Wal-Mart and It’s Organizational Behavior Issues
With each element listed the employees of the organization will identify this as work life that will guide their level of motivation. Depending on which level of motivation the employees are at will determine the outcome of their performance, along with their satisfaction, and development. The entire elements combine helps to build the framework in the way the organization operates. (Davis, 1993) It is important for Wal-Mart to understand their employees’ job satisfaction, fairness, personal development and growth within its organization. Wal-Mart was founded by Sam Walton in 1962.
Sam Walton business strategy was to supply products for customers at low prices. Sam Walton began the first Wal-Mart store in Rogers, Ark. While Wal-Mart was at their beginning stage their competitor Kmart was growing rapidly. During that time Walton was only able to invest in 15 stores. In the 1970s Wal-Mart offered stock which helped to expand the company with 276 stores in 11 states. By the 1980s Sam Walton was labeled one of the richest individuals in the United States. In 1983, Sam’s club Warehouse was opened. In 1988 the first Supercenter was open offering grocery and 36 departments of merchandise.
In 1989 there were 1,402 Wal-Mart stores and 123 Sam Club. As of to date there are 10, 185 Wal-Mart and Clubs location in 27 countries with 2. 2 million employees. Walton theory is quoted in autobiography by stating “… if you think about it from the point of view of the customer, you want everything: a wide assortment of quality merchandise; the lowest possible prices; guaranteed satisfaction; friendly, knowledgeable service; convenient hours; and a pleasant shopping experience. You love it when a store exceeds your expectations, and you hate it when a store inconveniences you, gives you a hard time, or pretends you’re invisible. This strategy helped to build the foundation of Wal-Mart and by the 1980s Sam Walton was labeled one of the richest man in the United States. (“History,”) With the low cost being the drive of the business, comes a price to employees’ benefits and pay. Walton believed in order to maintain low cost for his customers, he would have to control payroll. When Walton passed away in 1992, this issue was shed to light to the public in the way Wal-Mart treated their employees with unequal pay and benefits. The negative press created a negative image of Wal-Mart and caused them to lose 8 percent of their customers.
The new leaders of Wal-Mart took on one philosophy of Walton and that was reducing cost, but left out the key element of making their employees feel as if they had a stake in the company. The pressures of reducing cost created unrealistic demands for Wal-Mart’s managers, specifically dealing with payroll. The high cost of low price began to have an effect causing Washington to get involved of the turmoil. The state of Maryland followed suit by creating a bill for large employers such as Wal-Mart to spend at least 8 percent of their payroll on health benefits. Thirty others states are soon to follow with similar bills. Frank, 2006) Wal-Mart stated as a defense their company offers the lowest cost in healthcare benefits within their industry along with competitive wages. Wal-Mart’s associates have mixed reactions to how satisfied they are with their company’s benefits and wages. Some employees have resigned because of their dissatisfaction while other employees feel their needs are being met within the organization. (Armour, 2003) In the case of Wal-Mart the value theory of job satisfaction comes into play. This theory comes from the question what makes people satisfied and what do they value.
Wal-Mart’s employees express their dissatisfied with their pay and benefits package. Most employees can’t afford or aren’t eligible to receive their healthcare package. Wal-Mart continues to feel the effects and consequences by having a high turnover rate with employees. Most of Wal-Mart’s turnovers are voluntary, leaving the cost to be substantial to Wal-Mart. Wal-Mart’s turnover rate is absolutely appalling. Approximately 70% of Wal-Mart employees quit outright within the first 12 months. This could be that Wal-Mart is openly against any kind of labor union within their organization and will stop at nothing to keep collective bargaining way. (Keil, 2005) While researching this topic, so many things were found to be eye opening. One in which is the way that Wal-Mart conducted themselves when they had to manage their employees. How they dealt with promoting them and demoting them. Last year Wal-Mart started a new management style and wanted to promote more family time and create a less workload on each of the managers and employees. Therefore, they changed the schedule to becoming 3 days on and 3 days off which created more room for managers to fall into the field.
