Human Resources Challenges and Strategies Associated with Wal-Mart Incorporation - Case Study Example

Running head: analysis of an International organization 29th January Introduction Based on stiff competition in the domestic and foreign markets, it is vital for firms that are focused at becoming competitive to maintain a productive work force. This means that managers must initiate motivational factors that cater for the needs of the employees regardless of their position in the company. Despite their efforts to improve the productivity of their employees, companies are faced with various challenges that managers must put measures to deal with them. Such challenges include low wages, lack of skilled man power, gender discrimination and strikes among others. The aim of this paper is to review the profile, demographics, human resources challenges as well as strategies associated with Wal-Mart Incorporation. Analysis of Wal-Mart Incorporation Wal-Mart store is an international retail business that deals with wide range of products. Being the number one retail outlet in US as well as in the world according to the fortune 500 2013, Wal-Mart is headquartered in Bentonville, Arkansas. The company, whose operations are in the local as well as in the international markets, it highly values its brands in order to maintain a strong positive relationship with its customers. With an approximately 2.2 million employees, Wal-Mart Company has more than 4000 stores, 620 Sums’ club warehouses and more than 3000 supercenters. The international market contributes 29% of the company sales. Based on its expansive operations in Europe, Japan, Canada and Latin America, the company has continued to enjoy increase in revenue and profits (Vance and Scott, 1997). For example, in 2013 the company revenue stood at US$ 469.162 billion while the net income was US$ 16.999 billion. Through the remarkable financial performance under the leadership of Robson Walton (Chairman) and Doug McMillon (CEO), Wal-Mart has been able to expand in other markets thus expanding its customer base. The company has more than 400 million customers who are located in various parts of the world. Through its wide range of quality brands, the company has effectively met the needs of its customers while at the same time it has effectively faced off its main competitors such as Target Corporation, Carrefour SA and Costco Corporation (Wal-Mart Stores, Inc. Company Information, 2014). Wal-Mart purpose is to increase its returns through provision of quality brands both in the local and in the international markets. Additionally, the company aims at expanding its stores in the US market as a way of meeting the increasing needs of the local consumers. Common HR challenges facing Wal-Mart Despite its large number of customers, Wal-mart Company has continued to face a number of challenges in its work force an aspect that has made the company to be criticized by its competitors and other stakeholders. For example, the company has faced quite a number of lawsuits based on the problems that have been faced by its work force. Some of the notable problems that the company has been faced with include low wages, in adequate health care, anti-union policies among other poor working conditions. Based on the low wages that Wal-Mart pays its workers, more than 70% of new employees who join the company on yearly basis leave the organization within the first year of their duties. It is essential to note that employees are not only motivated by monetary factors but also it vital for the employers to provide other factors such as allowances, gifts, opportunity to join labor movement, holidays and training among others. However, on its part, Wal-Mart has been noted not to allow its employees to join unions and strikes. For instance, in 2013, the company was criticized by National Labor Relations Board among other parties for not allowing its employees participate in the Black Friday strikes. Another key challenge that faces Wal-Mart is the high level of gender discrimination that has continued to affect the productivity of its work force (Sellers, 2005). Some of the issues that depict discrimination include low pay and failure to promote female workers. A good example of a case that indicates the level of discrimination in the company is the Dukes v. Wal-Mart Stores Inc. While the female employees forms the majority of hourly paid workforce standing at 65%, only 33% of the female employees are involved in management duties. Influence of International status of Wal-Mart on the common HR challenges Wal-Mart position as an international company has resulted to increased revenue and sales for the company but on the other hand, it has influenced the human resources challenges that the company is facing. Being an international company with large number of its employees in foreign stores, the company faces workforce challenges due to the cultural diversity. In majority of developing countries, gender inequality has continued to be experienced. This implies that in most of the companies, male employees have taken the largest share of the management positions thus disallowing female employees to develop their career. During its operations in such counties, Wal-Mart Incorporation has been forced to emulate the culture of discrimination. Another