Although the announcement raised analyst eyebrows, it’s a smart move for Walmart – and given that the company’s influence as the world’s biggest retailer, could be good for society too.

It made the change to hold onto key managers, who are especially important at Walmart’s Supercenters, which can be as big to 200,000 sq ft and stock more than 100,000 product lines.

But the pay bump can help in other ways, too. Walmart has been attracting more higher-income consumers as middle-class families have seen their incomes squeezed by inflation. One of the simplest ways to keep them coming back is to get the retail basics right: Keep the fresh produce appealing, shelves stocked and aisles clean. Motivated managers can make a difference.

Unsurprisingly, better paid workers tend to be happier workers, according to human resources analytics company Revelio Labs.

There’s evidence this contentment can boost company and stock performance. In a 2012 study, Alex Edmans, Professor of Finance at the London Business School (then at Wharton School), found that firms on Fortune’s list of 100 Best Companies to Work for in America, which have superior employee satisfaction scores on factors including pay and benefits, outperformed peers by 2.3 per cent to 3.8 per cent per year from 1984 through 2011.

A follow-up by Hamid Boustanifar, associate professor at the EDHEC Business School, and Young Dae Kang of the Bank of Korea found that the relationship still held: Companies on the publication’s list earned an excess return of 2 per cent to 2.7 per cent per year through 2020, with particular outperformance during tough times.


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