International Human Resources Management - Wal-Mart - Case Study Example

Running Head: INTERNATIONAL HUMAN RESOURCES MANAGEMENT International Human Resources Management: Wal-Mart [Writer’s name] [Institution’s name] International Human Resources Management: Wal-Mart Introduction The most of the American population have a love-hate relationship with Wal-Mart Stores Inc that at times is hard to understand. The creation of Sam Walton ("Wal-Mart", has taken the lead into today’s leader of discount retailing. The organization has always faced, and is still facing, a considerable amount of controversy over a number of diverse issues. Nevertheless, none of these have done a great deal more than control this enormous operation of 1.2 million acquaintances in the US alone. This report will focus on Wal-Mart’s staffing practices, namely alleged cases of sexual discrimination. Wall-Mart’s overall strategy is one of cost leadership, evident in its slogan of “Always Low Prices”. It seems that Wal-Mart is intent on providing low prices holistically, including the salaries of its employees. According to PBS, “Wal-Mart employs a lot more people than any other organization in the America outside of the Federal government; however the most of its employees have children and live under the low poverty line. An unavoidable external force which affects the business practices of Wal-Mart and organizations in the same industry are legislation requirements. Wal-Mart has to under any circumstances abide by a lot of federal Equal Employment Opportunity laws and regulations these are the , Equal Pay Act, Immigration Reform and Control Act, as well as the Civil Rights Act of 1991 to name only a few of the laws which it has to follow. This paper will determine Wal-Mart’s adherence to these laws. Wal-Mart needs to look at and modify its HR practices in order to uphold power in the industry. Rewarding employees, recognizing achievements, encouraging input, offering incentive programs, treating employees with respect, and giving employees some decision-making power will create a loyal, dedicated and productive workforce, resulting in superior customer service that is second to none. Wal-Mart is positioned well behind its competitors in terms of equal numbers of male and females in more senior positions. Weaknesses Associates Don't Earn Enough to Support a Family The normal two-person family (one parent and one child) required $27,948 to fulfill their basic needs in 2005, according to Wal-Mart’s reports that its average salary for a full-time associate. Wal-Mart stated in the report that its average associate earned approximately $9.68 an hour in the year 2005. That makes the average associate's annual wages approximately $17,114 The company approximately 1.8 million employees, whom should be from a variety of different cultures and backgrounds, and has strong links with charities, organizations and schools; spending more than $106.9 million in 2003. Wal-Mart proudly states on its website that its culture is guided by the 3 Basic Beliefs, Sam’s Rules, and the Sundown and 10-Foot rules. The company has consistently appeared on Fortune’s 100 Best Companies to work for in the United States. However, it has appeared just as consistently in the tabloids for questionable human resource practices such as the alleged discrimination against women. Non-Unionization Unlike its competitors in the retail industry Wal-Mart has remained non-unionized. Its alternative is an open door policy which aims to encourage employees to take their complaints beyond management. The policy is rumored to do little to help employees, giving the business leverage to terminate unwanted non compliant help. Wal-Mart employees commence at lower wages than unionized corporations, quitting by the end of the first year. Report) surfaced that Wal-Mart prohibited employees from talking to union representatives. This is unethical behavior as the National Labor Relations Act states that employers should not discourage employees from forming a union. Wal-Mart forces employees to work off-the-clock In Wal-Mart's Annual Report of 2006 it reported that the company faced 57 wage as well as hour lawsuits. These Serious lawsuits have either been won by Wal-Mart or are working their way through the legal procedure in most of the big states. (Wal-Mart Annual Report 2006) In December 2005, a California court ordered Wal-Mart to pay $172 million in damages for failing to provide meal breaks to nearly 116,000 hourly workers as required under state law. Wal-Mart appealed the case. (topics.nytimes.com/.../wal_mart_stores_inc/index.html?query=CALIFORNIA&field=geo&match=exact) A Pennsylvania court, moreover in December 2005, accepted a class-action lawsuit in opposition to Wal-Mart Stores Inc. This case was issued by employees in Pennsylvania who claimed that Wal-Mart pressured them to work off the clock. The class might grow to comprise almost 150,000 present or previous employees who worked at Wal-Mart. [Arkansas Democrat-Gazette, January 12, 2006] Low Wages The average Wal-Mart associate makes between a paltry $12,000 and 17,000 annually. Various articles and