It is hard to be a stand out company in the supermarket industry, but Wigwams seems to have found a way. Wigwams Food Market Incorporation is a major grocery retail chain in the United States. Wigwams is not Just a grocery retail chain, it is also an experience. Whenever people shop at Wigwams, customers receive outstanding products and services.
Through its exceptional organizational culture, emphasis on human climate, and constant employee development, Wigwams has set itself apart from every other grocery store by simply putting its “employees first, customers second” (George & Reagan’, 2007, p. 3).
The Positive Organizational Climate at Wigwams Every company has an organizational climate. Organizational climate Is “the atmosphere that employees perceive [that] is created in their organizations by practices, procedures, and rewards” (Schneider, Gunderson ; Jolly, 1994, p. 8). Like most organization, Wigwams aims to have an encouraging atmosphere and positive organizational environment. “Wigwams [believes] that a strong set of values Us] an Important tool In creating and nurturing employee engagement with the company (George, 2007, p.
5). To create an organizational climate that stresses employee engagement, Wigwams promotes the following values: 1. We are about and listen to our people. 2. High standards are a way of life 3.
We pursue excellence In everything we do. 4. We respect our people. 5. We empower our people to make decisions that Improve their work and benefit our customers and our company.
(George, 2007, p. 12) The focus of each of these values Is the employees. Wigwams enacts these five values In Its every day work day simply by putting the employees’ needs and wants first. This emphasis allows Wigwams to have an organizational climate for excellently behavior. Creating a
Climate for Citizenship Behavior by Focusing on Employees Schneider claims the three key characteristics to have a climate for excellently behavior are that (1) “management Is non-exploitative,” (2) “there are norms of helpfulness and cooperation” and (3) “there are fair reward systems based on broad and diverse contributions to organizational success” (Schneider, 1994, p. 18).
In order for management to be non-exploitative, management makes It clear that the employees can trust them. If an employee has a concern, management will listen to the employee. Wigwams [assumes] that If the organization [trusts] employees and treats] them well, employees would In turn treat customers well, creating value for the customers as well as the company’ (George, 2007, p. 5). Management views building trust as a crucial component of creating a positive organizational climate because It benefits both the employees and the organization. Behavior by having “norms of helpfulness and cooperation” (George, 2007, p.
5). Management wants employees to feel like they are part of the decision making process.
Management also wants employees to feel like they can ask management for help whenever they need it. To accomplish this goal, Wigwams emphasizes collaboration. The company [has] a non-hierarchical organizational set-up, where employees [are] empowered to make decisions that [pertain] to their sphere of work, and suggest workplace improvements, as long as the decisions [are] in alignment with Wigwams’ values” (George, 2007, p.
7). Everyone at Wigwams, regardless of position, is part of the same team with the same goals. This emphasis on helping each other contributes to Wigwams’ organizational climate for citizenship behavior.
Another factor that allows Wigwams’ to have an organizational climate for citizenship behavior is the reward system. Wigwams described its reward system as one that souses on “freeing up people so that they can be more productive” (George, 2007, p. 8).
Management rewards employees when they go the extra mile or when they make suggestions to better the organization. Not only does management reward employees, but they also provide the employees with generous benefits. Employees receive health insurance, scholarships, academic funding, and constant training.
According a study by George Litton and Robert Stringer in 1968, “certain leadership styles produce a positive and stable organizational climate that makes an impact on motivation and performance” (Atkinson ; Brochette, 2009). One of Wigwams’ key leadership styles is to reward the employees periodically for their performances, which in turn motivates employees to continue working efficiently and productively.
By building trust, emphasizing collaboration, and rewarding employees, Wigwams has been able to create an organizational climate for citizenship behavior.
The Competitive Advantage at Wigwams The organizational climate and culture at Wigwams creates an environment that encourages employee involvement and customer satisfaction. The company’s underlying commitment to human capital creates a significant competitive advantage. In fostering an environment that emphasizes human capital, Wigwams recruits and develops knowledgeable employees who are able to provide a unique in- store experience. To facilitate its in-store experience, Wigwams management encourages employees to make a difference in the customers’ shopping experience.
