Every little helps
May 10, 2006 2:04 AM Subscribe
British supermarket giant Tesco recently posted profits of £2m ($3.73bn), like most modern employers it decided to reward its employees for their hard work: by giving them a free meal in the staff canteen worth £1.40 ($2.60). Others were offered sausage rolls and tuna sandwhiches. Does this make Tesco the most tightfisted corporation of all time? Or are their others equally parsimonious? Or even worse?
Maybe take a little more care with your posts?
I'm guessing you didn't actually mean to equate £2m to $3.73bn and that your first link was supposed to go here? (cause the Tesco homepage doesn't mention anything about their profits as far as I can tell)
posted by juv3nal at 2:16 AM on May 10, 2006
I'm guessing you didn't actually mean to equate £2m to $3.73bn and that your first link was supposed to go here? (cause the Tesco homepage doesn't mention anything about their profits as far as I can tell)
posted by juv3nal at 2:16 AM on May 10, 2006
I remember working for a place that was paying way too little money for their workers. They paid the same for lame temps like me (who'd just started) as they did for long term employees who'd been there for ages. During a meeting to discuss speeding up order processing, they asked us for ways that the process could be speeded up. The boss said, "If you do really well, maybe we can have a pizza party!" She then said that since we'd all been sitting down, we should go back to work rather than having our scheduled break. She pretty much ignored the point of a few of the more senior workers -- we just weren't being paid enough. Higher pay would be better motivation.
This seems like pretty typical behavior. Obviously, it would be nice if Tesco shared its profits with its workers. But it doesn't look like that happens in most industries.
posted by Deathalicious at 2:25 AM on May 10, 2006
This seems like pretty typical behavior. Obviously, it would be nice if Tesco shared its profits with its workers. But it doesn't look like that happens in most industries.
posted by Deathalicious at 2:25 AM on May 10, 2006
Ach. I should have been more careful, i actually meant to equate £2bn to $3.73bn. And juv3nal, you can get the story on Tesco profits here: http://news.bbc.co.uk/1/hi/business/4435339.stm. But for me the real story is not the company's success but its tightfistedness
posted by MrMerlot at 2:27 AM on May 10, 2006
posted by MrMerlot at 2:27 AM on May 10, 2006
Or are their others equally parsimonious? Or even worse?
The Deutsche Bank increases their profits for 2004 by 87% to €2,5 billion. It it decided to reward its employees for their hard work as well: They cut 5200 jobs.
posted by uncle harold at 2:41 AM on May 10, 2006
The Deutsche Bank increases their profits for 2004 by 87% to €2,5 billion. It it decided to reward its employees for their hard work as well: They cut 5200 jobs.
posted by uncle harold at 2:41 AM on May 10, 2006
increase*d*
posted by uncle harold at 2:43 AM on May 10, 2006
posted by uncle harold at 2:43 AM on May 10, 2006
If it was free does it mean that they didn't get the points on their Tesco Club Cards?
posted by three blind mice at 2:55 AM on May 10, 2006
posted by three blind mice at 2:55 AM on May 10, 2006
I'm sure there are companies out there that post record profits and don't give their employees anything for it. So I would say, all things considered, that this is pretty extraordinary, though it's still very piss poor. I guess the real question in this case probably should have been "Is something better than nothing at all?"
posted by Effigy2000 at 2:56 AM on May 10, 2006
posted by Effigy2000 at 2:56 AM on May 10, 2006
If legalized exploitation exists, then maybe one can exploit rich companies. They are made by humans, after all.
posted by elpapacito at 3:04 AM on May 10, 2006
posted by elpapacito at 3:04 AM on May 10, 2006
This why I want to say "I'll work exactly hard enough to not get fired" and milk the clock all I can. Unfortunately I seem to have been given an annoyingly inconvenient work ethic: for all that I truly believe that unless the company is going to reward me for hard work I shouldn't work hard, I work hard anyway.
But I really do think this sort of BS is annoying. I once worked for a telemarketing firm [1] and the middle management was constantly and irritatingly trying to "motivate" us employees to upsell the callers. They had stupid little contests with "prizes" such as permission to wear casual clothes on a day other than Friday. If they'd really wanted to make us work harder to sell more, they could have offered us, say 0.25% of the sale, hell even 0.025% would have been better than the big fat nothing that waited for us if we worked hard and got the caller to buy more.
But no, what we got were stupid slogans, motivational posters plastering the walls, and my manager in specific wandering through periodically and shouting her "encouraging" slogans at the top of her lungs [2].
Want enthusiastic, motivated, employees? Offer them profit sharing, it doesn't even have to be much profit sharing, just enough that if an employee works harder they see a positive change in their paycheck.
On topic, I'd say that Tesco just offered their employees more than an other company does. Unfortunately at a certain, low, point rewards seem like insults instead of rewards. "Hahahaha you wageslaves, I got a new yacht this year thanks to your work, have a tuna sandwich. No, lowly peon, don't thank me, I know I'm a fantastic boss since I gave you a tuna sandwich for your work!"
[1] I only *took* calls, I didn't call out. I'm not evil; well, not that evil anyway. I was the monkey on the phone when you called from Home Depot to order specialty wallpaper.
[2] Which once cost me a sale because it made the customer nervous about giving her credit card, she was an old lady and thought the background shouting meant I was a scam operation (nevermind how she happened to call a scam operation from the phone in Home Depot which automatically dials us).
posted by sotonohito at 3:42 AM on May 10, 2006
But I really do think this sort of BS is annoying. I once worked for a telemarketing firm [1] and the middle management was constantly and irritatingly trying to "motivate" us employees to upsell the callers. They had stupid little contests with "prizes" such as permission to wear casual clothes on a day other than Friday. If they'd really wanted to make us work harder to sell more, they could have offered us, say 0.25% of the sale, hell even 0.025% would have been better than the big fat nothing that waited for us if we worked hard and got the caller to buy more.
