Walmart Hrm Essay Example

of its workers, given that most employees with children who work at Wal-Mart are reported to live below the poverty line. PBS reports that Wal-Mart is the United States' second-largest employer (after the Federal government) with regards to its workforce size.

Wal-Mart is considered a significant powerhouse by analysts, who speculate that the expansion and domination of the retail industry will lead to a difficult future for other retailers. According to Brent (2005), the strategic plan of Wal-Mart includes enlarging its SuperCenter format, increasing the number of stores from 1,700 to over 3,100. Additionally, Wal-Mart plans to expand into other non-retail areas such as financial services, publishing, telecommunications, and travel.

Various retail experiments have been conducted in the industry by organizations such as Wal-Mart, including freestanding drug stores, convenience stores, healthcare superstores, small footprint general merchandise stores, and freestanding apparel units. However, these practices are subject to external influences like legislation requirements that Wal-Mart must comply with. For instance, the Equal Pay Act, Immigration Reform and Control Act, and Civil Rights Act of 1991 are federal Equal Employment Opportunity laws and regulations that Wal-Mart must adhere to. This paper will assess the company's problems with its associates and provide solutions.

The inception of Wal-Mart dates back to 1962 when it inaugurated its first store in Rogers, Arkansas. This marked the beginning of several triumphs for the corporation, which obtained the name Wal-Mart Stores Inc. in 1969 and established its initial distribution center and headquarters in Bentonville, Arkansas. Simultaneously, it went public on the New York Stock Exchange. In 1988, Wal-Mart introduced its first supercenter while Mexico City saw the launch of its primary global location opening in

1991.

Wal-Mart has earned numerous prestigious titles and awards, including being named a top retailer by Discount Store News in the early 2000s. It has been recognized as "Retailer of the Century," one of the "Most Admired Companies in America," and one of the "100 Best Companies to Work For" by Fortune magazine. Additionally, Financial Times listed Wal-Mart among the "Most Respected in the World." In 2002, they secured the number one spot on Fortune 500's list and were presented with the Ron Brown Award for Corporate Leadership from the president for their exceptional employee and community relations. Therefore, Wal-Mart Stores, Inc. is highly deserving of these accolades.

The company operates retail stores across all 50 US states in various formats. Their mass merchandising operations comprise of three segments: Wal-Mart Stores, which encompasses discount stores, Supercenters, and Neighborhood Markets within the US; Sam’s Club segment, which comprises of warehouse membership clubs in the US; and McLane Company, Inc., which is a subsidiary.

Through its more than 4,700 stores, Wal-Mart provides products and distribution services to both retail industry and institutional foodservice customers. This includes 1,475 discount stores, 1,750 combination discount and grocery stores, and 538 membership-only warehouse stores known as SAM’S CLUB (Bianco, 2003). With sales of US$247 billion resulting in a net income of approximately US$8 billion (“Income Statement”, 2004), the company has garnered numerous newspaper features and journal articles lauding its dominance and success. While nearly three-quarters of its stores are located in the United States (“Wal-Mart International Operations”, 2004), Wal-Mart is continuing to expand globally into countries such as Argentina, Brazil, Mexico, Canada, China, Germany, Japan Korea Puerto Rico and the United Kingdom via its

International segment which encompasses all operations in Asia Europe and South America (About Wal-Mart 2004).

As the world becomes more interconnected, Wal-mart - a highly visible multinational corporation - will continue to face significant challenges related to social issues in employment. Despite being unionized, Wal-mart has consistently resisted organizing efforts both in the United States and abroad. Some view the company as solely focused on growth at any cost. Headlines highlight its numerous employment-related problems including illegal immigrants working as janitors, sex discrimination lawsuits, low wages leading to worker strikes, among other issues. Though unions cannot be forced upon Wal-mart legally, they and community groups are likely to pose one of the largest obstacles for the company moving forward. These ongoing controversies have damaged Wal-mart's reputation with the public.

Unions criticize Wal-Mart stores for exploiting their employees, who cannot afford health insurance and other benefits solely on their income. Despite performing well, workers at Wal-Mart receive insufficient pay and benefits, including very low wages. Additionally, overtime work is uncompensated.

In 2004, Wal-Mart was required to provide compensation to employees who worked overtime between 1994 and 1999 without pay due to legal action taken by those affected ("Wal-Mart Stores, Inc.", 2004). In an effort to prevent unionization, the company has reduced its full-time staff (Biddle, 2004), resulting in a shortage of human resources as the company expands rapidly.

