The Highest Standards Of Walmart's Service - Term Paper Example

The Highest Standards Of Walmart's Service Table of Contents Table of Contents 1 II. Problem Statement 3 III: Literature Review 5 IV: Analysis of Problem 9 A.Causes of the Problem 9 B.Leadership and Organizational Behavior 11 V: Possible Solutions 12 VI: Reflection 14 VII. References 15 VΠΙ: Bibliography 19 I. Introduction Walmart is undoubtedly the most famous and successful retail corporation in the history of retailing. The corporation was established by Mr. Sam Walton in 1962 as the only retail store to serve its customers at the cheapest rate possible in the market, to state it in managerial terms ‘Discounting Retailing’. It was in the year of 1972, when the corporation was listed for the first time in the New-York Stock Exchange. The organization took the decision to expand its activities in 1980s with the set up of Sam’s Club as a supercentre in its acquired markets. In the present century the corporation is ranked to be one of the most successful retailers in the world market, acquiring over 8,692 stores in 15 countries around the world. The organization is also among the largest employers in the retail sectors, with more than 2 million associates working for the organization (Walmart Stores, n.d.). As observed by Michael Bergdahl, “The key to operations at Wal-Mart is the ability to maintain the highest standards while at the same time getting things done with lockstep execution” (Bergdahl, 2008). With its given strategy to serve the customers at the lowest price, the corporate giant was able to sustain with high volume of sales revenue since its incorporation. Even in the current fiscal the corporation is estimated to earn a profit of more than $4.5 billion in the fourth quarter of the current fiscal (Yousuf, 2010). In spite of gaining an image of a retail giant and being a leader in the retail industry, the company also faces some major problems in terms of its CSR activities, and employee management techniques. There have been repeated occurrences of issues such as sex discrimination between the employees, low-wage rate of the employees and unethical treatment towards the employee’s interests. Therefore, the company’s human resource management team is indeed in a pressure to eradicate these problems. Being a part of the Human Resource Team for long three years, I can state that the company is facing a major challenge in terms of motivation and employee satisfaction that is giving rise to such issues. II. Problem Statement From the outsiders’ viewpoint the company associates tend to be highly satisfied and motivated to ensure their job responsibility at the optimum level. But with a closer look as an insider it was quite easy to notice that employees were actually not that satisfied with their job. Regular interaction has revealed a lot of facts in this case. The employees are basically working in the company due to the reason of lesser job opportunities in the US market both outside and inside the company. It was the negative motivation that was working instead of the positive enthusiastic motivation demanded. Therefore, the employee performance gradually diminishes resulting into high absenteeism along with low rate of creativity and commitment. There are many such examples that conclude in the part of low motivational practices occurring within the organizational practices from a couple of years. Since past few years of its performance Walmart has come across many legal allegations sued by its employees. Some were based on the sex discrimination, like the case in 2001 which was filed by six female workers against the company and some were based on the low-wage rates for the hourly wage workers. The major problem rising from these lawsuits evolve in terms of huge penalties in order to settle the cases which amounted to more than $350 million in the year 2008. This is indeed affecting the company’s financial aspects in a short term perspective. On the other hand, with a long term viewpoint these lawsuits are not only influencing the market reputation of the retail giant, but are also affecting the investors’ impact in the US market (About Lawsuits, 2008). All these issues are indeed in the ethical prospect affecting the interests of the employees presently working with the company and the potential associates in the American market. For instance, certain lawsuits, like the case of sex discrimination can raise fear among female associates to suffer same kind of treatment from the employers. This shall in turn result in diminishing the employees’ performance and commitment towards her job. The same is applicable for other associates in terms of low-wage or inappropriate health assistance rendered by the company. Precisely, the problem of poor employee motivation and job satisfaction are affecting the operations of the