Managers would be thrown into the position of an area of the store they knew nothing about and expected to understand each thing and help customers find exactly what they are looking for. This created a huge problem, but of course Wal-Mart does nothing about this issue and just continues to have problems. The real ridiculous part of this whole hiring equation is how they promote people to become managers or the next level from what they are. Every store has certain quotas to meet each month, and they have to have a certain amount of managers that are women and men.
They will find someone that is totally unqualified for the position and throw them in it just to make the quota. They will even place a pregnant person in that position to make a quota. If you decline a job duty, you get demoted from your position. This is a horrible way to conduct a business and is causing many issues as of right now. I can only imagine what it is going to cause as time goes on. Many companies have ethical issues that they tend to not deal with and to simply ignore. These specific companies tend to have issues that get bigger and more difficult to deal with and some even result in involving lawyers and the law.
Wal-Mart in particular has so many different ethical issues, but one more relevant to all employees is in their hiring statuses. “For example, a job for a Front-End Supervisor position has been posted, two employees sigh-up for an interview. The first employee called subordinate A, has an M. B. A. , fifteen years of experience as a manger in the retail industry, and has been working for Wal-Mart stores Inc. , for two years. Subordinate B, has a 9th grade education, no experience in management or retail prior to Wal-Mart, and has been working for the company for one year and has a poor attendance record.
They both received the same rating on their ninety day evaluation, who does the manager pick for the position? The answer is subordinate B got the job, because his kids play with the general manager’s kids at school. ” (Richard Publishing) This happens all the time in the employment and hiring decisions and is completely unethical on so many levels. Decisions such as this could certainly create a somewhat uncomfortable work environment. This a great example of how the corporate structure of Wal-Mart could affect its employee’s behaviors.
Managers need to show their employees how they need to do their job correctly and are their role models. The employees feed off of the type of a manager he/she is. With having this person that has a horrible attendance already and very uneducated be technically in charge of them during workings hours is going to cause a lot of conflicts on the floor and customers will see Wal-Marts’ performance standards gradually declining because of these circumstances. In 2006, an activist group called the Los Angeles Alliance for a New Economy or LAANE, said that “Wal-Mart reports that full time hourly associates make on average a little over $10 an hour.
In addition, most employees are only allowed to work 34 hour workweeks. When multiplied by 52 weeks, this equates to a little less than $18,000 a year. Wal-Mart’s founder Sam Walton has been quoted as saying, “I pay low wages. I can take advantage of that. We’re going to be successful, but the basis is a very low wage, low-benefit model of employment. ” (Tejada, 2003) Wal-Mart claims that its wages are aligned with market averages although they truly cannot be compared because Wal-Mart simply staffs more part time employees than full time ones. This causes the comparison to be skewed and not authentic.
These blatant low wages are a great example of how the company’s management philosophy affects behavior within the company. Employees are often discouraged and disgruntled due to Wal-Mart’s non-existent pay raise structure. (Tejada, 2003) Wal-Mart will allow employees who work 34 hours or more to receive “full time” benefits. They discourage any paid time beyond these hours though and have even been accused of having employees work off the clock. Numerous lawsuits have been filed by both former and current employees regarding this unfair and unjust issue. Tejada, 2003) This example as well as others clearly exposes Wal-Mart’s poor working conditions. Another example would be that of class action lawsuits filed in 1995 by pharmacists who were forced to take salary cuts and hour cuts due to sales declining. (Tosh, 1999) In 2004, The New York Times reported on an internal Wal-Mart audit that examined a week’s worth of time clock punches for 25,000 employees. According to the article, the audit found a ludicrous amount of violations including but not limited to child labor law violations and state laws regarding break and meal times.
There were over 60,000 missed breaks and over 15,000 lost meal times. The Vice President of Communications stated that the company’s auditors auditing process was not correct and that there was nothing that the company would do to correct the issue as if there were none at all. (Greenhouse, 2004) With all of these examples of Wal-Mart’s desire for corporate expansion and complete disregard for anything or anyone standing in their way, (including their own employees), one must admit that this type of behavior is both unethical and immoral.
