Human Resources and Change
The three main responsibilities of human resources management include attracting, developing and maintaining a quality workforce. These responsibilities will be discussed in the context of Wal-Mart. Wal-Mart is a leading retail chain in the United States of America. Founded in 1962, the company has since doubled its fortunes to become the dominant player in North America’s retail industry. Wal-Mart has since opened 3,800 stores in America and 2,800 stores across the globe. In 2010, the company employed over 2.1 million workers in America, and other parts of the world. Notwithstanding its financial fortunes, Wal-Mart has faced serious challenges in managing its multicultural and large labor force. It has not been able to provide a work environment that meets the expectation of its workers and the general public. Wal-Mart’s failure to manage its human resources appropriately has had negative effects on its reputation and financial performance. Thus, there is a need to make changes in the company’s human resources management system.
The challenges that necessitate change at Wal-Mart include the following. First, there is income discrepancy in the company. There is a huge difference between the salaries of the top management employees and the junior employees. Besides, junior employees’ wages are below the average industry rates. Thus, there is a need to change the compensation structure in order to improve employee satisfaction and productivity. The level of employee dissatisfaction is also very high. Employees are not happy with the terms and conditions of their work. The workers have since accused Wal-Mart of providing inadequate medical cover, and refusing to pay for extra work hours. Therefore, it is necessary to change the terms and conditions of employees’ contracts. Finally, Wal-Mart is experiencing a very high turnover, especially, among the junior employees. Thus, it is imperative that changes are needed in Wal-Mart’s employee retention program.
Since retail industry is labor intensive, the employees play a critical role in achieving the goals and objectives of retail companies. The implication of this fact is that Wal-Mart’s failure to implement the above changes is likely to result into the following consequences. First, high levels of employee dissatisfaction will result into low productivity. Second, Wal-Mart is likely to lose its talented employees due to high turnover. Employees who are aware of their worth are likely to move to other firms if their expectations can not be met at Wal-Mart. As Wal-Mart loses its talented employees to competitors, its competitiveness will also reduce. Wal-Mart is also likely to face law suits for failing to provide acceptable work environment. Such law suits are associaed with compensations which will cost the firm millions of dollars. Finally, cases of pilferage will increase due to poor employee compensations. Employees tend to steal from the company if their wages are insufficient. These consequences can be avoided by implementing changes in compensation structure, retention program, and work conditions.
Attracting/ Acquiring the Workforce
Wal-Mart’s management should first plan for its human resources and then attract/ recruit the right employees. Human resources planning refer to “a process that identifies current and future human resources needs for an organization to achieve its goals”. This process involves identifying the optimal number of employees, the needed competencies, and the timeline in acquiring the needed human resources. Effective human resource planning will, thus, enable Wal-Mart to employ only the number of workers that it can afford to compensate at the prevailing industry wage rate. Hence the problem of dissatisfaction attributed to poor pay will reduce.
Recruitment is the process of hiring the right employees. Wal-Mart should focus on both internal and external recruitment strategies. Internal recruitment involves giving existing employees an opportunity to fill existing vacancies. External recruitment on the other hand involves hiring workers from outside the company. Internal recruitment will help in reducing employee dissatisfaction in the following ways. First, it will give the employees an opportunity to develop their careers through promotion. Second, promoting employees is a way of recognizing their capabilities. Employees are likely to be highly motivated if their efforts are recognized and rewarded accordingly. External recruiting gives the company an opportunity to hire people with new ideas which will be instrumental in implementing acceptable labor practices in the future.
Developing a Quality Workforce
Employee development is a mutual and continuous process in which the employee and the managers work together to improve the employee’s knowledge, skills, as well as, ability. It helps in improving employee satisfaction by enhancing high motivation levels. High levels of satisfaction will result into financial gains through high productivity. Thus, Wal-Mart will have enough funds to offer attractive compensation packages. Employee development will also help in reducing turnover by enabling employees to improve their skills through training (Abe, 2007, pp. 567-570). Introducing appropriate on-the-job training programs will help Wal-Mart to improve the knowledge, skills, and abilities of its employees.
An effective performance appraisal procedure will be required to aid employee development. Performance appraisal iis the process through which the successes and failures of an employee are analyzed. This process helps in determining the training needs of individual employees, and the criteria for rewarding top performers. A fair performance appraisal system is, thus, a formidable tool for enhancing satisfaction among employees and reducing turnover.
Employee orientation is also important in retaining employees. In this regard, Wal-Mart should provide its newly hired employees with information about its policies, goals, procedures, and organizational culture. Turnover is likely to reduce if employees are fully aware of the goals of the organization, as well as, the terms and conditions of their contracts.
Maintaining a Quality Workforce
Wal-Mart can retain its valued employees through the following strategies. First, the compensation and benefit structure should be revised. Employees’ salaries should reflect their effort, and be comparable to the prevailing industry salaries. Performance and competence should be used as criteria for setting wages. Benefits such as medical cover, compensation for overtime hours, and retirement benefits should be provided in accordance to the labor laws. Employee retention and turnover reduction can also be achieved by engaging the employees in making decision. Workers will be more committed if they are allowed to contribute ideas and suggestions that inform management decisions. This gives employees a sense of belonging, and reduces their chances of leaving the company. Introducing reward programs and reinforcing appropriate behavior will also help in retaining the employees. Employees have a basic need to feel appreciated. Thus, recognizing their efforts and rewarding them through incentive programs such as bonuses make them more satisfied with their jobs. Finally, the intended changes can be achieved through labor-management relations. Labor-management relation is concerned with recognizing the rights of all parties in an organization or an employment contract. In this context, Wal-Mart should recognize and respect employees’ right to fair compensation, acceptable work conditions, and career development.
Wal-Mart is a leading retail chain with a large labor force. The company has faced several challenges in managing its human resources. Some of these challenges include high turnover, high levels of employee dissatisfaction, and income discrepancy. Addressing these challenges necessitates changes in the company’s compensation and benefits structure, employee retention programs, and work conditions. Failure to implement these changes will lead to adverse effects on the competitiveness of the firm. The changes can be implemented through appropriate methods for attracting, developing and retaining employees as discussed above.
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