Human Resources Management Practices in Walmart - Case Study Example

Human Resources Management Table of Contents Introduction 3 Literature Review 3 Critical Analysis 5 Conclusions and Recommendations 7 Reference List 8 Bibliography 9 Introduction Wal-Mart has been a renowned organisation in the US for many years. In the recent times, the company has transformed into a household name across the world with its rapid expansion policy. Advertisement of the company’s low price policy can be presently identified and known in nearly all languages of the world. Owing to such huge growth, Wal-Mart has been hiring a large number of employees from all countries. Wal-Mart has been well-known for its business strategy. The value propositions provided by the company are its regular low prices associated with cost reduction strategy. The core aim of the business is to align all operational activities in such a way that customers can avail the products offered at the everyday low prices, thereby managing the competition faced. This proposition is kept primary because the company desires to facilitate customer convenience so that its clientele does not have to wait for the sale period. Hence, it is implied that savings are made in terms of time and money at Wal-Mart. The organisational size has made it critical for Wal-Mart to incorporate and run highly efficient and functional human resource management strategies. Then again, the company has failed to do. With constant rise in the number of employees as well as high brand value and brand recognition across the globe, it is expected that the company has a human resource policy comprising competitive employee benefit schemes and ensures proper treatment to all employees and the workforce as a whole. The news has been doing rounds that the company faces rampant lawsuits and bad press releases over its human resource management policies. The company is providing lowest wage rates in the industry. It must reconsider the hiring and training policies followed as well as rework on the retention and management policies for the human resources. Literature Review The retail industry in the United States comprises a huge market with a well-established channel of distribution and diverse retail companies that have collectively worked towards development of a competitive and open business environment therein. As per the data published by the US Commerce Department in 2011, total sales within the retail sector accounts for about USD 47 billion (Bustillo and Talley, 2011). Additionally, Fishman’s (2006) reports have pointed out that the retail industry employs over 42 million people. Wal-Mart Stores Inc is globally renowned as the biggest retailer as well as one of the largest employers in the retail industry. In the present scenario, the business environment is evolving and constitutes companies that are running in constant competition to manage one of the most critical components, which is the human resource, in the light of immense competition in the business methods, technologies and concepts. It is well known that human resources form the bottom-line of any company and it is essential to manage the baseline for gaining competitive edge. As per Armstrong (2003), companies can make the best utilisation of the employees by way of effectively satisfying them. Here, employee level satisfaction becomes the key success factor for a company. As per Ashar, et al. (2013), employee satisfaction has been described as the level at which employees of an organization feel happy and fulfilled about their needs related to workplace. Such satisfaction of the employees plays a critical role in attainment of the organisational goals, thereby providing motivation and also raising a positive morale within them. There have been studies that have established a positive relation between the level of salaries and that of employee satisfaction in companies. Among other variables that impact employee satisfaction, compensation and benefits above industry averages, recognition and rewards programs and perks are weighed higher (Armstrong, 2003). Yee, Yeung and Cheng (2008) have stated that no company can successfully achieve its goals and objectives without the help of right employees and their right efforts. As a result, most companies are presently aiming towards increasing the allocation of resources for attracting higher talents and retaining the best human resources (Yazdani, Yaghoubi and Giri, 2011). Employee satisfaction has been found to bear a positive correlation with their performance at work and also with the levels of customer satisfaction in many recent studies. This fact explains that higher levels of organizational attainment and business success is directly linked with proper management of the employees, who shall then be motivated to work positively towards the organisational welfare, thereby raising sales and satisfaction of clientele. All companies seek to retain the workforce over which they have made significant investments in terms of recruitment and training. Financial incentives, along with provision of leadership roles to the employees, greatly contribute in developing an organizational citizenship and hence, work towards employee retentions (Karsh, Booske and Sainfort, 2005) In this regard, Armstrong (2003) has asserted that Wal-Mart is infamous for its bad employee-employer relationships. The study aims at understanding problems associated with poor human resource management within the company as well as at conducting a critical study to recommend steps of improvements that can be undertaken by Wal-Mart in an attempt to improve the present situation. Given the importance of employee satisfaction as reflected in the literature, the paper seeks solutions to critical employee problems within Wal-Mart. Critical Analysis The company is a famous brand that attracts a huge talented staff for employment. It also has one of the largest retail businesses grossing the biggest sales figures on a global basis. The retail giant has one of the strongest networks of logistics and has been using the technology to the best advantages. Even though the company’s global presence is very strong, yet it has one of the most dissatisfied employees in the retail industry. The company is infamous for its everyday low wages, gender discriminatory policies and anti-union nature. The company also faces a large number of litigations, along with lack of effective communication policies with the consumers. Such issues coupled with the financial meltdown have resulted in declining sales figures and a tarnished organisational reputation on the global platform. Wal-Mart has gained defamation for paying one of the lowest wages to the staff and associates, which fall below the minimum wage stipulations. Logan (2014) has stated that Wal-Mart paid only USD 13861 per annum to its sales people, while the federal communication of poverty line was USD 14,630. The company has also been criticised for its gender discriminatory policies, where the women employees were less likely to receive promotion in the presence of a male candidature for the same position. The case was similar in respect of wage