But no, what we got were stupid slogans, motivational posters plastering the walls, and my manager in specific wandering through periodically and shouting her "encouraging" slogans at the top of her lungs [2].
Want enthusiastic, motivated, employees? Offer them profit sharing, it doesn't even have to be much profit sharing, just enough that if an employee works harder they see a positive change in their paycheck.
On topic, I'd say that Tesco just offered their employees more than an other company does. Unfortunately at a certain, low, point rewards seem like insults instead of rewards. "Hahahaha you wageslaves, I got a new yacht this year thanks to your work, have a tuna sandwich. No, lowly peon, don't thank me, I know I'm a fantastic boss since I gave you a tuna sandwich for your work!"
[1] I only *took* calls, I didn't call out. I'm not evil; well, not that evil anyway. I was the monkey on the phone when you called from Home Depot to order specialty wallpaper.
[2] Which once cost me a sale because it made the customer nervous about giving her credit card, she was an old lady and thought the background shouting meant I was a scam operation (nevermind how she happened to call a scam operation from the phone in Home Depot which automatically dials us).
posted by sotonohito at 3:42 AM on May 10, 2006
And who owns Tesco? Would it happen to be mainly owned by pension funds. Those funds are in turn owned by millions of Britons.
Damn - a company owned by millions of Britons has made a profit and thus made millions of Britons wealthier. Damn, them, damn them to hell. And damn the way Tesco have payed hundreds of millions of pounds in tax supporting all British citizens.
I'm happy to admit that in the Anglosphere over the past 25 years the split between the rich and the poor has increased and that this is undesirable. However, this primitive belief that big profits by large companies is a bad thing and that these profits only go to 'evil rich people' just marks people out as having failed to have thought things out.
What do you want? A system where working for a company automatically entitles people to ownership? Would that really work better? Why hasn't that kind of organisation (a partnership) been able to do things that modern large companies have?
posted by sien at 3:48 AM on May 10, 2006
Damn - a company owned by millions of Britons has made a profit and thus made millions of Britons wealthier. Damn, them, damn them to hell. And damn the way Tesco have payed hundreds of millions of pounds in tax supporting all British citizens.
I'm happy to admit that in the Anglosphere over the past 25 years the split between the rich and the poor has increased and that this is undesirable. However, this primitive belief that big profits by large companies is a bad thing and that these profits only go to 'evil rich people' just marks people out as having failed to have thought things out.
What do you want? A system where working for a company automatically entitles people to ownership? Would that really work better? Why hasn't that kind of organisation (a partnership) been able to do things that modern large companies have?
posted by sien at 3:48 AM on May 10, 2006
Meh. Sounds like pretty much any other retail corporation. I once worked for a local grocery chain and we pretty much got nothing. Funny thing is, the job was unionized, but the wages were right around minimum for the nation, and we didn't get a discount for buying groceries there.
posted by Talanvor at 3:50 AM on May 10, 2006
posted by Talanvor at 3:50 AM on May 10, 2006
Seriously? You're getting up in arms about this? Really? I worked at a company for 3 and a half years. In that time, I received one cost of living wage raise, and never a single bonus. From what I've heard, Tesco is actually one of the BETTER employers out there. Yeah, this is a piddly sort of "bonus" that they've given their employees - but I don't see anywhere reporting that Tesco has said "in lieu of a yearly bonus, please enjoy this free meal at the canteen". I just don't understand the outrage.
posted by antifuse at 4:07 AM on May 10, 2006
posted by antifuse at 4:07 AM on May 10, 2006
It's a free lunch, people still complain. If Tesco had given their staff nothing, then there would be no fuss, nothing in the press at all. Perhaps the lesson here is to not bother.
posted by bap98189 at 4:11 AM on May 10, 2006
posted by bap98189 at 4:11 AM on May 10, 2006
Sien, who is saying that profits are a bad thing, don't be so knee-jerky, what this story is about is the paucity of the reward. Is it appropriate, it it uncommon, what do other corporations do, how come stock brokers get massive City bonuses and check-out workers get sandwiches
posted by MrMerlot at 4:15 AM on May 10, 2006
posted by MrMerlot at 4:15 AM on May 10, 2006
sien writes "And who owns Tesco? Would it happen to be mainly owned by pension funds. Those funds are in turn owned by millions of Britons.
"Damn - a company owned by millions of Britons has made a profit and thus made millions of Britons wealthier. Damn, them, damn them to hell. And damn the way Tesco have payed hundreds of millions of pounds in tax supporting all British citizens.
Indeed if I gave you one dime you'd be 1) wealthier 2) better off then before. Yet if the profit after taxes was of £2 million and the company is owned by at least two million people, each one get £1 in increased value of the stock. Yet given it's a fund they probably get a portion of the profit proportional to the nominal investment, or some other solution.
Bottom line, the bullshit of "profit is always better" is indeed bullshit, if the profit didn't cover devaluation and give a benefit proportional to the risk, nominal profit can be a resounding failure.
Aka once again the masses don't realize the enormous risks they are taking and the misery of reward they are getting
posted by elpapacito at 4:36 AM on May 10, 2006
"Damn - a company owned by millions of Britons has made a profit and thus made millions of Britons wealthier. Damn, them, damn them to hell. And damn the way Tesco have payed hundreds of millions of pounds in tax supporting all British citizens.
