Walmart’s Wage Experiment?


Neil Irwin’s explanation gives us all how the organisation’s salary hike experiments is going so far. For those people who needs a reminder, the retailer last year raised their minimum wage to $10 an hour, and has invested much more in training and continues experimenting with more predictable and flexible hours.

There are some important things to be noted, for instance, the minimum wage only applicable to the staff who have completed training which is supposed to take a minimum of six months but often takes longer. And this is being tested in a very limited number of locations. But that’s all—it is an impeccable move in the direction of raising employee standards in the ultimate hope of increasing customer experience.

Meanwhile how is the experiment going so far? Down at the end of Irwin’s piece he concludes it up much clearly: ‘ In the short term, the Walmart experiment shows pretty clearly that paying people better improves both the work force and the shoppers’ experience, but not profitability, at least not yet.’ Customer satisfaction is up, but profits and share prices are pretty down. So it cannot be described as a victory lap. But the efficiency wage story is different and induces workers to put in more effort. However, in the case of Walmart, it isn’t getting more out of the same labours but is getting higher quality workers.

Tina Budnaitis, the manager of Walmart No.5260 in Rogers told that in the store level, managers describe a big shift in the model of workers they can bring by offering $10 an hour with a much solid path to $15 an hour. And in fact, we are attracting a different type of associate, we get more people coming in who want a career instead of a job.