Walgreens -- Compensation Analysis
Pay System and Benefits Package Overview
Walgreens has seen many changes in its industry and specific niche over the last decade. The rise of prescriptions by mail, ecommerce giants such as Amazon and EBay, the passage of the Affordable Care Act (ACA), and one of the worst economies since the Great Depression to name a few (Wagner & Orvis, 2013). With this backdrop the company had an ambitious goal of reaching seven thousand stores in 2010 from just over four thousand stores in 2003; Walgreens was opening a store every seventeen hours at one point (Wagner & Orvis, 2013). The company's strategy was primarily based on location however the changes in the industry forced them to reinvent themselves and create a new strategy to remain competitive.
At the center of this strategy was using human resources to create a better customer experience. Walgreens looked at other businesses that were leaders in driving customer experience and realized that people developed an emotional connection to a cup of coffee. Yet, Walgreens customers did not perceive the business any differently than other drug retail chains. Thus they had to create a better experience and creating a compensation package to support the types of behaviors they desired from their employees was a cornerstone of this strategy.
The company developed a true pay-for-performance system that is based off of three different performance metrics: financial results, team member engagement, and customer service (Wagner & Orvis, 2013). Managers were also positioned to be closer to the customer and make local decisions. Many of the previous duties of...
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