Introduction
The article under consideration is entitled “11 Reasons to Love Costco that Have Nothing to Do with Shopping”. The author of the article is Kevin Short. The piece of writing was published in the online source Huffington Post on 19 November 2013. Kevin Short provides readers with information about a variety of benefits of working at Costco Wholesale Corporation — one of the largest warehouse club. The author enumerates and describes policies of the company that are advantageous for both employees and CEOs.
The content of the article under consideration encompasses several key concepts. The first concept refers to the company’s approach to providing employees with benefits. Thus, Short (2013) writes about the public endorsement of the raising minimum wage for all employees. The initial payment is $11.50 per hour, and it is much more in comparison to other companies that are not ready to pay such a good wage to new employees.
The second key concept is about the policies concerning working conditions. The author of the article dwells on the fact that Costco’s employees do not work on Thanksgiving Day. This method demonstrates that the company respects human values and allows employees to spend their time with families. The positive treatment of employees was showed in the period of recession as well. The CEO of Costco implemented a flexible system of payment instead of laying off employees. Such policies resulted in the workers’ loyalty to the company. The rate of annual turnover (less than six percent) proves that fact as well.
The third concept is about the financial policies of the company. Thus, according to the article, prices at Costco are tolerant as far as the company never “marks up products by more than 15 percent” (Short, 2013, para. 8). Also, the company does not use advertisements as a means of product promotion. It does not employ public relations employees as well. Finally, the salary of the CEO is not extremely high.
The fourth crucial concept is the company’s human resources policies that aim to promote equality and health benefits.
Main Body
The central concepts of the article under review are directly related to the assigned class topic. First, they are connected with the principles of human resources management. Costco’s experience may serve as a vivid example of the beneficial company’s policies. The aim of human resources management is to provide employees with the best working conditions and opportunities. Costco’s support during the recession, company-sponsored medical insurance, respect to human values (such as the need to be with family on Thanksgiving Day) are cases of successful manifestation of human resources practices. Even more, the company’s experience is not only an example of good policies but an instance of positive consequences of such policies. The rate of annual turnover (less than six percent for employees and less than one percent for executives) proves that statement.
Also, the described core concepts are directly related to the topic of compensation. Compensation of workers is a significant factor that predetermines the satisfaction with work and desire to demonstrate the best abilities. Costco provides an efficient extrinsic motivation of employees by establishing a high minimum wage. However, the level of intrinsic motivation remains not very high, and there is a need for improvement. The percentage of the average turnover may be used as proof of positive aspects of good compensation practices. High compensation may be a result of the fact that the company does not spend money on advertisements.
Conclusion
The information from the article under consideration is significant because it describes the efficient implementation of policies that benefit employees. Many employers do not intend to pay a high minimum wage to new employees because it is too expensive. The same is the situation with allowing not to work on holidays and providing health insurance that is sponsored by the company. Costco’s principles show that high compensation of employees and their motivation result in positive outcomes for the organization. Costco’s practices are also useful for the evaluation of the connection between such a beneficial approach to employees’ treatment and the company’s perspectives for future development.
The introduced information has changed my view concerning the way of doing business. One aspect refers to the CEO’s salary. I always thought that all CEOs of big companies received large profits. Short (2013) writes that Walmart’s CEO has a much larger salary than the CEO of Costco. However, such a difference is not a result of substantially different levels of income. Costco’s CEO could have a higher salary, but he prefers developing the company. The other aspect concerns the role of advertisement. Before reading that article, I considered that no success was possible without advertisements in our world. Again, Costco’s approach has changed this point of view.
There is no doubt that Costco’s policies may serve as examples to follow to other organizations. Many companies have problems with employees’ motivation. Costco employs efficient methods to motivate employees both intrinsically and extrinsically. According to Maslows motivation theory, a person should be motivated to achieve some goal by the satisfaction of his/her current need. In Costcos case, the company aims at the satisfaction of the social, psychological and safety needs.
The provision of the company-sponsored medical insurance, additional day off and the insignificant increase of wages promote the fulfillment of the essential needs of the workers of the company. Being satisfied, they are able to feel a higher need and focus on their achievement. The increase in the level of worker satisfaction results in a significant improvement in the companys performance. Costco also tries to cultivate intrinsic and extrinsic motivation. Extrinsic motivation is high compensation and support during the crisis. Also, employees are motivated because they know that their CEO receives a reasonable salary and does not make a profit from their hard work.
However, the extrinsic motivation does not have the same impact on the performance of a worker as the intrinsic has. For this reason, Costco is recommended to devote a great deal of attention to the cultivation of intrinsic motivation. The members of the staff should be shown the importance of their work and the significance of their contribution to the development of the company. A worker, who realizes the impact of his/her actions and sees the way in which they change the working environment is more interested in the improvement of his/her performance. Therefore, the most productive and efficient workers should be involved in the process of decision making. This approach will demonstrate their role in the functioning of the company and stimulate the thirst for new achievements. Finally, the high level of intrinsic and extrinsic motivation will result in the improvement of the companys performance. I recommend using these practices to decrease the rate of turnover as well.
Reference
Short, L. (2013). 11 Reasons to Love Costco that Have Nothing to Do with Shopping. Web.