The absolute holes within the management system of this organization are so flawed that only money could keep the tower from collapsing. The evidence is there. The proof is in the gallon jar of pickles that only costs $2. 95, but costs the family of the worker who stocks said pickles 2 meals a week. One bright light in the equation is that of how Wal-Mart has handled the environment lately. As times keep getting more environmentally friendly, you are seeing more and more companies switching to different ways of conducting their business to produce a more “Green” workplace.
Some people may decide to shred paper, recycle or even turn to paperless documents. “Wal-Mart will be asking its 100,000 suppliers to cut the amount of carbon they emit when they produce, package and ship their products. ” (Earth Talks Para. 3). They are eliminating large laundry detergents and having them be put into small bottles which will result to more of a energy intensive way to ship. They have also been trying to have CD, DVD and video game producers, to create a smaller and lighter case to downsize the carbon emissions.
Actions such as this by Wal-Mart certainly facilitate that of a vested interest and sense of pride by its employees, but one must wonder if these actions are out of good nature or forced by governmental pressure to procure the environment. It is clear that although there are some bright spots in the corporate culture that is Wal-Mart, there are many factors that control the behavior of Wal-Mart’s employees. The solution to these issues is clearly government intervention and community involvement. We as a people must fight the yellow smiley face regime that is destroying our communities’ one at a time and literally illing society’s faith in corporate America. Tighter regulation from the government on monopolistic entities is a must. Perhaps boycott by the people could force Wal-Mart into submission. While these solutions seem far-fetched and almost impossible, awareness and education regarding these issues is a great start. From a management perspective, company executives must try to place themselves in their customer’s shoes. Not everyone has a six figure job. Not all people on this country want to work off the clock, in fact, most do not want to.
Management must employ practices to be much more employee focused rather than profit driven. These issues need to be constantly reviewed by both middle and upper management. Corporate programs for training toward unified company goals, with an emphasis on positive interaction with co-workers, both at the executive level and on the sales floor should be common place. If you want more from your people, treat them more like people. In conclusion, it is time for Wal-Mart to put some serious money behind their promises for improvement.
They have a need to implement plans to increase the number of women in management positions. All new job openings should be posted and made available to every employee that is eligible. In addition, a set standard of qualifications and experience need to be aligned to each job position should be posted as well. Next, Wal-Mart needs to allow employees to work full time if desired and provide the option of healthcare coverage, retirement benefits, and better wages. In response to their effect on importation and globalization, Wal-Mart should require a set of standards for their suppliers to adhere to.
These standards should include wages paid in underdeveloped countries, environmental impact and quality of goods provided. In regards to the environment, Wal-Mart needs to step up and implement renewable energy sources, like wind and solar power, in all of its stores and distribution centers. The fleet of trucks used to bring goods across the world need to be more fuel efficient. Another way that Wal-Mart can have a positive impact on the environment is to make a commitment to remodel existing vacant buildings instead of constantly creating new buildings and parking lots.
To go even another step further, a commitment to fund an acre of natural habitat preservation for every acre they occupy would make a very big, positive impact on the environment. Lastly, individual consumers can be more conscientious of where they shop. They can make a personal commitment to buy locally produced items and shop at local businesses. The pinch on the pocketbook will be felt up front, but eventually it will create better paying jobs in each small community, putting that money right back into the consumers pocketbooks. Our government can educate people about the effects of globalization and importing.
This can be done both in public forums and in our school curriculums. The government can also be effective in slowing this by providing incentives to encourage local entrepreneurship. Some of these incentives include small business loans, tax cuts and small business training. Some may say that the American consumer is the cause by choosing to purchase at Wal-Mart. There may be a point there. But, Wal-Mart should hold some responsibility for more than the almighty dollar. They should also be accountable for how they are affecting the quality of goods, the local economy, American jobs, the environment, and the well-being of their own employees.