Human Resources IP5
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Unit 3 IP: A Report on Walmart’s Human Resource Posture
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Unit 3 IP: A Report on Walmart’s Human Resource Posture
Unit 3 Individual Project: A Report on Walmart’s Human Resource Posture
Human Resources Strategy: MGT652-1503C-01
By
Andrew T. Robison
AIU Online
08/29/15
A Report on Walmart’s Human Resource Posture
Introduction
Walmart is a giant retail store, which started from a single store in Arkansas and steadily grew to what it is today. The retail store has over eight thousand stores globally and, as such, is the world’s largest retailer. There are more than four hundred Walmart stores in the United States of America, today. A deeper look into the company’s affairs yield’s the following results in the human resource posture.
Discussion
Benefits and Compensation
Walmart is among the leading companies in terms of the benefits and compensation schemes availed to employees. The giant retailer offers a vast array of benefits ranging from medical coverage, employee discounts to an advanced Savings Plan. Walmart offers up to a 6% match up on the employee savings scheme, which is way above the industrial average considering other companies don’t even offer any match up (Walmart Employee 401K Plan, 2015). However, the medical insurance cover given to Walmart employees is not as competitive as would be expected. A quick glance at the remuneration packages also gives a good image of the company’s human resource department. The company, earlier during the year, promised to raise the minimum wages payable to their workers to $9 per hour. The amount surpasses the federal minimum pay by $1.75 (Walmart raises pay well above minimum wage, n.d.). The pay rise affected about five hundred thousand workers positively. On that front, therefore, it can be concluded that the company offers competitive salaries in the retail industry. As at April 2015, Walmart claimed to be paying an average of $12.94 per hour. In that regard, the full-time workers expected a clean $13 per hour wage.
Business Leadership and Strategy
Walmart lays significant emphasis on its strong channels of distribution, management of inventory, differentiation in pricing and intense usage of IT in addition to cost leadership. It is through adherence to such policies that Walmart has managed to beat all competitors to its current position of the top retailer in the world. Endeavoring to be a market leader is one of the wisest quests any business can set on. Market leadership and business strategy is one of the significant sectors that have made Walmart so successful a retail store even in the face of the massive competition that the organization faces. An integration of cost leadership and the famous Porter’s five forces has positively served to create barriers for prospective market entrants. Walmart’s slogan –“Always Low Prices, Always” has gone a long way to establishing a favorable selling point that is unique and, as such, attracts droves of customers who yearn to get value for their money. In order to achieve the company strategy of low selling prices, Walmart purchases goods in bulk shipments so as to get trade discounts.
Walmart maintains a strategy of controlling its internal overhead costs. The stores are located in large buildings where the company pays comparatively low amounts of money in rent. The company’s board imposed an upper limit of $1 for every square foot during the 60s. Compared to other retailers, the company keeps a considerably small number of employees. Walmart has an in place an organizational culture that promotes cutting back on staff expenditure. For instance, whenever the managers travel from one place to another, Walmart arranges for their transportation by road rather than by air. The top employees are also encouraged to stay in relatively affordable hotel accommodation facilities while they are on business trips. Recent informative data published by Harvard Business School revealed that Walmart keeps a 0.3%-3.0% differential on costs over its major direct competitors in terms of value-chain business activities.
The only part where the company lags behind in terms of costs is the IT department. Walmart’s spends an average of more than 0.2% on Information Technology when compared to some of its direct rivals (Bradley and Ghemawat, 2002). The retail store has a functional Universal Code for all employees along with a strict monitoring process that ensures that product flows are thoroughly scrutinized for purposes of minimizing loss and wastage. Through such activities, it is possible for the supervisors to constantly check the sales, proceeds and inventories. All these measures facilitate efficiency in analyzing data from Walmart’s database and hence a reduction in wastage and production costs. Therefore, Walmart is an outstanding cost leader (Sedy, 1992).
Diversity
In the words of Walmart’s CEO, David Cheesewright, “Walmart spans the entire globe.” The company has established operations in twenty-seven different markets. The retail giant boasts possession of above seventy formats which makes them an entirely diverse business. There has been an observable practical value in sharing best practices and taking operations that are diverse in nature (Walmart Diversity and Inclusion Report, 2015). There exists not too much of a difference between inclusion and cultural diversity according to the CEO. Persons of various background origins have differing opinions and views of things. If one manages to mix such people together, they achieve a very solid and stronger team. Mr. David believes that the art of blending cultures is very important, whether the diversity is of gender or different countries’ cultures. That very diversity enables the company to better serve their customers who are equally of varying cultural backgrounds.