company and its sustainability in the US market and the international market as well. Apart from the employee satisfaction issues, the company is not under any such pressure that can affect its position in the world retail market. To be stated, the company calculated a revenue figure of $101,239 by the end of October in the current fiscal reporting an EPS of $0.95 which was more than that of the last year (Walmart Stores, 2010). With such a strong sustainable figure the company might treat the problem of labor dissatisfaction as a non-real problem. But in a more realistic approach, the business of Walmart is entirely related to the manpower efficiency and therefore it is of crucial importance. Considering these factors, the company should be much more focused on its employee motivation techniques in order to increase the productivity of the present workers. If the company provides a better leadership to enforce a more efficient employee motivation, the problem would seem as a non-real problem comparing to the present sustainability status of the company. III: Literature Review Related to the topic of a proper manpower management, the contribution of Don Hellriegel and John W. Slocum was of considerable significance. According to the authors, competency is achieved through different attributes that a person posses as his/ her personal characteristics such as knowledge, attitudes and other inter-related abilities. Competency is very important in the organizational perspective as it boosts the efficiency of the employee and the means to enhance these attributes are through an appropriate set of motivational schemes from the part of the leader. The basic model of motivation therefore comprises of factors like job designing and needs of the individual workers. However, there are several major challenges faced by any manager to implement a proper motivational process as it is an incidental process which cannot be framed in a specific alignment. Moreover, as the process is highly depended on the factor of human needs, which is again strongly dynamic in nature, it becomes more difficult to illustrate it in a simpler form in order to be implemented. Furthermore, people get motivated in different manner. Some may perform well after being negatively motivated, i.e. punishments or threats of termination, while others may strongly get de-motivated with the continuous pressure and fear of job-loss. Therefore, as suggested by the authors, managers should adhere to these factors while designing an appropriate motivation process for a given set of employees (Hellriegel & Slocum, 2007). In this context as stated by McShane & Glinow, organizational behavior is a globally applicable approach. The modern trends in this concept are the factors of globalization and the changing perceptions and needs of the related workforce. Presently, workforce of any given organization comprises of different racial groups of belonging to different cultures and age groups and gender as well. Therefore, in the modern scenario an organization not only has to deal with the globalization in the external operations, but also in the internal operations it has to deal with the diversity in race groups, gender groups, age groups, and cultural groups in a broader view point. This has an immense impact on the behavior of the employees which in turn influences the motivational dynamics to be adapted in the organizational behavior concept (Mcshane & Glinow, 2006). Regarding the incidents happening with Walmart in relation to its organizational behavior, there has been numerous study conducted by different researchers and economists. Some of them are highlighted below. In this context, the study of Stephen Halebsky has a great significance. As stated by him, Walmart had a plan to build up a new store in the city of Eureka, near from the tourist attraction ‘Redwood National Park’ in the year 1999. But the plan was instantly rejected by the local people due to the fact that the place where the company had chosen to build up its new store was expected to be revitalized by high paying industrial jobs, which the local people believed Walmart could not. This incident not only reflects the negative impact that the company had created for itself in the job market but also gave an initial idea that what kind of trouble the company is actually facing (Halebsky, 2008). Furthermore, to relate in this context, there were many motivational techniques adapted by the executors in its previous days as stated by Michael Bergdahl such as the ‘HEATKTE’ which was a song and dance performance involving the associates to motivate and energize them. This abbreviation represented the phrase stating ‘High Expectations Are The Key To Everything’. According to the author this technique played a vital role in improving the employees’ performances, helping it achieve a standard