HRM Practices in Wal-Mart - Essay Example

HRM Practices in Wal-Mart Contents HRM Practices in Wal-Mart Contents 2 Identify the ways in which you consider the TWO functions to be underperforming. 3 Evaluate why you consider it as being an underperforming practice in comparison to effective practices in this area. Your answer should use appropriate HRM theories and models to support your arguments. 5 Analyze how chosen HRM practices can be improved within your chosen company. 7 Provide appropriate recommendations to the Director of the chosen organization as to how those HRM practices could be improved and what the benefits would be to the company by improving them. 9 References 10 Identify the ways in which you consider the TWO functions to be underperforming. The company which has some underperforming human resource practices is Wal-Mart. The two human resource practice that is underperformed in Wal-Mart is employee relation or motivation and employee employment practices such as pay, rewards and training and development. Wal-Mart follows the cost leadership strategy and aims at becoming the lowest cost retailer in the industry. It achieves that by various cost cutting strategies that hinders the human resource practices in Wal-Mart. It tries to builds its low cost on the employment policies by achieving extraordinarily low costs on the employment. In order to maintain its competitive advantage Wal-Mart incorporates various low cost HR practices. It has tried to cut down cost right from the time of hiring by recruiting large number of employees and not only that by violating cheap child labour and the minors. The cheap price of acquiring such labours give them more of cost competitiveness than its competitors. Wal-Mart has even been seen showing discrimination towards employees who has certain disabilities, though such people may have the appropriate skills but they would be more costly for the firm. Wal-Mart has set high demand standards which have forced the workers to work beyond their normal working hours. They even show discrimination towards women working in their organization by denying them promotions, and at times even paying them less compared to men. They are even demoted if they complain just for the reason that Wal-Mart has to maintain cost reduction than its competitor. There is not an effective pay and reward model followed by Wal-Mart that would in turn help the employees to remain motivated. Wal-Mart follows its low cost strategy by cutting down the cost on wages every year. It pays very less wages to its Chinese labours. Wal-Mart maintains very low employee relation by not even providing them with proper healthcare facilities. The works have to pay 36% of the premium cost for the health insurance as the company does not bear any additional cost in order to follow its low cost strategy. Wal-Mart has down the line exploited its workers which in turn will reduce the dedication and loyalty of these employees towards the company. A less satisfied employee will not perform above the mark to deliver appropriate profits for the company. As Wal-Mart is on the process of reducing cost so they would not entertain any low performers and would dismiss them resulting into higher turnover rates. This high turnover would eventually increase the cost as there would be some additional cost associated with the recruitment of new people and then the training & development sessions that would be required for the new employees. Wal-Mart is accused by its workers for the low compensation policies that it follows. The workers at Wal-Mart are offered the lowest compensation compared to other organizations and at the same time the workers are made to work for longer hours even without providing them with any short breaks and cutting down on the meal hours (Aswathappa, 2012, pp. 56-58).The low cost strategy of Walmart forces the HR practices on training and development of the employees shorten. Some newcomers are not even given proper training in the organization and asked to show their performance efficiency. Though the company handles a large work force but it still needs to perform well on those areas which gives a competitive advantage indirectly to an organization. This is true having effective HRM practices that makes sure that the company is keeping its employees happy and reducing on the turnover rates. Walmart has been accused by its workers to show discrimination this is turn creates de-motivation in employees. This aggressive low cost strategy of human resource practices can affect the reputation of Walmart greatly in the future. If it does so then it could cost higher for the organization and even affect the long term profitability of Walmart. Evaluate why you consider it as being an underperforming practice in comparison to effective practices in this area. Your answer should use appropriate HRM theories and models to support your arguments. The practices that are adopted by the company are underperforming compared to those effective practices in the area. The HR practices that are adopted by Walmart are based on the contingency theory of best fit. This model sates that in order to achieve the best fit there is a combination of organizational environment, competencies of individuals and the job demand. This mixture of the factors has to be kept in account in order to achieve the best fit. The leaders in the company are more focused on maintaining a low cost strategy and develop the desired leadership styles that are a best fit for the situation. But the workers are very much dissatisfied with the working culture of Walmart. These practices are below the performance level, as they are focused on cutting down the cost component than improving the efficiency of the workers. This kind of contingency approach is handled by many of the retailers and supermarket chain but they do not involve cost cutting on the basis of providing low compensation to the employees. This results into poor employee relation and even brings the motivation level of the employees. Unionized supermarkets, Tesco supermarkets following the contingency approach could make the employees satisfied by providing the best training practices and a reasonable high compensation in the industry. According to the service profit chain of HRM strategy formulation the practices followed in Walmart is much below in the performance level criteria (Wilton, 2010, pp.167-168). The service profit chain illustrates that only a satisfied employee could give out high efficiency in performance compared to those employees who are not satisfied with the company. But Walmart follows this chain in the reverse style in which only the profits and its competitive advantage matters for the company and in order to achieve it they can cut down the overhead costs and even offer no rewards