Treating Employees Better = Rise in Stock?

To sum up Maddie’s blog post, Wal-Mart has been underpaying its employees and their concern for raising the wages of the workers is the possible decline in stock from stockholders thinking that they are not getting enough value from the employers with the amount of money they will be paying them. However, a recommendation is shown that with a raise, Google had seen a 60% increase in stocks, the opposite of what Wal-Mart executives were assuming.

Although what happened during the increase of Google’s stocks (maybe a new Google program could have launched) is not disclosed, Google’s increased stock could be explained by using an example of another company. Zappos is famous for providing great care for their employees which includes covering for all of their health care which is a big sum of money to cover in the U.S. Zappos’s philosophy is that when employees are treated better, they will be happy and therefore being fully productive.

As much as raising wages for employees does not sound like a profitable decision for Wal-Mart on paper, looking at a company like Zappos can really give Wal-Mart a new perspective on what the impact of raising wages could be.

Picture:

(Web Photo). Retrieved from http://wpmedia.business.financialpost.com/2012/07/0717lululemon.jpg?w=620

 

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