I wonder how it would be to work at both and then be able to compare their organizations. We read a excerpt from a book where a journalist tried to work at Wal-Mart but could not make it not only because of the wages but because of the mindless job she was asked to perform over and over, looking at the job descriptions at the Costco web site, the jobs are much similar (www.costco.com). The description of her job matches one of the definitions of the rational organization model where “individuals can behave rationally because their alternatives are limited and their choices circumscribed (page 57).
Furthermore JD Thompson says that “structure is a fundamental vehicle by which organizations achieve bounded rationality”; but do people can really adapt to this model? If we analyze from a turnover stand of point Costco with a turnover rate of 17% does better than Wal-Mart’s 44% (Academy of Mgmt Perspectives), even so those are high turnover rates, but why is Costco’s lower, if the job is essentially the same? Could that be because of the difference in wages or the work environment?
How many of us have been at Sam’s early in the morning to hear them cheer? I was there numerous times (I found that shopping before your household is up is more productive, how about that for formal rationality??!!), do the workers seem to be happy and excited to be there? Maybe some of them are, maybe some of them are not, and we found both examples in the book (Nickel and Dime). So, how does Costco weighs differently on its employees? If we use the annual report from both companies published on 2005, Costco wages were 40% higher than Sam’s club, on top of that the benefits, such as health care, at the first company are much better than in the later, giving Costco a higher sales per square foot (Academy of Management Perspectives pg 34,35).
So, do people really work harder for better pay? If we take Taylor for instance, pay would not matter, just the ‘pride’ in achieving maximum productivity would. On the other hand, Costco is a thriving example that rewarding people for their performance and taking care of its employees is a win-win situation. Now, what do the shareholders think about that? That’s a story for another blog…
Filed under: Blog |