Indeed if I gave you one dime you'd be 1) wealthier 2) better off then before. Yet if the profit after taxes was of £2 million and the company is owned by at least two million people, each one get £1 in increased value of the stock. Yet given it's a fund they probably get a portion of the profit proportional to the nominal investment, or some other solution.
Bottom line, the bullshit of "profit is always better" is indeed bullshit, if the profit didn't cover devaluation and give a benefit proportional to the risk, nominal profit can be a resounding failure.
Aka once again the masses don't realize the enormous risks they are taking and the misery of reward they are getting
posted by elpapacito at 4:36 AM on May 10, 2006
MrMerlot: The reward is given to the owners - not the workers. The two are separate, but not necessary so, workers can buy shares, admittedly at the income of most check out workers this is going to be hard.
Is it appropriate? Well, who can say - if there is a better way to do it then companies that work that way should do better. If an operation like Tesco is the most efficient way to do it, i.e. provides profits by providing a service, with cheap groceries for people, then perhaps its a better way to do it.
Other corporations that have similar setups tend not to offer anything to their workers. Has anyone ever heard of McDonalds giving free stuff to employees after a good year? On the other hand companies that have highly skilled labour, Micosoft and even some car companies, do give bonuses related to what the company has made.
Stock brokers get massive bonuses because they have convinced people their labour is of high value, and because there are relatively few of them and so the bonus they take is smaller than a small bonus offered to thousands of workers.
There are comments about rich companies made earlier. It's important to realize that a lot of rich companies are owned by the public.
posted by sien at 4:38 AM on May 10, 2006
Is it appropriate? Well, who can say - if there is a better way to do it then companies that work that way should do better. If an operation like Tesco is the most efficient way to do it, i.e. provides profits by providing a service, with cheap groceries for people, then perhaps its a better way to do it.
Other corporations that have similar setups tend not to offer anything to their workers. Has anyone ever heard of McDonalds giving free stuff to employees after a good year? On the other hand companies that have highly skilled labour, Micosoft and even some car companies, do give bonuses related to what the company has made.
Stock brokers get massive bonuses because they have convinced people their labour is of high value, and because there are relatively few of them and so the bonus they take is smaller than a small bonus offered to thousands of workers.
There are comments about rich companies made earlier. It's important to realize that a lot of rich companies are owned by the public.
posted by sien at 4:38 AM on May 10, 2006
But for me the real story is not the company's success but its tightfistedness
Might the two things perhaps be related? Tesco is out-performing Wal-Mart in the UK: it's doing enormously well in a competitive market. Their stock control is good, their non-core businesses are successful, their market share is increasing. They are doing something right: control of costs must be part of it.
On the subject of pay, we can bemoan low wages in the service sector but as consumers we're not prepared to change this by shopping elsewhere or paying more money for things. As citizens we have elected a government that has introduced Working Tax Credit to attempt to redress imbalances in pay (Tax Credit calculator).
posted by alasdair at 4:57 AM on May 10, 2006
Might the two things perhaps be related? Tesco is out-performing Wal-Mart in the UK: it's doing enormously well in a competitive market. Their stock control is good, their non-core businesses are successful, their market share is increasing. They are doing something right: control of costs must be part of it.
On the subject of pay, we can bemoan low wages in the service sector but as consumers we're not prepared to change this by shopping elsewhere or paying more money for things. As citizens we have elected a government that has introduced Working Tax Credit to attempt to redress imbalances in pay (Tax Credit calculator).
posted by alasdair at 4:57 AM on May 10, 2006
There is an alternative to shareholder capitalism for UK supermarket shoppers. Upmarket Waitrose is a partnership, with the staff owning and controlling the business. It's for this reason that John Lewis (part of the same partnership) didn't open its stores on Sundays for ages: the workers didn't want to.
posted by athenian at 5:05 AM on May 10, 2006
posted by athenian at 5:05 AM on May 10, 2006
Sien, I agree. The income of most supermarket workers is too low to buy many shares. You are dead right there. And if McDonald's are not giving their workers any bonuses, lets castigate them for parsimony too.
To reiterate, i don't have any problem with successful companies making decent profits, my pension depends on it, what i hate to see is a demoralisation of hard working people at the low-end of the income pile. I think they deserve more.
posted by MrMerlot at 5:10 AM on May 10, 2006
To reiterate, i don't have any problem with successful companies making decent profits, my pension depends on it, what i hate to see is a demoralisation of hard working people at the low-end of the income pile. I think they deserve more.
posted by MrMerlot at 5:10 AM on May 10, 2006
Here in the states, the gift of choice in such a situation is a lovely coffee mug. I'd prefer the sausage roll. I hate tunafish sandwiches, thought.
posted by TedW at 5:13 AM on May 10, 2006
posted by TedW at 5:13 AM on May 10, 2006
I worked for one of the most profitable and successful PC companies in the US. For two years at the end of the year, they would give each employee a few hundred shares of stock deposited into their 401k plan. The third year, we all got a coupon for a free sandwich.
Is Tesco truly evil for giving its employees such a small bonus on record profits? No. I don't think most service industry businesses give the rank and file anything in the US.
Sien's statement about Tesco being owned by pensioners is all well and good, and is a common reason given by any corporation. Corporations by definitions serve their stockholders first and foremost and their other stakeholders later.
