The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits Hardcover – Illustrated, January 14, 2014

The Good Jobs Strategy is an excellent and highly readable analysis of why firms that pay their employees well will also prosper. The book is much more than a moralist's plea to companies not to pay rock bottom wages to cut costs. Prof. Ton also details the concrete steps that 4 major retailers (Costco, Trader Joe's, QuikTrip and Spanish food chain Mercadona) took to reshape their day-to-day operations to take best advantage of a well-paid, highly-trained and highly-motivated workforce. Ever wonder why so often, you can't find something on the shelves at your local supermarket - and why when you start looking around, there is no one to help you? Because the few employees in the store are struggling to keep their heads above water with split-shifts paying minimum wage while the store insists on stocking 300 kinds of toothpaste, with prices that can change every few days and need to be relabeled accurately every time. It's no surprise that "phantom stocking" - the term used in the retailing industry when a store knows a product is in the building but not on its designated shelf or in the warehouse (i.e. lost) - is commonly estimated at 20 % of all inventory items. I'm not usually a fan of wide-ranging prescriptions of how to reshape an industry, our economy, with the latest management hot topic, etc.. Generally the messages are too vague, cover too much ground and end up being wishy-washy dream lists. I am a fan of this book. A very well-written nuanced story - with the details clearly explained in normal English - of why putting people first in a smart work environment pays off - for everyone.

This book is very timely in light of how the american jobs market has evolved over the past twenty or so years. As manufacturing jobs became a smaller and smaller part of total employment, retail jobs grew to become a dominant sector. Unfortunately, jobs in the retail sector generally pay well below those in manufacturing. Competition among retailers exerts constant pressure to reduce costs to remain price competitive. Traditionally, to meet cost cutting goals, retailers relied on lower labor costs by suppressing wages or reducing hours worked. In either case, the author argues the consumer though rewarded with lower costs in the short term, will find deteriorating operations when retailers rely on this approach that eventually lead to unsatisfactory customer service. Inefficiencies such as phantom "stock outs," inventory that remains shelved or misplaced will inevitably follow leading to loss of revenue through reduced sales. Poor or inefficient operations also damage customer loyalty which also engenders reduced sales.Ms. Ton suggests there is another retail strategy that is employed by "model retailers." Though counter intuitive in many ways, it has been validated as a recipe for growth, living wages for employees and steady gains for investors. The strategy employed by such household names as Costco, Quick Trip and Southwest Airlines have made these companies profitable and growing while remaining cost competitive. These companies also find it necessary to routinely cut costs to remain competitive. However, unlike traditional retailing strategies, they do not rely on reducing labor costs as the means to reduced operational costs. Instead of cutting wages or work hours, they simplify operations, invest continuously in their employees through cross training and empower them to find cost cutting opportunities within operations to help the company meet cost cutting goals.The book lays out a fresh approach to business operations that ensures long term rewards for customers, employees and investors. It is a refreshing approach that provides a potential solution to the stagnation of american wages, particularly in in the retail sector. Ms. Ton writes in a clear and easy to understand style providing interesting, salient examples from the retail business world. If you have any interest in this area, you won't be disappointed by this book.

