Companies were loyal to employees as recently as a couple of generations ago, but the good old days are gone forever. Why in the heck should I be loyal to my workplace when I know that the people in upper management would never show any loyalty to me?
As a nurse, is it really worth it to show loyalty to your place of employment? Perhaps there truly are benefits to being a loyal employee. Maybe not.
Your thoughts on workplace loyalty are probably dependent upon the generation in which you came of age. As recently as a couple of generations ago, it was common practice for companies to strive toward providing lifetime employment for all workers who performed at an acceptable level. In exchange for this implied promise of long term employment, most workers remained at the same workplace for 25, 30, 40+ years, or until retirement. In the distant past, corporations were fiercely loyal to employees, and employees gave back by being loyal to these corporations. The loyalty was mutual.
I am 31 years old and was born in 1981, so I was born at the very end of Generation X or the very beginning of Generation Y depending on the source I use to define the cutoff points for the generational cohorts. I was 20 years old when the Enron scandal unfolded in 2001 and watched as legions of loyal employees lost their jobs, retirement savings, and overall sense of security. The story behind the Enron collapse is complicated and way outside the scope of this article, but I will say one thing: the big wigs at the very top of that corporation did not show any loyalty to anyone but themselves.
My views on workplace loyalty are also shaped by the Great Recession of 2008 to 2009. During the last recession, companies laid off masses of employees without taking length of service, tenure, or loyalty into consideration. Benefits for workers have been eroding for years; however, this erosion has accelerated within the past few years. For example, many major healthcare systems are transferring a greater share of health care costs onto their employees. Also, defined benefit pension plans are largely a relic of the past, having been replaced with 401k plans and IRAs. In addition, many hospitals are hiring part-time and/or PRN employees only, as these jobs are cheaper to the corporation's bottom line than full-time benefited positions.
I also live and learn by ensuring that I do not repeat the mistakes of my more seasoned coworkers. The nurses in my metropolitan area who remain employed with the same workplace for 20+ years are often the first ones to be unjustly fired. I suspect this is due to the fact that they've topped out on the wage grid. I've seen the most loyal nurses get chewed up, spit out, discarded by healthcare corporations, and soon forgotten. When (or if) they find another job, it often comes with a substantial cut in pay and a zap to the soul. By the way, I live in an at-will employment state and unionized hospitals do not exist in the large metropolitan area where I work.
In summary, I am loyal to myself. I am loyal to my patients while I am on the clock and providing care to them. However, I will never be loyal to any entity that employs me. As soon as the people in upper management get tired of me, I know they'll terminate my employment without losing one minute of sleep over me. And as soon as my workplace no longer meets my needs, I will quit without feeling a morsel of guilt.
The feeling is mutual these days. It's nothing personal.
JIM SINEGAL, the chief executive of Costco Wholesale, the nation's fifth-largest retailer, had all the enthusiasm of an 8-year-old in a candy store as he tore open the container of one of his favorite new products: granola snack mix. "You got to try this; it's delicious," he said. "And just $9.99 for 38 ounces."
Some 60 feet away, inside Costco's cavernous warehouse store here in the company's hometown, Mr. Sinegal became positively exuberant about the 87-inch-long Natuzzi brown leather sofas. "This is just $799.99," he said. "It's terrific quality. Most other places you'd have to pay $1,500, even $2,000."
But the pièce de résistance, the item he most wanted to crow about, was Costco's private-label pinpoint cotton dress shirts. "Look, these are just $12.99," he said, while lifting a crisp blue button-down. "At Nordstrom or Macy's, this is a $45, $50 shirt."
Combining high quality with stunningly low prices, the shirts appeal to upscale customers - and epitomize why some retail analysts say Mr. Sinegal just might be America's shrewdest merchant since Sam Walton.
But not everyone is happy with Costco's business strategy. Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco's customers but to its workers as well.
Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."
Mr. Sinegal begs to differ. He rejects Wall Street's assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street's profit demands.
Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco's customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers' expense. "This is not altruistic," he said. "This is good business."
He also dismisses calls to increase Costco's product markups. Mr. Sinegal, who has been in the retailing business for more than a half-century, said that heeding Wall Street's advice to raise some prices would bring Costco's downfall.
"When I started, Sears, Roebuck was the Costco of the country, but they allowed someone else to come in under them," he said. "We don't want to be one of the casualties. We don't want to turn around and say, 'We got so fancy we've raised our prices,' and all of a sudden a new competitor comes in and beats our prices."
At Costco, one of Mr. Sinegal's cardinal rules is that no branded item can be marked up by more than 14 percent, and no private-label item by more than 15 percent. In contrast, supermarkets generally mark up merchandise by 25 percent, and department stores by 50 percent or more.
"They could probably get more money for a lot of items they sell," said Ed Weller, a retailing analyst at ThinkEquity.
But Mr. Sinegal warned that if Costco increased markups to 16 or 18 percent, the company might slip down a dangerous slope and lose discipline in minimizing costs and prices.
Mr. Sinegal, whose father was a coal miner and steelworker, gave a simple explanation. "On Wall Street, they're in the business of making money between now and next Thursday," he said. "I don't say that with any bitterness, but we can't take that view. We want to build a company that will still be here 50 and 60 years from now."
IF shareholders mind Mr. Sinegal's philosophy, it is not obvious: Costco's stock price has risen more than 10 percent in the last 12 months, while Wal-Mart's has slipped 5 percent. Costco shares sell for almost 23 times expected earnings; at Wal-Mart the multiple is about 19.Mr. Dreher said Costco's share price was so high because so many people love the company. "It's a cult stock," he said.
Emme Kozloff, an analyst at Sanford C. Bernstein & Company, faulted Mr. Sinegal as being too generous to employees, noting that when analysts complained that Costco's workers were paying just 4 percent toward their health costs, he raised that percentage only to 8 percent, when the retail average is 25 percent.
"He has been too benevolent," she said. "He's right that a happy employee is a productive long-term employee, but he could force employees to pick up a little more of the burden."
Mr. Sinegal says he pays attention to analysts' advice because it enforces a healthy discipline, but he has largely shunned Wall Street pressure to be less generous to his workers.
"When Jim talks to us about setting wages and benefits, he doesn't want us to be better than everyone else, he wants us to be demonstrably better," said John Matthews, Costco's senior vice president for human resources.
With his ferocious attention to detail and price, Mr. Sinegal has made Costco the nation's leading warehouse retailer, with about half of the market, compared with 40 percent for the No. 2, Sam's Club. But Sam's is not a typical runner-up: it is part of the Wal-Mart empire, which, with $288 billion in sales last year, dwarfs Costco.
But it is the customer, more than the competition, that keeps Mr. Sinegal's attention. "We're very good merchants, and we offer value," he said. "The traditional retailer will say: 'I'm selling this for $10. I wonder whether I can get $10.50 or $11.' We say: 'We're selling it for $9. How do we get it down to $8?' We understand that our members don't come and shop with us because of the fancy window displays or the Santa Claus or the piano player. They come and shop with us because we offer great values."
Costco was founded with a single store in Seattle in 1983; it now has 457 stores, mostly in the United States, but also in Canada, Britain, South Korea, Taiwan and Japan. Wal-Mart, by contrast, had 642 Sam's Clubs in the United States and abroad as of Jan. 31.Costco's profit rose 22 percent last year, to $882 million, on sales of $47.1 billion. In the United States, its stores average $121 million in sales annually, far more than the $70 million for Sam's Clubs. And the average household income of Costco customers is $74,000 - with 31 percent earning over $100,000.
One reason the company has risen to the top and stayed there is that Mr. Sinegal relentlessly refines his model of the warehouse store - the bare-bones, cement-floor retailing space where shoppers pay a membership fee to choose from a limited number of products in large quantities at deep discounts. Costco has 44.6 million members, with households paying $45 a year and small businesses paying $100.