literature suggest that the company cares more about keeping its prices low than to increase employees’ wages and thus, in turn, their standard of living. Discrimination against Women-Mart has been accused of discriminating against women by its actions of denying training and promotion opportunities that are generally offered to men. Men are also paid more than women. In the year 2001 in June a group of six existing as well as former female Wal-Mart workers filed a sex discrimination lawsuit (seeking to represent up to 500,000 current as well as former Wal-Mart workers) in opposition to the company. The suit was filed because Wal-Mart failed to provide equal employment opportunities for women. Women comprise 72% of the workforce but only small percentages are in supervisory or managerial positions. By applying an external metric for the calculation of disparate impact, to be precise the 4/5th rule, a first look at the calculations may give an impression that Wal-Mart has not sexually discriminated against women. Should the 4/5th rule be functional to senior management positions, the outcome is alarmingly different as disparate impact is obvious. In addition, Wal-Mart is the nation's largest employer of women, but unfortunately they are being treated without dignity and respect. The data also shows that women are rated higher in performance evaluations across all positions except cashier Wal-Mart can easily overcome the cost of a dollar an hour wage increase through raising prices a half penny per dollar. For example, a $2.00 pair of socks might then cost $2.01. This minimum increase would yearly add up to $1,800 per employee. (Analysis of Wal-Mart Annual Report 2005) The summery of the research of Richard Drogin would be that that: Women are disproportionately employed in lower paying hourly jobs Total earnings paid to men is about $5,000 more than paid to women. Women are on lower hourly rates but have been employed longer than men Women scored higher in performance ratings. Over 95% of Store Managers and Co-Managers change stores at least once upon entering the position80% of Support Manager promotions did not appear in job posting data Wal-Mart’s treatment of its female employees is characterized via a sexually demeaning environment, a place where female employees are consistently told that "women do not make excellent managers", that "a trained monkey” can also do what they are doing, as well as that women with kids couldn’t in any way be managers. Wal-Mart has the well-being of over 1.2 million US workers and their families in its hands. It should ensure the 4/5th rule is applied to not only women, but protected class citizens as well. The ‘glass ceiling’ can be demolished by establishing formal mentoring programs, providing opportunities for career rotation into other areas, increasing memberships of top management and boards of directors to women and individuals of color, allowing flexible working arrangements and by establishing clear goals of retention and progression. Factors contributing to the discrimination and disparate impact are centralized workplace policies, unsupervised local managerial discretion and gender bias. Local store managers have been given free reign in handling HR issues such as hourly workers’ promotions and raises; these managers were not equipped with the necessary knowledge and skills to act equitably and efficiently. Noted previously in conclusions drawn by Richard Drogin, women in hourly positions earned $5,000 less per year than their male counterparts, salaried positions earning an average of $14,500 less. This disparity cannot be explained by factors not relating to discrimination. No Health Coverage "Some facts on Wal-Mart and working families: The average annual pay for a cashier is $14,000 a year, $1,000 below the federal poverty line for a family of three. Wal-Mart fails to provide health insurance to over half of its 1.3 million U.S. employees. By its own admission, 46% of the children of Wal-Mart employees are uninsured or covered by Medicaid." (http://www.sourcewatch.org/index.php?title=Working_Families_for_Wal-Mart) Strengths Wal-Mart has very few strengths when it comes to human resources, they give low wages, expect around the clock shifts and no health care coverage , but yet they seem to still have done something good by trying to improve their human resources that is defiantly an important strength. As when an organization tries to correct what it has done wrong it goes toward the path to success . Workplace Diversity Initiatives The diversity initiatives have managed to salvage what was left of its reputation and continues to slowly change the community’s perception of the company for the better. Wal-Mart must also be extremely diligent when navigating international markets due to cultural differences in human resource practices. Potentially damaging misunderstandings may occur which will be reported and hyped up by the media, resulting in a loss of faith, trust and revenue. In November 2003 Wal-Mart took a step in the right direction by the introduction of workplace diversity initiatives to prevent further gender bias. Their