Compensation includes both the direct and indirect rewards that an employee gets in a company in return for their contribution. Examples of compensation include salaries, wages, and tips. On the other hand, benefits are the extras that a worker is given for their job on top of the compensation. Benefits might include life insurance, health, and paid vacation time among others. A competitive compensation scheme and excellent benefits attract employees to organizations and positions. Some types of compensation are tied on the performance of the employee while some exist at a flat rate. Also, it is important to note that some workplace benefits are provided by the law while others are given as a job perk. Walmart and Walgreen are two of the biggest stores in the United States with Walmart dealing with a range of goods and services and Walgreen mainly providing pharmaceutical products. As such, the companies have a huge number of employees who must be provided with various compensation and benefits not only to abide by the applicable laws but also to motivate the employees. As competitive business especially with regards to the pharmaceutical products, it is vital to analyze the differences in compensation and benefits of Walmart and Walgreens to determine who provides the better package for its employees.
Salaries
Walmart has an overall reputation of a demanding and low-paying employer. However, certain jobs pay extremely well and report a commendable level of job satisfaction. One of the highest paying jobs at Walmart is the store manager where an employee can rack up between $150,000 and $250,000 yearly in salary and other bonuses. Assistant managers follow in the list with a yearly remuneration of up to $45,000 with bonuses adding to a figure in the region of $48,000 ( Gordon, 2014). A shift manager is third on the list with a package of $65,000 with additional cash bonuses and stock bonuses among other financial rewards. A pharmacy manager earns up to $139,000 which is approximately 4% higher than the national average ( Gordon, 2014). In Walgreens, the highest earning professionals are the pharmacists who make an average of $58.47 followed by a Senior Certified Technicians who make an average of $14.76 per hour. Cashiers are among the lowly paid employees earning about $9.07 averagely per hour.
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Paid Time Off
Walmart has a Paid Time off (PTO) policy that ensures that vacation, personal time, sick time, and holidays are paid in a single category. Both the full-time and part-time associates are eligible to earn the PTO based on their tenure with the company and the number of hours which they have worked. The PTO can be used almost immediately after the acquisition and no waiting time is required. Walgreens also has a PTO system for its employees, but the only difference is the way it is applied. The years of service determines eligibility, the position occupied, and the average hour’s one works per week. An employee has to work to accumulate the PTO. It might take a considerable amount of time for it to add up.
Life Insurance
Walmart has life insurance known as “The Walmart Associates' Health and Welfare Plan.'' It is a single and comprehensive life insurance cover that caters to some services including medical, vision, dental, accident insurance, and critical illness among others. The life insurance benefits package has two options with the one paid by the company known as the Company Paid. Among the benefits that the employees can get from the package is death benefit where the company can pay a maximum of $50,000. However, there are certain scenarios where the life insurance claim can be denied include overdose, suicide, and drunk driving. In Walgreens, has only one option of being paid by the company. It provides the employees with a number of benefits when under the cover. The death benefit provided for hourly paid team members amounts to $25,000. Pharmacists, nurses, and other salaried workers receive the coverage amount as 1.5 times their basic annual salary. Unlike Walmart, the coverage provides for a voluntary plan that is optional and paid for the employee through the deductions in the payroll.
Disability Benefits
In January 2016, Walmart introduced a disability program that would offer employees with financial protection that would see them benefit when they are away from work for an extended period due to personal medical needs such as injuries, illnesses, or having a baby. The plan pays 50% of the employee's basic weekly wage for a period of 26 weeks. Despite the fact that Walgreen's has a similar disability plan, the terms are different with that of Walmart. Employees who are unable to work due to injury, illness or pregnancy are eligible for short-term disability benefits at either half or pull pay depending on their lengths of service. Full-pay is accorded to employees who require the benefits for two weeks while that which extends to 10 weeks will result in half-pay.
Minimum Wage
Another critical area where the two companies differ is on minimum wage. The United States government sets the minimum wage through the labor laws. From July 2009, the government put a directed that companies put the minimum wage at $7.25 per hour ( Snell, Morris, & Bohlander, 2015). Walmart is the largest private employer in the country, and as such, it receives widespread public attention with regards to its adherence to the minimum wage policy. Over the recent years, the company has raised its minimum hourly wage for the employers up to $11 and also dishing out other benefits that add up to $1,000. On the other hand, Walgreens also adheres to the minimum wage policy provided for by the government. The difference comes with the amount. The minimum wage at Walgreens is set at $8 per hour. The overall range from the lowest earning to the highest earning employer is $8.76 to $23.64 per hour. Senior Program managers and information technology experts make the highest with an average of $83.38. However, the least paid workers who have the title Stockers make the least with an average of $8.03.
Medical Plans
Walmart has a history of providing its employees with healthcare benefits that increase value and dignity of the worker. The healthcare services are ranked among the best in the retail industry. The most common health care plan for the workers starts at a paltry $23.20 per pay period. It also includes several upfront contributions that help in catering for medical expenses. Gupta, (2013) illustrated that Walmart pays for approximately 75% and 60% of their employees' premium cost and total healthcare costs respectively for those covered under their medical plans. Some of the elements covered in the plan include dental, vision, and the coverage for other domestic partners. Some other medical services that the employees can enjoy include free access to nursing care, and critical-ill insurance among others. Walgreens, on the other hand, has its unique medical plan that differs with that provided in Walmart. Employers who work for 30 and more hours a week have a choice between two health insurance plans. Comprehensive health, vision, and dental plans are available not only to the employees but also their dependents. Employees also have a choice to enrol in the Walgreens Consumer Driven Health Plans that assist the employees in paying for the healthcare needs.