A typical Costco store stocks 4,000 types of items, including perhaps just four toothpaste brands, while a Wal-Mart typically stocks more than 100,000 types of items and may carry 60 sizes and brands of toothpastes. Narrowing the number of options increases the sales volume of each, allowing Costco to squeeze deeper and deeper bulk discounts from suppliers.
"He's a zealot on low prices," Ms. Kozloff said. "He's very reticent about finagling with his model."
Despite Costco's impressive record, Mr. Sinegal's salary is just $350,000, although he also received a $200,000 bonus last year. That puts him at less than 10 percent of many other chief executives, though Costco ranks 29th in revenue among all American companies.
"I've been very well rewarded," said Mr. Sinegal, who is worth more than $150 million thanks to his Costco stock holdings. "I just think that if you're going to try to run an organization that's very cost-conscious, then you can't have those disparities. Having an individual who is making 100 or 200 or 300 times more than the average person working on the floor is wrong."
There is little love lost between Wal-Mart and Costco. Wal-Mart, for example, boasts that its Sam's Club division has the lowest prices of any retailer. Mr. Sinegal emphatically dismissed that assertion with a one-word barnyard epithet. Sam's might make the case that its ketchup is cheaper than Costco's, he said, "but you can't compare Hunt's ketchup with Heinz ketchup."
Still, Costco is feeling the heat from Sam's Club. When Sam's began to pare prices aggressively several years ago, Costco had to shave its prices - and its already thin profit margins - ever further.
"Sam's Club has dramatically improved its operation and improved the quality of their merchandise," said Mr. Dreher, the Deutsche Bank analyst. "Using their buying power together with Wal-Mart's, it forces Costco to be very sharp on their prices."
Mr. Sinegal's elbows can be sharp as well. As most suppliers well know, his gruff charm is not what lets him sell goods at rock-bottom prices - it's his fearsome toughness, which he rarely shows in public. He often warns suppliers not to offer other retailers lower prices than Costco gets.
When a frozen-food supplier mistakenly sent Costco an invoice meant for Wal-Mart, he discovered that Wal-Mart was getting a better price. "We have not brought that supplier back," Mr. Sinegal said.
He has to be flinty, he said, because the competition is so fierce. "This is not the Little Sisters of the Poor," he said. "We have to be competitive in the toughest marketplace in the world against the biggest competitor in the world. We cannot afford to be timid."
Nor can he afford to let personal relationships get in his way. Tim Rose, Costco's senior vice president for food merchandising, recalled a time when Starbucks did not pass along savings from a drop in coffee bean prices. Though he is a friend of the Starbucks chairman, Howard Schultz, Mr. Sinegal warned he would remove Starbucks coffee from his stores unless it cut its prices.
Starbucks relented.
"Howard said, 'Who do you think you are? The price police?' " Mr. Rose recalled, adding that Mr. Sinegal replied emphatically that he was.
If Mr. Sinegal feels proprietary about warehouse stores, it is for good reason. He was present at the birth of the concept, in 1954. He was 18, a student at San Diego Community College, when a friend asked him to help unload mattresses for a month-old discount store called Fed-Mart.
What he thought would be a one-day job became a career. He rose to executive vice president for merchandising and became a protégé of Fed-Mart's chairman, Sol Price, who is credited with inventing the idea of high-volume warehouse stores that sell a limited number of products.
Mr. Price sold Fed-Mart to a German retailer in 1975 and was fired soon after. Mr. Sinegal then left and helped Mr. Price start a new warehouse company, Price Club. Its huge success led others to enter the business: Wal-Mart started Sam's Club, Zayre's started BJ's Wholesale Club and a Seattle entrepreneur tapped Mr. Sinegal to help him found Costco.
Costco has used Mr. Price's formula: sell a limited number of items, keep costs down, rely on high volume, pay workers well, have customers buy memberships and aim for upscale shoppers, especially small-business owners. In addition, don't advertise - that saves 2 percent a year in costs. Costco and Price Club merged in 1993.