In its position as the world’s biggest retailer, Walmart tries to save people money in a bid to better their lives. The objective of bettering people’s lifestyles is a core presence in every single decision that the company makes. In order to meet such needs, Walmart has a unique Supplier Diversity Program. The program provides firms owned and run by minority groups, veterans, women and persons with disabilities with a chance of equality while at the same time expanding their own businesses. In the FYE15, the company spent an approximate sum of $13.5 billion with minority-owned businesses. The retail company promised to use its global scale and size to empower women in their supply chain and also continue to partner with top organizations in diversity programs to identify and work with potential suppliers.
Employee Relations
Walmart may be successful in other areas of its human resource wing, but surely the company is failing in employee relations. The relationship between the managers and employees is far from admirable. There are numerous complaints from current and former Walmart employees about the managers’ attitude towards workers. Some of the managers allegedly refuse to return greetings while others are said to have forced medically challenged individuals and pregnant women into hard labor. An extreme case has been recorded where one manager told an African-American worker that he would love to put a rope around his neck. The managers behave like sworn enemies of change. The activities of workers trying to push for revolutions have borne negative fruits in the past. At some instance, a manager was recorded threatening to shoot any particular worker calling for change. The only reasonable explanation for such consistently negative behavior on the managers’ side lies with the company’s training tactics. Leaked company training documents expose the company’s methods which include misinforming and tattling the trainee managers. The outlook generated is that the workers are more less cogs in a big capitalist locomotive.
Ethics and Corporate Social Responsibility
Statistical studies show that there is a huge gap between Walmart’s promises and performance in terms of Corporate Social Responsibility (CSR). It is worth pointing out that Wal-Mart has an above average performance score for such elements as corporate citizenship, environment and sustainability, community relationships, philanthropy and supply-chain management. In terms of environment and sustainability, Walmart is credited with focusing greatly on various activities that have directly resulted in the improvement of profitability and productivity (Sethi, 2013). On the other hand, there is cause to believe that the high-performance scores on the supply-chain management analysis are deceptive. The company is known for providing a lot of information on how the supply-chain elements should be managed yet not a single one of the same has been used successfully in practice. Information about very sensitive issues like integrity assurance, bribery and corruption is even scarcer.
The corporate culture of Walmart is dominated by financial considerations to the abandonment of ethical issues. This takes place, in spite of the company’s much publicized 34-page ethics statement. Large corporations’ value sets are protected from the general values of the society. The gap between high-wealth and low-wealth groups is ever widening. The corporations’ executives have formed a habit of measuring their actions to the standards set by their peers. Such officials draw confidence from the knowledge that their actions will be entertained, and even be protected by powerful friends in various societal segments and even in the government.
Organizational and Employee Development
In terms of career development, the human resource management at Walmart uses the company’s own tailor-made training programs aimed at increasing abilities, knowledge and skills. Such management programs are conducted on a regular basis. Walmart prides itself in improving the employees skills that relate to retail business and also the massive support offered to employees in order to enable them attend seminars outside the organization ("Walmart: Human Resource Management - Panmore Institute." Panmore Institute, 2015). The retail store matches the organization and individual needs through the person-organization fit system. Such a system ensures that the employees are aligned to the demands, needs and expectations of the company. This fit also serves to make sure that the worker finds the organization satisfactory enough. The person-organization fit has been very valuable to Walmart as it has facilitated the minimization of costs of recruitment, selection and training employees who don’t fit the corporation. Consequentially, a high person-organization fit results in low turnover.
The job positions, expansion plans and internal business processes at Walmart serve to identify relevant career opportunities and requirements. Whenever the corporation expands, new career opportunities emerge. It is imperative to say that any person pursuing a career at the company must meet Walmart’s minimum business process and job position requirements. Some of the Human Resource activities used in assessing the worker’s job potential at Walmart include: record-based productivity, feedback from colleagues, managers and supervisors, appraisals matched with the organization’s standards and personal employment records. The Human Resource managers and store supervisors at Walmart initiate career development initiatives. The supervisors and Human Resource managers later implement the initiated initiatives with relevant adjustments in order to suit each store’s unique conditions.
