Wal-Mart pays quarterly bonuses to more store employees

A Wal-Mart store in Washington, DC.
A Wal-Mart store in Washington, DC. PHOTO: AFP

CHICAGO (REUTERS) - Wal-Mart Stores said it paid more than US$201 million (S$273.8 million) in second-quarter bonuses to hourly store staff as 99 per cent of its stores met targets for cleanliness, faster checkout and better service.

The world's largest retailer said 932,000 store employees received a quarterly bonus this year. This was a jump from 880,000 employees in the second quarter of fiscal 2016 and 687,000 workers in fiscal 2015.

Wal-Mart is the largest private employer in the United States, with about 1.5 million workers including hourly store staff, store management and truck drivers. Hourly workers at the company's nearly 4,600 US locations are eligible for quarterly bonuses based on the performance of their store.

This increase in bonuses comes after the retailer bucked a string of weak earnings by its rivals and reported a better-than-expected quarterly performance last month, saying it benefited from more efficient US stores and higher employee wages that fostered better customer service.

It also comes at a time when the retailer is cutting back-office jobs. Earlier this month, Wal-Mart said it will cut about 7,000 jobs, mostly in accounting and invoicing positions at its US stores, and will offer affected employees consumer-facing positions.

Wal-Mart spokesman Kory Lundberg said until two years ago Wal-Mart's internal targets focused more on metrics like higher store sales. However, in the past two years the retailer has pivoted towards a greater emphasis on customer service by bringing more employees to the front of the store from its back rooms.

Wal-Mart has also increased entry-level wages to US$10 an hour and said it will invest US$2.7 billion in employee compensation and training over two years, a move it has said contributed to improved service levels. "As a result employee turnover has reduced and you have more people on the sales floor," Mr Lundberg said.

The retailer also recently launched a new system for scheduling workers at 650 US stores to improve staffing levels during peak shopping times and offer more certainty over hours for employees.