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Walmart Company Analysis

Essay by   •  July 18, 2011  •  Case Study  •  3,481 Words (14 Pages)  •  1,947 Views

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Content Page:

1.0 Introduction

2.0 Company Review: Wal-Mart

3.0 Issues: Motivation, Compensation and

Organizational Conflicts

4.0 Recommendations

5.0 Change Management

6.0 Conclusion

7.0 Bibliography

8.0 Appendix

Word count: 2,660 words

1.0 Introduction

'Change happens all the time. Some embrace it while others avoid it. Unfortunately, for business, societies and individuals to advance, changes need to occur.' (Sun Microsystems, Inc.) It is vital for the Human Resource Management to focus on issues that requires special attention. Things change, but an organization must be fully equipped with all the necessary factors that affect the HRM system from being at a satisfactory level.

The company that I have chosen to review and analyze on the current Human Resource Management issues and how to implement change management is Wal-Mart.

2.0 Company review: Wal-Mart

Wal-Mart is an American public multinational corporation specializing in discount retailing. Founded by Sam Walton in 1962, there are a total of 9005 stores and club locations in 15 countries today with the employment of more than 2.1 million associates. Wal-Mart is one of the most successful retailers in the world today, and is also one of the most admired companies based on the 2004 issue of Fortune Magazine (Stein, 2003).

Wal-Mart's strategy lies in the attributes of its strong corporate culture that originally came from Sam Walton. (Wal-Mart Stores, Inc., 2003)

While having a strong culture is highly sought after in organisations, Wal-Mart has been severely criticized on its questionable human resource practices, such as non-unionization, low wages, and discrimination against women. These are the issues affecting employee performance and contributing to the performance of the organization.

Sambrook (2000, p.159) stated that 'the Human Resource Management plays an important role in leveraging the knowledge of the organization specifically the enhancement of the abilities and skill of the employees.'

One of the key functions of HR is employing the right people with the right abilities and skills for the job, as this influences the morale of the employees.

The three major issues affecting Wal-Mart's performances lies in lack of motivation, compensation, and organizational conflicts. According to Hunt (1999), it is important for HR managers to understand the structures and climate in which people's potential can be released, developed and rewarded.

3.0 Issues: Motivation and Compensation

'Motivation is often perceived to be the foundation for outstanding performance... However managers need to know what will spark employees' best efforts, whether it be money, responsibility, bigger challenges or interesting work. That's an important piece of the motivation equation' (Dayton Business Journal, Dean Mcfarlin)

Wal-Mart has low wages and overtime woes. Wal-Mart's average wage is USD$8.75 per hour compared to the wages of most retailers in cities which pay about USD$10.50 an hour.

In relation to overtime, Wal-Mart had a strict policy on overtime and it was forbidden by company rules. However, it has been observed that at most stores, employees were required to work between 5 to 15 hours overtime per week.

Another tactic of Wal-Mart was by locking the doors of the store at the end of the shift, initially to prevent theft, and also to prevent the employees from leaving on their scheduled time. The employees were also not being compensated or paid for the overtime.

'The amount of effort, the intensity and the persistence demonstrated by an employee on any work task are influenced directly by the opportunities for performance provided within the job context and by the knowledge, skill and ability of the individual worker, as well as through motivational processes' (Blumberg & Pringle 1982). Employee motivation is responsible for particular behaviours and performance outcomes. Lack of motivation can be caused by these factors, such as low pay, no rewards, poor physical environment, not meeting employee needs, as well as lack of the right abilities or skills and knowledge of the job.

Gender also seems to be a factor affecting the motivation of employees within the company. Wal-Mart has been accused of discriminating against women, by denying training and promotion opportunities to them. Wal-Mart's workforce comprises of 72% women, with only small percentages in managerial or supervisory positions. These factors have contributed to centralized workplace policies and unsupervised local managerial discretion. This puts a heavy impact on the de-motivation of Wal-Mart workers, because managerial positions and opportunities are hardly given through promotion of good work.

One of the most influential approaches to motivation, which is applied in work settings, is Abraham Maslow's (1954) Hierarchy of Needs. 'Needs are categories of stimuli or outcomes that act to energise or initiate motivated behaviour', (Peter Murray).

David Bourassa (2007) lists how the five factors in Maslow's theory could be satisfied in a workplace; the first is physiological, which could include having a good salary and a safe working condition. The second is safety and security; an example would be job training programs and enrichment. The third factor is social; this could involve team building seminars. The fourth is esteem, this includes employee recognition program for performance and promotion. The fifth factor is self-actualization, which could be autonomy in selecting their own assignments in the workplace. Maslow's theory suggests that by ensuring that the employees' needs are met results in job satisfaction and a much higher level of motivation.

The working environment at Wal-Mart is perceived to be more of a threat than a desirable working environment.

Another issue faced by Wal-Mart in relation to motivation is compensation.

Wal-Mart does not provide the necessary wages for the

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