Talent Management
Walmart’s talent management approach is fairly consistent with other big companies. The company’s approach towards talent management involves numerous executive assessments and development of knowledge around the same talent. The organization strives to conduct executive development that is relative to the competencies of leadership that may be required in the near future, say three to five years. In as much the leaders make final decisions, the organization helps to facilitate the very process of enriching the executives with relevant experience. In order to keep the company’s talent approach simple but still unbeatable, the executives are always on the lookout for better means of improving the company. Walmart undertakes few activities with more emphasis on amplifying the impact and execution speed. However, the company also experiences challenges in talent management. Such challenges include: the company’s global nature which makes it difficult for the company to remain locally relevant, the size of the company positions and futuristic capabilities of the corporation. Technology
A proper mix and use of Information Technology (IT) and IT-related innovations has given Walmart an upper hand in business. The corporation’s first ever significant use of IT was in 1975. During that year, Walmart leased an IBM-powered computer system for the purposes of tracking both inventory and distribution centers. That step was a cutting edge that handed Walmart a competitive advantage over most of the other retailers. In 1983, Walmart implemented the use of barcodes in product scanning. The barcode system greatly reduced the checking out time and the data collection workload. Walmart made another significant step in 1987 by completing a private satellite network. The satellite network enabled the management to view information on inventory and sales directly through communication between the individual stores and headquarters. Walmart was one of the pioneers in using Radio-frequency Identification (RFID) technology. RFID uses communication through electromagnetic waves so as to exchange data between an identification/tracking tag and a terminal. Such tags are readable from considerably long distances, way beyond the reader’s line of sight.
Best Practices in Human Resource Management
Walmart has a strategic goal of being 100% supplied by renewable energy, selling products that are sustainable to both people and the environment and creating absolutely no waste. The company’s big picture is to achieve up to twenty million metric ton reductions worth of gas emissions and developing environmental product savings. Walmart has a volunteer sustainability program that challenges the associates to think of ways to make a difference in their communities, health or personal health. That challenge has seen the successful engagement of approximately half of Walmart’s associates in taking actions that focus on wellness, community service and environmental awareness.
In a recent interview conducted by Triple Pundit, Walmart’s Candace Taylor, Director of Sustainability said, “In many cases our associates first focused on the question of personal health. We’ve seen a tremendous number of associates who quit smoking or have achieved significant personal weight loss. What we are now seeing is that from this first tier of success associates are expanding their focus onto how they can volunteer more in their local communities and they are increasing their understanding of actions they can take that benefit the natural environment. In addition, as more associates report their successes we are seeing more associates volunteer to participate in this program.”(Roth, 2010).
Conclusion
The above analysis of the world’s largest retailer cast light upon a considerable number of solid conclusions about the giant corporation. Walmart registered steady performance levels even during the period that the U.S was going through a financial crisis. The company’s customer-oriented focus, working culture and unwavering aim at achieving the Walmart corporate vision sets it apart from the other retailers. Cost leadership and pricing strategies along with effective IT use have served in the transformation of Walmart into a huge corporation. The company commits resources to investment activities that better the customer’s shopping experiences. In spite of the company’s shortcomings especially in employee relations, it is prudent to say that Walmart’s advancements in healthcare provision, energy saving products, new product lines and efficient control of operations through IT use has assured stakeholders of a sustainable future growth.
Reference List
Financial Results & Reports. (n.d.). Retrieved August 28, 2015, from http://stock.walmart.com/investors/default.aspx
Roth, Bill. "Interview: Walmart's Green Human Resources Best Practices." Triple Pundit People Planet Profit. 6 Apr. 2010. Web. 29 Aug. 2015. <http://www.triplepundit.com/2010/04/interview-walmart-green-human-resources-best-practices/>.
Sedy, H., 1992, The Two Sides of Walmart, The New York Times
Sethi, P. (2013, May 8). The World of Wal-Mart. Retrieved August 28, 2015, from http://www.carnegiecouncil.org/publications/ethics_online/0081
Walmart Diversity and Inclusion Report. (2015). Retrieved August 28, 2015, from http://cdn.corporate.walmart.com/01/8b/4e0af18a45f3a043fc85196c2cbe/2015-diversity-and-inclusion-report.pdf
Walmart Employee 401K Plan. (2015, August 1). Retrieved August 28, 2015, from http://www.glassdoor.com/Benefits/Walmart-401K-Plan-US-BNFT13_E715_N1.htm
Walmart raises pay well above minimum wage. (n.d.). Retrieved August 28, 2015, from http://money.cnn.com/2015/02/19/news/companies/walmart-wages/
"Walmart: Human Resource Management - Panmore Institute." Panmore Institute. 7 Jan. 2015. Web. 29 Aug. 2015. <http://panmore.com/walmart-human-resource-management-hr-management>.