As a result, employees often advise customers about food choices. The employees also frequently give customers tips on how to cook and serve the food they buy. Wigwams discovered that a customer may resist buying a more sophisticated and, therefore, more expensive food item because of a lack of knowledge on how to prepare it. Wigwams customers overcome this obstacle through the in-store experience: customers have the opportunity to interact with knowledgeable employees who are able to answer questions that customers may have regarding their culinary choices.
Shopping is no longer a monotonous, routine activity for customers because at Wigwams, grocery shopping is a complete learning experience.
Customers leave Wigwams supermarkets with a greater knowledge of their food choices. The learning experience provided through the Wigwams in-store experience differentiates the company from its competition in the supermarket industry. Significant competitive advantage. Wigwams’ in-store experience creates tremendous value at the consumer level. Wigwams readily admits that employees are its main strength.
In utilizing its main strength, the company encourages its employees to positively impact the customers’ shopping experiences. The resulting in-store experience is synonymous with the Wigwams brand. CASE a result, Wigwams maintains one of the largest and most loyal customer bases in the entire supermarket industry. Through its loyal customer base and unique in-store experience, Wigwams remains competitive in an industry featuring retail giants Walter, Kroger, and Cost, despite its relatively small size. Wigwams increased estimated sales each year to an eventual level of 6.
Billion and remains ranked in the top 30 North American food retailers for the past 5 years. Wigwams’ success and popularity are a result of the company’s ability to differentiate its in-store experience and develop its human capital. The Development and Retention of Human Capital at Wigwams Wigwams develops and retains human capital by adhering to espoused values that resonate with employees. The company’s philosophy, “employees first, customers second,” reflects Wigwams’ emphasis on employee well-being, engagement, and work culture (George, 2007, p. 3).
According to the late Robert Wigwam, “Respect, fairness, honesty, and concern are what’s important to people” (Best Practices in Recruitment and Retention, 2007, p.
16). Management consistently acts according to these standards of conduct to ensure that Wigwams’ 32,000 employees are satisfied. Additionally, Wigwams promotes its set of five strong, simple values that the company encourages all employees to work and live by. Wigwams boasts one of the best retention rates in grocery store industry with an average length of employment of more than ten years for full-time employees and more than five years for part-time employees (George, 2007, p. . Around 6,000, or 20 percent of employees have ten or more years of experience with the company and over 800 have experience at Wigwams for 25 or more years (Holt, 2006, p.
317). While similarly sized grocery chains face attrition rates of 20 percent, Wigwams’ is only seven percent for full-time workers (George, 2007, p. 2). Experts attribute Wigwams’ success in developing and retaining human capital to the company’s programs and policies that exemplify the company’s five values. Showing Concern for Employees Wigwams’ employees know that the company cares about each employee’s well-being because Wigwams offers generous benefits.
While labor costs for regular supermarkets are around 12 percent of sales, Wigwams’ labor costs are between 15 and 17 percent of sales (George, 2007, p. 9). Wigwams Justifies these larger costs because the company’s retention rates exceed those of competitors. Both full-time and part-time employees have access to medical and life insurance, as well as a 401 k plan, and paid vacations. Full-time employees are eligible for profit sharing after one year of employment (George, 2007, p.
8). Additionally, Wigwams expresses its concern for the education of all employees through the Wigwams Employee Scholarship Program.
Required that employees work minimum number of hours time employees up to $2,200 and part-time employees up to $1 ,500 a year for four years (George, 2007, p. 8). The program has donated over $59 million in financial aid to more than 19,000 employees (George, 2007, p. 8).
Employees do not have to continue to work for Wigwams after graduating, but many still choose to. In the early sass’s, Wigwams also became one of the first private companies in the country to provide childcare services for employees, demonstrating that the company cares for employees and their families (George, 2007, p. ). Setting High Standards To maintain a standard of excellence in the workplace, Wigwams invests heavily in employee training. This investment shows employees that the company wants them to remain with the firm.
