Wal-Mart pays quarterly bonuses to more store employees

September 21, 2016 6:07 AM EDT

Shopping carts are seen outside a new Wal-Mart Express store in Chicago July 26, 2011. REUTERS/John Gress/Files

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By Nandita Bose

CHICAGO (Reuters) - Wal-Mart Stores Inc (NYSE: WMT) said it paid more than $201 million in second-quarter bonuses to hourly store staff as 99 percent of its stores met targets for cleanliness, faster checkout and better service.

The world's largest retailer said 932,000 store employees received a quarterly cash bonus this year. This was a jump from 880,000 employees in the second quarter of fiscal 2016 and 687,000 workers in fiscal 2015.

On a per-employee basis, the average bonus comes to about $220. Quarterly bonuses can account for up to 5 percent of a Wal-Mart store employee's total annual income, the retailer said.

Wal-Mart is the largest private employer in the United States. Its 1.5 million workers include store staff, store management and truck drivers. Hourly employees at the company's nearly 4,600 U.S. locations are eligible for quarterly bonuses based on the performance of their store.

This increase in bonuses comes after the retailer bucked a string of weak earnings by its rivals and reported a better-than-expected quarterly performance last month. Wal-Mart said it benefited from more efficient U.S. stores and higher employee wages that fostered better customer service.

At the same time the retailer is cutting back-office jobs, announcing earlier this month the elimination of about 7,000 positions, mostly in accounting and invoicing at its U.S. stores. It will offer these affected employees consumer-facing positions.

Wal-Mart spokesman Kory Lundberg said until two years ago Wal-Mart's internal targets focused more on metrics like higher store sales. However, in the past two years the retailer has pivoted towards a greater emphasis on customer service by bringing more employees to the front of the store from its back rooms.

Entry-level wages have also been increased to $10 an hour and $2.7 billion will be invested in employee compensation and training over two years, a move Wal-Mart says has contributed to improved service levels.

The retailer also recently launched a new system for scheduling workers at 650 U.S. stores to improve staffing levels during peak shopping times and offer more certainty over hours for employees.

Wal-Mart's shares traded up 0.44 percent at $72.29 per share in early trade on Wednesday.

(Reporting by Nandita Bose in Chicago; Editing by Stephen Coates and Daniel Bases)

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