Interesting Archives - Page 9 of 31 - I Hate Working In Retail

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At CVS, only the very rich get much richer

Red-lining at CVS is ‘quite the underhanded way to get the older employee base to leave.’ – a CVS worker
So-called red lines or red circles are common among U.S. retail and service companies

The nation’s second-largest drugstore chain adjusts its annual raises to how much an employee makes. The higher your salary, the lower your raise.

The top workers at CVS stores — those earning the highest hourly wage for their job classification — are “red lined” by the company and receive no raises at all.

I can say that because I have my hands on an internal CVS document — the company’s 2014 Wage Management Guidelines — spelling out the pay ranges for different positions and caps on raises.

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FOR THE RECORD:

CVS pay policies: A column in the June 27 Business section about pay policies at CVS Caremark misidentified Los Angeles compensation consultant Mark Lipis as Mike Lipis.
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“If you really think about it, the red-lined employees most likely are the ones that have been around the longest,” said one CVS pharmacist who asked that his name be withheld because of fear of retaliation.

“This is quite the underhanded way to get the older employee base to leave,” he said. “Would you want to stay somewhere that doesn’t give you a raise?”

Probably not. Trouble is: Where are you going to go? So-called red lines or red circles are common among U.S. retail and service companies.

CVS, which gave its chief executive a 26% raise last year to almost $23 million in total compensation, isn’t alone in making sure its rank-and-file workers don’t make too much money.

And this is why, in any discussion of income inequality, we keep reaching the same point — the rich get richer, while everyone else gets table scraps.

“It’s not personal. It’s business,” said Mike Lipis, a Los Angeles compensation consultant.

“There’s a point where no matter how good people are, how friendly they are, it doesn’t make sense to pay them beyond a certain amount,” he said. “You’re trying to make the most of your limited compensation dollars.”

That’s understandable. If you’re selling fast-food hamburgers for $3 apiece, say, you’ll go broke paying workers $30 an hour, even if they’re the best darn burger makers in the business.

But where’s the line? The average fast-food industry employee in this country makes $9 an hour, or just under $19,000 a year. Industry workers have called on McDonald’s and other employers to pay $15 an hour, or about $31,000 annually.

Responding to recent protests, the chief executive of McDonald’s, Don Thompson, said that he could possibly be open to a minimum wage of maybe $10 an hour. “McDonald’s will be fine,” he said. “We’ll manage through whatever the additional cost implications are.”

Considering that McDonald’s pocketed $5.6 billion in profit last year, I’m guessing that they’ll manage just fine.

But here’s the real issue: How can Thompson fret about paying workers something closer to a living wage when he’s pulling down total compensation worth $9.5 million a year, or more than $4,500 an hour?

Lipis, who made a strong business case for capping rank-and-file workers’ pay, acknowledged that this is where things get screwy.

“I would never try to justify some of the executive compensation contracts,” he said. “Do you really have to pay someone $400 million a year because you couldn’t find someone who could do the job for $300 million?”

I wrote recently about a report showing that the head of CVS, Larry Merlo, enjoyed the widest gap in the country between a CEO’s salary and that of his less-worthy underlings.

According to compensation researcher PayScale, Merlo’s $12.1-million salary last year was 422 times the size of the median CVS wage of $28,700.

Factor in all the additional bonuses and perks that come with the job, and Merlo earned $22.9 million last year, up 26% from a year before, according to figures tabulated by the Associated Press and compensation researcher Equilar.

So CVS workers may be miffed that the company’s Wage Management Guidelines show that a cashier making $7.25 an hour who is deemed an “outstanding performer” by her superior will see an annual raise of 4.75%.

But an outstanding cashier who, either because of past accomplishments or seniority, makes $12.48 an hour can expect no raise at all. She’s been red lined, as the company puts it.

A top-performing CVS pharmacy technician earning a base wage of $9.30 an hour will similarly merit a 4.75% raise. But a red-lined pharmacy technician earning $15.67 an hour will see no raise.

Those figures are for CVS stores in central Maryland. The company’s wage guidelines vary from region to region, based on the minimum wage in each state.

Mike DeAngelis, a CVS spokesman, declined to go into specifics about the company’s pay practices.

“CVS Caremark is committed to providing our valued employees with comprehensive and competitive pay and benefits,” he said. “We review salary ranges in our markets to determine an appropriate range of wages, which may vary based on a specific market.”