aspect that has been influenced by the international status of Wal-Mart is low wages for its workforce. It is vital to note that despite the high revenue that Wal-Mart enjoys as the result expansive operation in the domestic and in the international markets, the company does not allocate adequate financial resources to cater for its employees salaries. Based on the high number of employees that the company employs, the amount of wages that they are paid is low as compared to those of the competitors. As a result, the company experiences a high rate of labor turnover due to lack of employees motivation. In the developing countries, majority of companies do not allow their employees to engage in strikes. This is an aspect that Wal-Mart has adopted in such countries during its activities thus making the management to hesitate from allowing workers to join trade movements. HR strategy to deal with common HR challenges To improve the productivity of the employees, it is fundamental for Wal-Mart to emulate effective human resources strategy that addresses all the challenges that its work force is facing. This implies that the company should come up with an integrated flexible benefit scheme to be adopted in all it stores. This entails providing its employees with motivational factors including allowances and annual bonuses for high performing employees. Likewise, the company should provide the workers with adequate training both in house and in local universities. By providing the employees with flexible working hours, the company will allow them to have ample time to take extra training in their fields (Alexander et al, 2000). Wal-Mart should also initiate a strong sponsorship program that allows the workers to choose they deem fit and which will improve their productivity. This can entail forming linkage with foreign universities especially where the company has established its stores. To initiate a strong team work among the employees, Wal-Mart management should remove all the obstacles that disallow the workers to join labor unions. By joining the labor movements, the employees will feel that their rights are protected an aspect that will result to their high performance and a strong positive employee-employer relationship. Even though the employees are motivated by high salaries, their performance is more influenced by other aspects such as bonuses, holidays and gifts. This means that for Wal-Mart to improve the performance of its workforce, it is essential for the company to initiate annual social occasions where it provide its workers with gifts while at the same time taking its employees to foreign countries for holidays. Effectiveness of integrated flexible benefit scheme strategy Integrated flexible benefits scheme is an effective strategy that will make Wal-Mart to improve its human resources. As the competition in the global market continues to become stiff, many international companies such as Coca-Cola and Toyota have embarked on improving the performance of their employees by adopting very effective integrated flexible benefits scheme. This has resulted to very low rate of labor turnover for such companies. In its part, Wal-Mart has continued to lose its workers to such firms an aspect that is accused by low motivation and failure to provide employees with opportunities to develop. By initiating all the aspects that make up the integrated flexible benefits scheme including training, bonuses, promotion, annual holidays and gifts among others, the company workforce will highly improve leading to an increase in revenue generation and sales by almost 50%. It is important to note that Wal-Mart is an innovative company that produces quality brands that meet high demand in the local and international markets. This implies that if the company produces more brands and lowers the level of turn-over, it will effectively sell the brands in the market thus generating more revenue. In the same way if the company maintains a motivated work force, employees will be willing even to work in foreign markets where the company is focused at entering. This will ultimately result to increase in sales and profits. Conclusion Wal-Mart success greatly depends on the productivity of its employees. With a large number of employees whom are located in various company stores, the company has continued to enjoy an increase in revenue and sales. Thus, the company management team should initiate effective human resources policies to deal with the challenges that include low wages, high rate of turn-over, no allowing workers to join labor union and gender discrimination. Through integrated flexible benefits scheme, Wal-mart will effectively face off the key challenges it faces in its human resource that attaining a competitive edge. References Alexander, P., Ryan, R and Deci, E. (2000). Intrinsic and Extrinsic Motivations: Classic Definitions and New Directions. Contemporary Educational Psychology, 25, 1. Sellers, M. (2005). Women Against Wal-Mart. Christianity Today. Retrieved January 28, 2014. Vance, S and Scott, V. (1997). Wal-Mart: A History of Sam Waltons Retail Phenomenon. New York: Twayne Publishers. Wal-Mart Stores, Inc. Company Information. (2014). Available from http://www.hoovers.com/company-information/cs/company-profile.Wal-Mart_Stores_Inc.e82225a6f3c5e3bb.html Read More