- Joined
- Jul 19, 2011
- Messages
- 28,269
- Points
- 113
http://www.theglobeandmail.com/news...lity/article15316231/?section=2&autoplay=true
It's not a uniform story though. Through his company’s 35-year history, Leonard Lee, founder of Lee Valley Tools, has ensured the highest-paid worker never makes more than 10 times the wage of the lowest-paid worker. By contrast, that ratio averaged 122-to-one last year (in terms of CEO-to-average worker pay) at Canada’s biggest companies. The maker and retailer of woodworking and garden tools evenly distributes a quarter of pretax profit to its staff of 850 each year. Profit-sharing isn’t the only unusual aspect of its corporate culture. Lee Valley has never had layoffs in its history, never outsourced jobs and its executives get no bonuses.
The approach is easier at a family-run company that’s not publicly listed nor obliged to meet quarterly targets, Mr. Lee notes. But Lee Valley isn't the only company taking this approach. In the U.S., Whole Foods famously keeps its CEO-to-average worker pay ratio at 19 to 1. Costco, which has never had a major labour dispute in its history, ensures its workers in both Canada and the U.S. earn a living wage. And there are business benefits. At Lee Valley, Mr. Lee has found the flatter pay structure pays off in better worker retention and more engaged staff. It has encouraged the company to train and develop its own workers. It also boosts productivity and innovation, he says, because staff see the benefits of their actions.
It's not a uniform story though. Through his company’s 35-year history, Leonard Lee, founder of Lee Valley Tools, has ensured the highest-paid worker never makes more than 10 times the wage of the lowest-paid worker. By contrast, that ratio averaged 122-to-one last year (in terms of CEO-to-average worker pay) at Canada’s biggest companies. The maker and retailer of woodworking and garden tools evenly distributes a quarter of pretax profit to its staff of 850 each year. Profit-sharing isn’t the only unusual aspect of its corporate culture. Lee Valley has never had layoffs in its history, never outsourced jobs and its executives get no bonuses.
The approach is easier at a family-run company that’s not publicly listed nor obliged to meet quarterly targets, Mr. Lee notes. But Lee Valley isn't the only company taking this approach. In the U.S., Whole Foods famously keeps its CEO-to-average worker pay ratio at 19 to 1. Costco, which has never had a major labour dispute in its history, ensures its workers in both Canada and the U.S. earn a living wage. And there are business benefits. At Lee Valley, Mr. Lee has found the flatter pay structure pays off in better worker retention and more engaged staff. It has encouraged the company to train and develop its own workers. It also boosts productivity and innovation, he says, because staff see the benefits of their actions.
