Topics: Costco, James Sinegal, Wal-Mart Pages: 10 (2321 words) Published: May 2, 2014
The purpose of this report was to examine the implications on employees motivations used at Costco Wholesale Corporation. Research for this report included a review of current literatures on web-based tuition and Costco’s annual report, as well as other sources from electronic newspapers. The major findings indicate that while there is a need for some monetary rewards, and compensation, employee empowerment, leadership, and learning development should be seen as a way of enhancing employees motivation, and raising employee loyalty. While it is clear that employee needs are vary, and different from each employee’ condition, this report recommends that Costco Wholesale Corporation continue to develop and implement its learning, development approach if it wishes to continue motivating qualified employees, and retaining talents for the company in long run.


This report has been written to examine the implication of employee motivation used in Costco Wholesale Corporation, and recommend suitable manners to raise employee satisfaction and employee retention. It was important to consider pay and benefits offered by the company, and employee’s needs of career growth in term of leadership and recognition. The research was conducted by reviewing of current literatures on web-based sources, and other electronic newspapers, Costco’s annual reports. The report will comment on the prospects of the company and make recommendations that would motivate employees, and improve Costco’s current performance.

Costco Wholesale Corporation is an international chain of membership warehouses that carry quality, brand name merchandise at substantially lower prices for its members. The company has grown rapidly from its first open in Seattle, Washington in 1983 to 627 stores worldwide in 2013, become the fifth largest retailer in the U.S and eleventh largest in the world (Costco 2011). According to Jim Sinegal, the Company’s Co-Founder and Director, ability to run extremely low overhead, and to offer employees with greater values, and benefits than its competitors are enables the company to generate greater profit margin over years (Costco 2013). In a reward, Costco has lower employee turnover rate than Wal-marts, and continues to generate benefits for its members.

According to employee reviews, Costco provides a friendly working environment, where the relationships between staff and supervisors are close (Worthington 2012). As per Maslow’s Hierarchy of Needs, Costco meets employee’s needs by providing a sense of belonging through close relations throughout the corporate scale. Management supports staff by encouraging them to make decisions and assisting them in resolving issues. Hence they are motivated to perform more responsibly and confidently. In addition, employees are allowed to wear casual clothes to work which creates a comfortable and friendly workplace environment (cited in Costco 2003). Sinegal, CEO of Costco Wholesale spend much of his time touring Costco local stores, without formal business attire, giving compliments, recommendations and feedback to store managers and line staffs (Arthur & Thompson 2007). Building close relations between managers and lower-level staffs by effective communication and supportive activities are crucial to motivate employees.

Costco also provides large cafeterias with a variety of food options and an enjoyable campus for people who appreciate outdoor activities during break time. In order to minimise discrimination in the workplace, the company focuses on giving equal tasks and career opportunity for all genders and race. This enables Costco to gain employee loyalty and satisfaction, hence increase their productivity. PAY RATE

Monetary benefits are a major component of job satisfaction, which may affect their work performance (Ghillyer 2010). According to Weissmann (2012), employees at Costco’s main...
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