Introduction
Human resource management is a function that is designed to maximize employee contribution to an organization. Dessler, Cole, and Chhinzer assert that HRM mainly focuses on human resource administration through various guiding principles and structures that are set by the respective HR authorities (1). The HR department is responsible for recruitment, training and development, performance appraisal, and employee promotion. It also maintains a balance between organizational practices and policies that are made by governmental labor institutions in collaboration with industrial stakeholders. Hence, human resource administration is crucial for any organizational success since it motivates employees to give their best in their working environment. Human resource management professionals are critical in terms of developing human resource planning strategies in an organization. The HR department is a key section that steers the attainment of organizational goals. Therefore, it needs to have great plans for employee management to create a working environment that is favorable to them so that they can give their best to the organization. However, various human resource management strategies are executed stepwise because abrupt changes in the department often have adverse effects. This paper uses Wal-Mart as a case example to show the role that HR plays in transforming the organization into a global leader.
Overall Human Resource Strategy
In Wal-Mart, human resource management strategies are designed in a manner that encourages people to save their money to live better. This customer-focused HR plan forms part of the company’s vision. In its corporate social responsibility, Wal-Mart upholds the needs of its associates, customers, members, suppliers, and shareholders. For instance, it avails many work opportunities internationally annually while at the same time providing teaching schemes to its acquaintances as it continues to expand to different countries. In addition, the company is a major philanthropist that supports education facilities. It also promotes green and renewable energy solutions among other ways. Therefore, the company holds its employees dearly to the extent of referring them to as associates, owing to Sam Walton’s philosophy of motivating employees and making them feel important to the company.
According to Dessler, Cole, and Chhinzer, the efficiency of a company’s HR administration avails a high-end collaboration, reasonable rivalry, and reverential worker surroundings (1). Wal-Mart has more than two million associates/employees. This figure reveals how the HR administration assumes the most significant position in the development and achievement of the company’s mission and vision. In addition, it has a centralized management control system whereby the overall authority is based in the head offices. However, it has a strong management team at the branches and subsidiary levels. The team makes it easy for the human resource management department to manage the huge number of employees/associates. Besides, the company has people from various cultural backgrounds. Therefore, it has human resource managers from various cultural backgrounds who have enhanced the witnessed good relationship amongst the associates. Since company is the main dealer around the globe, whose achievement cuts across diverse cultural heritage, its HR administration is acquired through three basic strategies, namely inspiration, interior endorsement, and exterior employee enrollment.
To achieve the goal of quality service to customers, the company’s human resource management motivates its associates to the best of their ability to create a comfortable environment that enhances their contribution. In the Wal-Mart stores, every worker wears an employee tag that has no name. The boss also wears the same employee tag, which is broadly communicates the role that workers play in achieving the company’s agenda. This plan indicates a great sense of teamwork, which in turn eliminates any difference between the directors and employees in the workplace. Furthermore, the company’s communication channel is based on the culture of an open door where there is an open communication platform between the associates and managers. This strategy enhances the freedom of expression in the process of making suggestions and complaints (1).
The business avails several paybacks that inspire its acquaintances. For instance, all workers who have served the firm for more than twelve months or beyond 42 days are qualified to benefit from the business’ additional advantage of almost 6% of the firm’s yearly earnings. Besides, such employees and their relatives get price cuts every time they obtain commodities from Wal-Mart go-downs. This strategy encourages the associates to market the company to their family members.
In addition, the company gives a room for associates’ individual career growth through internal promotions and opportunities to study while still working. Almost 75% of directors in the business started their career as acquaintances before they gradually rose to high ranks. For instance, Larry English started in Wal-Mart stores as a stock associate. He then became an assistant manager in Rogers, Arkansas. After some time, he became Wal-Mart’s regional manager in Newport, Arkansas. After finishing financial management training, he became the company’s field manager who was responsible for overseeing the finance departments of many giant stores. Internal promotions are a great source of motivation to employees. They enable them to give their best to the success of the company.
In addition, in the recruitment of associates and high-level managers, Wal-Mart has a reputation for hiring many business owners. Such administrators are imperative for the company because they hold capitalist minds and traits such as economy and threat management. Associates who were hired based on the aforementioned backgrounds have been essential for the growth and development of the company. The human resource management has been using this recruitment strategy. It has enabled the company to adapt to new business environments such as the acceptance of new technologies by hiring competitively hi-tech experts. For instance, Wal-Mart employed Clarence Archer, a pharmaceutical expert, who advised the manager to introduce pharmacy division in the business. Now, the business has close to 4000 dispensaries. Such an attainment has made the firm the fourth biggest dispensary dealers in the world.