Wal-Mart has come under fire for not qualifying as a truly global company if its foreign managers are unable to communicate in the local language. The corporation responded by granting greater independence to individual country leaders, who would be responsible for managing operations and merchandising. This restructuring sought to promote effective international

activity. Nevertheless, Wal-Mart encountered difficulties maintaining workforce standards that matched those of the United States.

Wal-Mart faces ongoing challenges regarding its corporate culture, such as the insufficient experience and acclimation time provided to local employees and managers. Additionally, there are persistent discussions surrounding sexual discrimination towards female employees who frequently do not receive promotions. Available data shows that between 1996 and present day, the percentage of women employed at Wal-Mart dropped from 76% to 64% (Rock, 2001).

According to Rock in 2001, women have frequently been deprived of managerial roles due to the perception that they cannot work extended hours or relocate as necessary for businesses. This belief has caused women to be viewed as inflexible and hence disregarded for promotions. Nevertheless, Sam Walton acknowledged in his 1992 autobiography that his previous strategy of demanding excessive flexibility from managers may no longer be appropriate today.

As our company continues to grow, it is crucial that we remain connected to the communities in which we operate. To achieve this goal, we employ local staff and support local managers, which helps us maintain strong relationships with the community. Additionally, we recognize that past practices have negatively impacted intelligent and dedicated women who were unable to relocate like their male counterparts. Therefore, our commitment is to address this issue by providing more opportunities for women within our organization.

Despite facing criticism from various groups such as labor unions, community organizations, religious entities, and environmental groups protesting against our policies and business practices, Wal-Mart remains an integral part of many communities.

In 2005, labor unions such as the United Food and Commercial Workers utilized their Wake Up Wal-Mart campaign while the Service Employees International

Union employed their website named Wal-Mart Watch to influence public perception against Wal-Mart. In response, Working Families for Wal-Mart was established by the company. Furthermore, Walmartfacts.com - acting as Wal-Mart's official public relations platform - initiated a campaign in 2005 that aimed to refute claims of gender discrimination, violations of wage and hour laws, insufficient healthcare provisions, policies unfriendly towards workers, low wages and illegal hiring practices.

In 2001, a class action lawsuit was brought against Wal-Mart by six women from California who accused the company of gender discrimination. Their claims included allegations that female employees were unfairly denied promotions and paid less than male colleagues. The case, known as Dukes v. Wal-Mart, has become the biggest ever such lawsuit in history, with over 1.6 million current and former female associates involved. This was officially recognized on June 21st, 2004.

Although women had higher seniority and merit ratings than men, their representation in managerial positions and salaried positions at Walmart in 2001 was less than 15% and one-third respectively. Female managers earned on average $14,500 less than male colleagues while hourly female workers received $1,100 less pay for the same job classification as males. Even when considering seniority and performance, women still encountered a wage gap ranging from 5 to 15%.

According to The New York Times, Walmart has faced multiple class action lawsuits alleging violations of wage and hour laws. These violations include forcing employees to work without pay, altering time cards, and disregarding state regulations for breaks. As of January 2009, the company was involved in at least 73 such lawsuits. In December 2008, Walmart settled 63 of these cases for a sum between $352 million

and $640 million; however, the settlement did little to benefit affected workers.

Walmart's settlement in a wage-and-hour lawsuit in Minnesota amounted to just 13 hours and 56 minutes of their 2008 sales. However, local workers view the settlement as unfair. The amount settled was $54 million, but if Walmart had pursued the penalty phase of the trial, they could have potentially owed over $2 billion to the State of Minnesota.

One of the plaintiffs, Nancy Braun, was denied the opportunity to take bathroom breaks while performing her duties as the sole server and cook in a restaurant located in-store. Consequently, Ms. Braun experienced multiple incidents of soiling herself. Walmart's settlement payout of $54 million equates to the total sales the company generated during a period of 1 hour and 11 minutes in 2008.

According to the International NGO Human Rights Watch, Walmart exemplifies the flaws in American labor law due to its anti-worker policies. The company shut down a store and departments that unionized, including the store in Jonquiere, Quebec which closed in April 2005 right after attaining union certification. This particular store had become the first unionized Walmart in North America with 51 percent of its associates signing union cards.

In the year 2000, a union was successfully formed at a Walmart store in Texas for the small meatcutting department. Responding to this, Walmart announced the discontinuation of its in-store meatcutting across the company merely a week later. To prevent further organizing, Walmart released "A Manager's Toolbox to Remaining Union Free," which lists warning signs for managers to look out for such as "frequent meetings at associates' homes" and "associates who are never seen together start talking

or associating with each other." The toolbox also offers a hotline for managers to quickly report any attempts of associate organizing, giving company specialists the opportunity to intervene immediately.