He said caps on raises for red-lined workers “relate to a small percentage of employees who have exceeded the top of their jobs’ wage ranges.”

No one’s suggesting that a CEO should make as much — or as little — as a subordinate. It obviously requires a more complicated skill set to run a major company than it does to operate a cash register.

But when compensation experts talk about stretching compensation dollars as far as they’ll go — in other words, getting the most bang for your buck — the same calculations that apply to the rest of the staff should apply to the executive suite.

Why not have red lines for senior managers? If their compensation reaches a certain level, boom, that’s it — unless limits are lifted for all other workers as well.

“The general theory with red lines and red circles is that you should not spend your compensation dollars on people whose pay puts them ahead of the market,” Lipis said. “You should spend your dollars on people who are behind the market.”

If so, that’s almost certainly not the CEO

Sourced from latimes.com

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9 Disappointing facts about Chipotle

The company says it serves “Food With Integrity.” What does that mean?

1. Chipotle doesn’t do all of its own cooking: Some is done by an outside company, the same one that makes McDonald’s McNuggets, Big Macs, and McRibs.

Chipotle’s website says its “fresh cooking” is done “using classic culinary techniques — no shortcuts.” But Chipotle doesn’t do all of its own cooking: Two outside processing companies in Chicago, OSI and Miniat Holdings, braise the carnitas and barbacoa, trim the steaks, cook the beans, and make the bases for the restaurant’s green and red tomatillo salsas, all according to Chipotle’s specifications. (Everything else, said Chris Arnold, Chipotle’s Communications Director, “is made entirely in the restaurants.”)

OSI, a global meat processing corporation with facilities in 17 countries, also supplies McDonald’s with its burgers, nuggets, and other “value-added protein items” on its menu.

2. Some of Chipotle’s locally sourced food travels thousands of extra miles so it can be processed in Chicago.

“The less distance food has to travel,” Chipotle’s website says, “the better.” Sourcing locally — defined by the company as within 350 miles from the restaurant — has long been part of the Chipotle mantra. It’s good for local economies, the environment, and the consumers, who get to enjoy the freshest foods.

But the ingredients for the carnitas, barbacoa, beans, and salsa bases, even when raised or grown just a short distance away from the restaurants serving them, have all traveled through Chicago, either through OSI or Miniat facilities. This is for consistency purposes, even if it has the potential to add thousands of food miles to your burrito. “You get cuts delivered and packaged to our specifications,” Arnold said. “It’s prepared in a really efficient and consistent way by having that done in fewer places than you would doing it in multiple places.”

3. Chipotle’s animal welfare standards may be better than other national restaurant chains, but they are still unclear.

A big part of Chipotle’s “Food With Integrity” philosophy is sourcing what it calls “responsibly raised” meat (originally called “naturally raised”). However, “responsibly” and “naturally raised” are not terms regulated by the government, and Chipotle does not require producers to have a third party certification, such as Certified Organic or Certified Humane. “‘Natural’ is on the honor system,” wrote food expert Dr. Marion Nestle in her book What To Eat. “Some producers of ‘natural’ meats may be honorable, but you have to take what they say on faith.”

Chipotle’s version of responsibly raised meat has three main requirements: animals have received no added hormones, no antibiotics ever, and were humanely raised. BuzzFeed asked to see the full definition of the responsibly raised standards, but the company declined to share them. “We struggle with getting people to understand the most basic elements,” said Arnold, “and adding details really runs the risk of muddying that understanding further.”

When the company can’t meet its needs with responsibly raised meat, it uses conventionally sourced meat — meaning it’s from animals that were raised with growth hormones, sub-therapeutic antibiotics, and in conditions generally not considered humane — to fill the gap. In 2013, that came out to 7.8 million pounds of its beef (15% of its beef) and 88 million pounds of its chicken (less than 1% of its chicken). (All of the pork served fit their standards of responsibly raised.)

Several food and animal welfare experts recognize Chipotle for its efforts. “My reading of this is that they would like to be sourcing all of their meat from natural, sustainable, antibiotic-free, and cage-free farmers but can’t always get it,” said Nestle.

4. Chipotle is importing grass-fed beef from Australia, despite American producers lining up to work with them.

Last month, Chipotle CEO Steve Ells announced that the company was sourcing grass-fed beef from Australia, saying “the U.S. supply isn’t growing quickly enough to match our demand.”

