Wal-Mart to Sweeten Bonus Plans for Staff - WSJ.com
         
      March 22, 2007 




      Wal-Mart to Sweeten
      Bonus Plans for Staff
      By KRIS MAHER and KRIS HUDSON 
      March 22, 2007; Page A11

      Wal-Mart Stores Inc., long criticized for its pay and benefits, has 
      revamped its bonus program for hourly employees and will establish a new 
      reward program for long-tenured workers in what some view as a bid to 
      boost morale.
      The world's largest retailer by sales will pay more than $529.8 million in 
      bonuses to 813,759 hourly U.S. employees at Wal-Mart and Sam's Club stores 
      today. It said it will pay a total of $1.06 billion in bonuses to both 
      managers and hourly employees in the U.S. today. The company declined to 
      say how much it paid in similar bonuses last year.
      The company also announced a new annual bonus of one week's pay, called a 
      "Servant Leadership" bonus, to more than 13,400 hourly employees with more 
      than 20 years of service at stores, which will be paid out later this 
      year. The company said it hadn't yet determined the total dollar amount.
      In another change, the company said it will begin paying bonuses to hourly 
      employees, based on sales, profit and inventory performance at individual 
      stores, on a quarterly, rather than annual, basis "to reward performance 
      on a more frequent basis." Experts said that more employees could 
      potentially receive bonuses as a result and that the change could help the 
      company reduce costly turnover among hourly workers. The National Retail 
      Federation, a retail trade association, said turnover in the U.S. retail 
      industry is 80% annually for full-time workers.
      The Bentonville, Ark., retailer announced the changes today. It said they 
      are part of a program launched last year called "Associates Out in Front," 
      designed to "make Wal-Mart a better place to work." The new rewards are 
      intended "to demonstrate just how much we value every member of the 
      Wal-Mart family," said Susan Chambers, executive vice president for 
      Wal-Mart's People Division.
      The company, which will mark "Associate Celebration Day" today with 
      cookouts at each of its 4,000 stores and at its headquarters, said it also 
      planned to create a "Customer Champion" cash award to reward employees who 
      provide "outstanding customer service." It said that award would begin in 
      midsummer but didn't say how the award would be determined or its amount.
      Such moves are a stark shift from recent changes that have helped the 
      company rein in labor costs but have also upset and even angered some of 
      its 1.35 million U.S. employees. Those earlier changes include a new 
      automated scheduling system aimed at aligning workers' shifts with each 
      store's busiest shopping times and a move that capped the salaries of tens 
      of thousands of workers, both of which hit longtime workers hardest. In 
      October, employees at a Wal-Mart in Hialeah, Fla., walked off the job 
      briefly in a spontaneous protest of the new policies.
      It is unclear what impact the company's latest efforts will have. Some 
      experts say the view among many consumers and workers that Wal-Mart 
      doesn't treat its workers as well as rivals has grown over the past year.
      This impression is partly based on actual wage and benefit practices, 
      experts say. Wal-Mart, for example, now says it pays its full-time U.S. 
      workers $10.51 an hour on average. That is an increase from last year's 
      $10.11 average. By comparison, competitor Costco Wholesale Corp., of 
      Issaquah, Wash., recently boosted its minimum pay for full-time hourly 
      workers, and it pays $17.46 on average to its full-time and part-time 
      workers in the U.S. The U.S. Department of Labor's Bureau of Labor 
      Statistics lists average U.S. retail-sales wages ranging from $8.73 to 
      $13.99 an hour in 2005, the latest year for which data are available.
      Wal-Mart's image has also been dented by the unrelenting criticism of 
      groups backed by labor unions, as well as politicians and grass-roots 
      community groups seeking to block the company's expansion efforts.
      "Wal-Mart is being hit on two sides. One is that it's an unfair 
      competitor, and one is that it's an unfair employer," says Gary Chaison, a 
      professor of industrial relations at Clark University in Worcester, Mass. 
      "I think that it wants to go on the offensive to show workers and 
      consumers that it's not a bad employer."
      Lois Honeycutt, a 46-year-old customer-service manager at a Wal-Mart in 
      Altamonte Springs, Fla., said the bonus-program revisions might help boost 
      spirits in some of Wal-Mart's stores. "I really think they're trying to 
      bring up some of the morale," said Ms. Honeycutt, a 10-year Wal-Mart 
      employee. "If you've ever worked in retail, you'll know that it's not an 
      easy job."
      Sarah Clark, a company spokeswoman, said the changes weren't an effort to 
      improve morale. "That's not the case," she said, adding that "associate 
      engagement scores" across the company remain very positive.
      Write to Kris Maher at kris.maher@wsj.com1 and Kris Hudson at 
      kris.hudson@wsj.com2
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