retail news in context, analysis with attitude

The New York Times reports that Texas-based HEB is awarding 55,000 of its employees an equity stake in the company.

According to the story, "The Butt family, which founded the San Antonio-based grocer 110 years ago, is handing an estimated 15 percent of the company’s shares to employees over 21 years old who have worked at least a year at the retailer and clocked at least 1,000 hours in a calendar year."

HEB has 370 stores in Texas and Mexico and generated $23 billion in net sales this year.

Craig Boyan, HEB's president/COO, tells the Times that "the plan is intended to recognize workers’ contributions and foster loyalty to the company, and enhance their long-term financial stability ... Under the plan, workers are able to cash out when they leave or retire from the company, and will also receive dividends based on the retailer’s earnings."

Here's how the Times describes the plan:

"Starting in January, eligible workers — the retailer calls its workers 'partners' — are set to receive a grant of nonvoting shares valued at 3 percent of their salary, as well as $100 in stock for each year of continuous service ... The retailer said it would continue to make yearly contributions to the stock plan, based on company performance. About 55,000 of the chain’s 86,000 full- and part-time employees are expected to receive shares. Employees in Mexico are not eligible, for now, because federal laws that set standards for pension and health plans do not apply there."

Boyan says, "So many in retail are competing in the race to the bottom, and people are the largest cost. So it seems logical to cut people, and lots of folks are doing it. We think that’s a trap. We believe the race for the bottom cheapens the American experience. It’s bad for the country and bad for companies ... We think there is great benefit in a more empowered, inspired, proud, trained work force."
KC's View:
Outstanding. No other way to describe this move.

Let's repeat that passage again...

We believe the race for the bottom cheapens the American experience. It’s bad for the country and bad for companies ... We think there is great benefit in a more empowered, inspired, proud, trained work force.

HEB isn't the only company that has figured this out. Publix and WinCo are two other companies that understand that when employees believe they have skin in the game, and feel a real sense of ownership (as opposed to a contrived, just-for-show approach that calls employees something other than that and then treats them as nothing but), then they will be more effective, more efficient, more productive.