of excellence in its operational tactics. Certainly the values of the company’s top executors were worthwhile. But the company at the same time ignores the fact of employee satisfaction within the organization. One of the major reasons that the author states, is that the flow of information is always from the top to bottom level, i.e. the middle level and the low level managers are bound to perform the strategy adapted without a question regarding the consequences of the implementation. Certainly this kind of centralized communication form made up a faulty organizational behavior framework which could not meet the needs of the employees in the present scenario and resulted in major consequences (Bergdahl, 2008). According to another study conducted by Charles Fishman, the company has many positive attributes that are beneficial for the US economy but also possesses a darker side that affects the participants from all dimensions including the customers, the employees and the investors as well. As the study states, Sam Walton had the intrinsic ability to find eligible representatives and recruit them in the company. The founder was able to train them in a manner, so that they could perform at the optimum level to benefit the organization. In its past era, the company’s officials were recorded to earn million of dollars unlike the present scenario when the company is allegedly based on the political and legal issues related to employee satisfaction. For instance, the company was repeatedly alleged on the basis of low wage rate to its associates. Even the double amount of the present wage is in real practice and is termed to be of supplementary value rather than a supporting amount for the American families. But the reason why so many people opt to work for the company is that, approximately in two-third of America is captured by Walmart as the largest employer. But technically concluding the company cannot render an increased amount of salary to its workers without affecting its low price attitude. And therefore, shall hamper the company’s strongest strategy to serve customers at the lowest price (Fishman, 2006). Certainly in the study of Walmart’s organizational behavior, there are some major faults. But there are also some specific reasons to influence the matter. According to Colin Egan, the major reasons are the environmental instability and complexity of change occurring in the market scenario. As the author states, organizations often follow the pre-examined organizational techniques to motivate their employees. But in the real phenomenon, each and every organization is built up in different mechanism and deal with unparallel circumstances. Therefore, similar kind of strategies might not be effective in two different concerns. Hence, the organizations in the modern scenario should initiate to design their own strategies in order to develop the organizational behavior within the company (Egan, 1995). IV: Analysis of Problem A. Causes of the Problem The main problem of the company as stated earlier, was not the lawsuits or protests organized against it. The true problem was actually the faulty behavioral system practiced within the organization. The lawsuits were the results while the actual reason was the insufficient significance provided to the matter or employee motivation and the job satisfaction from the part of the management. The company in this case had a low wage structure which was unable to meet the need of the employees. The company also possessed a rigid top to bottom hierarchy which restricted the flow of information at a broader sense. As the data states, Walmart presently has a pay scale of around $9.39 for the retail sales associates, for retail cashiers and the department manager the company allots $8.89 and $11.81 respectively on a per hour basis (PayScale, 2010). While to compare it with other similar organizations, it has a higher rate of hourly wage system. For instance its competitor, the Kmart stores has a pay scale of $7.55 for the retail Sales Associates, for the retail cashier it is $7.48, and for the department managers the rate is $11.00 per hour (PayScale, 2010). In this regard, to state the average minimum wage rate as committed by the government during the end of July of the last fiscal was $7.25 on a per hour basis which was an increase by $2.10 from the 2007 (Labor Law Centre, 2009). Walmart in this stage pays an average rate of hourly wage which is much higher than its competitor and maintains a justifying figure with the federal law as well. But as some lawsuits have alleged, the company’s wage rate is not enough for the support of a family, is somewhat true. According to the GDP rate per capita a person needs an annual income of $46,000 as estimated in 2009 to attain a healthy living. While the company renders an average of $3,630.86 on a monthly basis