Wednesday, May 7, 2008

Catholic Business

I've only been to Costco once- and I got some kickin' jeans- but I stumbled across this article on a sports blog. It is from the 2005 NYTimes and describes the difference in employee pay and benefits between Wal-Mart and Costco. You can read it all if you want, but this was most interesting:

But not everyone is happy with Costco's business strategy. Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco's customers but to its workers as well. Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."...Despite Costco's impressive record, Mr. Sinegal's salary is just $350,000, although he also received a $200,000 bonus last year. That puts him at less than 10 percent of many other chief executives, though Costco ranks 29th in revenue among all American companies..."I've been very well rewarded," said Mr. Sinegal, who is worth more than $150 million thanks to his Costco stock holdings. "I just think that if you're going to try to run an organization that's very cost-conscious, then you can't have those disparities. Having an individual who is making 100 or 200 or 300 times more than the average person working on the floor is wrong."
Let that sink in. Does BP, or GM, or anyone else hold that attitude. I'm not sure what they're background is, but that is refreshing. A great example of reasonable and responsible capitalism. Would there were more...

4 comments:

Adrienne said...

I worked for Costco for close to 9 years. Everything the article says is true. It was a wonderful company to work for. And Jim Sinegal is a great guy. When he comes to your warehouse he walks around with a Costco name tag that says "Jim" - no ego problem there.

I've even witnessed folks that developed drug problems. Do they fire them? No - they send them to treatment and if they do well they come back to work.

Another fellow broke his back in an accident. They paid his insurance for over a year when he couldn't work and as he healed they found work for him as he continued the healing process.

Adrienne said...

....oh, and lets not forget the Costco "culture." No swearing, bad jokes, disrespect, or any of the things we witness in other companies. It is just NOT done at Costco. New employees figure this out real, real fast.

Fr. Andrew said...

Thanks for the on-the-ground perspective! Good to know it isn't smoke and mirrors. The whole CEO-janitor ratio is an interesting concept.

Adoro te Devote said...

About the drug issue...it's illegal NOT to let someone come back to work if they have a drug problem and get treatment. I know this because when I was in a management position a few years ago, one of my employees didn't show up one weekend. I learned about it on Monday when I came in that Chris hadn't showed up (and no one bothered to call me at home and tell me...). Anyway, I couldn't reach him either, and that Wednesday I got a call from a woman who identified herself as a friend of his. She said that he was in a place where he could "get some help." I explained that I needed more information than that in order to be able to help him and she finally admitted he was in drug treatment, she had dropped him off, he was there willingly, and so hadn't missed work on purpose. He was not reachable (which is true in treatment programs.)

At the time, I didn't know the law on this but I did know that the general policy of the company was that if someone doesn't show up, it's a resignation. However, I felt that drug treatment should be exempt from this policy and in researching the issue before I went to my boss (the HR director) I learned that, in fact, the company could not legally fire him. And I took the info to the director who was also familiar with the law and we worked out a plan for the employee and he came back to work when he was released.

But it has a sad ending...I left the company but ran into one of my co-workers, another manager, about a year or so later. She gave me the bad news; Chris wasn't clean. He'd gone the way of John Belushi, killed by an 8 ball, not long before.

Please pray for Chris. He really was a great guy and his death was shocking to me. Still is.

(Sorry, didn't mean to take this off on a tangent.)