raises and hikes. Owing to such employment policies, Wal-Mart has been facing a number of lawsuits. As a part of its anti-union policies, Wal-Mart has reportedly closed down its stores on finding that the employees have formed unions. It is suggested that if the company wants to change its image of being an anti-union firm at the corporate level, then it has to work towards development of a corporate image that is employee gracious and union friendly. It has to primarily work towards overcoming the lawsuits and settling the cases, following which alone can it develop employee and employee union policies that can enhance organisational image. The company has also started facing boycotts of its stores owing to stringent human resources policies. The claims have to be managed, regardless of the fact that these are small claims. They might have a potential to become manifold and impact largely if immediate action is not taken. Hence, it becomes critical for the company to fix its corporate image. Such can be attained by firstly, satisfying salary needs of the employees and raising them to the industry standards so that any inferior feeling on the salary front is eliminated. Also, the company needs to work upon providing equal opportunities to the women in terms of salaries as well as promotions. This initiative would imply that policies must be framed that can provide for non-discriminatory policies within the company rule. The union entry within the company needs to be welcomed and a separate cell dedicated towards hearing employee complaints must be set. Such a forum shall comprise union representatives who shall be allowed to express concerns and views to the company management, which in turn would help in attending to and resolving employee grievances. In addition to such basic policy changes, Wal-Mart has to allow for rightful salary increases to employees who have been serving for a long period of time. Skilled and qualified female employees should also be given promotions and provision of leadership roles. Such a corporate move must involve serious consideration on part of the company management as it might initially have a significant impact on the company’s income and profitability. The shareholder concerns also need to be addressed because their income receipts shall get temporarily reduced. However, these initiatives are critical and must be undertaken on an urgent basis in order to avoid mass shut-downs and loss of business on part of the company. Wal-Mart profits are also facing huge downfall primarily because the employees are not adequately motivated to make and put efforts in increasing sales at the stores. Besides the above changes, Wal-Mart also requires to introduce certain training and development programs within the organizational framework so as to provide opportunities to the employees to grow within the workplace and enhance skills. Such training and development programs also contribute towards raising employee morale. It has been reported that employees at Wal-Mart are highly de-motivated; so much so that the ground staff that works towards making sales and assisting customers are doing nothing other than placing products on the racks and shelves (Neumark, 2005). Such facts have also raised the number of consumer complaints regarding the lack of helpful staff at Wal-Mart stores. Low salaries have added to the high attrition rates. It must be mentioned that the provision of deserving salaries, providing equal opportunities for women to work and grow, eliminating any sort of discrimination within organisational framework and developing overall work conditions for the employees shall ensure the latter’s happiness and facilitate overall need satisfaction within the workplace. Such satisfaction of needs, as discussed within the literature, is critical for supporting employee motivation, higher performance at work as well as ensuring satisfied customers and higher incomes. Such a chain reaction creates a significant impact on the company’s future income earning capacities. Additionally, well-motivated staff performs better, which secures customer satisfaction along with high levels of customer loyalty. Happy and contented staff reduces employee turnover with rise in employee motivation and loyalty. These actions collectively will help Wal-Mart in building a steady and positive corporate image that shall go a long way in determination of sustainable competitive advantage for the global concern. Conclusions and Recommendations The research findings have been able to highlight on critical insights related to the degree of employee satisfaction within Wal-Mart and also the perception of employees with reference to the company policies. In the light of the analysis, there are three significant aspects that can be said to require immediate company attention. The recommendations are stated below. 1. To determine the employees’ needs and understand the present situation of employee satisfaction, it is suggested that the company undertakes a survey internally and seeks answers from its employees allowing for complete confidentiality of data. This survey shall be helpful in framing the policies towards developing measures for facilitating improvement in the working situations. 2. Survey results have to be matched with commensurate policies, which is why the company can consider involvement of the unions for employee development initiatives. This move shall not only help toward development of the rightful policies, but also contribute significantly towards fostering union relations. 3. The training and development initiatives should be initiated immediately in order to work upon development of the employee motivation and morale. Reference List Armstrong, M., 2003. Human Resource Management Practice. New York: Prentice Hall. Ashar, M., Ghafoor, M., Munir, E. and Hafeez, S., 2013. The Impact of Perceptions of Training on Employee Commitment and Turnover Intention: Evidence from Pakistan. International Journal of Human Resource Studies, 3 (1), pp. 2162-3058. Bustillo, M. and Talley, K. 2011. For Wal-Mart, a Rare Online Success. The WallStreet Journal, p. 21. Fishman, C., 2006. The Wal-Mart Effect: How the World’s Most Powerful Company Really Works—and How It’s Transforming the American Economy. New York: Palgrave. Karsh, B., Booske, B. and Sainfort, F., 2005. Job and organizational determinants of nursing home employee commitment, job satisfaction and intent to turnover. Ergonomics, 2(3), pp. 1260-1281. Logan, J., 2014. Do Wal-Mart Workers really Love their jobs? Available at: [Accessed 8 August 2014]. Neumark, D., 2005. The effects of Wal-Mart on local Labor Market. NBER. National bureau of Economic Research.11782. May. Yazdani, B., Yaghoubi, N. and Giri, E., 2011. Factors affecting the Empowerment of Employees (An Empirical Study). European Journal of Social Sciences, 20 (2), pp. 267-274. Yee, R., Yeung, A. and Cheng, E., 2008. The impact of employee satisfaction on quality and profitability in high-contact service industries. Journal of Operations Management, pp. 651-668. Bibliography Carolan, M., 2014. Cheaponomics: The High Cost of Low Prices. London: Roultedge. Read More