Poor employee motivation and compensation at Walmart Stores Inc - Research Paper Example

? Poor employee motivation and compensation at Walmart Stores Inc Number The paper Outline I. Poor employee motivation and compensation at Walmart Stores Inc. II. Walmart Inc. III. Background of Walmart A. Multinational 1. 8,500 branches 2. Presence in 15 countries 3. Largest global retailer 4. Two million employees B. Retail industry 1. Thousands of retail stores 2. Biggest private employer C. Product or service 1. Retail goods 2. Fair-priced commodities IV. Quality management processes 1. Cheap prices 2. Firm infrastructure 3. No regional offices 4. Pleasant working environment V. Introduction to the Problem A. Poor employee remuneration 1. Wages 2. Allowances B. Recruitment 1. Qualifications 2. Different job-groups C. Training D. Promotion E. Employee privileges F. Benefits G. Flexibility of work H. Working environment VI. Quality Issues that need addressing A. Performance issues 1. Contracts 2. Supervision B. Customer service issues 1. Customer feedback options VII. Walmart’s Opportunities A. Potential gains 1. Revenue increase 2. Global expansion 3. Stronger brand name 4. Shareholder satisfaction VIII. Walmart’s goals A. Better quality levels B. Lower costs of quality C. Improve customer satisfaction D. Increase employee and business productivity E. More income F. Customer satisfaction G. More market share IX. Walmart’s Quality Management Initiatives A. Six Sigma B. Lean Principles C. TQM D. Balanced Scorecard E. Zero defects F. Quality Control X. Linkage to Course TCO A. Communication B. Organizational Change C. Employee Motivation XI. Conclusion Abstract Walmart apparently is America's largest retailer. The corporation has turned out to be a widely emulated player in not only the United States market, but the world in general. Regardless, the company grapples with widespread accusations of how it treats its human resources. The average Walmart employee working on a full-time basis earns poor pay. The organization’s health care program covers only a paltry number of workers as the remaining more than half of the staff are left to their own devices. Notably, not many of the employees will really stay at the organization for their lifetime: Walmart’s employee turnover rate hits almost half mark on an annual basis. Introduction Formerly Wal-Mart Stores Incorporation, the multinational was rebranded Walmart Stores, Incorporation since 2008. The organization is an American multinational corporation in the retail industry, owning and managing thousands of large discount department outlets in form of stores and warehouses. Currently, the corporation occupies the third position globally in the private sector (Cascio, 2006). Walmart is also the biggest private organization employing more than two million workers across the world. The organization occupies the first position within the retail industry in the world. The organization is owned by Walton family, who control 48 percent of the shares. Additionally, Walmart is apparently one of the most profitable corporations in the world. Barely decade after being founded by Sam Walton in 1962, Walmart was incorporated in late 1969 and later traded publicly at the New York Stock Exchange. With its headquarters situated in Bentonville, Arkansas, the multinational is also the biggest retailer of grocery in America. Three years ago, the corporation generated more than half of its income from grocery sales in the United States market (Woodman, 2012). The corporation also owns and manages the Sam's Club warehouses situated in North America; the store falls within Walmart’s retail business. Walmart boasts more than 8,500 outlets in 15 countries (Huber, 2011).These branches are however, existing under different names (Johnson, 2012). The organization operates under the popular Walmart name in the native United States and Canadian market, and also in Latin American states such as Puerto Rico, Brazil, and Argentina (Agren, Ogier, & Bamrud, 2011). The organization serves Mexicans under Walmex name, Britons as Asda, in India as Best Price and in the Japan’s market as Seiyu (Woodman, 2012). Walmart's ventures outside the North American market have yielded different outcomes, however. Whereas its operations in South America, Britain and China are immensely successful, the outlets in Germany and South Korea did not thrive well (Fishman, 2006). A synopsis of the quality management processes Owing to the significance of human capital management to any business, Walmart values their employees as an imperative asset that will shape its organization’s culture and level of performance. This is especially true in the current business environment of stiff competition. According to McCrate (2005), human asset is an import factor that dictates the success or failure of each and every practice within the organization. Due to the pivotal role played by Walmart employees, the organization emphasizes on the need to implement quality management processes in managing human capital in order to achieve the smooth running of the department. The organization appreciates the vital connection of contemporary performance management initiatives to an effective employee relations program. DiNovella (2005) indicated that the