However, a company can invest in its employees by sharing its profits or paying the employees better as a method to attract better workers. I'm sure Tesco, like every corporation, has a "our employees are out most important asset" statement in its HR guide. A sandwich is better than a big sack of nothing or a layoff notice. But does it buy any goodwill with the employees. Did it stop an workers from quitting? Did it stop workers from being only productive enough to avoid being fired? Did is stop workers from stealing? Probably not. It really stings when you are a good worker and you get a reward of a sandwich only to read that upper management all got sizable bonuses amounting to more than you make in a year.
My true question is it is better to just give nothing than a low value "fuck you" token? Certainly, Tesco has a lot of employees and the costs of those sandwiches -- even if it the materials of at cost from its suppliers -- was several hundred thousand pounds. Instead of a sandwich for everyone, it could have pooled the funds for and had a larger bonus for each store [a non-management worker is selected from each store to win 500£ or something].
posted by birdherder at 5:54 AM on May 10, 2006
Is Tesco truly evil for giving its employees such a small bonus on record profits? No. I don't think most service industry businesses give the rank and file anything in the US.
Sien's statement about Tesco being owned by pensioners is all well and good, and is a common reason given by any corporation. Corporations by definitions serve their stockholders first and foremost and their other stakeholders later.
However, a company can invest in its employees by sharing its profits or paying the employees better as a method to attract better workers. I'm sure Tesco, like every corporation, has a "our employees are out most important asset" statement in its HR guide. A sandwich is better than a big sack of nothing or a layoff notice. But does it buy any goodwill with the employees. Did it stop an workers from quitting? Did it stop workers from being only productive enough to avoid being fired? Did is stop workers from stealing? Probably not. It really stings when you are a good worker and you get a reward of a sandwich only to read that upper management all got sizable bonuses amounting to more than you make in a year.
My true question is it is better to just give nothing than a low value "fuck you" token? Certainly, Tesco has a lot of employees and the costs of those sandwiches -- even if it the materials of at cost from its suppliers -- was several hundred thousand pounds. Instead of a sandwich for everyone, it could have pooled the funds for and had a larger bonus for each store [a non-management worker is selected from each store to win 500£ or something].
posted by birdherder at 5:54 AM on May 10, 2006
alasdair writes "On the subject of pay, we can bemoan low wages in the service sector but as consumers we're not prepared to change this by shopping elsewhere or paying more money for things.
And why should we ? Why should all the cost of change be supported by the consumer ?
The bottom numerical line is : a consumer can't spend the money he doesn't have. If he borrows , but the work is intermittent or the pay insufficient , he'll default. Moralists say he shouldn't borrow (but banks encourage borrowing by credit card) and should buy only as much as he can afford AND put money away for the future (but the market pressures him constantly to buy buy buy buy) and that he should work hard to produce more and be happy of having a work because many people don't, but he can't trade off less work for less pay because he have bills to pay, family to raise.
Increasingly, workers can't escape poverty by working , hence the expression "working poors". The same treatement is increasingly being received by white collar workers ; yet companies post RECORD profits despite China..it doesn't add, somebody is getting the shaft.
Now please explain me why ALL the cost and risks are always shoveled back to consumer ?
posted by elpapacito at 6:03 AM on May 10, 2006
And why should we ? Why should all the cost of change be supported by the consumer ?
The bottom numerical line is : a consumer can't spend the money he doesn't have. If he borrows , but the work is intermittent or the pay insufficient , he'll default. Moralists say he shouldn't borrow (but banks encourage borrowing by credit card) and should buy only as much as he can afford AND put money away for the future (but the market pressures him constantly to buy buy buy buy) and that he should work hard to produce more and be happy of having a work because many people don't, but he can't trade off less work for less pay because he have bills to pay, family to raise.
Increasingly, workers can't escape poverty by working , hence the expression "working poors". The same treatement is increasingly being received by white collar workers ; yet companies post RECORD profits despite China..it doesn't add, somebody is getting the shaft.
Now please explain me why ALL the cost and risks are always shoveled back to consumer ?
posted by elpapacito at 6:03 AM on May 10, 2006
erm. I'm not usually one to defend the huge organisation, but you might want to have a look at this before getting too worked up. It's from last year here's a little quote from the article for those too lazy to click the link :
TESCO is sharing a £220 million bonus among its staff in what is the biggest-ever reward pay-out by a British company.
Almost 150,000 employees are receiving the windfall, with shop-floor workers reaping about £4,000 each, after the company made record profits last year
posted by silence at 6:15 AM on May 10, 2006
TESCO is sharing a £220 million bonus among its staff in what is the biggest-ever reward pay-out by a British company.
Almost 150,000 employees are receiving the windfall, with shop-floor workers reaping about £4,000 each, after the company made record profits last year
posted by silence at 6:15 AM on May 10, 2006
McDonald's gives a free meal to it's employees every day. At least it did when I worked there many years ago. I would assume that policy is still in place. I think it went that if you worked a full 8 hour shift you got any meal you wanted...less than that you got like a happy meal.
posted by SweetIceT at 6:20 AM on May 10, 2006
posted by SweetIceT at 6:20 AM on May 10, 2006
Pizza Hut did the same back when I worked there as a highschooler, SweetIceT, which was a good thing since I would go straight to work after school and didn't leave until the store closed, so it usually was the only dinner I got.
posted by mr_crash_davis at 6:40 AM on May 10, 2006
posted by mr_crash_davis at 6:40 AM on May 10, 2006
I think silence silenced the concern about Tesco. Sharing such a bonus amongst the rank and file is pretty generous and uncommon.
posted by Falconetti at 6:43 AM on May 10, 2006
posted by Falconetti at 6:43 AM on May 10, 2006
so it usually was the only dinner I got.