Retirement Benefits
Walmart has a system of benefits directed towards employees who have served the company until the age of retirement. Gupta (2013) asserted that through the 401(K) plan, past time employees could become participants in a scheme that aims at benefiting workers who no longer work for the company. The company makes contributions towards this kitty as well as the employee who is given an opportunity to contribute part of their earnings towards facilitating their retirement package. Therefore, other than the pension plan provided by the company, Walmart contributes to the retirement benefits through the contributions made via the (401K). Walgreens has slightly different retirement benefits from that enjoyed by employees working in Walmart. Just like the 401(K) policy in Walmart, the retirement plan for Walgreen workers is a profit-sharing trust system where both the employees and the company contribute. However, in this case, the company's contribution is determined by the Board of Directors ( Sherk, 2013). Also, retired employees are also entitled to certain health insurance benefits once they cease working. However, certain critical criteria with regards to age, the date of hire, and service period must strictly be satisfied before the enrollment.
Leave Benefits
As earlier noted, Walmart is the biggest private employer in the country, and as such, it has to provide its employers with some of the best benefits to act as the pacesetter for other smaller companies. One of the areas in which Walmart has expanded its benefit is on the parental leave. The full-time hourly associates receive parental leave including 10 weeks paid maternity leave for female workers and another six weeks paid parental leave for both the male and female workers. Salaried workers are also incorporated into the move the plan that is vital in increasing the customer satisfaction levels. However, Walgreen does not reach such levels with regards to the provision of maternity and paternity leaves. Sherk (2013) pointed out that they have a 12-week maternity policy that is divided into two. The first six weeks are catered for by the company in terms of payment while the next six weeks are not paid for. Regarding the paternity leave, the employees have 0 weeks and 0 weeks of unpaid paternity leave. It, therefore, means that the company does not value the position of the male employees in childbearing.
Employee Bonus
Walmart has approximated that it will use a total of $400 million in the 2018 financial year to fund the bonuses given to the employees. According to Snell, Morris, & Bohlander, (2015), employees who have served the company for over 20 years are set to receive a bonus of $1,000 following the implementation of the fiscal policy for 2018. The starting wage has also been on the rise in the recent past with the latest one having risen to $11 which is a huge pay considering what is paid by other companies as their minimum hourly pay. Walgreen has its bonus system that slightly differs with that employed by Walmart. Birkner and Flake (2015) illustrated that the total amount it spends on annual employee bonuses is an average of $5,283 with amounts ranging between $0.31 and $45,000. The District manager receives the highest bonus with the Certified Pharmacy Technician receiving the least bonus. The criterion for Walmart is 20 years of service while in Walgreens the criteria for receiving the bonuses are unspecified.
Other Benefits
Holidays are important events where most workers are given an off-duty to spend their time away from work. Walmart no longer pays for holidays unless the workers put in hours from their own time. On the other hand, Walgreens recognizes holidays and pays for them. The paid holidays include the Christmas Day, Thanksgiving Day, Labor Day, and Independence Day. Other recognized holidays by the company include the Memorial Day and the New Year’s Day. Secondly, Walmart does not give its workers an employee discount for those willing to buy products from the company. They would buy them just the way any other customer would have made the purchase. However, with regards to Walgreens, the case is different. The employees, including their household members, are given a 15% discount on most of the purchases at any Walgreens store ( Birkner & Flake, 2015). As such, the company finds a way of not only valuing the employees but also building its customer base.
In conclusion, the two companies have various compensation and benefits that first comply with the labor laws of the United States and secondly motivate the employees towards working for the achievement of the companies' goals. Walmart thrives in the areas of wages and salary, leave benefits, and employee bonuses. Walgreens, on the other hand, is efficient in leave benefits, paid time off, paid holidays, and life insurance. More similarities are witnessed in retirement and medical benefits because they apply almost consistent strategies. It is also critical to appreciate the role that both companies are playing in ensuring that they continue bettering the benefit services given to the employees. Some recent initiatives include increasing the minimum wage and putting more emphasis on retirement benefits. Some of the gaps that still exist include Walmart’s reluctance to offer paid holidays and Walgreen’s refusal to recognize paid paternity leaves.
References
Birkner, C., & Flake, E. (2015). Taking care of their own. Marketing News. Retrieved February 23 , 2015.
Gordon, P. (2014). The Two Walmarts. In Corporate social responsibility in the global business world (pp. 207-217). Springer, Berlin, Heidelberg.
Gupta, A. (2013). The Walmart working class. Socialist Register , 50 (50).
Sherk, J. (2013). Productivity and compensation: Growing together. Heritage Foundation Backgrounder , 2825 .
Snell, S. A., Morris, S., & Bohlander, G. W. (2015). Managing human resources . Nelson Education.
