Costco vs. Walmart - Lessons from investing in employees

Sadly, very few corporate entities in the U.S. recognize the points this article makes.

Thanks for posting

... there's always the option of offshoring and treating third world workers like slaves.

It is really very sad.

The villain is a super wealthy guy (played by Robert Vaughan) who has blackmailed a low-level employee who happens also to be a computer genius (played by Richie Pryor) into helping him with his evil schemes. I don’t remember the plot details, but Mr. Rich SOB forces the Richie Pryor character to help him engineer a total rip-off of the world’s wealth, or something like that—you know, the typical over-the-top evil mastermind plot.

Anyway, at one point the Richie Pryor character asks Mr. Rich SOB why? He points out that the rich guy already has more wealth than anyone else in the world and couldn’t possibly spend it all no matter how long he lived. The villain utters this line, which has stayed with me all these years: “It is not enough that I win; everyone else must lose.”

I think that is at the bottom of a lot of the evil the super wealthy and super powerful do. They want to see the peasants desperately scraping and scrambling to barely survive—and they delight in watching the “little people” fight each other, even to the death, for the few crumbs that fall from the tables of the wealthy.

That need to watch others suffer and scrape is far more important than profit to such people. (Think about how much of a loss Murdoch and Clear Channel are willing to suffer to keep FOX News and Limbaugh, respectively, on the air despite advertising losses.)

They might not even be conscious of that vicious need in themselves. No doubt they twist their own perception of reality (we all know how easily they do that) to convince themselves that they are actually protecting their profit margins and that they really, really need to do those evil things to protect their wealth and their business success. Most of them probably also convince themselves that they are not being selfish, but actually going the extra mile to protect liberty and the rights of the individual.

But what they are really doing is feeding their Jabba the Hutt-like need to watch others tremble, suffer, and be destroyed so that they can feel supreme in their own power and control.

What these people fear more than anything is their own common humanity. They must constantly prove to themselves and their peers that they are one of the "elite". Certainly, they rationalize, someone who identifies so little with the common person that they would repress and exploit them in the thousands and millions couldn't possibly be one of them.

Yet at the back of their minds is always that nagging doubt... that reality that they eat, drink, eliminate, sleep, think and feel just like all of the other ordinary folks out there. The idea that this might be exposed for themselves and those around them to see terrifies them to their very soul.

To them, to be one of us is to die.

you quoted Superman III. I never thought ANYONE would do that. Sorry, I couldn't help myself.

I don't see dour faces. I see people engaged in those around them, customers and other employees. My kids have fun when they go there. I haven't been to Wally World so I don't know if they do the same thing, but I can tell you I never see the "People of Costco" photo streams in my email inbox.

Weekend will harm their brand greatly.

even their lowest part time workers better.

i can't tell you how many times i have stopped shopping at stores because i have overheard employees bitching about the management or each other.

I sense it clearly when I go there, which is rarely.

are basic teachings in any business school.

Unstated is the sheer boring nature of work required of most workers at the lowest level and how few career tracks there are for those workers.

Highly automated inventory management systems have reduced to mostly manual, menial tasks much of the work that is physically and mentally draining.

Much of that will be automated in the future.

Automation has also reduced the need for top tier employment.

But,as for myself-- I have been a musician for 45 some years and have done musical instrument repair for 36 years. I don't get bored because, 1- I enjoy what I do-not all the time, of course, but most of the time. And 2- My attitude toward myself as I work.

Would I be bored as a cashier at Walmart? That would again depend on what attitude I had toward myself. . At the same time, the thought of doing that task is not a pleasant one.

I have been in the same field of work for over twenty years. I enjoy it and I am compensated well for what I do. My job now consist mostly of managing and passing on knowledge to new people. Luckily I still get to get out from behind the desk.

But I do have days that remind me of the movie, Groundhog's Day and I want to bang my head against the wall. LOL.

And the way Bill Murray reached 'the next day' and get out of the vicious cycle was to change his attitude toward himself and the world..

Bill also used to be part owner, and maybe still is, of the St Paul Saints minor league baseball team. :>

Wal*Mart sees employees as a cost and threat.

I don't like shopping there, and Wed. afternoon was the last straw.

Three items were missing from my bags when I got home. I called the store to let them know and said for me to come back to customer service. After waiting 15 or so minutes, I was told by one of their employees that they had "proof" I had indeed taken my items (they had me on video). I said I bought about $150 worth of items, so there were multiple bags. All I know is the three items I purchased which were listed on my receipt were not in my car or in my home.