You lived on pizza ? Now that may explain something
posted by elpapacito at 6:44 AM on May 10, 2006
You lived on pizza ? Now that may explain something
posted by elpapacito at 6:44 AM on May 10, 2006
flaconetti: the concern remains, but it seems Tesco has shown strong goodwill backed by strong money, which makes it a more interesting employer. I would certainly encourage Tesco workers to go an extra mile and work more diligently for a good employer.
posted by elpapacito at 6:48 AM on May 10, 2006
posted by elpapacito at 6:48 AM on May 10, 2006
"You lived on pizza ?
Aye, pizza and spaghetti.
Now that may explain something
Indeed it does. What, exactly, no one knows. But it does explain something.
posted by mr_crash_davis at 6:53 AM on May 10, 2006
Aye, pizza and spaghetti.
Now that may explain something
Indeed it does. What, exactly, no one knows. But it does explain something.
posted by mr_crash_davis at 6:53 AM on May 10, 2006
IME as an unskilled retail wage slave, it is better to get nothing at all than to be given largely symbolic crap. They give you nothing and you just feel bitter about the whole wage slave system you're caught up in. They give you symbolic crap and you feel that the overlords are trying to assage their guilt and buy you off with sparkly trinkets and still feel bitter about the whole wage slave system. It's like they're rubbing your face in your crappy existence.*
It is better to be ignored than insulted, or as my father would say, "half-assed is worse than no-assed."
*Which is not to say that it is impossible to alter that existence. I was lucky enough to do so though I recognize I had many advantages that others do not. Which I am thankful for. This gratitude manifests itself in many wooly hippy retread ways. And now I am blathering.
posted by Fezboy! at 7:17 AM on May 10, 2006
It is better to be ignored than insulted, or as my father would say, "half-assed is worse than no-assed."
*Which is not to say that it is impossible to alter that existence. I was lucky enough to do so though I recognize I had many advantages that others do not. Which I am thankful for. This gratitude manifests itself in many wooly hippy retread ways. And now I am blathering.
posted by Fezboy! at 7:17 AM on May 10, 2006
At least that is something, though. I've read about too many companies who celebrate record profits by laying people off.
posted by SisterHavana at 7:26 AM on May 10, 2006
posted by SisterHavana at 7:26 AM on May 10, 2006
Damn. I was ready to go cash in the five-pound note I have sitting in my drawer.
posted by staggernation at 7:36 AM on May 10, 2006
posted by staggernation at 7:36 AM on May 10, 2006
RE TESCO PROFIT SHARE : The story posted by Silence says that Tesco awarded to profit share to 150,000 staff but i've read that the company employs over twice that, i think the figure is close to 350,000? If that is the case, over half got nothing, oh apart from a sausage roll
posted by MrMerlot at 7:46 AM on May 10, 2006
posted by MrMerlot at 7:46 AM on May 10, 2006
what a weird post. i once got a $10 bonus to a big-box grocery store.
posted by mrgrimm at 7:48 AM on May 10, 2006
posted by mrgrimm at 7:48 AM on May 10, 2006
The Scotsman has eight pages worth of Tesco stories. It looks like Tesco have both success and failure stories , somehow similar to the german giant Lidl which is under close scrutiny for alleged anti union activism and mistreatement of employees as a "don't ask- don't tell" company policy.
posted by elpapacito at 8:01 AM on May 10, 2006
posted by elpapacito at 8:01 AM on May 10, 2006
Why are people so mislead by raw numbers? That 2.2 billion in profit is on 41.8 billion of revenue - a net margin of about 5.4%. Target did 4.6% (but 5.5% in Q1 this year) and Wal-Mart did about 4%. But Tesco has some financial services and telecom revenue streams which tend to have higher profit margins. Did Tesco perform well? Absolutely. But it isn't in a position to spend too much time celebrating. The Street's reaction was neutral - Tesco met expectations, but UK margins were disappointing. It is a growth company, so it should be experiencing record profits each quarter.
posted by mullacc at 8:14 AM on May 10, 2006
posted by mullacc at 8:14 AM on May 10, 2006
mrmerlot: don't be discouraged by dfelingdotorgwhatevernick high standards, almost anybody can almost always do better
posted by elpapacito at 8:50 AM on May 10, 2006
posted by elpapacito at 8:50 AM on May 10, 2006
Dflemingdotorg: you could have done better with your reply.
posted by MrMerlot at 9:13 AM on May 10, 2006
posted by MrMerlot at 9:13 AM on May 10, 2006
So, we're agreed that attempting to reward workers with small items is fraught with cultural and management issues?
posted by alasdair at 9:22 AM on May 10, 2006
posted by alasdair at 9:22 AM on May 10, 2006
yes, especially if the greater rewards are dolled out to the higher-ups. It breeds contempt as the postings on Supermarket Sweep Up demonstrate.
posted by MrMerlot at 9:27 AM on May 10, 2006
posted by MrMerlot at 9:27 AM on May 10, 2006
It's a free lunch, people still complain. If Tesco had given their staff nothing, then there would be no fuss, nothing in the press at all.
