Human Resource Management - The History of Wal-Mart

Human Resource Management - The History of Wal-Mart

Table of Content
Executive Summary
Introduction
History of Wal-Mart
Recognizing and Rewarding Employees
Labour Relations and Collective Bargaining
Conclusion
Bibliography

Executive Summary

In this paper, I will discuss the company Wal-Mart, which is a worldwide known retailer. I will particularly address two chapters. The first part of the paper will describe the way Wal-Mart’s employees are rewarded and recognized for their work. The second part will discuss the much controverted: labour relations and collective bargaining. First, I start by covering a bit of the history of the company as well as some important dates. Throughout its history, it is possible to see how fast the company grew in terms of stores, employees, and sales. Next, I continue to relate the information I obtained about Wal-Mart to chapter seven in the HRM book, Essentials of Managing Human Resources. This part contains some of the voluntary and financial benefits offered to the employees by the employer and also how employees are evaluated. Afterwards, I create a link with the difficult subject of collective bargaining. I tell one story that actually happened in Quebec, in 2005, about someone who left a mark in the history of Wal-Mart. I also tell the possible reasons why an employer would not want his employees to be unionized. Finally, I conclude my research with my opinion on the giant company: Wal-Mart.

Introduction

For this term paper, I chose to research a company that is really profitable for its customers, but very demeaning for its employees. On the contrary, this company has won many prizes including the 2010 Corporation of the year, which is nothing small! As seen in class, I’m referring to the international path Wal-Mart has taken. The reasons why I chose Wal-Mart are simple. First of all we have seen lots of videos in class about this company and the comments were mixed. In one of the videos, the employees who were giving their testimony were complaining about the way they were treated within the company; they were under paid for the value of their work, and they did not have enough recognition for what they were contributing to the company. Overall, the videos about Wal-Mart always displayed positive things when the managers would tell the viewers about the way they treat their employees and the way they participate in ethical business. I noticed that in these videos, employees were somewhat happy with their jobs, and in general would not complain. Those were people who worked as United States employees at Wal-Mart stores. In my research, I tried to look at the point of view of the Canadian workers of Wal-Mart. Most of the stories that I heard were about the way they were abused of their rights. Many of them were complaining about the poor quality of the management and on top of all that too many employees were afraid of grouping up into unions for fear that the management would decide to close the store (as it did happen in 2005 in Jonquière). So I found that this company was worth investigating. In the following pages you will find out about how the employees are rewarded and also about collective bargaining in Wal-Mart.

History of Wal-Mart

Differently to what many people think, the discount retailing did not start with the opening of famous stores such as Kmart and Wal-Mart in 1960, but with the chain of variety stores owned by Sam Walton in the 1950’s. Samuel Moore Walton is the founder of the Wal-Mart store chain. In regards to Wal-Mart, its first store started in 1962 when Sam and his wife, Helen, decided to invest their money in the first store. Their investment made up 95% of the money that was necessary to open the first Wal-Mart in Rogers, Arkansas. While Kmart was expanding its stores in the 1960’s, Sam only had the money to build 15 more stores at that time.
In 1972, Wal-Mart entered the New York Stock Exchange and in 1977, Wal-Mart opened it pharmacy, auto service center, and jewellery divisions. By the end of the decade, the company had expanded to 276 stores in 11 states, employed 21 000 employees, and made $1. 248 billion dollars in sales.
In 1983, Forbes magazine ranked Wal-Mart No. 1 among general retailers for the eighth consecutive year in 1983 (the year that the first Sam’s Club opened in Midwest City, Oklahoma). In 1985, Wal-Mart counted 104,000 employees in 882 stores with sales of $8.4 billion.
In 1987, Wal-Mart marked its 25th anniversary with 1,198 stores, sales of $15.9 billion and 200,000 employees. In 1988, Wal-Mart had stores in 29 states. In 1990, Wal-Mart became the nation’s number 1 retailer.
Finally in 1991, Wal-Mart decided to do business internationally and opened a store in Mexico City. A few weeks before the passing of the founder Sam Walton in 1992, the president of United States honoured him with the Medal of Freedom. It is the highest qualification to be given to a civil person. Also, in the same year, Wal-Mart operated in 45 states in the United States and expanded into Puerto Rico. It is only in 1994 that Wal-Mart expanded to Canada with the construction of 123 stores and opened three value clubs in Hong Kong. In the two years that followed, Wal-Mart acquired stores in Vermont, Argentina, Brazil and China.
In 1997, Wal-Mart became the largest private employer in the United States with 680,000 employees, plus an additional 115,000 employees through the world. In 1998, Wal-Mart entered the market in Germany and in Korea. Fortune magazine gave Wal-Mart the top spot on its “Most Admired Companies” list two years in a row, in 2003 and 2004. As of 2005, Wal-Mart employed more than 1.6 million people in 3,800 stores in United States and 3,800 stores around the world, with $312.4 billion in sales for the year. The company served more than 138 million weekly customers in the United States, Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Germany, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico, South Korea and the United Kingdom.
By 2006, the number of weekly customers grew to more than 176 million around the world, with 6,779 locations. Wal-Mart had record net sales of $345 billion. In February 2007 Wal-Mart helped launch “Better Health Care Together”, a unique partnership of organizations dedicated to a set of four common sense principles for achieving a new American health care system by 2012.
Recognizing and Rewarding Employees
Concerning the benefits that the employees receive in return of their work, most of them are voluntary benefits regarding health and welfare coverage. For example, Consumer-directed health plans including Health Reimbursement Accounts plans and a High-deductible plan with a Health Savings Account. Those plans include $4 co-pay on more than 2,000 eligible generic drugs, the Ask Mayo Clinic Nurse Line –where it is possible to speak to a registered nurse 24/7, a Life with Baby Maternity Program and the Quit Tobacco program. There is also a dental insurance, a company-paid life insurance, illness protection, accidental death and dismemberment insurance, and many more benefits that are offered by Wal-Mart to the employees and their families. There is also financial benefits such as a discount card of 10% on regular priced general merchandise and fresh produce purchased at all Wal-Mart stores. More benefits include retirement account rollover, paid time-off for holidays and vacation, military differential pay, and more.
Wal-Mart uses a Pay-for-Performance system and regarding incentive plans, it is composed essentially of individual bonus , it is basically a supplement on the basic pay. But since the demands for a more complete comprehensive benefit package increased from the employees, bonus incentives have been redesigned to fit their needs. Wal-Mart uses a point system to evaluate the quality of the job of their employees. One example is that when employees are missing work because they are sick, they lose one point in their folder. To determine the value of the compensation, Wal-Mart takes into consideration the cost of living, the employee’s relative worth, and its ability and willingness to pay. Everyone knows that Wal-Mart offers everyday low prices. Unfortunately, this does not enable Wal-Mart to offer a competitive salary.