Walmart's anti-union stance is evident in their various labor law violations, including terminating employees who try to organize a union and using illegal surveillance, intimidation and threats against individuals who speak out. This behavior has been criticized by the international NGO Human Rights Watch, which referred to Walmart as "a case study of what is wrong with American labor law". The NGO's report emphasizes that Walmart's aggressive opposition to union formation contributes to an overall sense of fear at their stores.

Reports have indicated that Walmart has engaged in illicit tactics that violate the globally recognized worker right to association in the United States. Furthermore, compared to other similarly sized companies, Walmart has a significantly higher frequency of labor law breaches. With regards to healthcare provisions, Walmart's offerings are substandard and financially inaccessible.

Walmart provides several healthcare plans for qualified associates, including those who are eligible for Medicaid and other publicly subsidized care programs. Despite having low-cost premiums, the deductibles on these options tend to be high. One plan that was introduced in 2010 has a $27-per-pay-period family coverage premium ($702 per year) with an annual deductible of $4,400. Participants in this program must also bear out-of-pocket maximums up to $10,000. High deductibles can lead to significant expenses for employees and their families; if a family has an annual deductible of $4,400, they must pay $5,102 before receiving insurance payments from Walmart's scheme.

For families whose sole income is a Walmart associate's wage of $11.75 per hour,

insurance costs would consume nearly 25% of their earnings annually. This consists of a $702 premium and a $10,000 out-of-pocket maximum that must be reached before coverage commences. Consequently, many Walmart associates are eligible for Medicaid and other publicly-funded healthcare alternatives, leaving taxpayers to bear the expenses. In Ohio exclusively, Walmart accounted for the highest number of staff and dependents on Medicaid, resulting in roughly $44 in taxpayer expenditures.

In 2009, the total number of employees in Walmart was 8 million. However, an alarming 41.4% of the company's workforce in Massachusetts availed publicly subsidized healthcare in 2008, which amounted to a cost of $15.5 million that was borne by taxpayers.

As per a 2004 report, California incurred a cost of approximately $86 million due to public assistance utilized by Walmart employees since their health care plan does not cover almost 700,000 workers. Walmart provides health insurance to only 54% of their total 1.4 million US associates. Walmart has acknowledged that public assistance appears to be a "better value."

Despite earning profits exceeding $12 billion, Walmart's former President and CEO Lee Scott acknowledged in 2005 that public programs may be superior in certain states due to higher income limits and lower premiums. However, Walmart's associates receive lower wages compared to their retail counterparts. Therefore, it is imperative for Walmart to improve employee compensation despite its massive profits. Additionally, when Walmart enters new markets, it frequently reduces wages and displaces more lucrative retail jobs. A 2005 study revealed that the introduction of Walmart in a metropolitan area leads to the removal of similar positions paying approximately 18% more than those available at Walmart.

Walmart pays below the industry standard, causing

retail workers in those areas to experience a 0.5% to 0.8% decrease in their average earnings. Walmart's hourly rate nationwide is $11.75, which is $2 less than the industry average.

The Bureau of Labor Statistics (BLS) reports that Retail Sales persons comprise the biggest occupation within the retail sector. Walmart pays these workers an average hourly wage of $11.5, which is 5% less than the industry-wide average hourly rate of $12.04. This indicates that Walmart's mean wage for this position falls below poverty level and yields a yearly salary of $20,7744 for its employees. All and their contents will remain unaltered.

The salary of Walmart employees falls almost 6% below the Federal Poverty Level, which is established at $22,050 for families of four. In specific markets, Walmart's average wage is notably lower than that offered by unionized competitors. In California, for instance, a Walmart associate's average salary is 26% less in comparison to the UFCW worker's average wage at any of three major supermarkets operating under the current master contract for Southern California; while in Massachusetts, retail workers covered by a UFCW agreement who work for a large employer earn an average of 19% more than Walmart associates. Despite its financial capability to do so, Walmart does not offer higher wages.

It was found in a 2007 report that raising Walmart employees' minimum wage to $10/hour could lead to an annual earnings boost of $1,020 to $4,640 pre-tax. Implementing this change may only result in an additional cost of 36 cents per shopping trip or $9.70 yearly for the average shopper. Despite this potential outcome, Walmart CEO Mike Duke received a total compensation of $12.2 million in

2008 - which is 587 times greater than the typical full-time Walmart Associate's annual income. Due to the company's history of low wages, taxpayers often bear these expenses.

