As the largest retailer in history, Walmart was chosen as object of this study. The present case aims to be relevant by discussing Walmart's issues, due to its importance for the modern American economy, once the company has become an integral part of it.
Although Walmart is target of effusive praise, by employing 2.2 million people, the firm has been also the target of vicious attacks. The increasing at wages and problems with paying low wages has been widely discussed in the global media. For that reason, it will be the focus of this case study from the human resources view, specifically from the topic “Employee motivation”.
The American multinational retail corporation, WalMart Stores, Inc., operates a chain of discount department and warehouse stores, with a number over than 8,000 stores, employs more than 2.2 million people, and sells more than $400 billion worth of goods in every year. The company's low prices assure that its stores are economically accessible, as its slogan “Save money. Live better” emphasizes.
Whenconcernstothehumanresources point ofview, asa resultofhavingover 2.2million employees worldwide, it is important to highlight some facts as the company is the largest private employer in the United States, employing more African Americans
than any other private employer in the United States.
Despite the history of low wages, inadequate health care, poor working conditions and anti-union policies taking a negative place in the image of the company, the human resources department of Walmart assure they recognize the importance of the employee, calling them “associate” inspite of “employee” and also assure:
“ HR'S ROLE IS TO FOCUS WAL-MART'SLEADERS AND EMPLOYEES ON CONTINUOUS LEARNING, CONTINUOUS IMPROVEMENT, SUPERIOR EXECUTION, EMPLOYEE EMPOWERMENT, AND EMPLOYEE OWNERSHIP. WAL-MART LIKES TO HIRE PEOPLE WHO ARE ENTREPRENEURIAL MINDED WHO AREN'T AFRAID TO ROLL UP THEIR SLEEVES AND WORK LIKE THEY OWN THE BUSINESS. THEY ALSO LIKE PROBLEM SOLVERS. TEAM SUCCESS IS VALUED OVER INDIVIDUAL SUCCESS WITH THE GOAL BEING THE ACHIEVEMENT OF TEAM SYNERGY. WAL-MART TEAMS ARE HIGH LYPRODUCTIVE BUT AT THE SAME TIME THE STA#NG LEVELS ARE LEAN.
MANAGERS ARE TAUGHT TO PITCH IN TO HELP EMPLOYEES GET THE WORK DONE WITHOUT THE NEED TO HAVE EMPLOYEES WORK HIGH COST OVERTIME.”
Two of the most broadly accepted models of human resource management are the hard and soft approach. The organization has been using a hard approach to achieve its objectives. The company provides one of the lowest wages in the market, offers minimal training, close supervision and monitoring, and intensification at work. The approach used by Walmart is related with its strategy to achieve profits but at the meantime offer low prices for its customers.
Walmart have been being the main headline for years because of infamous
employment practices. Some examples are about: wage law violations, inadequate health care and exploitation of workers. Economists from Cato Institute consider that Walmart is successful because it sells products that consumers want at low prices, satisfying customer´s needs. A result of this is the immateriality, the treatment of employees it not one of the main goals of the company.
Because of these problems, employees leave the company at the first chance they have and Walmart has 44% of annual turnover of employees, which is a huge number of workers, seeing that the company has more than 2 million of workers worldwide. Some consequences are: lost sales from in-store customers, generally surly attitudes among workers, diminishing the Wal-Mart shopping experience."
Walmart could increase the motivation of its employees increasing compensation and benefits. The company should change drastically its strategy to afford a reasonable increase in wages. As said the profit of Walmart comes from paying low wages and offering low prices. The organization is cost driver oriented instead of sales driver. The solution consists in increasing the wages and at the meantime changing the price of products.
However, the organization should analyze with strict criteria the willingness of customers to buy the products that have an elastic demand. Provide fair salaries result in happy employees and more satisfied shoppers. Walmart pays $9/hour against $20/hour paid from its main competitor called Costco.
Other fact that should take into account is the amount of money Walmart spend in hiring new employees every year. Analyzing the turnover is possible find 17% to Costco against 44% to Walmart during the first year at the company. To support the solution proposed is required offer more training for employees to increase their productivity.
To sumup, beingan organization thesizeof Walmartitisveryhardtomanagethe operations and tasks unless a very well process have been designed for each and every organizational activity. From a human resource perspective the solution offered could be one way for Walmart change its image regarding treating employees. The results will be a small increase in prices, decrease in costs related with high turnover and hiring, higher salaries and loyal customers. All the stakeholders will be more satisfied with the results of employees well treated.