Walmart Company’s Human Resource Management Practices

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Identifying Physical, Human, and Financial Resources

This study uses Wal-Mart’s human resource department, which is responsible for the management of all human resources within the organization. The department has formulated its strategic objective, which is to manage Wal-Mart’s human resources effectively and in a sustainable manner that guarantees optimal support for its retail operations and an ambitious global expansion plan.

To achieve this objective, the human resource department performs a range of functions, which include job design and analysis, recruitment, performance evaluation, cost-effective training and development, compensation management, performance appraisal, welfare administration, grievance handling, discipline handling, and labor relations. The realization of the department’s strategic objectives and functions requires the manager (with the help of the department’s staff members) to identify, select, plan, coordinate, and review the effectiveness of the various resources allocated to it, including physical, human, and financial resources.

Examples of physical resources used by the department include computers, photocopier machines, printers, office desks, working spaces, and stationery. The main financial resource used by the department is cash. This resource is deployed in funding managerial activities and employee compensation. In regards to human resources, the department has employed six specialist managers and a corresponding number of assistants to help in performing its functions.

According to Lussier, identifying physical resources requires the manager to categorize physical/tangible needs for the department (37). Such needs include fixtures, lighting, and air conditioning, furniture, and office equipment to provide working spaces for the employees, ICT equipment to record and store employee information, and Ethernet connectivity to enable the sharing of information among staff members. Freedman recommends the hiring of benefits specialists who will be responsible for developing a comprehensive scheme of service and reimbursements such as health, welfare, insurance, and retirements for the organization’s staff (20).

Resource Planning

Human resource planning will be based on the strategic objectives and functions of the department. For recruitment, I will hire a recruitment specialist to offer advice on the identification and selection of the best human resources for the company, including evaluating the performance of recruits. To arrange for further training and development of the organization’s employees, I will hire a training and development specialist whose responsibility will be to assess the need for further training of Wal-Mart’s human resources.

To cater to compensation, I will sign up for an accountant or compensation expert who will work with a performance appraisal expert to ensure that workers are adequately remunerated and that any additional reimbursement following any promotions is factored in the payroll. I will also plan for the recruitment and retention of a benefits specialist who will be responsible for the management of employee paybacks such as insurance, retirement, and welfare. Lussier advocates the planning for a pension’s manager tasked with the responsibility of managing employee pensions (38).

Finally, to ensure that discipline is maintained among the organization’s employees, the department will have a protocol and ethics officer. The hiring and maintenance of human resources will require budgeting for the recruitment process, the compensation of newly recruited staff, their allowances, and other employee benefits. All specialists/managers will also require the additional hiring of assistants to help them in performing their functions optimally. The total monthly expenses for salaries for the six managers are expected to be about $100,000, while their assistants will incur expenses summing up to $ 50,000. Each manager will also require funds (activity cost) to manage his or her functions. Table 1 below shows monthly and annual resource plan for the department’s human resources (amounts in US dollars).

Table 1: Monthly and Annual Resource Planning.

Position Number required Salary Activity cost
Monthly Annual Monthly Annual Monthly Annual
General HR manager 1 1 10,000 120,000 100,000 1,200,000
Benefits experts 1 1 5,000 60,000 1,000,000 12,000,000
Training and development experts 1 1 5,000 60,000 500,000 6,000,000
Protocol officer 1 1 5,000 60,000 50,000 600,000
Compensation manager 1 1 5,000 60,000 5,000,000 60,000,000
Recruitment manager 1 1 5,000 60,000 300,000 3,600,000
Pension manager 1 1 5,000 60,000 1000,000 12,000,000

According to Greene et al., planning for physical resources should be based on the organization’s size and the number of permanent or temporary employees (34). For example, the number of physical resources to be procured should be based on the number of employees working in the department. The current case scenario has 13 employees who include six managers, their assistants, and I. Physical resources will encompass private working spaces, office furniture, computers, utensils, stationery, a printer, photocopier machines, water dispensers, and coffee machines. For private working spaces, the department will have to cater for rental expenses.

Each manager will have a working space of 180 square feet while every assistant will have a 90-square-feet space. As shown in Table 2 below, based on the current charges, the rental space will amount to $ 28,000 a month. Fixed physical resources such as furniture, computers, printers, and photocopier machines will only incur purchasing costs and, after that, varying maintenance costs. However, monthly costs of current physical resources such as stationery will have to be determined according to the amount used by each staff member

Table 2: Monthly and Annual Plan for Human resources (amount in dollars).