Walmart’s effective performance management program is based on the realization of the appropriate business outcomes, gauged by their effect and not by the magnitude of the measures. Walmart attempts to value their workforce as an important part of the corporation in order to lay the foundation for other positive results such as a stronger brand name and more profitability (Even, & Macpherson, 2012). In general Walmart attempts to achieve a substantial growth and maturity of the organizational effectiveness. In today’s job market, Walmart is engrained in vying for better talents as their main focus turns to the recruitment, molding employees and reduction of the turnover of talented employees and an increase in productivity. In light of this, Walmart tries to utilize an approach and management program that will heighten the organization’s performance so as to have an edge over its competitors (Woodman, 2012). Although, Walmart has been accused of poor management of human resources, it appreciates the significance of its employees, albeit more theoretically than practically. Poor employee motivation and compensation Walmart has kept its employee wages low in its retail supply chain (Woodman, 2012). This has been attributed to its outsourcing of jobs in its outlets situated in the United States (McCrate, 2005). Walmart's legendary low commodity prices translate to a hidden problem for the employees enlisted by the organization. Even though, these employees handle Walmart commodities, a bigger percentage of them essentially are enlisted on subcontracted logistics organizations and temp companies, where remuneration programs are poor and labor laws are never followed (DiNovella, 2005). Contracting out has become a common practice within Walmart, partly because most of the top largest industries, which register substantial growth rates have adopted the practice (Cascio, 2006). This outsourced workforce serving Walmart, work very hard at the low-end of a multifaceted hierarchy of agents and in optional employment programs that expose them to significantly weak labor rights claims and lack of knowledge about where to find a solution (McCrate, 2005). According to DiNovella (2005), outsourcing has increasingly turned out to be a common culture in a large number of the nation's key distribution centers, such as the larger sections of the market in Illinois and in Southern California. Walmart’s employees at the very low sections of the supply chain are increasingly faced with physically hard jobs, usually moving heavy loads loading and offloading trucks for the better part of the day (DiNovella, 2005). In spite of the daunting task faced by the workers, majority of them are paid peanuts and are usually deprived of important benefits like health care insurance or leave (Cascio, 2006). The commonness of temp job also implies that a significant percentage of employees toil on a daily basis with no job security. As a result, McCrate (2005) indicates that Walmart’s subcontracting has immensely contributed to rampant pay and overtime violations with little hope reinforced by poor health and safety of the workplace. According to Woodman (2012) a large number of these cases have been documented in class-action legal proceedings and invocations of labor laws by labor union leaders. Walmart workers working at the facilities contracted by the company in both Illinois and California have responded to the improper treatment by staging a series of legal suits in the recent past, claiming the contractors have handed them a raw deal out of the contracts and contravened minimum wage legislations (Woodman, 2012). In the recent past, unions have tried to strategize on how to counter the problems facing employees in some American states such as California, though the intricate nature of contracting frameworks has proved difficult to work under due to the presence of a highly splintered employee voice hindering their unionization (Even, & Macpherson, 2012). One labor organization fighting for the Californian workers, Warehouse Workers United, indicated that many of the challenges are faced principally by Hispanic warehouse workers in the region (DiNovella, 2005). Agren, Ogier, and Bamrud (2011) pointed out that Walmart strategized on how to dodge the burden and shift financial risks to the workers toiling at the lower segment of the supply chain, leading to essentially poorly remunerated Latino employees (Agren, Ogier, & Bamrud, 2011). Although, the problem should be corrected, changing the current state of affairs within the organization means opening many decent opportunities and working full time to better the quality of life in the retail industry. In response to the accusations, Walmart claims that the accusations are baseless and only serve to paint the corporation including its distribution network in bad light (Even, & Macpherson, 2012). That regardless of the significant role played by labor organizations, the unions have individual affiliations to fulfill. The corporation maintains that it holds all of its contractors and middlemen to the best industrial standards and anticipates and ensures that they fulfill all the relevant regulations (Fishman, 2006). Walmart maintains that its distribution centers merely are a negligible part of its entire