approximately to its lower level workers and therefore, it is unable to meet the demands of the employees working to earn the household living (CIA, 2010). Apart from the wage system, the employees have been repeatedly complaining on the issue that the senior managers in the middle and the low level had pressurized the followers to work for hours after their schedule without any break and without any extra allowance for over-time. Even the employees are not provided with an appropriate level of health assistance in the working environment making the working environment rigid rather than flexible for the associates to work with. To be stated in the context, the company had recently announced that the extra pay that it was rendering to its associates for working on Sundays, would also be eradicated (Hernandez, 2010). Being a part of the internal operations of the company and moreover as a HR Manager, I can state that these activities hamper the working environment of the company which in turn is very critically affecting the employee motivation and the job satisfaction criteria of the organization. B. Leadership and Organizational Behavior The above presented data and information clearly states that the organization is indeed facing a challenge in keeping pace with the employee needs. This is affecting the leadership efficiency as the aspects of proper motivation and job satisfaction rely on the leaders for the implementation. Moreover, in a wider perspective it is hampering the internal environment of the organization in order to attain an efficient organizational behavior. The operations of the company states that in order to satisfy the company’s policies, it can not increase the wage rate, even with such a huge income the company is cutting down the extra wage allocated to be paid to the employees for their extra service. Additionally, the organization follows a strict policy regarding its internal flow of information or supervision. To relate the concept of Leadership and Organizational Behavior, these policies do not abide by the thought of the concepts. As a result, the practices work as a de-motivating factor than as a motivation to the employees and fail to generate effective satisfaction within the employees. As the Manager of the company’s Human Resource Department, I would like to put some concern to the actual concept of Leadership and Organizational Behavior. The concept gives considerable significance on the issue related to the values, i.e. the need of respect and self-esteem which the company unfortunately fails to adhere to. Implementing this thought will not only be affective to increase the employee productivity, but shall also improve the organizational behavior. V: Possible Solutions To reduce the problem it is very important to emphasize on a better motivating process to generate a level of job satisfaction within the employees. From the early practices motivation is accepted to be one of the most important elements in the development of organizational behavior. The trends of motivating employees in the modern era have changed drastically with the change of perceptions, needs and values of a person. Previously it was believed that punishment or negative motivation and the rendered pay scale is the only motivational techniques that can be affective to motivate an employee. The company in its present situation is also following the ancient thought inappropriately, which is again affecting the overall organizational behavior. The company thus certainly needs to follow the trends suggested by the modern day philosophy to be affective enough. For example, the praising technique through incentives or appraisals and even the use of employee ownership technique by rewarding them stock ownership. Both these techniques can surely increase the individual participation and therefore prove effective for the organization. However, each and every person is motivated in a different manner and thus it is in the hands of the leader to implement the technique in a better way (Gitman & McDaniel, 2008). The prime objective in this regard shall be to attain a level of effective motivation through utilization of efficient leadership perspectives. This would in turn deliver a significant amount of job satisfaction. From the above study, it is clear that the employee needs are proportionately concentrated on the aspects of wage rates and ethical treatment from their superiors. Thus, the company leaders should implement different pay and benefit schemes in this regard. It can be incentives on extra work, efficiency or even competitive contests held for the employees. Moreover, the company should also restrain its labor welfare policies regarding the issue of unions to reduce conflicts with the employees. While implementing a new structure for pay scale and a comparative flexible group of labor