I ran across this article from US News and World Reports about Jim Sinegal and how his treatment of employees is what has lead Costco to be such a retail star. There have been lots of articles written about what a great CEO Jim Sinegal is for various reasons that usually have to do with quality products or a great profit for the company, but this article focuses on how his treatment of employees is the real secret behind Costco’s greatness.
This article is all about Jim Sinegal’s belief that if you treat your employees right, they’ll treat the customers well, and that will lead to a successful company. One of the ways that they treat employee’s well is through decent, fair wages and by giving them the opportunity to have a career, not just a job, if they want it. The manager at the store that they were touring has been with Costco for over 20 years and worked his way up from associate to location manager; that’s impressive no matter what kind of company you’re talking about. It is that kind of longevity and opportunity for workers that keeps Costco at just a 12% employee turnover rate; remarkably low, as the author points out, for a retail company. But there are the more obvious, immediate aspects that help keep employees happy too. Such as an average wage of $19.00 per hour and more than 86% of employees have health insurance and benefits even though half of them are part time.
Other CEOs, and managers, could certainly learn a thing or two from Jim Sinegal about treating people with respect to get much better results for the company. This quote from the article sums up Jim Sinegal’s beliefs about the importance of treating employees well:
“It’s really pretty simple. It’s good business. When you hire good people, and you provide good jobs and good wages and a career, good things are going to happen,” Sinegal says. “We try to give a message of quality in everything that we do, and we think that that starts with the people. It doesn’t do much good to have a quality image, whether it’s with the facility or whether it’s with the merchandise, if you don’t have real quality people taking care of your customers.”
If only more CEOs would run their companies this way!
To read the article: