Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘employee compensation’

The Grocery Store That Competes With Walmart Prices And Is Beloved By Employees

Friday, May 22nd, 2015

Bryce CovertThis week, Wegmans, a family-owned grocery store chain, announced it would open its first location in New York City.

The announcement prompted an outpouring of devotion for the company. The New York Times noted it can actually claim a “cult following.” Part of the devotion to the store is not just that it manages to have a huge selection while offering prices that can compete with Walmart, but that it does it while treating its employees well.

The perks start with pay, which for hourly store employees is a little more than $33,000 a year on average. By contrast, Walmart has admitted that more than half of its employees make less than $25,000 a year, although it recently announced a wage increase, and retail sales workers make a median $21,410 annual salary. Anonymous pay sites like Glassdoor and Payscale also show that a Wegmans cashier can expect to make more than $9 an hour, on average.

But that’s not what makes the company famous for employee satisfaction, landing it on Fortune’s 100 Best Companies to Work For list every year since the list began. It also offers generous benefits. It pays about 85 percent of the costs of health care coverage, including dental, for its full-time employees and offers insurance to part-time workers who put in 30 hours a week. It offers 401(k) plans with a salary match of up to 3 percent of an employee’s contribution.

And it has a scholarship program that awards tuition assistance to employees, which has paid out $100 million to 32,000 employees since it began in 1984. The program gives part-time employees up to $1,500 a year and full-time employees up to $2,200 a year to study at any college in any field. Starbucks’s lauded scholarship program, by contrast, used to only be for studying careers that directly prepared employees for working at Starbucks and now is only applicable for studying at Arizona State University. The share of companies offering employees college assistance has been trending downward.

Wegmans also offers more work/life balance than most retail jobs. It gives employees 11 days of paid vacation and holidays and three extra days of paid time off. It’s known for flexible scheduling, a perk that regularly tops surveys of its own workforce as the most important benefit offered. Managers have the power to craft their own schedules and work with employees’ needs, and many workers use an online system to lay out their availability around their own schedules. In retail at large, on the other hand, more than a quarter of workers report irregular and unpredictable scheduling like being made to be on call or working two shifts in one day. Nearly 40 percent of retail workers in New York City say they don’t have a set minimum of hours week to week.

These benefits aren’t just altruistic. The company generates $7.1 billion in revenue and is profitable. “When you think about employees first, the bottom line is better,” the company’s vice-president for human resources has said. The company boasts a 5 percent turnover rate among full-time employees, compared to a 27 percent rate for the industry. That comes with a cost, as it often eats up about 20 percent of a worker’s salary to replace him.

“What some companies believe is that you can’t grow and treat your people well,” says a senior vice president. “We’ve proven that you can grow and treat your people well.”

This blog was originally posted on Think Progress on May 14, 2015. Reprinted with permission.

About the Author: The author’s name is Bryce Covert. Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media.

Just When You Thought the Hostess Story Couldn't Get Worse...

Thursday, December 13th, 2012

Kenneth Quinnell

Money that was intended for employee pensions was used by Hostess Brands management to cover operating expenses and workers were never compensated for the lost payment, Yahoo News reports. An undetermined amount of money that Bakery, Confectionery, Tobacco Workers and Grain Miller (BCTGM) members were supposed to receive as part of their contract with the company was used to keep the company running after mismanagement led to significant losses and eventual bankruptcy. 

This was during the same time period that Hostess began paying out massive bonuses to executives. BCTGM learned that the then-Hostess CEO was to be awarded a 300% raise, and at least nine other top executives were to receive raises ranging between 35% and 80%.

The process of taking the pension money was quite simple for Hostess:

For example, John Jordan, the local union financial officer for [BCTGM] Local 334 in Biddeford, Maine, said workers at a Hostess factory in Biddeford agreed to plow 28 cents of their 30-cents-an-hour wage increase in November 2010 into the pension plan.

Hostess was supposed to take the additional 28 cents an hour and contribute it to the workers’ pension plan.

Employees never saw that 28 cents. In July 2011, Hostess stopped making pension contributions and used the money to run the business. Employees never received the pension funds and the compensation Hostess promised the workers was not made up in wages, either.

In all likelihood, the tactic doesn’t violate federal law because the money didn’t get paid to employees first, but went directly to the pension fund. Lawyers call the situation “betrayal without remedy” and it’s unlikely the money can be recovered.

Hostess CEO Gregory Rayburn’s response ranged from understatement to “it’s not my fault.”

Gregory Rayburn, Hostess’s chief executive officer, said in an interview it is “terrible” that employee wages earmarked for the pension were steered elsewhere by the company.

“I think it’s like a lot of things in this case,” he added. “It’s not a good situation to have.”

Mr. Rayburn became chief executive in March and learned about the issue shortly before the company shut down, he said. “Whatever the circumstances were, whatever those decisions were, I wasn’t there,” he said.

Rayburn’s predecessor at Hostess, Brian Driscoll, refused to comment.

The end of pension contributions by the company was a key reason for the BCTGM strike:

Halted pension contributions were a major factor in the bakers union’s refusal to make a deal with the company. After a U.S. bankruptcy judge granted Hostess’s request to impose a new contract, the union’s employees went on strike. Hostess then moved to liquidate the company.

“The company’s cessation of making pension contributions was a critical component of the bakers’ decision” to walk off the job, said Jeffrey Freund of Bredhoff & Kaiser PLLC, a lawyer for the union.

“If they had continued to fund the pension, I think we’d still be working there today,” said Craig Davis, a 44-year-old forklift operator who loaded trucks with Twinkies, cupcakes and sweet rolls at an Emporia, Kan., bakery, for nearly 22 years.

The amount of employee compensation lost by the company is not known, but the numbers are staggering:

In five months before this past January’s bankruptcy filing, the company missed payments to the main baker pension fund totaling $22.1 million, Mr. Freund said.

After that, forgone pension payments added up at a rate of $3 million to $4 million a month until Hostess formally rejected its contracts with the union. The figures include company contributions and employee wages that were earmarked for the pension, according to Mr. Freund.

This post was originally posted on AFL-CIO on December 11, 2012. Reprinted with Permission.

About the Author: Kenneth Quinnell is a senior writer for AFL-CIO, and a former precinct committeeman in the Leon County Democratic Party. He is a former vice chair of the Florida Democratic Party’s Legislative Liaison Committee, and during the 2010 election, through the primary, Kenneth Quinnell worked for the Kendrick Meek campaign. He has written for Think Progress, AFSCME and for OurFuture.org on Social Security.

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