My dad was a journalist. Got his degree from University of Michigan in 1965 and started writing for the Jackson Citizen Patriot newspaper right out of college.
He worked for his future father-in-law at Toy House all through high school and college to pay for that degree and even worked part time around his journalism job to help pay for the expenses of having a new family.
There is a legendary story about how he got his start at Toy House when my grandfather gave him a 40% raise to lure him away from another job at age sixteen.
Four years after college my dad got another job offer, this time to move to New York and write for Newsweek. Once again my grandfather made my dad a substantial counter-offer 33% higher than the Newsweek offer to stay and work full time at Toy House.
Now some might say my grandmother was behind this offer. She didn’t want to see her grandchildren (my sister and me) leave town. But my grandfather knew a good employee when he saw one. He always told me …
“You can never overpay for great help.”
Talking about Sears these last few days has struck a nerve. Along with the comments here, I’ve received emails with stories of families with long ties to Sears.
One long-time reader of this blog told me how his grandfather who worked for Sears for 33 years talked about how they changed their employee stock options program in the 1980’s. He speculates that started some of their “well-trained staff” attrition.
Wikipedia tells of how Sears changed their hourly pay structure in 1992 that ended up cutting pay for several employees. This followed on the heels of Walmart and Kmart surpassing Sears in total retail sales in 1990 and preceded by a year the demise of their catalog. Coincidence?
Circuit City did the same thing in March 2007, cutting starting hourly pay and laying off 3,400 higher-paid employees. Less than two years later they liquidated.
In both cases the C-Suites were only looking at payroll as an expense to be cut instead of an asset to invest in.
You can treat your employees as an expense instead of an asset and get away with it. Amazon has done that for years. Even their new round of raises was offset by a cut in bonuses and other benefits (and was politically motivated to decrease the chance of Bernie Sanders getting the Stop BEZOS Bill passed).
It only works, however, if you didn’t treat your employees like assets first.
I may be biased but I think my grandfather had it right. How you treat your employees affects how they treat your customers which affects your bottom line.
Go find some people to overpay.
PS I wish I could have paid my employees better. I wish I could have offered them better benefits. Since I couldn’t, I did other things to help them out like grant all their time-off requests, work with the schedule to make sure they got the hours they wanted, feed them every now and then, train them, treat them with respect, give them responsibility, pay a stipend toward their continuing education, celebrate their birthdays and achievements, and bring in a masseuse during the Christmas holidays. Even when you don’t have the budget there are things you can do to make your staff feel appreciated.