Vons Contract Links Pay, Store Performance : Sunday Sales, Bonuses Key for Tianguis Workers

Workers at Vons’ seven Tianguis food markets have ratified an innovative contract that will tie their pay to the performance of their stores.

Labor experts said Thursday that the three-year contract, ratified last week by 1,000 workers, is unusual because it links productivity and pay in a service industry. The concept is common in manufacturing where individual workers’ productivity can be more easily measured.

Although contract issues are still being worked out, the agreement includes two key provisions, according to Bill Bailey, director of labor relations for Vons Cos.

First, the company and the union have agreed to a form of profit sharing in which employees would be paid bonuses for helping to boost profit. In addition, employees working Sundays, by far the Latino-oriented chain’s busiest day, would be paid according to a formula based on sales per square foot.

Under a long-standing rule, food industry employers generally pay workers time and a half on Sundays. Unions nationwide fought for that premium years ago, largely in an effort to discourage food merchants from opening on Sundays so that workers could be off.

New Pay Formula

But in recent years Sunday has become a huge shopping day. Tianguis assigns 85% to 90% of its staff to come in on Sundays to handle the crush of customers.

With the aid of UCLA Prof. William G. Ouchi, a management expert, the El Monte-based company and the United Food and Commercial Workers devised a new pay formula. The UFCW represents the Tianguis chain’s clerks and most of its meat cutters.

Workers will start out making straight time on Sundays, but their pay will be adjusted upward as sales rise. Company and union officials anticipate that workers eventually could earn nearly double the straight pay.

Audrey Freedman, a labor economist with the Conference Board research group in New York, praised the contract as one that should promote teamwork.

“They’re paying workers for the burden of serving more people,� she said. “It encourages cooperation (because) a group is being rewarded on a group basis for taking on an extra load.�

Ranging from 21,000 to 60,000 square feet, the Tianguis stores are more dependent on service than typical self-service supermarkets. The larger stores employ as many as 400 workers.

Among other departments, they feature a large delicatessen, a Mexican-style bakery, a pizzeria and a tortilleria, where workers make and bag tortillas daily.

“The Tianguis operation is labor intensive,� said Rick Icaza, president of UFCW Local 770 in Los Angeles. “They service you to death. Tianguis allows employees to kibitz, making it more of a social event.�

Union sources noted that profit sharing programs of one sort or another do exist at a few other chains in the East, including A & P and Kroger stores.

But the Tianguis pact is unusual in tying Sunday wages to productivity and in combining two job categories--food clerks and lower-paid general merchandise clerks--into one, affording Tianguis more flexibility in assigning workers.

Icaza said the union is excited about the possibilities. “We like the idea that if we work hard we can earn potentially more than in the mainstream,� he said. “I think this may be the contract of the future.