Yeah, it's bad PR on Tesco's part -- "Tesco gives free meal as bonus" is a solid, amusing story, with a little sprinkling of outrage. Tesco should be making more noise about the bonuses it actually did give its staff. The story could just as easily been "staff buy new cars with Tesco bonus", or something, if they'd been paying attention.
posted by reklaw at 10:15 AM on May 10, 2006
Yeah, it's bad PR on Tesco's part -- "Tesco gives free meal as bonus" is a solid, amusing story, with a little sprinkling of outrage. Tesco should be making more noise about the bonuses it actually did give its staff. The story could just as easily been "staff buy new cars with Tesco bonus", or something, if they'd been paying attention.
posted by reklaw at 10:15 AM on May 10, 2006
dflemingdotorg writes "Thank you for raising the bar here, both by encouraging posts based on emotions and not wrong facts
You are welcome ! When you are done spitting your emotional anger against me, please remember you should have accused me of encouraging post based on emotions and WRONG facts, not "not wrong" , therefore "right" facts. Don't worry, I know you were just mad :) You shall overcome someday !
posted by elpapacito at 10:15 AM on May 10, 2006
You are welcome ! When you are done spitting your emotional anger against me, please remember you should have accused me of encouraging post based on emotions and WRONG facts, not "not wrong" , therefore "right" facts. Don't worry, I know you were just mad :) You shall overcome someday !
posted by elpapacito at 10:15 AM on May 10, 2006
Employees signed a contract accepting consideration for their labour. They were free to accept the terms or not. In addition, employees are free to quit and find other employment at any time should they feel that their compensation is no longer appropriate. Where is this feeling of entitlement coming from?
posted by loquax at 10:20 AM on May 10, 2006
posted by loquax at 10:20 AM on May 10, 2006
That's right, and that Oliver Twist in the Victorian work house, he'd been fed once already, where did his feeling of entitlement come from? Greedy bugger!
posted by MrMerlot at 10:56 AM on May 10, 2006
posted by MrMerlot at 10:56 AM on May 10, 2006
Really? You're comparing voluntary employees of Tesco in the year 2006 to fictional orphans in Victorian novels? Hey, if you don't like your offer of employment, don't sign it. If you do sign it, don't be surprised if your employer actually pays you only what you both agreed to.
posted by loquax at 12:02 PM on May 10, 2006
posted by loquax at 12:02 PM on May 10, 2006
Want enthusiastic, motivated, employees? Offer them profit sharing, it doesn't even have to be much profit sharing, just enough that if an employee works harder they see a positive change in their paycheck. - sotonohito
At a former employer, we used to get cash bonuses when certain targets were met. Then they did a study that suggested that cash bonuses just got rolled in with the rest of their employees income, spent, and then promptly forgotten. So they did away with cash bonuses and instead inplemented a points program and the points could be redeemed for merchandise like an Xbox, a new bike, gift certificates for restaurants, etc (there was a whole catalouge). The theory was that by making it a tangible reward, every time we looked at or enjoyed our new reward, it would remind us of our success and reinforce that our work paid off. We missed the cash, but their theory made a lot of sense and they were probably right that the $100 dollar reward probably had a greater psycholgical impact on me than the cash ever did.
posted by raedyn at 12:12 PM on May 10, 2006
At a former employer, we used to get cash bonuses when certain targets were met. Then they did a study that suggested that cash bonuses just got rolled in with the rest of their employees income, spent, and then promptly forgotten. So they did away with cash bonuses and instead inplemented a points program and the points could be redeemed for merchandise like an Xbox, a new bike, gift certificates for restaurants, etc (there was a whole catalouge). The theory was that by making it a tangible reward, every time we looked at or enjoyed our new reward, it would remind us of our success and reinforce that our work paid off. We missed the cash, but their theory made a lot of sense and they were probably right that the $100 dollar reward probably had a greater psycholgical impact on me than the cash ever did.
posted by raedyn at 12:12 PM on May 10, 2006
Shoot, I meant to say more before I posted that.
I've had passionate discussions with friends, co-workers and employers about the idea of "pay more to get harder workers". Some employees claim that they'd work harder if they were padi better, because they'd be inspired. While employers typically want to see the harder work first, and then reward the good behaviour.
posted by raedyn at 12:14 PM on May 10, 2006
I've had passionate discussions with friends, co-workers and employers about the idea of "pay more to get harder workers". Some employees claim that they'd work harder if they were padi better, because they'd be inspired. While employers typically want to see the harder work first, and then reward the good behaviour.
posted by raedyn at 12:14 PM on May 10, 2006
Having worked for Tesco for a few years I have to say they were pretty good to work for (compared to some others) - the pay was OK and we got a fairly good bonus in the shape of free shares every year (all levels got this). The free meal was normally just a free buffet every time the annual results came out, a sort of extra bit. The best bit was the discount on shopping - I was going through a lot of pizza at the time! I notice that the original story was from The Sun, not always the finest example of quality journalism.
posted by badrolemodel at 12:20 PM on May 10, 2006
posted by badrolemodel at 12:20 PM on May 10, 2006
loquax writes "Employees signed a contract accepting consideration for their labour. They were free to accept the terms or not. In addition, employees are free to quit and find other employment at any time should they feel that their compensation is no longer appropriate. Where is this feeling of entitlement coming from?"
A more appropriate way to frame this is that you agree to a contract and fulfill it in a stellar manner. At that point management makes a big show of "recognizing" your effort but then gives you a crap sandwich. The employee is going to [sub]consiously associate management's true level of appreciation with any tangible reward given when management elects to demonstrate their appreciation via some tangible reward.
Conversely, if management goes with verbal praise or no recognition at all, the employee takes this as status quo—it is the natural order of the capitalist system. Wage slaves have been conditioned to accept empty platitudes from management if they get anything from management at all.
In a sense, Tesco are attempting to demonstrate to their employees the degree to which they recognize their effort via some tangible gift. When the tangible evidence of management's appreciation is a friggin' sandwhich that the employee could probably get the deli manager to make for them on the sly anyway, the employee makes the association that his/her extra effort is pretty much worthless to management. Not only that, but that management is more or less out of touch with the realities of being a wage slave. In effect, bringing to the fore all of the inequities involved with participating in the capitalist system.