"Jim has done a very good job in balancing the interests of the shareholders, the employees, the customers and the managers," said Mr. Price, now 89 and retired. "Most companies tilt too much one way or the other."
Mr. Sinegal, who is 69 but looks a decade younger, also delights in not tilting Costco too far into cheap merchandise, even at his warehouse stores. He loves the idea of the "treasure hunt" - occasional, temporary specials on exotic cheeses, Coach bags, plasma screen televisions, Waterford crystal, French wine and $5,000 necklaces - scattered among staples like toilet paper by the case and institutional-size jars of mayonnaise.
The treasure hunts, Mr. Sinegal says, create a sense of excitement and customer loyalty.
This knack for seeing things in a new way also explains Costco's approach to retaining employees as well as shoppers. Besides paying considerably more than competitors, for example, Costco contributes generously to its workers' 401(k) plans, starting with 3 percent of salary the second year and rising to 9 percent after 25 years.
ITS insurance plans absorb most dental expenses, and part-time workers are eligible for health insurance after just six months on the job, compared with two years at Wal-Mart. Eighty-five percent of Costco's workers have health insurance, compared with less than half at Wal-Mart and Target.
Costco also has not shut out unions, as some of its rivals have. The Teamsters union, for example, represents 14,000 of Costco's 113,000 employees. "They gave us the best agreement of any retailer in the country," said Rome Aloise, the union's chief negotiator with Costco. The contract guarantees employees at least 25 hours of work a week, he said, and requires that at least half of a store's workers be full time.
Workers seem enthusiastic. Beth Wagner, 36, used to manage a Rite Aid drugstore, where she made $24,000 a year and paid nearly $4,000 a year for health coverage. She quit five years ago to work at Costco, taking a cut in pay. She started at $10.50 an hour - $22,000 a year - but now makes $18 an hour as a receiving clerk. With annual bonuses, her income is about $40,000.
"I want to retire here," she said. "I love it here."
If that's too difficult to read (the hyperlink didn't paste correctly so I had to cut and paste the article), here's the relevant information:
But not everyone is happy with Costco's business strategy. Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco's customers but to its workers as well.
Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."
Mr. Sinegal begs to differ. He rejects Wall Street's assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street's profit demands.
Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco's customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers' expense. "This is not altruistic," he said. "This is good business."
I haven't read the whole thread, partly because it's become an 8-page slog, but mostly because my DGS is pacing up and down, wondering when Granny will be finished with his PC. Visiting the kids is great, but maintaining your networks is very, very difficult :).
I started work our old facility in 1990. when it belonged to Corporate A. I loved the old hospital, I loved my colleagues, and most of us were very loyal to our manager. He was just one of those guys who inspired his staff to always do their best. In 1999, ownership passed to Corporate B, who scaled down certain benefits but improved others. We didn't mind too much as we retained our existing management and overall were better off. In 2004, we were sold off to Corporate C, which got rid of our manager and implemented an "absentee boss" style of management. They weren't interested in our opinions, ideas or contributions, and decided within a 2 years that they would be building a new hospital and moving us out.
We thought this was great; I was disturbed about the lack of liaison between management and staff - after all, this was a much smaller organisation than Corporate B, yet it was as if they were completely aloof from us - but, we felt, all this would change when they appointed a permanent manager. Our NSM was, at the time, fulfilling both functions.