For an insightful, unique addition to your practice as a manager of a business, this is the best book of the year – bar none.The author, Zeynep Ton, holds a professorship in Operations at MIT. Her assertions are not the product of a creative mind, but the results of solid research into what has been achieved by superb companies.The book’s focus is on retail, she explains, because if what is suggested is possible in this most difficult of environments, it is possible elsewhere. It is important to state this upfront so the message of the book is not ignored by those outside of the retail trade. This message has wide applicability.Most employers in businesses with wafer thin margins believe that the only way one can succeed is at the expense of their employees. This is achieved by offering jobs that pay low wages, which have scant, if any benefits, and unpredictable work schedules. These businesses are often understaffed, and lack equipment to do the job well. The result is that it is very hard for employees to perform well, and finding meaning and dignity in the work is impossible.This is the “bad jobs strategy.” It produced the “vicious cycle of retail.”Customers do not want to buy from these retailers, but do so because they are on tight budgets, and the prices are low enough. Customers are served by harried staff, in chaotic settings. Customers’ buying experience is unpleasant, finding what they want is difficult, and getting help, nearly impossible. The store managers need to offer ever lower prices by paying staff less, and spending less on the operations of the store.In the U.S. in 2011 the median hourly wage for the 15 million retail workers was 34% lower than all other workers. To achieve its “everyday low prices”, Walmart employees in California were found to be receiving over $ 85 million in public assistance annually to supplement their paltry wages. In the UK only one in seven people working at supermarkets earned a living wage in 2012.And these are people with real jobs.Decades ago, Sasser and Schlesinger argued in their seminal book, “The Service Profit Chain”, that capable, committed and satisfied employees provide good customer service, which then drives customer loyalty to improve sales and profits. This is not difficult to believe this of companies that sell high-end, differentiated products, or that compete on the basis of service.Most people do not believe it is possible to do the same in industries with wafer-thin margins such as low-cost retail. So, our experiences with restaurants, airlines, hotels, hospitals and call centres, must remain disappointing, frustrating, and time-consuming.Ton asserts that the “bad jobs strategy” is a choice. It does not have to be this way, and she has proved this from her studies.The alternative is the “good jobs strategy” and its “virtuous cycle of retail.”Ton focus on four “model retailers” and refers to many businesses in other industries able to achieve huge returns to shareholders, great service to customers, and well-paid, challenging and satisfying work for their staff.The model retailers are Costco, a wholesale-club chain that has 580 stores with a turnover $ 76 billion; Mercadona, the largest supermarket chain in Spain, with 1,400 stores and a turnover of € 19 billion; QuikTrip, a convenience store that also sells petrol, with 600 outlets and a turnover of $ 8 billion; and Trader Joe’s, an American supermarket chain with 340 stores and a turnover of $ 8 billion.All of these businesses outperform their industry and have greatly enriched their shareholders despite spending much more on staff than their competitors in order to have a well-paid, well-trained, well-motivated workforce. The same is found in business such as Southwest Airlines, UPS, Toyota, Zappos, the Wegmans supermarkets, and Shouldice Hospital.The “good job strategy” does not rely on a hefty investment in staff alone. It requires a set of four operational decisions consistently upheld, and rigorously applied.All these companies have limited the number of products and services they offer to a basic set of the necessary and important. They sell, for example, only the six most popular types of tomato sauce, instead of 26.These companies delicately balance job standardization and employee empowerment. They have efficient, proven, and ever improving operational systems which are standard across their huge number of stores. Within these parameters their staff are empowered to make decisions in the best interests of the customers.Staff are taught to multi-task so that customers can be assisted during busy periods by any of the trained staff who might be available. A shelf-packer is able open an additional till to relieve queueing customers.Staffing levels are high so that the slick operational system can be easily and well managed, but no higher than they need to be. Overstaffing is as unprofitable as understaffing, as Ton research shows.There are many common excuses, Ton explains, for not pursuing a “good jobs strategy.” This carefully argued books shows that none are valid.Among these excuses are that “Public companies cannot do it” because shareholders expect managers to sweat all assets including people. But Costco is a public company.Another excuse: “Big companies can’t do this.” Costco employs more than 140,000 people, Home Depot, 200,000.Another excuse: “Those model companies must have idiosyncratic qualities that we don’t have.” The real reason for there being so few companies offering good jobs, low prices, good customer service, and superb financial performance, is the difficulty. Excellence is much harder to achieve than mediocrity.“I wrote this book for managers, executives, and entrepreneurs who want to offer good jobs but don’t think they can, because controlling costs is so important to their business.” Read this book carefully if you are one of these managers, executives or entrepreneurs.Readability Light -+--- SeriousInsights High -+--- LowPractical High +---- Low*Ian Mann of Gateways consults internationally on leadership and strategy and is the author of Strategy that Works.

This book is just great. The author describes the reasoning behind why companies in all sectors should follow the good job strategy. Care bout your people and live by your values, then they will look after your business. The book is also fill with plenty of real life examples that are well described with answers to must of the popular misconceptions about low pay jobs.

Must read for Retailers across the world

Muito bom o livro da professora, que mostra a diferença entre empresas que investem muito em funcionários e empresas que nao investem.Na pesquisa que ela fez não é só investir em funcionários tem também que investir em colocar a empresa com bons processos, e boas interações com clientes.A pesquisa foi feita em 4 companhias de varejo do mundo: Mercadona, Costco, Quicktrip, Trader Joe. Ela coloca bons pontos como ao invés de contratar um par de mãos as empresa deveriam começar a contratar uma pessoa.

I found it extremely inspiring and it provides academic support to empirical experience: many of the sentences sound like just common sense but they are strongly supported by facts

The author shows how companies that pay their employees better can actually be more profitable than their lower-wage competitors. The secret to being profiatble is to get the operations right. Although the examples in the book are focussed on the retail industry, the lessons apply to any number of other industries as well.