It is a difference between the frames of reference for labor and management. Management sees the act as a sign of appreciation while labor sees it as management wanting to get credit for being benificent employers but not putting their money where their mouth is, so to speak. Thus, if you give out sandwhiches while taking home a five figure (a purely made up number used for illustrative purposes) bonus and expect a wave of gratitude for the gesture you're pretty much clueless.
It's roughly the same principle that explains why people eventually revolt against opression. It's not the cumulative effects of oppression that eventually lead people to revolution (historically), but the granting of small privileges by the oppressor that alerts the populace that things need not be this way necessarily. Two easy examples of this are the collapse of the Soviet Union and the French Revolution. And now I have gone a bit far afield...
posted by Fezboy! at 12:46 PM on May 10, 2006
A more appropriate way to frame this is that you agree to a contract and fulfill it in a stellar manner. At that point management makes a big show of "recognizing" your effort but then gives you a crap sandwich. The employee is going to [sub]consiously associate management's true level of appreciation with any tangible reward given when management elects to demonstrate their appreciation via some tangible reward.
Conversely, if management goes with verbal praise or no recognition at all, the employee takes this as status quo—it is the natural order of the capitalist system. Wage slaves have been conditioned to accept empty platitudes from management if they get anything from management at all.
In a sense, Tesco are attempting to demonstrate to their employees the degree to which they recognize their effort via some tangible gift. When the tangible evidence of management's appreciation is a friggin' sandwhich that the employee could probably get the deli manager to make for them on the sly anyway, the employee makes the association that his/her extra effort is pretty much worthless to management. Not only that, but that management is more or less out of touch with the realities of being a wage slave. In effect, bringing to the fore all of the inequities involved with participating in the capitalist system.
It is a difference between the frames of reference for labor and management. Management sees the act as a sign of appreciation while labor sees it as management wanting to get credit for being benificent employers but not putting their money where their mouth is, so to speak. Thus, if you give out sandwhiches while taking home a five figure (a purely made up number used for illustrative purposes) bonus and expect a wave of gratitude for the gesture you're pretty much clueless.
It's roughly the same principle that explains why people eventually revolt against opression. It's not the cumulative effects of oppression that eventually lead people to revolution (historically), but the granting of small privileges by the oppressor that alerts the populace that things need not be this way necessarily. Two easy examples of this are the collapse of the Soviet Union and the French Revolution. And now I have gone a bit far afield...
posted by Fezboy! at 12:46 PM on May 10, 2006
Staples took my coworkers and I bowling last year, but we had to pay for our own shoe rentals. Also, we get a 12.5% discount three or four weeks out of the year.
Not that dissimilar or surprising, really, at all.
posted by The Great Big Mulp at 2:10 PM on May 10, 2006
Not that dissimilar or surprising, really, at all.
posted by The Great Big Mulp at 2:10 PM on May 10, 2006
Anecdotal: 1 in every £8 spent in the UK is spent in a Tesco.
Anecdotal: Tesco is the UK's largest road haulier.
Anecdotal: When Sainsbury, a major rival of Tesco, offered a voucher scheme, Tesco decided to accept Sainsbury's vouchers. At a complete loss. Sainsbury's response was to print more vouchers. Tesco continued to accept the vouchers.
Anecdotal: Tesco once procured a store site from Sainsbury which included a petrol filling station. Sainsbury had left a valuable quantity of petrol in the tanks.
Tesco have appeared on blacklists of the UK's worst environmental offenders in recent years.
Walmart don't like Tesco.
posted by nthdegx at 2:55 PM on May 10, 2006
Anecdotal: Tesco is the UK's largest road haulier.
Anecdotal: When Sainsbury, a major rival of Tesco, offered a voucher scheme, Tesco decided to accept Sainsbury's vouchers. At a complete loss. Sainsbury's response was to print more vouchers. Tesco continued to accept the vouchers.
Anecdotal: Tesco once procured a store site from Sainsbury which included a petrol filling station. Sainsbury had left a valuable quantity of petrol in the tanks.
Tesco have appeared on blacklists of the UK's worst environmental offenders in recent years.
Walmart don't like Tesco.
posted by nthdegx at 2:55 PM on May 10, 2006
Want enthusiastic, motivated, employees? Offer them profit sharing
i can understand profit-sharing as a motivational tool for employees at a very small company, but if you're one of 350k wage slaves at a corporation with 2-billion in profits, what kind of effect are your personal efforts going to have? 0.0001%? and then that gets distributed among the other 349,999 employees, leaving you with a 0.0000001% bump?
even if it gets broken down by store, i think it's such a negligibly small amount that from a personal microeconomic standpoint it doesn't justify the extra work. most people would be better off doing the minimum and getting a second job, i'd think.
posted by sergeant sandwich at 4:09 PM on May 10, 2006
i can understand profit-sharing as a motivational tool for employees at a very small company, but if you're one of 350k wage slaves at a corporation with 2-billion in profits, what kind of effect are your personal efforts going to have? 0.0001%? and then that gets distributed among the other 349,999 employees, leaving you with a 0.0000001% bump?
even if it gets broken down by store, i think it's such a negligibly small amount that from a personal microeconomic standpoint it doesn't justify the extra work. most people would be better off doing the minimum and getting a second job, i'd think.
posted by sergeant sandwich at 4:09 PM on May 10, 2006
LOQUAX: I didn't realise people were still so touchy about Dickensian metaphors. Can you really not see the point behind it?
posted by MrMerlot at 5:20 PM on May 10, 2006
posted by MrMerlot at 5:20 PM on May 10, 2006
Nope. This is as close to a black and white deal as I know. Mutually agreed upon contract + no breach of said contract by either party= no problem whatsoever. Who do these guys think they are, professional athletes? ; )
Wanting more than you have legally agreed to accept in return for your services is sour grapes and/or greed. Want a piece of that hot hot profit action? Buy some stock. Think your employer is giving you the shaft? Quit.
