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March 27, 2004

Costco's costly largesse

Happy employees make for happy customers, goes the old adage; but what if it makes for unhappy shareholders? That's the dilemma facing Costco, the Wall Street Journal reports.

Costco Wholesale Corp. often is held up as a retailer that does it right, paying well and offering generous benefits.

But Costco's kind-hearted philosophy toward its 100,000 cashiers, shelf-stockers and other workers is drawing criticism from Wall Street. Some analysts and investors contend that the Issaquah, Wash., warehouse-club operator actually is too good to employees, with Costco shareholders suffering as a result.

'

Update: P-I reporter Christine Frey looks at this issue from the Costco perspective -- and finds that the company is quite comfortable with its philosophy for compensaitng employees.

Category: Zeitgeist watch
Posted by Brian Chin at March 27, 2004 09:16 PM
Comments

I believe that the Wall Street Analysts that would prefer to pay cashiers a below sustenance wage are negating the quantifiable effects of creating a resentful and hostile workforce. I previously worked for Costco, and while doing so, was able earn adequate compensation in order to finance a University education and obtain a professional designation. The many colleagues and still personal friends that continue to work for Costco currently have families, houses, and dignity. The employees of Costco have respect for themselves, the company for which they work, and most importantly the members and shareholders they serve everyday. Costco strives to exceed expectations for employees, customers, and shareholders. This type of excellence is systemic in Costco’s organization and is not something that can be performed in only a select number of its pursuits.

How much is excellence worth to a commercial organization? Some would agree that it is often immeasurable.

Posted by: Kent Chawrun at March 28, 2004 12:57 PM
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