tactics seem to be effective, judging from the sudden influx of positive articles. Among that article that was posted on Walmartfacts.com are the headlines Wal-Mart Stores, Inc. documented. As Top Company For managerial Women by the National Association meant for Female Executives along with Wal-Mart Receives American Bar Association Award for exceptional Achievements in Promoting employee Diversity. Improving Working Conditions And Increase In Wages Wal-Mart Stores, responding to year of criticism over its labor practices, announces it will make several changes at corporate and store levels to improve conditions for its workers; chief executive H Lee Scott Jr outlines changes at company's annual shareholders' meeting, Fayetteville, Ark; changes include establishment of compliance group that will oversee workers' pay, their hours and even whether they take breaks; Wal-Mart is testing program that will alert cashiers. (http://select.nytimes.com/gst/abstract.html?res=F60917FD3B550C768CDDAF0894DC404482&n=Top%2fReference%2fTimes%20Topics%2fSubjects%2fW%2fWorking%20Hours) Recommendations Mart must improve its HR practices in the areas outlined above. By making more of an effort to take better care of its employees, the company could stand to save millions in legal fees, and costs associated with recruitment and training. Admittedly, the barrage of bad press about Wal-Mart’s practices have not driven consumers away, it seems no one has found a way to beat “low prices”. This is not a substantial reason to continue current behavior. This report applauds the initiatives Wal-Mart has introduced to revolutionize its image and reputation and encourages even more radical programs and changes. Workshops, Training & Seminars This paper recommends that the CEO address managers and the HR department, emphasizing that Wal-Mart is serious about its strategic initiatives to promote and hire more women to managerial and supervisory positions. From the data and research collected, it appears that the key people in charge of promoting and hiring of staff are male. In order to change their perspectives and beliefs regarding women in the workforce, we believe it is imperative that these people realize the benefits, experience and knowledge that women can bring to the organization. We realize it will be a gradual and at times seemingly slow process, but many psychology studies confirm that a change of beliefs is possible via avenues such as sensitivity training and workshops. Diversity Task Force The formation of a Women’s Group which enthusiastically promotes supports as well as pays ample attention to women’s rights in the organization will help enhance equality. Other organizations have already started implementing diversity task forces to immense success, these companies report that turnover has greatly decreased at the same time as staff morale as well as job satisfaction has increased. It is very interesting how the CEO of the Diversity Advisory Board (DAB) Eric Beresford states that If a company is prepared to state that diversity is a business imperative, in that case a diversity advisory board [or diversity council] is a great way to make that a reality ... nevertheless if diversity‘s depth consists of three layers in an organization, the diversity council might get aggravated. But if diversity is a business imperative, in that case diversity council can offer marvelous value. Obviously posted job openings/promotion opportunities as well as put an end to implied ‘relocation’ for positions of Management. Wal-Mart ought to make sure advertisements for any managerial or supervisory positions are viewed without any difficulty by each and every member of the staff, and that there are no conditions attached to the job, ie. Transfer, non-flexible hours, which might lead to women being hesitant to apply. Conclusion The ever-changing market presents continuing and unbeatable challenges to retailers. First retailers have to be aware of the strong implications of a 'buyers' market' Customers are being presented a wide selection of shopping experiences, however no one operation can incarcerate them all. Technology, demographics, consumer attitudes, as well as the beginning of a global economy are all conspiring to modify the all the rules for success. Success in the upcoming decade will completely upon the degree of understanding retailers have concerning present values, expectations, as well as needs of both the internal as well as external customer. Wal-Mart has been to court more than once and in more than on state, its employee’s seem to be completely unsatisfied, and the only way it has to satisfy its employees is to strengthen its human resource management. References http://select.nytimes.com/gst/abstract.html?res=F60917FD3B550C768CDDAF0894DC404482&n=Top%2fReference%2fTimes%20Topics%2fSubjects%2fW%2fWorking%20Hours retrieved on 27 august 2007 http://www.sourcewatch.org/index.php?title=Working_Families_for_Wal-Mart retrieved on 27 august 2007 topics.nytimes.com/.../wal_mart_stores_inc/index.html?query=CALIFORNIA&field=geo&match=exact retrieved on 27 august 2007 Wal-Mart Annual Report 2006, 2005 Read More