and less payments to its employees. They even do not provide the required training that is essential for its employees. This in turn does not achieve the strategy of best fit but compromises on the essential human resource practices that gives an organization a competitive advantage as the competitive advantage is provided by some of the basic human capital resources such as judgment, skills and intelligence of the employees of the firm. The firm adopts the practice of best fit for achieving the competitive advantage but pays very less focus on the skill enhancement that is needed for giving Walmart a competitive advantage. Walmart works on the lowest cost strategy and in order to do so it opts for cutting down the costs on various employment practices. But this is not an effective measure as it makes the employee very less satisfied with the work he is performing. These HRM practices that based on the contingency model that is followed by the is under performed than the level of performance of these practices as it is not achieving the best fit module but resulting into more of dissatisfied employees. These employees are accusing Walmart on the discrimination and lower compensation policy that the company follows which in turn results into less retained customers. The practice within the contingency model reflects that the system must incorporate the interest of the individuals working in the organization as well as the core competence of the organization. But the practice that Walmart conducts does not enhance the interest of the employees but only seeks to achieve the low cost strategy and be a low cost leader in the retail industry. Analyze how chosen HRM practices can be improved within your chosen company. The basic two major problems that employees in Wal-Mart have been facing over the years are been seen in this research report that are related to the rewards that are not been given to them rather the employees are been forced to work for overtime without any employee benefit been given and second being that the employees are not given any kind of training program for their growth of knowledge and skills (Armstrong, 2010, pp. 199-205). Wal-Mart even been a globally big giant is facing problems from its employees and it causes a huge impact over the company. The company’s Human Resource department should look to come up with policies in providing rewards to its employees over the work that they do, this helps in creating motivation among the employees and it helps them to give their best in the performance. For example in the Swedish retail chain of ICA Maxi both the customer and the employee satisfaction is kept in mind and the rewards are given to the best employee in various forms like cash or promotion or by some gift items or by sponsoring a family tour. In the same way another retail giant like CCD rewards its employees by giving various facilities and also gives them more salary for working overtime and doesn’t forces them to work overtime without the requirement. Not only in case of retail companies but reward system is also there in other type of industries like in IT sector in IBM the employees are given various rewards in form of cash or foreign trips and also for over time the employees gets extra amount per hour. The various reward systems that can be done are like been followed by Dierbergs Family Market which are like hiring a caterer to provide lunch for everyone once a week this will help to improve the communication among the employees and break various barriers and also motivate the employees by coming up with various ideas from them for the betterment of the process and giving award for the best upcoming idea. The HR department of the company should also look to provide training and development to the employees to have a continuous growth of the employees along with the company’s growth. The training and development of the employees will improve the skills of the labours as a result of which the company will only be benefited and get better and efficient performance from the employees just like the T&D provided in McDonald’s wherein the normal staff member goes on to become the store manager (Storey, 1999, pp. 187-193). It can also create a note pad for every individual where they can note and write their own performance and have an access to it. Different training programs can be conducted like FedEx conducts outdoor programs conducting various games and programs which help them to increase the unity and brings a lot of team building skills among the employees. In the same way Wal-Mart must conduct certain events to bring new skills in the employees like team building, leadership and also help the employees to learn to work in pressure situations. Provide appropriate recommendations to the Director of the chosen organization as to how those HRM practices could be improved and what the benefits would be to the company by improving them. Director of Wal-Mart must look to improve the HRM practices in the company by providing reward system and also providing training and development to the employees in a huge scale so that the employees gets enough motivation from the company and are motivated to work efficiently for the company and help the company in improving its productivity in all sides. The director must look to gain not only satisfaction from its customers but also from its employees. By implementing the reward system and also by providing training o the employees the company will get lots of benefits as it will increase the working interest level of the customers and also improve their skill of working. These changes will bring in god work environment in the company and also make the employees have faith and belief over their managers and also the company. Forcing the employees to work for more time without giving any benefits to them will lead to revolt from the employees and also Wal-Mart being a retail chain the employees are directly in touch with the customers and with the disinterest rising among the employees it can affect in the way they behave with the customers as a result of which the customer relation might get hampered. Thus the director must look seriously towards these two factors of making the work environment more interesting for the employees by providing rewards to them and also by helping they grow in their skills by undergoing various training and development programs. References Armstrong, M. 2010. Armstrongs Handbook of Reward Management Practice: Improving Performance through Reward. London: Kogan Page Publishers. Aswathappa, K. 2012. International HRM. New Delhi: Tata McGraw-Hill Education. Storey, J. 1999. New Perspectives on Human Resource Management. London: Cengage Learning EMEA. Wilton, N. 2010. An Introduction to Human Resource Management. Great Britain: SAGE. Read More