Eventually, the new hospital was finished and the time drew near for us to move in. By this time I was deeply troubled, as there was practically no input invited from staff, not concerning layout, equipment, nothing. Once we did move in and the levels of corner-cutting, bad design and inefficient layout became apparent, it felt to me like the worst betrayal I'd ever experienced, even though, if I'm perfectly honest, I saw it coming. It's now almost 23 years down the line, two years from mandatory retirement age for me, and I've become a time-marker. Although evidence points towards an attitude amongst management to work us old hands out, I won't let them do that to me. They'll put up with me and my big mouth until I retire, or face me in court. Fortunately we have some pretty stringent labour laws here which make it impossible to dismiss staff on a whim; I'm pretty well protected, but I can't help hoping against hope for a turnaround in their attitudes. A company loyal to its staff inspires loyalty amongsttheir staff. Loyal staff inspire each other, and inspire confidence in their clients, customers or patients. It is a commodity beyond price.
Dudette's got it right, of course. Management that focuses only on profit inspires nothing more than cynicism. The accounting department is where both moral and morale go to die. Yet what are we to do? We too, if we have invested funds, are shareholders, the vampires who dictate whether a business shall live or die. Can we change things? Yes, certainly, if we are prepared to place principle above profit. Disinvest from companies who manufacture in countries using slave labour. Pour funds into companies like Mr. Sinegal's Costco. Support those who empower their workers, and keep pushing in your own facilities for better communication and a democratic style of management. We all have the right to be happy in our place of work, but we also have a duty to do what we can to make it so.
Specializes in Clinical Research, Outpt Women's Health.
I try to be loyal, but I am a realist and know that if they don't have the funding I am gone. So I am always hedging my bets. I have a wonderful employer, but I know that funding comes and goes.
There was another thread in which someone said we shouldn't leave a job during the holidays because it's difficult to staff for the holidays.
Companies don't seem to mind layoffs around Christmas, though.
The Associated Press reports today that R.S. Owens & Company, which has manufactured the statuettes for the Oscars (and the Emmys) for three decades, will lay off 95 employees on Dec. 17, when the Chicago company is bought by St. Regis Crystal of Canada. According to the A.P., R.S. Owens employs 250 workers, and the president, Scott Siegel, said they could apply to be rehired, although he wasn’t sure how many would be accepted.
It’s not the first time the economic doldrums have rubbed shoulders with Oscar glitz. Last year there was an employee-owner dispute at R.S. Owens, with 50 Teamsters locked in a battle over wage freezes.
Regardless of the changes, the Oscar statuettes will continue to be made in Chicago, R.S. Owens vows.
Specializes in Case mgmt., rehab, (CRRN), LTC & psych.
Companies don't seem to mind layoffs around Christmas, though.
Companies will lay employees off at any time that is convenient for the corporation's bottom line, even if it's during the holiday season. As long as companies are more loyal to their profit margin than anything or anyone else, I'll never be loyal to any workplace.
This article hit home, I work for a very large research/teaching hospital that recently announced its corporate restructuring plans, which included almost 1000 layoffs over the next few months, absolutely no overtime for any employees, a change in the Paid time off and benefits policy which put a cap on the amount of hours people can earn in PTO. I have a contract with this hospital, which if I break I will owe a pretty steep amount of money, however with all of the recent changes management has become distant and unavailable, staff morale is horrible and I have considered breaking my contract. I used to have pride to work for this hospital, and was quite loyal to the entity, now I dread coming to work, and I know if the company had a reason to get rid of me they would, especially if it was fiscally prudent to them during their "Restructuring Phase"
The place I work at now has a history of cutting hours and layoffs. I know not to expect anything from them, I will continue to do my job as long as I have one.
What you have written is sad, but all so true. I am a L.P.N. in a small assisted living facility. I go to work when scheduled, do not call out and adhere to all of their rules and regulations. I got suspended today for the reason that I kissed a resident on the forehead. I was told it was innappropriate to do this. I love each and every one of my residents, they are like family. They have never shown any loyalty to any of the staff, and I am thinking they do not deserve mine either.
I don't feel any loyalty to a place of employment. I live in an "at will" state. I can quit anytime and they can fire me anytime. I care about my patients, but have no doubts that the hospital will throw me under the bus without hesitation. I was born in 1986....maybe it's a generational thing.
dudette10, MSN, RN
3,530 Posts
Has anyone seen this article?