Wal-Mart’s Strategic HR Plan and Its Benefits
Wal-Mart is a world’s renowned organization whose great success is attributed to its well thought out HR plan. Human resource department is responsible for ensuring that employee welfare is taken care of on a day-to-day basis. Wal-Mart’s HR department ensures that the working environment is conducive for associates’ contribution. The company has developed a strategic plan that is unique relative to other companies’ plans. It is only in Wal-Mart that an employee is handled as a company’s shareholder. This gesture makes employees aspire to live longer in the company. Hence, it is considered a greener pasture for job seekers.
Firstly, the company recruits both highly qualified and literary competent workers whose principles are in accordance with its core value of adding significance to people lives. Highly qualified candidates are recruited to make the company grow and/or adapt to the fast changing business environments. The company has adopted new business models and technologies. These people have specialized skills and talents that the company needs to scale up to greater heights. Moreover, the high-end workers enable the company to grow its market coverage across various regions and cultures in the world.
On the other hand, the other group of candidates comprises people who are skilled, although they do not have specialized professions. The company needs these people for various reasons that include low-cost labor, providing employment opportunities for the unemployed, and the need for jobs that do not demand specialized skills. Unskilled people offer cheap labor to the company, thus enabling it to lower its operations cost. Hence, it ends up selling commodities to customers at prices that are often lower than the fee that their competitors charge for the same merchandise. Hiring these people forms part of the company’s objective of improving the quality of people’s lives. It offers employment opportunities to the jobless persons. Moreover, many jobs that are available in the stores do not demand specialized skills. Hence, the company has set these jobs aside for low-skilled persons.
Secondly, Wal-Mart has its internal industrial relations policies that have enabled it to attain a competitive advantage in the chain store industry. Employees are not allowed to join unions because of various reasons. For instance, the company has a centralized management structure whereby managerial decisions are made at the headquarters and then passed to the branches and subsidiary levels. Trade unions do not have universal policies. This situation makes it hard for the company to have its employees under different trade unions in various parts of the world. By allowing them to join trade unions, some employees might be favored by their countries’ trade union laws more than others, hence making it hard for the HR department to establish universal policies. Hence, the company has its own industrial laws, which tend to ignore the hierarchical organizational culture. It has created a structure that enhances the spirit of teamwork in the company.
Wal-Mart associates work as a team following the will of the Sam Walton who founded the company. Senior managers view low-level associates as their colleagues and vice versa. This plan allows free interaction and communication between employees and employers, thus creating an environment that is conducive for employee involvement towards the accomplishment of the company’s goals and objectives. Teamwork spirit also enhances the relationship between employer and employees. It has helped the company to attain its objectives of improving people’s lives.
Thirdly, Wal-Mart’s HR plan has enabled the company to do cost saving. Consequently, this move has enabled it to sell its products at low prices. As mentioned earlier, Wal-Mart hires competitively skilled candidates. It utilizes their talents to meet its objectives. Such talents help the company to venture into activities that save its operational cost. For instance, the store has a pharmacy that was launched as an employee initiative, which has enabled the company to set its pharmaceutical products at lower prices than the normal market prices because the employee is a company’s associate.
Steps Followed by Wal-Mart’s HR to Implement the Plan
Wal-Mart is a company that has a strong corporate culture, which acts as the key successful strategy that the management has been enjoying. Besides, the company’s HR administration deploys Walton’s customs and viewpoints of worker supervision. Walton believed in enhancing people’s welfare for the benefit of the company’s success. However, when hiring, the needs of the company supersede the desire to help people. The company can be of benefit to people only by getting the right skills. Hence, employee retention is doable if found necessary for the benefit of the company. However, the HR implements its plan by considering the following three steps, namely getting good people, keeping good people, and growing good people as Dessler, Cole, and Chhinzer present in chapter 5 of their work in the book ‘Human Resources Management in Canada’ (1).
