Conduct Unbecoming at Virtuous Costco?

(MoneyWatch)  Any company that's been known to violate what Stanford business professor Bob Sutton infamously calls The No Asshole Rule -- if it hasn't already been held up to shame in his best-selling book of the same name -- can expect to be shamed on a regular basis in Sutton's blog, Work Matters.

Which is why it came as a surprise last week, when Costco -- one of the companies Sutton praises in his book for its positive culture, compensation policies, and how it compassionately treats and rewards employees -- was called out on Sutton's blog for not living up to its usually high standards. Not by Sutton, mind you, but by a person claiming to be a longtime Costco employee who had read Sutton's book and emailed him a long letter with a litany of grievances.

While the letter-writer concedes that Costco workers "are paid very well at Costco and receive excellent benefits," he or she adds that Costco CEO Jim Sinegal "has become too far removed from the 'store level' to see what's really happening on a daily basis." Among the writer's allegations:

• "...The culture that I and my colleagues have experienced is one of micro-management by intimidation. I have worked with a couple general managers and dozens of area managers and I have found that with regard to hourly employees' behavior, they unanimously assume negative intent..."
• "...I have seen a trend over the years that I've been with Costco of employees demoting themselves. I have personally known of 6 individuals who have taken up to a $15,000/year pay cut to 'step down'..."

As Sutton reminds us, Sinegal is not a draconian boss of any sort: He earns a salary that is just 10 times greater than the top hourly employees -- far, far below industry averages. And his employees earn good money far above scale, with store managers hitting well into six figures. Still, with a company the size of $64 billion Costco, the letter, if true, suggests how hard it probably is in a company of that size to enforce Bob's code of conduct.