Publix is all about performance and that's why customers love it.
Most of the company's store-level employees are also quite happy as 77 percent of them were rewarded with raises last month for meeting or exceeding performance goals. Of course, the remaining workers who either stayed at the same rate of pay (19 percent) or had it cut (four percent) may be considerably less than happy.
The Publix system rates employees on a numerical basis in 21 different areas. The rating is then matched up against expected numerical performance numbers based on position. If the employee exceeds the standard of performance, then they receive a raise. Superior performance could lead an hourly employee to receive pay raises two or three times a year with an increase of up to $1/hour when all is said and done.
"We want a customer experience the customer deserves and expects at Publix, so we are rewarding people for hard work while increasing what we pay overall," Shannon Patten, spokesperson for Publix, told the St. Petersburg Times. "But some associates face a decrease if their performance slips."
The pay-for-performance system has not always been in effect at Publix and some believe it will ultimately prove counterproductive.
"I've never seen a pay-for-performance plan that works because it brings the top-performing lions out to feed on everybody else," said Terri Kabachnick, a retail human resources consultant and author of I Quit but I Forgot to Tell You. "It's worse in supermarkets where people don't control outcomes. Their day is 'go here, go there, clean up this spill.' If you don't get along with the manager, forget it."
Wal-Mart made news with performance bonuses it handed out to store employees last week. The company said it gave $528.9 million in bonuses to 80 percent of hourly employees working in Wal-Mart and Sam's locations. While associates receiving raises were pleased with the extra money, there are still a number who remain upset over the company's decision last summer to place caps on hourly worker wages based on a job pay scale.
Discussion Question: Does pay-for-performance at the store-level create superior results or does it ultimately lead to an atmosphere of conflict within the organization? Is there validity to the claim that pay-for-performance programs are a type of misdirection strategy that is used by companies to reduce the amount of wages paid out?
- Publix's new pay system: High performance, smaller paycheck - St. Petersburg Times
- Wal-Mart: Thanks for the Bonuses, But? - BusinessWeek.com