Many American producers, though, disagree. “We firmly believe that [Chipotle] could find domestic sources for all of their beef,” said Marilyn Noble, the American Grassfed Association’s Communications Director.

The Texas Agriculture Commissioner also wants in. “Texas ranchers want to be successful,” Bryan Black, Director of Communications for the Texas Department of Agriculture told BuzzFeed. “If there is a major market for grass-fed beef, then you can be sure many Texas ranchers would jump at the opportunity.”

But Chipotle did not contact these organizations before the announcement, nor did it respond to AGA’s email offering more domestic suppliers afterward. “The price premium on grass-fed beef in the United States makes it a less viable solution unless we’re willing to raise prices,” Arnold said in explanation of the company’s decision.

Environmentalists would like Chipotle to find a way to source domestically. “We hope that importing from abroad is a temporary measure while they work to improve and transform the U.S. supply chain,” said Doug Sims at the Natural Resources Defense Council. “Clearly, the best option is to minimize transport costs and impacts and have more U.S. sources of better beef.”

In the meantime, the savings on Australian beef may not last. Thanks to increased global demand for it, prices for Australian beef will go up in the second half of 2014. According to The Daily Livestock Report, “implying higher costs for beef processors and ultimately US consumers.”

5. Chipotle will not disclose which Australian companies are supplying its grass-fed beef, making the environmental impact of importing it widely unknown.

By telling consumers that the Australian beef is from 100% grass-fed cattle that have never been given antibiotics or hormones, Chipotle is providing more information than most companies do about the origins of their meat. But without the names of the companies, consumers can’t fully understand or assess the environmental impact of importing grass-fed beef instead of using conventional beef from closer to home.

Grass-fed beef isn’t necessarily better for the environment than the conventionally raised kind. “To be ‘better’ or ‘sustainable,’ producers must verifiably follow best practices,” said Sims, noting that “climate smart” ranches take steps to maintain soil health and limit their release of carbon dioxide. “To verify whether their beef comes from a responsibly managed ranch, consumers increasingly want to see an independent, third-party standard and certification. The Sustainable Agriculture Network’s cattle standard, used by Rainforest Alliance, offers one such program for beef.”

Arnold says that all imported beef has “USDA label claims and is certified by AusMeat,” but neither address the questions about environmental impact.

6. Chipotle’s ingredients include GMOs and trans fats.

Although Chipotle initially resisted calls to disclose its ingredients, it published a comprehensive list in March 2013, becoming the first national restaurant company to do so.

The annotated list on the website reveals that despite backing GMO labeling, Chipotle’s tortillas and tortilla chips are still made with GMO corn and soybean oil. The tortillas are also made with hydrogenated oils, better known as trans fats.

Arnold said the company “hope[s] to have GMOs removed from all of the ingredients by the end of this year.” Chipotle chefs are also looking for ways to make tortillas without hydrogenated oils, which Arnold said is “so little it rounds to zero under labeling rules [which require listing trans fats only if they are above .5g/serving].” Reconfiguring the tortilla recipe, Arnold said, “isn’t simple” because both the available substitutes — lard, which isn’t vegetarian, and palm oil, which is environmentally destructive — present their own problems.

7. Chipotle’s advertising campaigns are as much fiction as fact.

Chipotle’s advertising campaigns (including the Willie Nelson tracked commercial “Back to the Start”, “The Scarecrow” featuring music from Fiona Apple, and the Hulu original series Farmed and Dangerous) all compare the horrors of factory farming with idyllic, beautiful sustainable agriculture.

But viewers should not confuse these fictional stories with Chipotle’s, or their competitors’, actual practices. For one, Chipotle does rely on conventionally raised meat when it can’t find enough responsibly raised meat. (Importing beef from Australia will help but not solve the problem, Arnold said, as it’s “filling at least some of that gap.”) So it is not as removed from industrial agriculture as the ads imply.

Second, several of the messages these commercials convey are just not true, including that competitors use GMO animals (they do not), that Chipotle uses no GMOs (they do) and that their naturally and responsibly raised animals live in outdoor, open pastures. (That may be true, but can’t be verified without the full definition of its standards.)

8. The restaurant’s “Cultivating Thought” campaign features the work of 10 writers, but none of them are Mexican or Latino.

