Lack of Employee Motivation Within Walmart

IMPROVING EMPLOYEE MOTIVATION AT WAL_MART

Employee Motivation

Improving Employee Motivation at Wal-Mart

Wal-Mart is the largest retailer and the second largest corporation in the United States. It is also the second largest private employer in the United States, with approximately 1.3 million workers (Jordan, 2008). Wal-Mart has also become the symbol for corporate mistreatment of workers. There have even been documentaries in the mass media that highlighted how Wal-Mart treated their employees and the type of lifestyle they promoted. In 2010, Wal-Mart had a net income of over $11 billion, which brought them even more criticism for treating their employees poorly (Jordan, 2008). This research will explore the thesis that, "Employee empowerment is not the result of corporate policy, but that it must become a part of corporate culture that permeates every level of the organization."

Several key points about the organization will affect the results of this study. Wal-Mart is not the only major retailer that has been criticized for employee policies and mistreatment, but because it is the largest retailer in the United States, it has become the symbol for what is wrong with the retail industry in terms of that employee practices. On an average day across America, the legal team is busy battling nearly 17 lawsuits filed by employees per day (Jordan, 2008). This takes a lack of employee motivation to the extreme. Employees not only lack motivation in the workplace, some of them are hostile towards it.

Workers that are busy filing lawsuits against their employer are not busy doing what Wal-Mart wants them to do, which is providing for their customers' needs. This lack of employee motivation has created a public relations nightmare for Wal-Mart and made them the poster child of employment nightmares. This research will explore the problems that led to the creation of the situation and will explore ways that Wal-Mart can improve their reputation and become a desirable place to work, instead of the last place anyone would want to work. Resolving the problems at Wal-Mart might seem to be in monumental task, but solving them a Wal-Mart can serve as a model for other retailers to improve their employee satisfaction and motivation.

Company Overview

The problems at Wal-Mart are endemic to their size and corporate structure, therefore, they have been a part of Wal-Mart since the beginning. It has already been mentioned that Wal-Mart is the largest retail establishments in the United States. To understand the complexity of the problem associated with employee motivation, one must understand the extent of the hierarchy that governs the corporation. It is difficult to find information on Wal-Mart and its structure, as much of the information is part of its trade secret and considered proprietary. However, some information was available and the corporate structure of Wal-Mart can be summarized as follows.

Wal-Mart is divided into 35 Wal -Mart regions and 6 Sam's Club regions. Each region is supervised by regional vice president who is based in the Bentonville home office and travels for three out of four weeks within their assigned region. The home office is home to many of the managers and executives. Each region contains 11 districts and each district contains about eight stores. Each district is managed by a district manager who lives in the field (Wal-Mart Space, 2005).

Each store is exactly the same. They have the same job categories, job descriptions, and the same management hierarchy. The Store Manager is the top level of the individual store. Sometimes they have a Co-Manager, if the store is large enough. The store has several assistant managers, who are salaried. The next step down are manager trainees that is a 4 to 5-month program, which prepares employees for positions as assistant managers. Next come the hourly managers. The highest level hourly manager is the Support Manager. There also other hourly managers such as a customer service manager. Department managers also fall under this category.

The lowest level on the ladder is the hourly employee including cashiers, sales associates, stockers, and warehouse workers (Wal-Mart Space, 2005). These are the employees that can make the most difference in sales and in customer retention because they are the ones that are in direct contact with the customer. Low morale on this crucial bottom level can mean that this attitude is perceived by the customer, which can lower their opinion of the store and affect their experience in a negative manner. As one can see, it is a long way to the top from the lowest level to the top managers who are in the decision-making positions. This is the key problem that is being faced by Wal-Mart regarding employee motivation and empowerment.

Key Problems

The situation at Wal-Mart is worsened by several factors. When Sam Walton became the CEO of Wal-Mart, employee empowerment was his mantra. When he visited a store he often wanted to meet regular employees and get to know them on a personal level (Rao, 2009). According to the body of academic research on employee motivation, employee empowerment is one of the most important factors (Saloazar, Pfaffenbeg, & Salazar, 2006). Sam Walton had the idea right, and the size of Wal-Mart makes this an excellent public relations campaign, but on a practical level, one has to ask how many employees Sam Walton was able to meet on a personal basis in reality.

The most important point about Wal-Mart regarding this analysis is that Wal-Mart's size makes it impossible for corporate level managers to have contact with lower level employees, the ones that have the greatest impact on customer experience. Wal-Mart is like a factory and cannot be compared to a mom and pop store where managers have the same contact with customers as other employees. Wal-Mart's size will affect this analysis and the ability to apply the recommendations to other retail stores. The results of this study will only be applicable to other stores of similar scale and size.

Another key factor that will affect the situation is the amount of media attention that the problem has received. This media attention has the ability to skew public opinion and to have an affect on the ability of Wal-Mart to resolve the situation. This media attention has potentially made the situation worse, by drawing attention to current Wal-Mart workers. One of the factors that needs to be explored is whether hearing the media stories about the employment conditions at Wal-Mart had an effect on the attitudes of current Wal-Mart employees. They may have lowered esteem about their employer as result of mass media documentaries about their working conditions. This is one of the key problems that Wal-Mart will have to overcome and it may take time to convince both the employees and the public that they have made meaningful changes within the organization.

The key problem being faced by Wal-Mart is that it not only needs to make policy changes and recommendations, it needs to change corporate culture. Only through a real change in corporate culture that permeates to all levels of the organization can it hope to turn the situation around. Change management cannot be dictated from the top, it must permeate all levels of the organization. Inertia is one of the key problems that any change manager faces. It is hard to break habits, particularly those that have been a part of the daily routine for so many years.

