When It Comes to Employee Wages, We Just Need to Do the Right Thing

This pay initiative is an important part of our strategies to continue attracting and retaining the best talent in order to deliver a great shopping experience, remain competitive on wages in our U.S. markets and stay focused on our value mission,” TJX Chief Executive Carol Meyrowitz said in a statement.

Having noticed from afar the recent groundbreaking announcements that have come from major retailers in the U.S., that decision has given me cause for hope.

First Wal-Mart and now Target has, on their own initiative, decided to raise the wages of their workers. That is a good sign. I particularly liked the above statement, tying it to “attracting and retaining.”

Doing what is right

Cumulatively this may sound like a big drag on company earnings, but I see it more as a stimulus to their bottom line.

I remember a statement from Starbucks CEO Howard Schultz in his book Onward. He told of being reprimanded during an earnings call about the insurance he provided for his part-time workers. In essence, he was told that he could increase earnings even more if he would drop that benefit. To his credit, Schultz stepped up to the plate and showed what true leadership is about.

He said: “I will continue that benefit to our partners, and if you feel you can get a better return someplace else, you are more than welcome to invest there.” 

Just do the right thing

Sometimes in life, when challenges face us, it does not take a lot of hand wringing to make a decision. It’s simply “just do the right thing.” We all know what that is, because when you do, there is such a great feeling that comes over you from having been guided by your gut instinct.

The retail business has historically had the highest turnover of any industry. I have always attributed that to low pay because it is well-known for paying workers at the bottom of the wage scale.

But on the other end, retail executives are looking for stellar customer service. They are looking for top talent at the customer interfacing level, but paying wages that the vast majority of us could NEVER live off of. So in essence, it is a stop-gap measure on the career scale until someone finds something else.

Nordstrom is a retail chain that is known for stellar customer service. My formula is that if you want good customer service from your people you have to leave no stone unturned in taking care of them. That is not groundbreaking, but remember — what you put into people will come out accordingly.

There is a lot of angst in the U.S. over the minimum wage, but I would like to challenge any of the powers that be to switch places, and after you have walked a mile in their shoes, make a decision.

Been there, done that

In a prior life, I owned a retail store which was a knock-off of 7-Eleven. My wife and I bought a small grocer and turned it into a 7-Eleven type store. We were open 24 hours. We employed about 12 people. In a discussion with the previous owner, he told me what he was paying his people, which was off the books and below minimum wage.

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After our discussion, we decided that we would pay above minimum wage with a goal of putting in some type of profit sharing. We also included a week of paid vacation. All of my competitors thought I was crazy and basically bragged as to how they were paying people at such a low wage. Our motto was “just do the right thing.”

We were trying to rebrand and grow a business and I needed all the help I could get. I had never been in this type of business before, and my employees had worked in it all their lives. I needed them a lot more than they needed me.

We grew that venture from sales of around $200,000 to $1.5 million by the time we sold it nine years later. That could never have been accomplished without the hard work of our team because they were the ones who worked those long shifts, some of them overnight.

The formula is easy

So, it isn’t brain surgery in the whole scheme of things within the organization. It is about doing what is right and that can’t be done unless you take care of the people who will get you there.

My lesson from that is this:  “You treat them right and, for the most part, they will treat you right.” That is so simple that I cannot understand how the leaders of an organization can’t seem to understand that simple fact of life

The bottom line is this: if we take care of our people, they will in turn build better relationships with your customers that result in greater brand loyalty, repeat sales, and lower marketing costs, and, you’ll build a workplace that attracts talented people who will stand behind your brand.

Remember your employees are the STARS of your organization. And remember this quote by William J.H. Boetcker: “The individual activity of one man with backbone will do more than a thousand men with a mere wishbone.”

Ron Thomas is Managing Director, Strategy Focused Group DWC LLC, based in Dubai. He is also a senior faculty member and representative of the Human Capital Institute covering the MENA/Asia Pacific region.

He was formerly CEO of Great Place to Work-Gulf and former CHRO based in Riyadh. He holds certifications from the Human Capital Institute as Global Human Capital Strategist, Master Human Capital Strategist, and Strategic Workforce Planner.

He's been cited by CIPD as one of the top 5 HR Thinkers in the Middle East. He received the Outstanding Leadership Award for Global HR Excellence at the World Human Resources Development Congress in Mumbai, and was named as one of the 50 Most Talented Global HR Leaders in Asia

Ron's prior roles included senior HR positions with Xerox HR services, IBM, and Martha Stewart Living.

Board memberships include the Harvard Business Review Advisory Council, McKinsey Quarterly's Executive Online Panel, and HCI's Expert Advisory Council on Talent Management Strategy.

His work has been featured in the Wall Street Journal, Inc. Magazine, Workforce Management and numerous international HR magazines covering Africa, India and the Middle East.


1 Comment on “When It Comes to Employee Wages, We Just Need to Do the Right Thing

  1. Keep in mind. There is a cost for “doing the right thing” to everyone.
    Whenever there is an increase in expenses (increased taxes, increased min wage, or voluntary increase in wages). When expenses go up I have found from my 30 years in retail management that the following occur in order to pay for that increased outlay of money…….
    prices go up
    yearly raises are less
    starting salary for higher up positions are reduced
    Available hours will be cut….leading to…….
    increased productivity parameters..meaning that people will be required to do more with less help. So cashiers will need to scan more items per hours in order to keep their jobs. Dead weight who cant comply will be let go,
    Reduction in benefits…so instead of 5 paid sick days a year, you can get only 4. Or id you get a second week vacation after 3 years, now its 5 year wait. The weekly cost of health care may go up.
    Less full timers are hired to keep the cost of benefits down

    All the above occur to some degree….and you never really notice it or connect the dots to the original increase in wages.

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