OK Foods is raising its base hourly pay rate by 30 cents and awarding new cars to employees to encourage chicken plant workers to stay put.
More than 2,000 hourly production workers will get pay increases, the Fort Smith-based company said Wednesday. They also will be eligible for attendance incentive pay of $1 per hour and a 50-cents-per-hour production bonus in select chicken plants, including those in Arkansas.
While rates vary by position and location, the new base pay will increase by 30 cents per hour, OK Foods said. The rate increase took effect Sunday.
"Our team members are the backbone of OK Foods," Trent Goins, president and chief executive officer, said in prepared remarks. "Accordingly, we believe it is important to provide competitive compensation, and we expect that our team members will continue to grow with us as we further our mission to nourish the world."
A spokesman with OK Foods said the base rate for entry-level production workers would increase from $9.70 to $10 and $10 to $10.30, depending on the location. Considering the other bonuses, Bailey Moll said, employees have the capacity to make $1.80 more per hour if the plant meets its production goals, or an extra $3,744 a year.
"That's a lot for a lot of people," Moll said.
Efforts from meatpackers to increase wages as a temporary fix stems from an ever-tightening labor force. However, efforts to retain workers with 10% and 20% wage increases have been "at best, minimally effective," said Rabobank analyst Christine McCracken in a labor report.
"At present, the magnitude of the increase needed to stem the loss (estimated to be upward of 40%-50%) exceeds the company's willingness to pay," she said in the report published last summer.
As part of its incentive efforts, OK Foods also recently started a program that enters employees with perfect attendance into a quarterly drawing for rewards, like extra vacation days and new cars.
Last month, Rosa Mayorga, Maria Herrera and Vikki Downs each won an extra week of vacation, while Duc Vo, Manuel Gutierrez and Felipa Garmendia each won new Buick Encores.
OK Foods began doing this in Fort Smith in April, Fort Smith television station KFSM, Channel 5, reported.
"We appreciate the dedication of those who work in our production facilities and are excited to see their professionalism rewarded," Christy Terry, vice president of people services at OK Foods, said in prepared remarks.
Martin Thoma, principal of Thoma Thoma marketing agency in Little Rock, said the car giveaway aligns with some of the work he does with clients, emphasizing the importance of corporate culture over strategy, innovation and technology.
"They're using financial and culture incentives to retain, motivate and drive human performance factors," Thoma said. "They're saying 'Hey, if I show up to work every day then I've got a chance at winning a new car.' The fact that they've given away five, means that they are putting their money where their mouth is."
Poultry workers on the production line deal with high noise levels, extreme temperatures and develop physical injuries or disorders from handling dangerous equipment and chemicals, such as knives and ammonia, according to the Labor Department. This has led to historically high illness rates. Compared with the national private industry average, on-the-job illness cases in the poultry industry were more than six times higher in 2013, or a ratio of 16-to-104.
Arkansas poultry workers earn on average $13.84 per hour, or $28,792 annually, according to a study from the Northwest Arkansas Workers' Justice Center, a nonprofit group based in Springdale. More recent data published last year with the U.S. Bureau of Labor Statistics, however, shows they earn closer to $12.58.