In 2004, it was disclosed that Walmart associates in California received around $86 million in public assistance annually, implying the potential taxpayer expense for Walmart public assistance could reach $2 billion per year if this trend extends to other states. Mona Williams, a spokesperson for Walmart admitted that their wages were not intended to support families as "more than two thirds of our people..."

Wal-Mart is facing accusations of hiring illegal workers, as federal investigators claim that the company was aware of undocumented immigrants being employed by contractors in their stores. While there are some who hold Wal-Mart responsible, others argue that it was the contractors who were awarded bids to work for the company that hired these workers. Nevertheless, it should be noted that Wal-Mart's job openings are intended for individuals without dependents.

Although originally a small rural corner store, Wal-Mart has significantly expanded, becoming the world's largest company and America's biggest employer. However, this growth has resulted in various responsibilities which Wal-Mart has failed to fulfill. The corporation has disregarded its founding principles by reducing wages, outsourcing highly paid positions overseas, and prioritizing cost-cutting over social impact. Furthermore, Wal-Mart has exploited undocumented workers and violated child labor laws while facing the most extensive legal action for gender discrimination in history.

Wal-Mart has a substantial workforce of over 1.4 million and generates enormous profits, which implies significant responsibilities. A critical issue is the payment of livable wages as employees currently receive inadequate compensation despite working full-time. Wal-Mart can take steps

to address this by implementing changes that guarantee sufficient pay and benefits for retirement and healthcare.

Providing sufficient and inexpensive health insurance to their workers is crucial for companies like Wal-Mart as it would prevent taxpayers from having to cover healthcare expenses. Additionally, suppliers should prioritize the protection of American jobs over lowering prices.

Both S. Jobs and companies advocating for "Made in America" products have a crucial part to play. At Wal-Mart, women are currently being paid less than men, but this can be remedied by implementing equal treatment across genders to ensure fair compensation for all.

This paper suggests that Wal-Mart should address its managers and HR department, stressing its commitment to promoting and hiring more women to managerial and supervisory roles. Our research indicates that the personnel responsible for promoting and hiring staff are predominantly male. To alter their views on women in the workplace, it is necessary for them to recognize the benefits, experience, and knowledge that women can offer the organization. While it may be a gradual process, studies in psychology (Bentham, Veltman, ; Vebrugge, 2004) have shown that beliefs can be changed through means such as sensitivity training and workshops.

Establishing a Women’s Group within the company can be a proactive measure in advancing women's rights and promoting equality. Various companies, including Napa Valley College, Kodak, Wells Fargo, and AT&T, have implemented diversity task forces to great effect. According to Cole (2007), turnover rates have decreased while staff morale and job satisfaction have increased. The CEO of the Diversity Advisory Board (DAB), Eric Beresford, affirms that having a diversity council is an excellent way to realize diversity as a business imperative;

however, if diversity is not thoroughly integrated throughout the organization, the council may become discouraged.

A diversity council can offer significant value if diversity is deemed necessary for businesses. Wal-Mart should clearly advertise job openings and promotion opportunities without any implied conditions, such as relocation or non-flexible hours, that may deter women from applying for managerial or supervisory roles. The company's diversity initiatives have helped to improve its reputation and gradually shift the community's perception of it in a positive direction. Wal-Mart must exercise caution when operating in international markets as human resource practices may differ due to cultural disparities.

The media may overhype potentially damaging misunderstandings, causing a loss of faith, trust, and revenue. Ongoing challenges exist for retailers in the ever-changing market, especially with the implications of a 'buyers' market' (Lewison, 1994). Shoppers have a variety of options, and no single operation can capture them all. The rules for success are being rewritten by technology, demographics, consumer attitudes, and the global economy. Retailers must understand the current values, expectations, and needs of both internal and external customers to succeed in the next decade.

In an effort to combat gender bias, Wal-Mart introduced workplace diversity initiatives in November 2003 (Anon., n.d. -a). These tactics appear to be successful, evidenced by the recent increase in favorable articles.

Walmartfacts.com features headlines such as Wal-Mart Stores, Inc. being acknowledged as a top company for executive women by the National Association for Female Executives and receiving an American Bar Association award for outstanding achievements in promoting diversity. The potential for Wal-Mart to appeal to its target market significantly increases if it enhances its image and diversifies its workforce.