Unit 6 project _Dollar General

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Feb 20, 2024

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1 DOLLAR GENERAL BY GARY QUICK PARK UNIVERSITY COMPENSATION MANAGEMENT (HRM 637) UNIT 6 PROJECT – PART C

2 Current state of Dollar General’s compensation Dollar General has the largest number of store locations in the United States, beating the goliath of retailers, Walmart. With over 17,600 stores in 46 states, and with ts well-known golden and black logo, it has become a growing enterprise across the country (Reed, 2021) . They incorporate a merit-based pay structure; however, this is not to say they have had their own share of issues with this structure, they have. Currently, entry level salaries are approximately $21,000 a year (according to 2023 estimates). Assistant manager’s salaries are $33,000 yearly, and a Store Manager’s salary is about $45,000 a year. Executive salaries tell a different story though. Average pay structure for executives is $237,000 (with a range from the average, to $2M). The current CEO of Dollar General is Todd Vasos, who averages about $15.6M in his total compensation. Let break that down. Hourly, an entry-level employee can make $10 to $12 an hour, Assistant Manager about $15 an hour, and Store Manager about $21 an hour. Although the company boasts a wide array of benefits for employees after a 90-day probationary period (such as health insurance, flexible spending accounts, short and long-term disability insurance, and employee discounts), the average for an executive working here is approximately $113 an hour. Executive salaries are typically more than the employee at a company. That being said, the disparity of compensation between its executive branch and store employees is evident and problematic, to say the least. After discussing the issue with employees at the local store, the feeling of the disparity is confirmed. Employees do have bonus opportunities if their store makes sales plan and it deemed profitable, but the bonus structure is minimal. This only compounds the company’s issues for a fairer pay structure. Perhaps they should look at a skill-

3 level pay compensation plan (I know I am not supposed to give recommendations at this point) or a combination of both a merit-baes and skill-based element. The disparity in pay, long working hours, lack of a work/life balance, and overwhelming duties enhance a poor morale driven problem. Currently, the CEO has an approval rating from its employees of only 57% and a 62% for a work/life balance. According to Indeed.com, other employee reviews rate the company at a 2.5 (out of 5) for compensation and benefits, a 2.7 for job security and advancement, 2.8 for its culture, and 2.8 for management in general. Because of the lack of attention to its pay scale and low employee ratings, many Dollar General store employees look to unionize within the company. This topic will be discussed shortly. Special groups and executives As previously stated, the average executive salary is around $237,000 plus stock-options and bonuses. The average work hours for an executive here can be quite long though. On average, and executive usually works 60-70 hours aper week and can be on-call for weekends. This is true with any organization. Longer hours are expected and are a requirement, hence the level of pay. The company has a CEO (Todd Vasos), an EVP and CFO (Kelly Dilts) a Chief People Office (Kathy Reardon) a CIO (Carmen Wenkoff), a Chief Medical Officer (Albert Wu) and 10 other members of its executive branch. There is a board of directors and a leadership team as well. This top-heavy executive structure prides itself on the company being a non-unionized entity. Union’s role at Dollar General There seems to be a dire need for union interventions at the company. Low pay as well as pay

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4 disparities derive a growing concern from their employees. As previously stated, the company is aggressively opposed to unions with a company philosophy of remaining a union free environment ( Sainato, 2021). In one such instance in Connecticut, a union vote was scheduled for the United Food and Commercial Union (UFCW). In this instance, five workers at the store voted to unionize. Six votes were needed. The day before the cut-off for the final vote, the sixth employee was abruptly fired. It is of special note that this sixth employee had no counseling notices from the company, was never late for his shift, and was considered a model employee from store management. About an hour after his shift, he was notified by store management that his services will no longer be needed. All the employees at the store had wished to remain anonymous for the fear of retaliation from management. Dollar General is considered an “at- will” employer. Hence, they can terminate employment with an employee for any reason at any time. Another such instance was that of a market planning analyst at corporate employee was terminated after sending emails to his superiors with concerns about poor Covid responses from the company (Sainato, 2021). In 2017, a Dollar General store voted four to two to unionize. This was the first store to do so. The company disputed the ruling but lost the appeal in court. Soon after the appeal, the company decided to close that store, citing future profitability concerns. It has been noted from employees that the company has sent in “union busters” to squelch any voting attempts to unionize. Today, employees still feel a growing need for unionization to improve wages and work environment. International compensation The company is opening 10 new stores in Mexico along with the United States. There they plan

5 on what makes the company great and adapting it to the Mexican retail landscape (Wilson, 2021). If the venue from Mexico is successful, other markets should and would be explored for future growth and sustainability. Compensation elements that impact Dollar General The company has a well-earned reputation for lower pay and disparity between their employees and management. They do, however have and attractive compensation package (as previously stated). After the probationary period, these is a host of benefits they offer. That is not the central issue though (according to store associates). In the end, the issue is low pay that is not comparable to other companies in the market. Attempts at unionization have only compounded the issue even more. Employees have criticized the pay structure, work-life balance, and store safety. Dollar General is known for being a habitual offender of state and local safety ordinances from OSHA to the point that OSHA has reported the company to new organizations and outlet in the desire to get the company’s attention. From my dealing with the company, they tend to have crowded isles of product that needs to be put away. This is especially true on a day where they receive their replenishment trucks. On these days, you can find some of the aisles unshoppable with only one or two employees working. They incorporate a merit-based pay compensation structure, but it seems the need for it to be reviewed and revitalized is necessary. Conclusion Dollar General has tapped into a customer driven, low-cost retail juggernaut. It may not be the

6 vastness as a Walmart, but I have seen these store in more rural areas whereas the retail giant, Walmart, tend to be more city and town driven in its expansion. You couple this convenience with low prices that are a measurable difference compared to a gas station/convenience store with an increased product selection, and you have a recipe for increased customer traffic and customer satisfaction that will keep them coming back for more.

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7 References Dollar General - Org Chart, Teams, Culture & Jobs . (n.d.). THE ORG. https://theorg.com/org/dollar- general Dollar General Corporation (DG) Leadership & Management Team Analysis . (2023). Simply Wall St. https://simplywall.st/stocks/us/consumer-retailing/nyse-dg/dollar- general/management#:~:text=Dollar%20General%27s%20CEO%20is%20Todd%20Vasos%2C%2 0appointed%20in Dollar General Salaries: How Much Does Dollar General Pay In 2023? - Zippia . (2020, August 27). Www.zippia.com. https://www.zippia.com/dollar-general-careers-3515/salary/ Sainato, M. (2021, October 19). “People are fed up”: Dollar General workers push to unionize amid hostility from above . The Guardian. https://www.theguardian.com/us- news/2021/oct/19/dollar-general-employees-union-drive-workers Weaver, R. (2022, April 20). Dollar General: Company with CEO to Worker Pay Ratio of 1:935 Gives CEO an Unusual Travel Perquisite . As You Sow. https://www.asyousow.org/our-work/ceo- pay/blog/2022/4/20/dollar-general-company-with-ceo-to-worker-pay-ratio-of-1935-gives-ceo- an-unusual-travel-perquisite Wilson, M. (2021). Dollar General plans to go international with Mexico locations . Drug Store News. https://drugstorenews.com/dollar-general-plans-go-international-mexico-locations

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