of-stocks since it began making the investment in its workers. Today, 75 percent of Walmart stores meet the company’s internal goals for customer service, up from 16 percent a few years ago.
Almost from the outset, Walmart said it saw employee turnover slow as a result of its higher pay scale. In August, the company announced customer traffic to its stores for the eighth straight quarter. Same-store sales were up 1.6 percent during Walmart’s second quarter, the seventh consecutive quarterly increase in comp sales for the retailer.
Walmart paid an additional $200 million in second quarter cash bonuses to 900,000 hourly associates. The bonuses were based on individual store performance during the quarter. The bonus program has been designed as an incentive for associates and is paid out four times a year.
Training is a key component in Walmart’s improvement strategy. In addition to Pathways for entry-level employees, the company announced plans earlier this year to open 200 Academies across the U.S. to teach more advanced skills to department managers and hourly supervisors.
- How Did Walmart Get Cleaner Stores and Higher Sales? It Paid Its People More – The New York Times (tiered sub.)
- Walmart is copying one of Costco’s winning strategies – Business Insider
- Is Walmart on a roll? – RetailWire
- Walmart Associates Earn More Than $200 Million in Cash Bonuses – Walmart
- More Than One Million Walmart Associates to Receive Pay Increase in 2016 – Walmart
- Wal-Mart execs say investment in people paying off, must do more for stores – The City Wire
- Walmart gets a quick return after raising employees’ pay – RetailWire
DISCUSSION QUESTIONS: Do you expect to see continued improvement in Walmart stores as a result of its investments in higher wages and employee training? What would you suggest Walmart do next to continue building on the momentum created by its investment in its associates?