Every time a new Wigwams supermarket opens, the company invests in training new employees. For example, when a new store opened in Dulles, Virginia, Wigwams spent more than $5 million on training alone (Holt, 2006, p. 316). The company also often sends employees on training excursions around the world to increase their knowledge of the food they sell (George, 2007, p. ).
This level of investment in employees’ training not only fraternities Wigwams from a typical supermarket, it impassions employees and provides them with the tools to excel in the workplace. Giving Back to the Community Wigwams makes a difference in the communities through the company’s Work Scholarship Connection (WAS) program by recruiting local teenagers who are at a risk of dropping out of high school. Teenagers benefit from mentoring from veteran employees and flexible work schedules that accommodate schoolwork.
Wigwams gives these students $5,000 in college scholarships for maintaining their Jobs through high school and for finishing high school. Since 1986, the WAS has provided around 7,500 teenagers with more than $54 million in college tuition assistance (George, 2007, p. 8).
Of the 80 percent of WAS students who graduate from high school, 80 percent of them go on to higher education (George, 2007, p. 8). Wigwams’ successful program is responsible for the fact that 75 percent of Wigwams’ current managers started working for the company when they were 15 to 16 years old (Best Practices in Recruitment and Retention, 2007, p. 6). Emphasizing Empowerment and Respect Another reason why Wigwams is so successful at retaining its human capital is because the company respects and empowers its employees. Wigwams maintains a non-hierarchical” set-up that encourages employees to make decisions they think are necessary to improve individual customer satisfaction as long as these decisions are in alignment with Wigwams’ values (George, 2007, p.
7). Wigwams’ management also encourages employees to brainstorm ideas for new products and store improvements.
Managers regularly hold employee appreciation days to reward employees for their dedication to innovation and customer service (Best Practices in Recruitment and Retention, p. 17). The Continued Success at Wigwams Wigwams continues to be one of the top grocery stores in America since the case published in 2007.
This success due to the emphasis on the five-value system and the employee-friendly environment Wigwams has established. The many success. The grocery store has remained in the top five on Fortune’s 100 Best Companies to Work list for eight consecutive years, and holding the number four spot in 2012 (“Cnn Money,” 2012).
Wigwams ranked as one of the top businesses according to the “Customer Service Champs” rankings, and according Supermarket news, as of 2012 they are ranked the number 29 top retailer and wholesaler (“Customer service champs 2010,”). Wigwams is continues to add locations cross the northeast. In 2007, there were 71 different Wigwams locations.
As of now they have grown to about 80 stores. According to the owners of Wigwams, they intend to only open new stores at the rate of about three per year. The reason for this strategy is for the company to keep its customer service at the levels they work so hard to strive for.
Also, the owners feel that opening stores too fast would diminish their product. One of the reasons is for this mentality is because Wigwams closed nine different stores over the past few years due to expanding to the wrong areas One of Wigwams’ most significant business moves came in (Wigwams 2011).
2008 when they decided to stop selling all tobacco products in their stores. Along with this decision, they offered a smoking cessation program to all of its employees. Over 2,000 employees have enrolled in the program since it was offered in 2009.
Because of this program, the American Lung Association of New York State gave Wigwams the “Lung Champion Award” (Wigwams 2011). Wigwams commitment to excellence and their focus on putting its employees first has proves to be a solid business system that helps to create success for the company. Its success raises the questions over whether other companies can duplicate this model.
While in theory other companies should be able to copy Wigwams culture of employee motivation and engagement, it would take years to be able to reach Wigwams’ level.
The reason is that it has taken Wigwams decades to reach the point it is at today. If another company tried to create a culture similar to Wigwams, it would first have to work to get rid of the previous culture that in its self would take time too. The only way for another company to be successful by adopting Wigwams’ culture would be to e dedicated to the cause for more than Just the short term. This leads into the other reason other stores could have trouble duplicating Wigwams’ culture is because Wigwams is privately owned.
This allows Wigwams to focus on the long term instead of the quarter like biblically traded companies.
This is significant because when Wigwams opens a new store, it spend a lot of money training the new employees. This is a huge overhead many other companies either cannot afford to this training or do not realize how important the training is to creating a good culture for the employees.