Labour Relations and Collective Bargaining

Collective unions never really happened to work in the Wal-Mart stores found in Canada. For example, in 2005, there was a case in Jonquière, Quebec where the employees voted to be unionized. However, Wal-Mart’s management decided to cut their illusions short and simply close the store. This case went to Canada’s Supreme Court and employees claimed that their right to organize a collective bargaining system was violated under the Canadian Charter of Human Rights and Freedoms, and the Quebec’s Labour Code. For their defense, Wal-Mart just said that the store was not productive enough so it was a reasonable reason to close. Finally, the Supreme Court decided that Wal-Mart’s management was right to close the store; it was its right to do so.
Wal-Mart has a bad reputation in Canada concerning how they treat their employees and the unions’ scandals basically just made this reputation worst. "Wal-Mart has built up an expertise, like a labour relations team, whose entire job is to delay certification, during which time the experts can come in and basically engage in what some people call psychological terror with employees," says Roy Adams, labour expert .
What you have to know is some reasons why the direction of a store would not want its employees to form a union. One of the first resorts of a union is striking. Striking is the refusal of the employees to perform their jobs , and such a refusal to work would be unfavourable for the productivity of a company. Also, employees can go out picketing to advertise the dispute and to discourage people from entering the stores. This would not only be unfavourable for the productivity, but also for the image of the company. The last resort of the unionized employees would be to boycott. The boycott strategy consists in refusing to patronize the employer. This would also be unfavourable for the image of the business because unions can use handbills, radio announcements, and notices in the newspaper to discourage purchase of the employer’s products.

Conclusion

After conducting this research, I have arrived to the conclusion that Wal-Mart is a very good store for customers who are always looking for low prices because that is what Wal-Mart offers them all year long. However, I also think that Wal-Mart is not a good business to work for if you are a simple worker there and are aiming for only a bit of self-esteem in your work. I consider Wal-Mart a passing stage of a work life. What I mean by this is that you do not build a career at Wal-Mart. In my opinion, it is only a job people turn to when they do not have any choice or, again, if they are a looking for simply a student job. Some people are happy with what they get from working at Wal-Mart and that is good for them. It is not to be overlooked that Wal-Mart offers good voluntary benefits apart from the minimum salary. Finally, I think that Wal-Mart is the best company that is able to see big by doing little. Wal-Mart stores can be found anywhere around the planet and continues to succeed in achieving astronomical sales. Congratulations to them for that fact because it is the dream of all business managers!

Bibliography

CorpWatch. (n.d.). Article. Retrieved April 20, 2011, from http://www.corpwatch.org/article.php?id=12194
Striking. In B. B. Stewart, HRM the essentials of managing human resources (pp. 323-324). Nelson.
Wal-Mart. (n.d.). Careers. Retrieved April 20, 2011, from http://walmartstores.com/Careers/7750.aspx
Wal-Mart. (n.d.). Health and Wellness. Retrieved April 20, 2011, from http://walmartstores.com/HealthWellness/7624.aspx
Wal-Mart. (n.d.). History. Retrieved April 20, 2011, from http://walmartstores.com/AboutUs/7603.aspx
Wal-Mart. (n.d.). Wal-Mart Stores. Retrieved April 20, 2011, from http://walmartstores.com/AboutUs/336.aspx