Resource Quantity required Number of Employees using the resources Cost of acquisition (USD1000) Cost of maintenance or use (USD1000) Budget for troughs for January and December (USD1000)
Monthly Annual Monthly Annual Monthly Annual Jan Dec
Office equipment N/A N/A 13 N/A N/A 3 30 N/A N/A
Stationery N/A N/A 13 5 60 N/A N/A 5 5
Computer maintenance N/A N/A 13 N/A N/A 5 60 N/A N/A
Working space for 13 staff 180 sq.ft. 180 sq.ft. 13 N/A N/A 2.4 28 N/A N/A

Sources and Processes of Resource Management

One of the modes of sourcing human resources is through labor market intermediaries, which refer to entities that mediate between the organization or department and the job seeker. Bonet et al. explain that intermediaries may act as brokers by advertising and filling vacant human resource positions on behalf of the organization. In contrast, others may take additional obligations such as the signing of contracts with newly hired human resources (341).

To enable the managers and their assistants to perform their functions, they will need a favorable working environment. This goal is achieved by a proper procurement of all the necessary physical resources that will be used by staff members. The department may also source for human resources within the organization. Muscalu refers to this process as internal recruitment (353). The advantage of recruiting from internal sources is that the manager can evaluate the employee over a certain period. Muscalu observes, “Recruitment via the Internet can provide a large number of possible candidates at low costs and a significant increase in the speed of processing applications for employment” (356). For physical resources, Tsai et al. recommend sourcing from the online retail industry (345).

However, the e-retailer should have a well designed and advanced IT infrastructure that creates a tightly consolidated value chain while delivering high-quality online services. Making this assessment will ensure that the department gets value for its money. Another source of equipment would be through traditional physical retailers. The advantage of using such retailers is that during procurement of equipment, furniture, and stationery, the department can assess the physical quality of the materials such as the brand and product specifications before purchasing, thus eliminating product risk that is existent in e-retailers. Moreover, Kacen et al. highlight that the department would negotiate for lower prices of the procured physical resources, thus increasing the value-cost ratio (16).

To ensure that quality resources are properly and continuously procured, Chiang et al. recommend adopting an agile and flexible supply chain process (49). Such a supply chain will enable the department to react or change to the market conditions with a little penalty on cost, performance, or time. For instance, a decrease in the supply of human resource specialists will require the department to improve its benefits package, failure to which it risks acquiring incompetent or less qualified individuals. Similarly, the department may need to form a strong long relationship with its suppliers to ensure the best pricing packages. To aid in selecting the suppliers, Eltantawy and Giunipero suggest a strategic sourcing centricity, which describes the acquiring of the necessary knowledge or insight regarding a supplier (215).

This knowledge encompasses elements such as the long-term benefits of having a relationship with certain suppliers, the demerits of using particular suppliers, and the opportunities available in using the selected suppliers. In the current scenario, the department may choose online sources for both human and physical resources to gain the benefit of reduced prices. Alternatively, the department may reap the advantage of a reduced risk of low-quality products by using traditional retailers while sourcing for physical resources. Therefore, the department may need to integrate its supply chain from an Omni-traditional channel into a multi-channel one, which encompasses both online and physical retailers.

The goal here is to reap the advantages of both. Also, procuring resources from both sources will ensure the continuity of supply in case of shortage from one type of supplier. Besides, the department can include plural sourcing as part of its processes through procuring resources from both internal and external sources. This strategy is especially applicable to human resources. This technique notwithstanding, Krzeminska et al. suggest the need to define the boundaries such as quality to maintain the standards of resources supplied to the department (1615).

Strategies and Model for Resource Failure

One of the strategies that Chopra and Sodhi recommend is the segmentation of supply chains (76). To increase the effectiveness of the arrangement, the supply chain should incorporate both decentralized and specialized capacities depending on the cost implications for each. For instance, for resources with a high frequency of use, such as stationery, the department can source a decentralized approach from multiple suppliers.

Therefore, the department reduces the impact of disruption in the supply of stationery since other sources are also supplying the same item. The main cost implication of this strategy is that the department may be provided with products of different quality, thus affecting the final value. Besides, the strategy may be more costly if applied in sourcing for human resources because of increased expenses. For products that are less frequently used or do not require immediate supply, such as fixed physical resources and human resources, the department can apply a less costly centralized approach.

For example, it can narrow down to internal and online sources for the supply of its human resources. Another strategy that Chopra and Sodhi suggest is the regionalization of supply (78). More often, supply is limited to a particular county, state, or region. For instance, in counties that have a low level of education, it would be prudent for the department to source for human resource specialists from other regions. Similarly, the lack of physical resources such as stationery by county retailers will require the department to seek supply from retailers outside the county or state. However, this strategy comes with its cost implications, with the most common impact being the high cost of transport.