The creative campaign features 10 pieces of original work from American writers printed on the restaurant’s packaging. But there were no Latino writers on the roster.

“Personally, I was puzzled by the lack of Mexican-American voices for an organization that built itself as a restaurant that’s a Mexican grill,” says Professor Alex Espinoza of California State University, Fresno, who has launched a Facebook page in response. “By not paying attention to the contributions of Mexican-American writers, it says in a very subtle way that Mexican-Americans are not capable of creating stories, that we’re not capable of creating art, and the only thing that we’re capable of doing is standing behind the sneeze guard shoving a burrito full of beans.”

Arnold told BuzzFeed that Chipotle reached out to more than 50 writers, including Latinos, but that none wanted to participate. “It was never our intention to omit any group of writers and there were several Latino authors on the initial list,” he said. “If we do more of these, we’ll continue to broaden that outreach and hopefully add to the diversity of voices.”

9. Chipotle’s two CEOs were paid a combined $49.5 million in 2013, while the average entry-level employee salary starts at $21,000.

CRAIG F. WALKER / Denver Post via Getty Images

Steve Ells and Montgomery Moran, who share the CEO title, have each made more than $100 million since 2011, the New York Times reported in May. Each earned more than the CEOs of Ford, Boeing, and AT&T. An average entry-level employee “would have to work more than a thousand years to equal one year of the co-CEO’s pay,” wrote David Gelles in the New York Times.

“Given the amount of money that Chipotle’s paying its executives, I think it can do a better job of paying its workers and American ranchers, without having to go to Australia,” said Eric Schlosser, the writer and producer of Fast Food Nation (both the movie and the book).

Arnold told BuzzFeed that Schlosser’s suggestion was nonsense.

The day after the Times report on the salaries, investors voted against a CEO compensation plan that would continue to pay Ells and Moran on that scale.

 

Sourced from buzzfeed.com

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How close are you to your nearest burger chain?

Nearest Burger

After looking at pizza places, coffee, and grocery stores, I had to look at burger chains across the country. The data was just sitting there. (Thanks, AggData.)

As before, the map above shows the nearest burger chain out of the selected seven. I chugged along every twenty miles, checked within a 10-mile radius, and then colored each dot accordingly.

With pizza places you saw a lot of regionality despite the national coverage of Pizza Hut. You saw a lot of Domino’s on the east, Little Caesar’s in California, and Godfather’s in the midwest. Similarly, with coffee, Dunkin’ Donuts reigned in the east and Caribou is popular in the midwest.

However, more than a handful of burger chains cover the country somewhat evenly, which gets you this map that resembles sprinkles on a cupcake, save a couple areas of interest. In the Oklahoma and Arkansas areas Sonic Drive-in dominates, and Jack in the Box established itself well in California. We saw a similar geographic pattern in Stephen Von Worley’s burger map a few years ago.

But still, McDonald’s is sprinkled throughout, which shouldn’t surprise since it has more than twice the locations than its nearest competitor Burger King. Keep in mind this includes all the Golden Arches in Wal-Marts, airports, and college food courts.

Because of this expansive burger coverage by McDonald’s and the other major chains, it’s more useful to look at the locations separately, shown below. I also included all the other chains with at least a hundred locations.

burgers

As you expect, it looks like population density in the beginning. Chains are gonna open where the people are. Once you get past Wendy’s though, you start to see region-specific chains.

I’d say Dairy Queen is well-established nationally, but it’s interesting to see a gap with Oklahoma, Arkansas, Mississippi, and Louisiana. Do the folks there not like Dairy Queen? Maybe Sonic has a stronghold on the states in an epic battle for burger supremacy. Or it’s just a totally mundane reason like Dairy Queen started in Illinois, expanded east, and then saw growth opportunity in Texas.

In any case, the separation is more obvious when you look at just Dairy Queen versus a competitor like Sonic, using the same distance formula as the first map.

sonic-vs-dq

The rest of the chains kind of have their regional pockets: Whataburger in Texas, Checkers in Florida, and of course, In-N-Out in California.

Then there’s all the local joints, which I didn’t even touch on yet. I’ll have to leave that for another day though. In case someone is interested, Yelp seems like a good place to start. I poked around the review data for a bit, and it was interesting that the local places almost always reigned review-wise, and profiles for chains basically serve as somewhere for people to complain.

 

Sourced from flowingdata.com