Costco is a company that has been highly acclaimed as a company with low employee turnover rates, and better employee motivation. This is due to the fact that Costco is company that has been committed towards creating a better life and a no frills selling point for buyers. The employee retention rates are better than the industry standards and this is attributed to the high amount of benefits offered to the employees and also the various employee benefits that are provided to them. The employees at Costco are actively participating in the various systems that make it important for them to feel important and essential for the company. Involvement in the decision making process provides them with the only process of keeping employees interested and acknowledging employee contribution within the company (Dr. Dixit, 2012`).
Decision making skills of the CEO is unmistakably superior to many leaders within the competition and also there is the fact that the company derives its good virtues from the management who is always in the way of creating better perspectives for the people and also creating better prospects for the company. The main issue of decision making resides in the number of products to showcase and also what products to buy. Since the company depends on the sales of its short term spiked sales, it requires great planning, assessment and good intuition from the management to decide which products would be most beneficial for the company’s revenue generation. The shopping system, the ways the products are displayed and also the total shopping system is the decisions of the employees and the management which is then assessed by the CEO. In the active participation from the management the decisions made by the employees find their way to the realisation, making them actively interested in participating and also making them feel valued (Dr.Tarawneh, 2012).
There is a need for careful monitoring and planning from the Costco perspective. The business runs of sales of goods that are highly discounted and are sold in packages of a number of pieces to make them more profitable for the buyer and sellers. This makes it important for the company to make the assessment of the ways to understand the motives and the way the consumers are thinking; this requires careful assessment of the customers and their desires and goals. Most people at Costco come to shop for their daily needs and sometimes travel a good distance to make sure that they stock up on their essentials. The company thus makes it a point to create limited time discounts on luxury branded products like Michael Kors bags which are usually high in price but at the Costco sale a seller can get it at a very less price. There is a need for understanding the concept of how Costco works and the need for the assessing of the various works and methods of working within the company. The CEO is directly linked with how the company works and procures its products. The active participation is surely a deciding factor (D’Aveni, 2016).
The earnings of an average employee at Costco is said to be around% higher than the average income of a similar employee at stores like Wal-Mart and Sam’s club. Higher wages are also bundled with greater medical benefits for the large number of employees. To compare them we might take into consideration the numerical by the industry, stating that when there are more than 80% of employees at Costco who have medical coverage only half the percentage is under the benefits of medical in Wal-Mart, the most popular competitor of Costco (DeNisi, 2013). There is also the fact of the benefits received by the employees at the time of retirement, and even in that case the retirement benefits of a Costco employee is better. The percentage of employees under the retirement plans in Costco is well above the 90% range whereas only 64% of employees at the competitors are taken under the retirement benefits plans. The pay at the Costco is higher and the benefits are much better than the competitors.
But still the company is aiming to work better and achieve more and more benefits and revenue each day. There is much speculation about how the company manages to provide so many benefits to the employees and still be profitable? The secret to the question is the fact that even though the company provides a number of benefits to its employees it takes the no frill way of shopping. The low turnover rates mean lower costs on searching for new employees, lower costs on training new employees and also lower loss of revenue due to employee shortage. The Costco Company is known for its value for money deals and their low cost deals. The flash sales and no frills sales system is one of the reasons why many people love shopping at Costco. Not only the number of people who are shopping at Costco but also the number of people who are working at the stores would be a good example of how the transformational and inspirational leadership has made the Costco a reliable brand and name. The employees here are less prone to job change; they get better pays as well as health and retirement benefits. This is attributed to the fact that they know that they are important with respect to the company, increasing their motivation to work better. With recent changes in costs the company CEO has made a few changes which have been positively taken in by the employees who are more than happy to work for the Costco.
The productivity of the employees is high due to the friendly and easy to work with environment at the Costco stores (India, 2009). The employees are provided training to assist the guests at the store and help them with product choices and purchases. The products are arranged in functional way, without many frills, the store also doubles up as the warehouse saving money. Products are sold off in bulk quantities to make the products sell off quicker. The company also spends a significantly low amount of advertising and branding. There are no celebrities endorsing the brand, nor billboards or advertising agencies making the company save up on the expenses. The company derives its traffic purely through its pleased customers who refer their friends and family. Also die to the employees being more aware about their duties and integrity within the company, employee theft is less and also the productivity of the employees are high, resulting in better sales, better revenues (Mr.Hameed, 2014).