After being basically called a shoplifter and a liar, I went home. I emailed corporate Hellmart, posted stuff on FB and called their corp. office this afternoon and told them what happened.

At Target, this has never happened to me. They believe their customers and don't assume they are guilty right off the bat. Their employees greet me, ask if I need help and have been excellent when I've needed to return an item.

I have a feeling the items were left in the carousel thingy and the next person in line got my items. Wouldn't surprise me in the least.

Assholes.

They're running a "lose-lose" business ... predation and animosity. It's all negatives. Employees are treated like dirt and many of them will live DOWN to the way they're treated.

It's been my experience that upper management not only does not fully understand what the front line workers even do, but don't respect those very front line workers. Many of those bosses could not successfully do the very jobs that keep the company in business. Look at the show "Undercover Boss" and you see that over and over again.

When it comes to flying, for instance, what ultimately matters is not how cheap your ticket is, but what that experience was like for you. So it is those employees who work out of the airport, plus the reservations people if you actually call up to make your booking, who matter. So the ticket counter agent, the gate agent, the baggage handler, and the mechanic are crucial. And then the pilots and flight attendants. Back in the Golden Age of flight the CEOs of airlines had often started out in one of those jobs. But for about thirty years now it's just all the graduates of MBA programs, who are taught that if you can run one business you can run any other one, and that employees are fungible items. And they're wrong on both counts.

I only wish I had a Costco here in Santa Fe.

The nearest Costco to me is 57 miles away. In that radius, there are over 10 Walmarts alone, not counting Sam's Clubs.

While yes, I'm sure Costco has great relations with its employees, especially with winter coming, driving about 60 miles just isn't a feasible option for me.

The nearest Costco to me is 3.7 miles away. The nearest Walmart store is 9 miles and in that radius there are four Costcos. Costco is closer than their Walmart 'market', which is 4 miles away. The nearest Sam's club is 160 miles away.

Where do people learn it's ok to treat other people
badly, to step on them, manipulate them, use them,
and disregard their well-being? Throw-away people,
a dime a dozen.

Employers who understand people -- their consumers
as well as employees -- are most likely to succeed.
Life itself, not to mention business, flourishes.

Bad businesses with ill-treated employees create a
dark sinkhole of meaningless emptiness & hopelessness
which eventually sucks everything in, including the
CEOs.

Thanks for the reminder. I just sent in a job application.

I've ordered a lot of office supplies (started a business this year), and their prices are excellent.

I bought an office chair from them, but I needed to return it. No problem; in fact, one of the employees carried it out of my car and brought it to customer service for me.

I love their towels, sheets, etc.

When you don't spend millions upon millions in bonuses for upper management it's amazing how well you can treat your employees.

I use Costco "Executive Membership" it's $100 for a year but every year you get a check back for 2% of your purchases. I'm feeding 6 people so by the end of the year the 2% covers my membership plus a weeks worth of free groceries. I cannot recommend them enough.

Great comment, and spot on!

Too many employers don't seem to get those simple facts.

And, the privatizers are constantly after government employers to treat their employees badly.

We use Costco for everything we can. Sams and Walmart are visited only when we can't find what we want elsewhere.

from your employees, screw them, your suppliers, your distributors, and anyone else you can.

That way they share the profits instead of giving them to the tax man.

Trader Joes pays their employees 50% more than union scale. And they have the highest per square foot sales for food stores in the country. The owner is a German but its entirely managed and run by a guy from California.

which is the first symptom of their entire fail.

Much of what the article explains is what Amazon does (or at least did when I worked for them).

There are a lot of things that I don't like about Amazon, but they always paid everyone respectable wages, shared restricted stock units to even the lowest hourly employees, sought their input with ideas for increasing productivity, and made sure that you worked at least 40 hours a week. Their pay wasn't the top payer in our area, but for the work that the employees did, they were paid better than 75% of their peers in the same jobs in the same area.

The way that Amazon fights unions is by giving everything that employees want so that they don't need to unionize in order to get it. There was starting to be some grumblings about low wages in our building. Management took that very seriously and gave everyone a raise.

Maybe walmart should learn from this lesson.

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The article makes good points. I am doing my doctorate in business with a focus on retail companies. It would be interesting to find out how retail employees are treated in other countries as well.