Costco Case Study Essay

1. How does Costco differ in the way it treats its employees from other large retailers?
Costco differs from other retailers in treating employees on notation of
“Take care of employees then they will take care of organization”
• Allotting a better pay package with an average pay of 17 $ per hour which is 40 % higher than other retailers.
• Covering 85 % of employees with health insurance plans even part time employees who are remained continuous 6 months which is very high in compare to other retailers.
• Not having much disparity among employees of various grades in terms of pay scale or fair treatment in firm or growth opportunities etc.
• Implying generous 401(k) pension plan after retirement.
• Providing Good job security which can be evident by lowest levels of turnover in retail industry.

2. What are

• Dramatic increase in customers by the way of satisfaction and employee fair treatment.
• Increase in business sales that can be evident by increase in financial performance by 8 % in 2010 first half to 2009 first half.
• Cost saving by decreasing employee turnover rate in terms of hiring new employees, training them, guiding etc.

3. Why don't all employers treat their employees as well Costco does?
Other retailers differ in treating employees when compare to Costco because
• There is no equity in pay scale for example entry level employees are paid with minimum pay of around while top managers are paid abnormally high.
• Profits or revenues gained by organization is credited to top level managers rather than full time employees.
• Implementing health insurance and retirement plans to all employees will cause financial burden to organization.
• Not recognizing the economic impact and burden caused by employee turnover to the organization.
• They are not properly engaged in work when compare to Costco.