The CEO of Costco, Mr Jim Sinegal is a transformational leader, and has been hugely successful in the creation of the good atmosphere for work within Costco. The theory of Transformational leadership can be easily studied through the use of Sinegal as the centre point. There are a number of features of the transformational leader, who is someone who believes in working with the people, winning their trust and loyalty and working towards the organisation’s vision and goals. There is an aspect of change within these leaders who try to get the participation from every employee towards fulfilling one common goal, the need to claim and commit toward the future of the company (Sadeghi, 2012). The Costco is a company that has been in popularity because of the success it has generated even though they are not advertising about their brand or stores and also due to the fact that they are not even employing attractive ways for the people to shop. The most important fact is that the employees are happy and content in their positions and are constantly working towards making Costco a better destination to shop. The CEO is one of the most inspirational figures in the management and is closely associated with his team and all the employees of the company. He takes his position as the CEO very effectively and does make it a point to create a better interpersonal relationship between him and the management. The CEO is responsible for creating a better aspect for the development and growth of the company. In care of a new inauguration of the store, the CEO is present at the e new store providing the new employees with a good feeling about their new skills (Pihie, 2013). AT every store there are meetings every morning to make sure that the employees have provided their inputs and have been reminded of their needful duties for assisting the customers at the store. The inspirational and transformational leader Sinegal provides the best methods for the employees to become attached with the company.
He has been not taking his raises and has kept his salary only twice of the average Costco company store manager’s salary, making it a point to visit every store twice year, even when it costs the management a good amount of travelling throughout the country (Givens, 2016). The active participation from the employer gives a better viewpoint about the company’s views on the way it treats their employees and also the goals of the company. There is hardly any doubt that the people associated with the company are provided better facilities and wages, but still the company produces better revenues. This is due to the good personnel management system of the company. The CEO believes in inspiring and making sure that the people associated with the company do not feel pressurised to work for the company. Instead, the CEO meets more than thousand Costco managers at the Annual meetings as well as decided the monthly budget with a team of 70 store managers of the Costco. There are regular talks about the basic methods to keep cost low and sales high. It is true that active participation from the employees is one of the main reasons why the CEO is always interested in dealing with the store managers (Roesner, 2010). The CEO shares his ideas with the team and asks them about their ideas, which in turn create better understanding of the company and its goals, provides better solutions to the problems of the company and also makes the managers interested in performing well. The various aspects of business and the leadership skills of Sinegal have been profoundly important in the growth of the company. Under the guidance of the CEO the company employees find themselves working for someone who is interested in hearing their ideas and also thinking of incorporating them. Teamwork and virtues are some of the important traits of the workers. Along with good pay and good benefits, the employees find the humble personality of the CEO quite inspiring. The most appraised characteristics of a transformational leader is to provide a clear vision for the company, and MR Sinegal has provided just that, his vision for the company Costco is straight and no-frills , just like the way he believes his business to be. The company CEO has courage, another important characteristics of the transformational leader ; Costco takes risks, and depends on its team of curators to create an appealing sales and also. The self motivated and passionate characteristics of Sinegal, is shown in his dedication towards being at every new Costco store launch and visiting each store twice a year.
The CEO also spends time to listening to the inputs for all matters regarding sales, stocks. As a transformational leader, the CEO of Costco is highly inspiring figure in the minds of the employees, allowing the workers to become better at their own work and acknowledging the effort of the team workers, store managers and workers, and inspiring them to become better workers. The efforts for the manager to be able to guide the employees towards greater success and inspiring them into being better employees and helping the company grow together are some of the reasons why the Costco is a leading brand and has been recording growth in terms of its revenue as well as employee retention. Good leadership and good values have helped the company to be on the path of growth.
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