Organization Analysis, Part 1 - Essay Example

High staff turnover costs the company in terms of tangible and intangible resources. On the one hand, the company loses on the knowledge of the departing staff whereas on the other hand, it is forced to use more resources, which could have been put to better use elsewhere, on constant recruitment and job training for new staff. Another major HR challenge that the company faces is the effect of different cultures arising out of its global expansion. Wal-Mart cannot impose a standard HR practice in all countries because of their different cultural dimensions (Hofstede, 2001).

Nevertheless, Michael Duke, the President and CEO of Wal-Mart identifies developing staff as one of the five key strategies central to the company’s future (Wal-Mart, 2012). After all in retail it is the store and club associates that take care of customers and members which determines whether customer become loyal or not. On the legal front, Wal-Mart’s HR management has two chief areas of concern, ensuring equal employment opportunities and improving their labor relations. Under the equal employment opportunity challenge, the important activity is to prevent the likely occurrence of discrimination practices among its staff.

This aspiration should ideally reflect the spirit of the law as envisioned by the Civil Rights Act of 1991 by reinforcing illegality of making hiring, firing or promotion decisions on the basis of sex, ethnicity, race or religion (DeCenzo & Robbins, 2005). This act also includes the Glass Ceiling Act. Wal-Mart has been addressing the equal employment opportunity concern by embedding diversity and inclusion into its culture. This has been done partly through its Diversity Goals Program where managers are held accountable for elevating the standards of diversity and inclusion throughout the company, with up to 15 percent of management bonuses and ten percent of performance evaluation scores tied to their diversity goals achievement (Wal-Mart, 2011).

This program has seen the numbers of minorities’ rise from 21.3% in 2005 to 36% in 2011 and that for females rise from 38.8% in 2005 to 57% in 2011. Of the two HR challenges, Wal-Mart’s greater challenge has been its labor relations. Wal-Mart is America’s largest private employer and it has used its muscle to quash all attempts by its workers to form or be part of labor unions. The company’s low cost strategy relies on minimizing production costs and labor costs are often the major expense in production for low-end retail (Woodman, 2012).

Without a union, Wal-Mart employees have had less bargaining power and this could be one of the reasons why the company has a rapid turnover. Nevertheless, the continued growth of the group Organization United for Respect at Wal-Mart (OUR Walmart) demonstrates less likelihood of the company’s staff relenting on this issue. For this reason we envisage this power struggle on whether to unionize or not continuing into the future unless either party relents. We however believe that it would be more productive for Wal-Mart to address the concerns of its workers if it seeks to remain competitive in the coming years.

A possible solution is to meet workers’ demands half-way by giving them some of the demands they are requesting such as respect, affordable health care, stable and fair scheduling, and improved wages. Wal-Mart’