Unfortunately for Wal-Mart, poor employee motivation is a part of corporate culture and has become a part of the company's brand image, whether they like it or not. To turn this situation around, old habits will need to be broken, and it will take more than words from managers at the top to do this. The size of Wal-Mart will make this a daunting task, more so than in a smaller corporation. It will be difficult for Wal-Mart because of the distance of the top managers from the employees on the storefront floor. This research will explore Wal-Mart's dilemma and ways that they can have a positive affect on employee motivation on the bottom levels of the company.

Analysis

To understand the situation at Wal-Mart, one must first understand the terms being used. Increased employee motivation is the goal of Wal-Mart and the topic of this research study. Employee motivation refers to the level of energy, commitment, and innovation that workers apply to their jobs. Employee motivation is a primary concern for today's managers, particularly considering the competitiveness of the business environment in recent years. Increasing employee motivation equates increasing profitability and company growth. That is why this issue is so important to retailers.

Employee empowerment refers to a feeling of worth and autonomy in the working environment. Employee empowerment has been linked to employee motivation (Saloazar, Pfaffenbeg, & Salazar, 2006). One of the most difficult factors in the Wal-Mart case is that employees often do not have a high number of choices that they can make in their work day. Wal-Mart is a highly automated system and employees often feel as if they are workers on an assembly line, with little job empowerment. The hierarchical structure of Wal-Mart means that orders come down from above and innovation seldom travels up the chain. This is not an environment that leads to employee empowerment and increased employee motivation.

SWOT Analysis

To understand the position of Wal-Mart, as compared to the competitors mentioned, a SWOT analysis will be helpful. SWOT analysis will only consider Wal-Mart in terms of employee morale, rather than its financial position. In terms of strengths, Wal-Mart has several advantages over its competitors. The first is its size and its access to resources to help resolve the problems. The second is that it is already in the news media and any changes that it makes in terms of employee morale will reflect as positive media exposure.

A key weakness in terms of employee morale is the large, hierarchical structure of the company. Those that make the decisions are far removed from those that operate the store and provide customer service on the lower levels. There is little communication from the lower levels to the upper levels of the organization. This supports the establishment of a dictatorial and managerial style. This type of management style is not conducive to employee morale built on communication and a sense of ownership and personal satisfaction in the company.

Wal-Mart has an excellent opportunity to turn this bad situation into a success story that will create positive images of the company in the future. The spotlight is already on Wal-Mart and if it can find a way to improve employee morale, it will have the opportunity to improve its image in the public eye. However, this media exposure could also be its greatest threat if it fails to achieve its goals of higher employee morale. The media exposure and spotlight on Wal-Mart can be both an opportune or threat depending on how it is used.

Competitor Analysis

Now let's take a look at some of Wal-Mart's major competitors and how they are viewed in terms of employee motivation. Target is the second largest retailer after Wal-Mart. Target offers some of the same merchandise as Wal-Mart, only they base their competition on providing quality to the customers rather than cheap prices. It too, has been the target of labor practice violations. It does not have a living wage certification and it does not have labor unions (Jones, 2010).

Target faces many of the same morale problems as Wal-Mart. These problems result in low attendance and a high incidence of family problems outside of work. Target tried a unique approach and hired social workers to help improve morale. This program resulted in increased morale and reduced absenteeism by 17% (Jones, 2010).

Macy's is another large scale retailer, but it does not operate in the same discount market as Wal-Mart. However, for comparison, this retailer is in the same retail class. They have a slightly more sophisticated and high-end clientele than Target or Wal-Mart, but they are still in the general merchandise segment. In November 2010, the Chicago Tribune reported that employee morale and Macy's was so bad that employees held rallies and protests about their treatment (Channick, 2010). According to the article, a new employee morale program that brought management and the employees together in a supportive atmosphere was launched, and it is reported that the program has been successful to date.

Information was not available on overall employee morale at Kohl's, another major retail competitor. However, it appears that this lack of low morale among lower level employees is not limited to Wal-Mart. Their competitors also face the same problems, but Wal-Mart has been targeted by the media to set an example, simply because of their size. The media focus has been on Wal-Mart, but this does not diminish the scale of the problem in the industry as a whole.

Recommendations and Rationale

Assessment of Current Employee Attitudes

Currently, no solutions are in sight for Wal-Mart's problems. Part of this may be a result of the fact that the complainers make themselves known more readily than those are satisfied. Employees that are happy and content typically do not openly express themselves as readily as those that are not happy. Credible information from academic sources is difficult to obtain and much of the information appears in the mass media.

The subject of bias must be considered when evaluating the sources, and it is not known if the bias that was found in the study provides an accurate opinion of Wal-Mart, or whether the fact that they have grown significantly for the past decade is evidence enough that the problems are not as bad as they seem. Nonetheless, it was found that low employee morale was a problem for all major competitors in the retail industry. This problem is systemic and needs to be resolved in order for profitability and growth to continue. Using Wal-Mart is a case study is an excellent way to resolve these issues for the industry as a whole.

Strategic Steps to Improve Employee Motivation

Communication was found to be a strengthener of employee motivation (Chiang, Jang, & Canter, et al., 2008). The study found that other motivational components are more effective when communication is positive between the parties. Employee motivation is the key to productivity within organizations. Expectancy theory states that people's expectations will lead to a given behavior and will result in desired outcomes. Employee motivation is a result of employee expectations (Mathibe, 2008). The expectancy of being rewarded, employee training, employee empowerment, employee involvement in decision-making, and high-level dyadic relationships were found to contribute to positive employee motivation outcomes (Fernandez & Pitts, 2011). Recognition can increase employee motivation, but only if it is administered in an equitable fashion and is not perceived to show favoritism (Pratheepkanth, 2011).