First, obtaining reliable workers is one of the maintenance tactics where worker output determines the company’s ability to achieve its desired goals. Every competitive organization aspires to retain competent employees. Hence, it uses different strategies that encourage them (employees) to stay in the workplace. Dowling, Festing, and Engle claim that Wal-Mart has a knowledgeable HR unit that makes the corporation celebrated as the best place for any qualified human resources (2). The company’s ability to get good people does not happen by chance because competent candidates seek employment opportunities in organizations that have a good reputation as far as their working environment is concerned. Hence, the HR ensures that the company has a good standing to attract the competitive candidates. The HR also ensures that it has selection strategies that enable the company to get qualified competitive candidates. The company focuses on skills, past performance, and the innovativeness of a candidate.
Secondly, after getting reliable persons, the HR embarks on implementing strategies that enable the company to retain them. Competitive employees are the organization’s greatest assets. Hence, they should be retained by creating a working environment that favors them. The idea of enhancing the spirit of teamwork in Wal-Mart has played a major role in enabling the company to retain its competitive employees. Competitive human resources feel threatened whenever they are denied the freedom to communicate freely in a working environment. Hence, the employer must ensure that employees enjoy the freedom of expression and sharing of their ideas.
Wal-Mart’s HR department has various strategies that enable the company to retain its employees. Through the department, an employee has the opportunity to share innovative ideas that can be implemented by the company (2). Successful ideas have made employees rise to high positions in the company’s management. Staff members have opportunities to advance their careers whereby they are allowed to enroll in academic institutions while working on part-time bases. Many of them have become professions with the help of their employer.
The company also has a strategy where employee individual contributions are recognized and awarded. Employees feel happy whenever their efforts are recognized. This strategy enhances their relationship with the employer. The spirit of teamwork enables recruits to work in harmony. Whenever their individual contributions are recognized and awarded, they tend to compete with each other, consequently enabling the company to achieve its desired objectives within a shorter time span. These rewards include promotions and profit-share bonuses, which make employees aspire to live long while working for the company. Moreover, once an employee is hired, the HR ensures that the new entrant gets into the pension plan, which encourages him or her to live long in the company while focusing on the huge retirement and pension benefit after his or her retirement.
Thirdly, Wal-Mart’s HR has strategies that ensure that the company is capable of growing good people. Psychologically, it is human to be ambitious. Hence, people feel good while working in an environment that creates ambitions in their minds. The company’s HR department ensures that employees are given growth opportunities to keep them ambitious. The plan also ensures that they get those opportunities with regard to their individual contribution. To achieve this goal, the company offers training sessions to the employees to make them improve their skills in the workplace. From the training sessions, employees are well equipped to work in an environment that has greater responsibilities (2). It is recorded that the majority of the company’s managers started as junior associates. They have risen to high positions through trainings and recognizable individual contributions.
In addition, through the HR section, Wal-Mart has a profit-sharing strategy that makes employees feel part of Walton’s family. Employees who work for the company for at least one year are eligible for sharing profit bonuses as a way of making them enjoy the fruits of their labor together with shareholders. Bonuses grow annually based on other factors such as the workers’ ability to invest and the positions that they hold. Hence, staff members feel encouraged to work for the company for a long time to continue enjoying such annual financial benefits.
Conclusion: Forces that are Changing Wal-Mart’s Operating Environment
In the recent years, various forces have affected Wal-Mart’s operations environment. The first force is the push for trade unions where employees are influenced to join trade unions. Trade unionists claim that the company prohibits them (employees) from joining the unions as a way of exploiting them in terms of low wages and denying them the freedom of expression. However, the push is not valid because recruits are employed on a contractual basis. Agreements are made before signing such contracts. The low-wage plan is not a valid claim because employees are answerable to profit-share bonuses. This strategy does not exist in other companies. Hence, the company manages to balance the cost of labor by paying low wage while at the same time allowing the profit-share plan.
In the recent past, the company has been acquiring many stock commodities from cheap markets such as China to sell at lower prices. However, there has been propaganda claiming that Chinese products are of inferior quality. This claim has affected the company negatively. The alternative has been to buy products from other markets that are considered to have high-quality goods. Hence, to sell the goods at lower prices, the company has opted to utilize its employee talents whenever necessary to incur less cost.
References
Dessler G, Cole N, Chhinzer N. Human Resources Management in Canada. Canada: Pearson Education Canada; 2013.
Dowling D, Festing M, Engle D. International Human Resource Management: Managing People in a Multinational Context. New York, NY: Cengage Learning EMEA; 2008