Wegmans

BRIEF HISTORY OF THE COMPANY

Wegmans is a regional grocery store chain that has built its reputation as a ?one stop? shopping experience. In this grocery store you can pick up your prescription, order dinner in the market cafe, rent a video for the night and pick up your dry cleaning. Wegmans mantra ?Every day you get our best? is truly what they, as a company, strive to accomplish. From the inception of the first Wegmans store in Rochester, New York during 1930, this family owned company has positioned itself to be unique from the competitor. When the current President Danny Wegman returned from Harvard in 1976 he helped position the company to be competitive against the emerging competition like BJs and other discounters. In the midst of this unending focus on the needs of their customers we are left to wonder where the Wegmans employee is. In addition to the convenience they offer their shoppers, Wegmans has made itself known as being an exceptional place of employment for its 30,000 employees.

In 2005 Fortune magazine named it number one of the top companies to work for. So again we were left questioning whether the techniques Fortune uses to rank these exemplary companies was reflective of the opinion of the person who is selling you your lotto ticket or the helping hands putting your groceries into your car. We wondered what it was that Wegmans has done to make their employees so happy, and to earn them the top spot on Fortune?s list. We decided to analyze the reward and recognition system at Wegmans to determine what they are already doing and what improvements will keep them at number one.

Information taken from sources such as the company website as well as surveys completed by various store employees show that Wegmans offers it?s employees benefits that are both tangible and intangible. Many of these benefits include a scholarship fund, health insurance, vacation pay, holiday pay, an ESL Federal Credit Union membership, direct deposit, 401k retirement savings plan, profit sharing, a dependent care reimbursement account, adoption assistance, an employee assistance program, employee discounts on a fitness center, as well as movies, cultural events, and even high wages. Other benefits noted include a satisfying work experience and a friendly team.

DESCRIPTION OF OPPORTUNITY

A survey developed by one of our group members has indicated that a select group of employees in a Williamsville store location appreciate both the tangible and intangible benefits that the job has to offer. Employees expressed many reasons for wanting to work for Wegmans which included great co-workers, opportunities for advancement within the company, the scholarship fund, convenient locations, raises, flexible hours, and even free pizza and soda.

A theme that arose in these surveys is the fact that incentives make people work harder. Incentives that have been indicated, such as employee of the month or posting compliments, reinforce the fact that certain employees have an inherent desire to be recognized for their hard work. The question that arises for Wegmans is, what recognition and rewards do employees need to be satisfied, and the amount it will take to make them work harder?

Many Wegmans employees find working for the franchise to be quite self rewarding. For example, employees take pride in working hard every day and gain satisfaction from helping customers and other employees. It is indeed true that many workers are driven by money; however, there are many others who take pleasure in their jobs also because they enjoy doing the work. This theory is reflective of Douglas McGregor?s motivational Theory Y. One of the assumptions of Theory Y as noted in the textbook states that ?Employees can view work as being as natural as rest or play?, activities that are undoubtedly rewards in themselves (Robbins, 45). Creating a work environment based on Theory Y would mean that no other reward system would be needed. Wegmans would like to believe that all their employees are self-motivated at all times but everyone knows that this is not true.

Wegmans employees work harder and are more satisfied not only through self motivation, but also through reward systems. This behavior is connected with the two-factor theory, which states, ?that an individuals relation to work is basic and that one?s attitude toward work can very well determine success or failure,? (Robbins 45). According to the surveys conducted, the only negative or dissatisfying job as Herzberg would say, is dealing with rude, unappreciative, and negligent customers. This every day problem seems to have the greatest effect on an employee?s spirits. Many people wind up quitting because of not wanting to deal with difficult customers. For example, an employee could be selected for ?Employee of the Month? for putting in a great effort while helping unhappy customers. In addition, it is very important in a workplace such as Wegmans that employees have management to encourage and motivate them as the day to day tasks of their can be discouraging. Many employees who were interviewed commented on how they are daily dragged down by customer attitudes and it has an impact on their own personal day when they are called names or yelled at by customers. A system of rewards offered by the firm helps to improve employee spirits in a sometimes difficult work environment.

DESCRIPTION OF EVENTS AND CIRCUMSTANCES

Despite the prestigious designation as being the country?s #1 company to work for in 2005, there are still areas in which the company can improve its employee reward systems. In a large grocery store like Wegmans, employees generally specialize within a particular department (i.e. stock, seafood, deli, cashier, etc.). Each department is under the supervision of a different management employee. One of the greatest challenges in creating effective and fair reward systems at Wegmans is standardizing the reward systems across this departmental divide. In other words, equity should exist between the incentives offered to employees in each department. To a large degree, this equity is maintained at Wegmans. Employees from all departments are eligible for their scholarship program and employee of the month award. However, it is much more difficult to maintain equity in the most vital employee reward ? pay. Robbins speaks to employee rewards and equity in the context of ?Equity Theory.? He defines this theory as follows: ?Equity theory says that employees weigh what they put into a job situation (input) against what they get out of it (outcome) and then compare it?to others,? (Robbins, 50). Robbins goes on to note that it is vital that the perceived input/outcome ratio must be equal among all employees in order to have equitable rewards. Using