The first and necessary step for the model to work was to get a new labor
agreement with EXPO-AM’s unionized work force. Philips, working with EXPOAM’s
Industrial Relations department, negotiated an agreement with the Food
Workers’ Union. The new agreement was signed in June 0f 2000. The conditions
were as follow:
1. Full Time store employees would become “associates” because they would
contribute ideas on the management of stores.
2. For each $25,000 in weekly sales, the Super AM store was required to have
one full time associate—in EXPO-AM stores one was required for every
$10,000 in weekly sales.
3. Each Super AM store would have its own seniority system, eliminating
transfer of associates from other EXPO-AM banners except for promotional
reasons.
4. Super AM pay rates for associates would be 20 percent under those
scheduled in EXPO-AM’s labor agreements.
5. A GSP process would be in place in each Super AM store.
6. All associates in each Super AM store would share in an annual bonus. The
size of the bonus pool would be based on a store’s total annual labor cost
relative to sales revenue. (Exhibit 4 presents more detail).
The new approach reduced each store’s labor complement to 10 full time
employees. EXPO-AM had never operated a store with so few full time employees
but this was the only way to decrease full time hours to 25 percent of total hours.
Under the GSP process associates were encouraged to contribute ideas for better
managing the business. These ideas and issues were discussed and acted upon at
the lowest possible organizational level. Matters only went higher when solutions
affected or required agreement from those outside the group involved. The forum
for discussing ideas and issues was a series of meetings was held on a regular basis
(Exhibit 5). The first and lowest level meeting was at the departmental level in the
store. The second level was at the store level. The third level of meeting was at
the regional level and results were to be known at the store level within two weeks
of this meeting. The fourth meeting was at the head office of EXPO-AM