The Operations Research/Management Science (OR/MS) model of disruptions in the supply chain is a method of forecasting supplies. It encompasses various resource management processes, which include the evaluation of supply disruptions, the sourcing of decisions and contracts, and incentives. According to Snyder et al., the aim of evaluating supply disruption is to assess the probability and risk of a given supply or source (95). The process can be based on previous failures experienced by the department or through a simulation where the department reviews its capacity, the frequency of use, transportation delays, and other causes of disruptions while forecasts their probability. Decision sourcing as an element of the OR/MS model uses two strategies: contingent rerouting and routing sourcing.

Regarding the routing plan, the department acquires a resource from a single reliable supplier during every procurement period and cannot place another order if the supplier becomes unreliable. Thus, as long as the supplier’s state is reliable, the supply will remain predictable. On the other hand, the contingent strategy combines dual sourcing and flexibility to forecast any disruptions. This model suggests that the department can source from one reliable supplier. However, the process is flexible to cater for the measured probability of disruptions. Another way to forecast disruption is to sign contracts and/or give incentives to suppliers. According to Snyder et al., this strategy reduces the risk of disruption, particularly in cases where the supplier is faced with financial problems (105).

Moreover, the contract should include penalties in case the supplies disrupt the accessibility of a resource. Overall, it is important to have a plan in case of a disaster, such as the disruption of the supply of a resource. Snedaker and Rima define disaster planning as a methodology that addresses concerns emanating from disasters or disruptive events to guarantee the continuity of business (3).

Review of Resource Management Practices

One of the essentials of resource management is reporting. The importance of reporting is to review the actual use of each resource to determine its value or benefit concerning cost. To assist in this process, Oliver recommends identifying the challenges and issues involved in forecasting, planning, and implementing resource management practices (256). Examples of specific areas that will require reporting include the frequency of use, cost, time, quality, and disruptions, as illustrated in Tables 3 and 4 below.

Table 3: An Example of a Physical Resource Reporting Arrangement for One Month.

Resource Challenge/Issues reported Forecasted Frequency of Use for the Resource Actual use
Office equipment To be used daily Was used daily based on need
Plain papers To be used daily Only 60 percent was used for printing and photocopying purposes

Table 4: An Example of a Human Resource Reporting Arrangement for One Month.

Resource Challenge/Issue Forecasted frequency of use for the resource Actual use
Benefits manager To work from Monday to Friday Worked from Monday to Friday during the month
Pension manager To work from Monday to Friday Worked from Monday to Friday during the month

An innovative method of reviewing, monitoring, and recording the progress of the actual resource use against the planned use is an integrated Value-based Cost Management System (VCMS). This approach integrates the VCMS model of reporting with the level of resources used by a department. As Busco et al. reveal, “One of the primary levels of the organization that affects all decisions is the resource level” (152). Therefore, the department needs to ensure that it has the right combination of human skills and in the right proportions that enable it to perform its role effectively and efficiently. In particular, when reporting the costs emanating from the acquisition of various physical resources used by the department, the process will require the department to account for whether the quantities of resources used are proportional to the level of activity.

Another method that can be used to review the utilization of resources is performance analysis, which entails comparing the expected level of performance of the various resources with the actual operations. This goal is achieved by first identifying the performance indicators of each resource. For human resources, the level of competence is a key indicator of the expected performance level. Once competence has been established, the manager should then evaluate the performance of the individual resource on a periodical basis by analyzing its behavior and/or actual results. For instance, the benefits manager is expected to have a deep understanding of all paybacks that can be rewarded to an employee.

Therefore, an increase in employee complaints will indicate poor results and consequently, meager performance. The main performance indicator for physical resources is quality service output. This indicator is determined through a quality management system, which determines the expected or forecasted value of the service of a given resource before comparing it with the actual eminence it generates.

To inform future planning processes, various techniques can be used. One of the techniques used is the capital appraisal method, which entails determining the amount of cash that should be invested in acquiring or maintaining a particular human resource and relating this information to its benefit. Götze et al. also suggest forecasting future management process using a return on investment method (3). The method accounts for the level of performance/output of a resource relative to its investment. Here, resources that relay the highest returns should incur a higher investment compared to the ones perceived to have lower benefits. Auerbach et al. explain that the greater the strength or performance of a resource, the higher the return on investment (1362). For instance, the benefits manager will have a higher salary relative to his or her assistant due to his greater return on investment.

Works Cited

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