Poor Oliver was an orphan, and an indentured servant. The tyke had no part in the circumstances he found himself in, and had no control over changing them. Free adults of sound mind and body understand and accept the consequences of their actions. Unless you want to say that Tesco promised a bonus and didn't deliver, or that Tesco employees are slaves, or stupid children that cannot understand the pieces of paper upon with they sign their names, the metaphor does not apply.
posted by loquax at 6:01 PM on May 10, 2006
Wanting more than you have legally agreed to accept in return for your services is sour grapes and/or greed. Want a piece of that hot hot profit action? Buy some stock. Think your employer is giving you the shaft? Quit.
Poor Oliver was an orphan, and an indentured servant. The tyke had no part in the circumstances he found himself in, and had no control over changing them. Free adults of sound mind and body understand and accept the consequences of their actions. Unless you want to say that Tesco promised a bonus and didn't deliver, or that Tesco employees are slaves, or stupid children that cannot understand the pieces of paper upon with they sign their names, the metaphor does not apply.
posted by loquax at 6:01 PM on May 10, 2006
I once worked for a big IT consultancy company that put up a graph showing their profit going skywards over the past year. When I asked what the blue line was that sat at the very bottom and went only downwards I was told this was the money allocated for our bonuses and salary reviews.
When a company makes millions and leaps into the FTSE thanks to the hard work and dedication of their employees who do the grunt work, it does seem rather trite to allocate them less money to compensation than the year before.
When profit is up 80 percent I don't expect the pool for compensation to go up 80 percent too - but I certanly don't expect it to go down by 20 percent.
posted by mr_silver at 2:09 AM on May 11, 2006
When a company makes millions and leaps into the FTSE thanks to the hard work and dedication of their employees who do the grunt work, it does seem rather trite to allocate them less money to compensation than the year before.
When profit is up 80 percent I don't expect the pool for compensation to go up 80 percent too - but I certanly don't expect it to go down by 20 percent.
posted by mr_silver at 2:09 AM on May 11, 2006
LOQUAX. That's just mean. Maybe u think that's an ok thing for a person or an institution to be. I don't.
posted by MrMerlot at 4:45 AM on May 11, 2006
posted by MrMerlot at 4:45 AM on May 11, 2006
It's not mean, MrMerlot, it's Life, Liberty and British Common Law. Those profits belong to the owners of the company, not the employees. If you don't like that, capitalism is not for you. Which is fair, but it seems pointless to complain about Tesco (and the employees) operating within the law and the economic system in which they exist.
posted by loquax at 7:43 AM on May 11, 2006
posted by loquax at 7:43 AM on May 11, 2006
What's the law got to do with it. We are talking about common decency. You seem to think that a sausage roll is adequate repayment for your role in £2bn pound profit. I don't. Can we agree, at least, on that?
posted by MrMerlot at 2:44 PM on May 11, 2006
posted by MrMerlot at 2:44 PM on May 11, 2006
Well, I agree that a sausage roll freebie is a bit patronizing, but I don't think that the employees have anything to do with profit, unless their contracts call for profit sharing. So it isn't an issue of "repayment". They have been fairly compensated for their efforts as per the contracts they signed. Being given money on top of that would be taking it from those that invested capital in the business in the first place, which, presumably, most employees did not. Is that fair? Or look at the converse, what if Tesco had lost money - should employees have to work extra unpaid hours or give back part of their salary? Of course not!
(The law I was referring to was contract law)
posted by loquax at 3:11 PM on May 11, 2006
(The law I was referring to was contract law)
posted by loquax at 3:11 PM on May 11, 2006
I don't think that the employees have anything to do with profit - loquax
huh?
They have been fairly compensated for their efforts as per the contracts they signed. - loquax
I don't think (memory may be failing me though) that anyone was saying the company was obligated to additionally reward the employees, just that them choosing to do so in such a lame and half-hearted manner was ineffectual and bordering on offensive.
posted by raedyn at 3:33 PM on May 11, 2006
huh?
They have been fairly compensated for their efforts as per the contracts they signed. - loquax
I don't think (memory may be failing me though) that anyone was saying the company was obligated to additionally reward the employees, just that them choosing to do so in such a lame and half-hearted manner was ineffectual and bordering on offensive.
posted by raedyn at 3:33 PM on May 11, 2006
I don't think that the employees have anything to do with profit - loquax
huh?
I just meant that they have no "entitlement" to profits (or obligations for losses), not that they don't contribute to the profit (or loss).
just that them choosing to do so in such a lame and half-hearted manner was ineffectual and bordering on offensive.
I agree. Someone upthread said that they just shouldn't have bothered and it wouldn't have been an issue, and they're probably right.
posted by loquax at 6:43 AM on May 12, 2006
huh?
I just meant that they have no "entitlement" to profits (or obligations for losses), not that they don't contribute to the profit (or loss).
just that them choosing to do so in such a lame and half-hearted manner was ineffectual and bordering on offensive.
I agree. Someone upthread said that they just shouldn't have bothered and it wouldn't have been an issue, and they're probably right.
posted by loquax at 6:43 AM on May 12, 2006
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