Costco and emotional security

1. Connor Corrigan

2. Founding
 Started as “Price Club” in 1976
 San Diego, California
 “PriceCost” merger created Costco in 1983
 Requires a membership to join
 Founded by James Sinegal and Jeffrey Brotman

3. Founding
 705 Warehouses across numerous countries
 US = 493
 Canada = 90
 Mexico = 36
 UK = 27
 Japan = 25
 South Korea = 12
 Taiwan = 12
 Australia = 8
 Spain = 2

4. Founding
 Wanted to compete with Wal-Mart prices
 While keeping quality products
 One of the top 3 Retailers for US Sales
 Low prices are compensated for by supplying largely
“Bulk” items.
 Keeping overhead costs low, by selling in high quantity

5. Founding
 Provides
 Prescriptions
 Food
 Furniture
 Etc.
 Average Household income of club members =
$165,000
 Low prices can also be maintained through
membership rates

6. More About Costco
 NASDAQ: COST
 First company to grow from $0 - $3 Billion within six
years of its founding.
 Estimated annual anual sales of nearly $100 Billion

7. Investment in Employees
 Emotional stability and a feeling of security are focal
points of Costco’s approach towards employees.
 Opportunities for advancement within the company
and high wages provide an environment of dedicated
and well cared for employees.

8. Investment in Employees
 Average hourly income for employees
 20.89/hour
 Health Benefits
 Dental
 Optical
 Etc.
 In Store Discounts for Employees

9. Investment in Employees
 Even employees who work at Costco- who make the
type of wages that we pay- are being hit at the gas
pump. We’re working very hard to schedule people
from the same part of town so they can drive together.
We’re encouraging van pools. We’re even testing 10-
hour days, something we’ve never done in the past. If
we can schedule some employees for four 10-hour days,
that’s one day they don’t have to drive to work. They’ve
got a 20% savings in their gas right there.”
 James Sinegal

10. Investment in Employees
 Beyond savings and competitive wages, Costco further
invests in their employees personal and financial well
being.
 Opportunities for advancement and an active Human
Resources Dept. see to any employee complaints that
may arise.
 Employees are offered equity in the company, further
allowing for financial gain and a feeling of security

11. Stress, Burnout, and Social Support
 As mentioned in the quote from Sigel, Costco plans
most of its operations around convenience and benefit
to the employees.
 Working fewer, but longer days saves both gas and days
that someone is working.
 Employees are encouraged to become friends and
mingle socially outside of work to build a feeling of
belonging and team support.
 By investing in its employees, Costco saves an incredible
amount in employee turnover costs, such as training,
recruiting, etc.

12. Stressors
 Costco’s team building makes sure that no employee
feels stranded in their work.
 The ability to ask for help from other coworkers, or
across departments, is encouraged in order to ease the
individual workload.
 Roles are clearly defined for employees, but all are
encouraged to assist their fellow employees.

13. Stressors
 By ensuring both work related, and emotional support
through management and fellow staff, Costco keeps
from having overwhelmed employees.
 The positive reinforcement from management also
improves the work environment for employees.

14. Burnout
 Although employees are assigned to specific
departments, the stressors of repetitive tasks are taken
care of through the employee based method the
company uses.
 Personable management, and support from
teammates in all departments creates an environment
that encourages all members of the staff to cooperate
and build one another up.

15. Burnout Prevention
 Companies that are known for treating their workers
right have been a growing market in the US, with
current stigma towards companies such as Wal-Mart
 By ensuring happy employees, Costco can provide a
more pleasant experience for shoppers, as well as
having a dedicated and motivated staff.

16. Empathy
 With CEOs who are personally invested in the well
being of their employees, Costco provides an
environment for all employees to thrive, regardless of
their role.
 Managers and Human Resources staff are trained to
approach each employee situation on an individual
basis, to show the investment the company has in the
well being of its employees.

17. Outcome
 Costco’s approach to their employees maximizes both
store profits, as well as financial and emotional profit
for its employees.
 Understanding that the employees are what give the
final impression of a business to the customer, Costco
puts a high premium on helping their staff in all
aspects of work, in and out of the store.

18. Works Cited
 Book
 http://i-sight.com/resources/employee-relations-best-
practices-costco/
 https://www.eremedia.com/tlnt/weekly-wrap-what-
costco-can-teach-about-treating-employees-right/