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Case Title:

Costco's Employee Loyalty Strategies

Publication Year : 2008

Authors: Punithavathi Srikant, Doris Rajakumari John

Industry: Retailing

Region:US

Case Code: HRM0038C

Teaching Note: Available

Structured Assignment: Available

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Abstract:
Costco Wholesale Corporation (Costco), the seventh largest global retailer (as of 2007), stands out in the crowd as an exceptional retailer, which adopts distinctive employee welfare strategies. The company develops programs and employee benefits that motivate its employees and strives to create an environment that fosters employee loyalty. While offering excellent employees benefits is not viewed very favorably by the investment community, Costco's CEO, Jim Sinegal, firmly believes that keeping employees satisfied and loyal will result in profitability for the organisation in the long-run. This is in stark contrast to the HR policies followed by Wal-Mart, the world's largest retailer and analysts doubt if Costco's HR policies will actually pay-off.

Pedagogical Objectives:

  • To understand the various employee strategies followed by Costco
  • To discuss whether in the prevailing competitive retailing scenario, a successful retailer has to focus on creating stakeholder value or shareholder value.

Keywords :  Human Resource Management, HRM Case Study, Employee Loyalty, Employee Benefit Strategies, HR Model, Firms of Endearment(FoE), Cult Stock

Contents:

  • About Costco
  • Human Resource Policies at Costco
  • Building Employee Loyalty
  • The Challenges
  • Sinegal's Trick
  • Employee Benefits at Costco

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