logistics network across the United States. The company boasts over 120 facilities owned and managed by the company across the United States upon which the more than 70,000 Walmart job opportunities are based (Cascio, 2006). That enables the corporation to fulfill the requirements of Walmart’s warehouses and clientele, a big percentage of who rely on Walmart to offer them the commodities that their family requires at a cost they can foot. Quality management issues Walmart has been accused of cutting back motivation and compensation of employees (DiNovella, 2005). The corporation’s low wages and insignificant benefits package need addressing. With this, the executives need to reexamine and channel more resources to enhancing the competitiveness of various employees’ offers in order to improve motivation and efficiency of the human resources. As it is in every organization, Walmart should realize that human resources are the most important asset. In light of his, employee satisfaction through guaranteed and effective motivation and compensation programs should be cautiously looked into by the HR team (Neff, 2011). Owing to the high annual turnover of employees at Walmart, the organization should do all it can to retain productive employees and to motivate them to serve the company with more dedication, which essentially requires concern for the financial and emotional and even physiological needs of the employees (DiNovella, 2005). McCrate (2005) indicated that basic financial compensation and workplace conditions for employees are established by national institutions or the minimum wage laws such as the Employment Relations Act (2004) or through collective negotiations with labor organizations. Walmart should, therefore observe these legal structures in its resolve to achieve an effective workforce and lower employee turnover (DiNovella, 2005). Details of the job description are usually more vital than the generalized basics. Therefore, Walmart should from time to time evaluate monetary and other forms of employee motivation so as to improve on them by ensuring their competitiveness and improved employee satisfaction. The expectancy theory of motivation, for example, holds that employees anticipate and should be rewarded in line with the nature of the job they execute. McCrate (2005) argues that this will enable them to enhance their capability, and resolve to improve on their productivity so that they can stand to win more rewards. Walmart employees, therefore expect the organization to have competitive compensation mechanisms that they believe as being just and proportionate to their competence and anticipations. Generally, the compensation may sometimes serve the purpose of employee motivators (McCrate, 2005). This form of motivation that employees stand to gain may be administered in a direct way through direct rewards, such as wage increments, commissions, and incentives (Neff, 2011). On the other hand, indirect compensation can be in the form of insurance benefits, flexible hours of work, employee recognition initiatives, and vacation benefits. Notably, these benefits are lacking at Walmart, especially among those working at the lower levels of the supply chain. According to the systems theory, various operations within the company must be channeled to different work units such as firms, divisions, units or groups (Cascio, 2006). Operations must be dedicated properly so there will be no loopholes and duplication of duties as well as the setting up of emergency measures. Additionally, different organizational levels require distinct kinds of work. Walmart’s human resources staff needs to examine these factors in the development of the organizational structure. Opportunities Walmart has immense opportunities in its program to expand the branch network to other countries. These include setting up partnerships to put up outlets in overseas economies. The expansion program will enable the retailer to achieve cultural diversity within the organization. Owing to the immense capital that the retailer has put forward to succeed in overseas markets, taking over already existing companies abroad is also achievable, for example Asda in the United Kingdom (Fishman, 2006). The technological development also provides immense opportunities to the retailer, for example home delivery of products, whose orders have been placed online. Additionally, the online transactions are in line with Walmart’s outsourcing policies. Most of Walmart stores are situated at the periphery of urban areas to enable customers to carry out hassle-free shopping. This strategy will capture more customers who fear the congestion of most towns. The establishment of Walmart convenience outlets is an achievable goal that will enhance the customer base. It will also enhance acceptance of the organization by local society and reduce travel costs (Neff, 2011). Finally, in hard economic times, people tend to save money during shopping, and Walmart is the most viable option. Walmart’s goals Walmart applies strategy is their management of the human resources in order to achieve organizational goals both locally and internationally (DiNovella, 2005). At the world’s largest corporation, organization’s goals are rooted in its founding goals. These include; working