policies, the company should follow the following steps, Determine the job responsibilities Analyze the requirement of the employee The average market pay scale rendered by other similar organizations The ability of the company to render a higher and effective pay scale The policies of the organization regarding salary The terms and conditions that an associate needs to adhere (Manager’s Electronic Resource Centre, 1999) VI: Reflection The study of the problem gave me a better idea of the present working scenario and the significance of motivation in gaining a desired outcome. Additionally, the challenges in the Walmart culture also helped me learn the need for self-esteem in relation to the work force. To state about my personal development, I could easily relate the issue of motivation with job satisfaction and its importance in a person’s life. Conclusively, the study was very useful for me to understand different aspects of the business world. It also gave me the opportunity to know many role models and therefore generated the belief that positive environment is very essential for future achievements. VII. References About Lawsuits, (2008). Wage and Hour Lawsuits against Wal-Mart Settled for over $350 Million. News and Information about Personal Injury Lawsuits. Retrieved Online on December 09, 2010 from http://www.aboutlawsuits.com/wage-and-hour-lawsuits-against-wal-mart-settled-2211/ Bergdahl, M., (2008). What I Learned From Sam Walton: How To Compete And Thrive In A Wal-Mart World. Wiley-India. CIA, (2010). The World Factbook. United States. Retrieved Online on December 10, 2010 from https://www.cia.gov/library/publications/the-world-factbook/geos/us.html Egan, C., (1995). Creating Organizational Advantage. Butterworth-Heinemann. Fishman, C., (2006). The Wal-Mart Effect: How The World's Most Powerful Company Really Works-- And How It's Transforming The American Economy. Penguin. Gitman, L. J. & McDaniel, C., (2008). The Future of Business: The Essentials. Cengage Learning. Pg 240-250. Halebsky, S., (2008). Small Towns and Big Business: Challenging Wal-Mart Superstores. Lexington Books. Hellriegel, D. & Slocum, J. W., (2007). Organizational Behavior. Cengage Learning. Pg 1-123. Hernandez, C., (2010). Wal-Mart to Stop Extra $1 Sunday Pay For Employees. All Headline News. Retrieved Online on December 10, 2010 from http://www.feedsyndicate.com/articles/7020763819 Labor Law Centre, (2009) Federal Minimum Wage Increase for 2007, 2008, & 2009. Federal Minimum Wage Increase, effective July 24, 2009. Retrieved Online on December 10, 2010 from http://www.laborlawcenter.com/t-federal-minimum-wage.aspx Manager’s Electronic Resource Centre, (1999). Developing a Salary Policy. USAID Cooperative Agreement. Retrieved Online on December 10, 2010 from http://erc.msh.org/newpages/english/toolkit/DSP_english.pdf McShane, S. L. & Glinow, M. A. V., (2006). Organizational Behavior: Essentials. Tata McGraw-Hill. Pg 2-12. PayScale, (2010). Employer: Wal-Mart Stores, Inc. Hourly Rate for Employer: Wal-Mart Stores, Inc. Retrieved Online on December 10, 2010 from http://www.payscale.com/research/US/Employer=Wal-Mart_Stores,_Inc/Hourly_Rate PayScale, (2010). Employer: Kmart Corporation Median Hourly Rate by Job. Hourly Rate for Employer: Kmart Corporation. Retrieved Online on December 10, 2010 from http://www.payscale.com/research/US/Employer=Kmart_Corporation/Hourly_Rate Walmart Stores, (No Date). History. About Us. Retrieved Online on December 08, 2010 from http://walmartstores.com/aboutus/297.aspx Walmart Stores, (2010). Walmart Reports Third Quarter EPS Of $0.95; Company Raises Full-Year EPS Guidance. Condensed Consolidated Statements of Income. Retrieved Online on December 09, 2010 from http://investors.walmartstores.com/phoenix.zhtml?c=112761&p=irol-newsArticle&ID=1496847&highlight= Yousuf, H., (2010). Wal-Mart Earnings Rise. CNN Money. Retrieved Online on December 08, 2010 from http://money.cnn.com/2010/08/17/news/companies/Walmart_earnings/index.htm VΠΙ: Bibliography Boushey, H. & Et. Al., (2007). Understanding Low-Wage Work in the United States. The Mobility Agenda. Retrieved Online on December 10, 2010 from http://www.google.co.in/url?sa=t&source=web&cd=1&ved=0CBsQFjAA&url=http%3A%2F%2Fse1.isn.ch%2Fserviceengine%2FFiles%2FISN%2F57210%2Fipublicationdocument_singledocument%2F78A9433F-FF7F-43D6-BC1B-9778E5B09907%2Fen%2Flowwagework.pdf&rct=j&q=Understanding%20Low-Wage%20Work%20in%20the%20United%20States&ei=Ns8BTYylFJSjcaKmwc0E&usg=AFQjCNHEOc8iPBjpmFYPSNaEi-vX_yeTBQ&sig2=RbQ30uJSCT6dfqbH1aEv0w&cad=rja Frank, T. A., (No Date). A Brief History of Wal-Mart. Reclaim Democracy. Retrieved Online on December 10, 2010 from http://www.reclaimdemocracy.org/walmart/2006/history.php Maddock, R. C. & Fulton, R. L., (1998). Motivation, Emotions, and Leadership: The Silent Side of Management. Greenwood Publishing Group. Read More