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Keogh 12 Nudges: Woolworths' Underpayment of Staff

December | Leadership Development | Read time: calculating...

12 Holiday Nudges: Woolworths’ response to underpayment

Nudge 11: Woolworths Underpay Staff

Wage theft has made the headlines a few times in 2019, first with George Columbaris being slapped with a fine of $200,000 for underpaying staff $7.8 million in wages. Beyond the financial punishment, the media personality’s brand took a serious hit and he became persona non-grata on the very TV production that helped bolster his restaurant endeavours.

More recently, Woolworths has caught the ire of retail workers and the general public with reported employee underpayments of around $300 million. There’s also an ongoing class action from staff who believe that this amount may have in fact been higher.

Woolworths Store at Commercial Road East Mt Gambier

Woolworths store in Mt Gambier, South Australia.

While Woolies’ systems for calculating overtime, etc, need to be looked at, something else needed to happen first. Where leadership fails is when everyone looks at each other because no one wants to take responsibility. That doesn’t mean owning a mistake that isn’t yours but owning the responsibility to fix it. Doing so makes you a true leader.

The supermarket giant has come forward and stated: “Woolworths Group is committed to fully rectifying these payment shortfalls and an extensive plan is in place to ensure salaried team members’ pay is correct and compliant moving forward.”  Additionally, the CEO will forego his short-term bonus (around $2.6 million).   

Admitting to one’s mistakes as a leader is vital to success these days. It builds trust, creates an environment of psychological safety, and is key to innovation. Feeling free to experiment is key to making innovation happen. More importantly – and we hope that this is the case with Woolworths – building a culture that actively seeks to learn from its mistakes is more likely to succeed.

Ask yourself “How comfortable am I  saying “I don’t know?”. Try it out for size sometime. And how are you as a leader responding to mistakes? Are you using them to create a powerful learning moment for the individual and the organisation?


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