tirelessly to show respect to every individual; satisfying customers’ expectations; working out fruitful partnerships with suppliers and associates; watching market rivals with a keen eye and putting in place more effort to achieve a competitive edge over them; implementing streamlined operations and limiting costs; offering cheaper goods; putting into practice continuous training of human resources, aiming for best practices, and adjusting to market changes (Johnson, 2012). The corporation also participates in community activities as a way of implementing company-society values. The organization also strives to put a smile on the eye of employees who work hard, and expresses appreciation to all stakeholders on a regular basis. Quality management initiatives Walmart implements Six-Sigma in an effort to enhance process outputs by recognizing and eliminating factors that might result in defects, and reducing variability. To achieve these objectives, the organization implements lean principles and outsourcing in its handling of the human resources to control costs (DiNovella, 2005). The organization’s strategic management examines the key initiatives that it takes on behalf of the shareholders, customers and other stakeholders. For example Walmart carries out strategic control of financial and human resources to enhance profitability and expansion across the world. These measures entail spelling clearly the missions of the organization, which revolves around fair commodity prices. According to Agren, Ogier, and Bamrud (2011), Walmart uses a balanced scorecard to assess the general performance of the organization and its growth toward meeting the objectives of a bigger market share and profitability. In the recent past, the corporation has adopted a strategy that starts with its concern for the expectation of the key stakeholders and the use a customized balanced scorecard, which takes care of the interest of all stakeholders such as the shareholders, the human resources, suppliers, and the customers. Shareholders, for instance, will expect an increase in profitability of the organization; employees will expect better workplace environment and competitive compensation programs; competitive rates offered to suppliers; and ‘affordable’ wares for customers. Terminal Course Objectives In every organization, the treatment of human resources tops the list of best practices. In light of this, the issue of motivation and compensation is the first aspect that featured in the Terminal Course Objectives. Unfortunately, Walmart’s top management team cannot claim not to know the best practices even as the organization continues provide a salary well under the minimum wage to its employees and without a proper benefits package. Second, communication is an important aspect of business organizations. The company issues statements to its employees on various issues affecting its operations. Third, Walmart carries out organizational change as way of adjusting to the changing market trends and consumer needs. The practices are also aimed at reassuring its employees of a better workplace environment. For instance, online orders and transactions have been adopted by the company of late, prompting easier, faster and more flexible services. Recommendations Apart from other positive operations within the organization such as effective supply, proper customer services and corporate social responsibility programs, Walmart should dedicate more resources to solve employee motivation and compensation problems. The management should consider more seriously the fair treatment of the workforce to limit high annual turnover within the organization. The executive team should be more willing to discuss important corporate issues with various stakeholders. The organization’s leadership style needs a review in order to ascertain its effectiveness. The corporation should also channel more funds to making employee benefits, and incentives competitive in order to achieve more employee productivity (Woodman, 2012). Collective bargaining and more open lines of communication should be allowed by the organization to champion workers’ rights. Conclusion Generally, HR function contributes immensely to the realization of company’s objectives. Through proper and consistent implementation, it will result in higher efficiency of the organization and increase profitability. All human resource functions should be well calculated and channeled to advance the missions of the organization. Walmart has come under criticism for its lackluster performance in its handling of the employees. Cases of poor remuneration programs, lack of fundamental employee benefits such as insurance cover, and appropriate work hours are rampant in most Walmart stores across the world. In light of these weaknesses of the Walmart’s HR policy, the organization should evaluate its operations and implement appropriate policies to achieve more productivity and crack down on the high rate of turn-over dogging the organization. References Agren, D., Ogier, T., & Bamrud, J. (2011). Walmart: Latin American Success. Latin Trade 19(4), 24-27. Cascio, W.F. (2006). Decency Means More than "Always Low Prices": A Comparison of Costco to Wal-Mart's Sam's Club. 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