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ENERGIZING WORKERS

Not only does Raley's try to differentiate its stores, it also tries to differentiate its employees, whom it refers to internally as colleagues. Four years ago I began wondering what we could do to leverage the great asset our colleagues represent, Bill Coyne, president and chief executive officer, told SN. The more people I talked to about it, the more I realized there was

WEST SACRAMENTO, Calif. — Not only does Raley's try to differentiate its stores, it also tries to differentiate its employees, whom it refers to internally as colleagues.

“Four years ago I began wondering what we could do to leverage the great asset our colleagues represent,” Bill Coyne, president and chief executive officer, told SN. “The more people I talked to about it, the more I realized there was something there.”

So he hired Joan Miszak, who holds a doctorate in organizational behavior, as senior vice president of organizational effectiveness.

“Her job was to work with me to figure out how we could be more effective and efficient at having the most energized workforce in the U.S.,” Coyne explained. “Now we're in the third year of engagement coaching, which has energized our colleagues and made them excited to serve customers and to do their jobs in ways that exceed customer expectations.

“This was all built on the premise that the most important person to a colleague is his direct supervisor. So we came up with a cascading model of leadership in which we train one group of colleagues, who share their learnings with the next level, like a cascade, with everyone in the organization having responsibility for passing the message further down the line.”

Raley's came up with two sets of metrics to measure the success of the initiative, Coyne told SN: one to determine the level of employee engagement, and another to determine if employees were following up by engaging customers enough so that customers would promote the company.

To get its workers more involved, Raley's developed a 20-question confidential survey, which it now conducts once a year. The chain's 15,000 colleagues can use their own computers or computers at the stores, and the response rate runs very high — an average of 82%, Coyne said.

“The results of the survey determine how we are doing as an employer and whether our colleagues feel they have the proper tools for good communication with management and with each other,” he said.

The company can break the responses down by district, by store or by department within a store, and then develop guides for coaching employees where needed.

“Each year, we identify three or four corporate priorities, and the first coaching guide of the year talks about those priorities in general and sets the stage for more detailed discussions later in the year,” Coyne explained. “We send the guides to the store directors, and they spend 15 minutes talking to the department heads about that topic, and then the department heads talk to the people who work for them, and gradually the information cascades down. Subsequent coaching guides follow after the first one, with more details and more suggestions on how to be more effective in accomplishing a specific priority.”

To determine the engagement level among customers, Raley's developed a survey that asks them how likely they would be, on a scale of 1 to 10, to refer the chain to a friend or family member. A person whose score is 9 or 10 is considered a promoter; a 7 or 8 is neutral; and 6 or below is a detractor.

That process creates a “customer engagement index” number, which represents the percentage of promoters minus the percentage of detractors, and using that as a baseline, the chain is able to measure its progress month by month and store by store, Coyne explained.

Customers are encouraged, at the bottom of each register receipt, to participate in the online surveys, with the promise that one participant a month will win a $500 Raley's gift card.

Raley's offers an incentive plan to top executives based on annual benchmarks set for improving colleague and customer engagement scores, with increased pay tied to how much scores increase, he noted.

“What I'm most proud of about this program is that we developed it entirely in-house,” Coyne told SN.