A good employee and management relationship is attributed to a number of benefits in an organization. Some of these benefits include development of suitable working environment that result to work efficiency, high work commitment and satisfaction and thus, high organization profitability. A good management and employee relationship promotes open communication between or two way communication where employees can easily present their ideas and grievances and the management address them accordingly. Sharing of ideas promotes creativity in an organization. Good human resource management that include reasonable compensations, provision of incentives and other work related benefits, promotions, and training among other employees development (Schreiner 1).
Costco has managed to enhance a desirable relationship between the management and the organization. The company has managed this by increasing employees’ compensation regularly. The company also embraces internal hiring by promoting different employees from one operation position to a higher position. This has increased the company employees’ retention rate and as a result reduced the cost of hiring. Desirable employees’ treatment in Costco has also attracted a huge number of customers who shop not because they consider the company products to be of high quality but because they are moved by the company’s good employee’s treatment (I-sight 1).
On the contrary, Sam’s Club has a different way of handling its employees. They treat their employees in an almost contrary way from Costco. Employees’ dues are very minimal compared to that of the CEO. In this organization, the communication is normally one way and hierarchical such that employees do not get a chance to present their grievances to the management. This has highly killed the employees working moral and their commitment to their work. The rate of retention in the company has gown down. Unlike Costco that experiences employee loyalty, Sam’s Club employees are not loyal to their company. In this regard, Sam’s club has to invest more on advertisement to be able to attract more customers since its employees do not employ more effort to enhance this.
Similarly, Costco has a low CEO to Employee ratio as compared to Sam’s club which has a very high ratio. This high ratio gives the CEO a higher supremacy in the company giving them the power to treat employees with disregard. This according to Whelton (15) has promoted unethical behaviors in different US based organization by the CEO. High salaries thus give management a higher pride and make them to consider themselves to be more important in an organization than any other organization stakeholders. This promotes a negative relationship. This also puts customers off in the market since they know their contribution only benefits a few and not those who highly need money for survival (Nesterak, 1). In this regard, high CEO compensation negatively impact the organization relation with its customers, stakeholders and the customers and thus it promotes the company’s downfall.