Walmart's employee management practices and ethical violations

Managing People -- Wal-Mart

Wal-Mart

Summary of the Company and Facts

Wal-Mart is among many multi-national retail businesses that are well-known. It runs chains of large discount department stores and warehouses all over the world though it's an American multinational retailer corporation. It is also the biggest private employer in the world, to employ such a big number of workers can be very challenging and hence the employee relationship with the management requires thorough evaluation. With corporations such as Wal-Mart always chasing to grow higher and getting better returns come with the temptations to go really wrong in many ways. Wal-Mart does a lot right; it has expanded its productivity by being more efficient and leaner when compared to many companies. Shoppers accrue a lot of benefits from the expansion of Wal-Mart. Like all this retail businesses the employees in Wal-Mart are given low wages, they work on part-time conditions particularly having a strict policy of scheduling their employees that ensures that they are not paid overtime. The employees are therefore required to clock out early if they had been working over on a previous day. Wal-Mart has a very high employee turnover rate, on average at any Wal-Mart store at the end of a year like half of the employees would have left this leads to mismanagement of employees and overall lack of morale by the employees. This is attributed to the low wage levels in Wal-Mart to the employees.

Employees at Wal-Mart are expected to be busy all the time i.e. At work all the time clocking out during lunch and breaks on time are mandatory for employees. In other cases some employees are required to work off the clock and they are denied the overtime pay and in other cases they are not even allowed to take breaks for lunch or even mere rests. There are some unethical practices carried out in Wal-Mart like gender discrimination when it comes to hiring and the actual work area. Women employees in Wal-Mart fare worse when compared to their male counterparts when it comes to receiving adequate take home pay, the hours they have to work, the training they go through and respectful treatment. There are general discriminatory practices among the Wal-Mart management when it comes to women. Another unethical issue is the fact that Wal-Mart employs minors who work too late, during school hours or even for too many hours in a day. They are extensively violating the children's rights and child labor laws.

Wal-Mart is known to employ even undocumented immigrants in their stores. Wal-Mart has health insurance that set to cover only a small percentage of its workers. The fact that there is an insurance policy for the workers is a good thing but this would only be very effective it would cover all its employees. The fact that it covers less than half its employees is not something to be happy about. Wal-Mart is even set to reduce or bring down its health care expenses through measures such as the employment of younger and implicitly healthier workers through attracting them by offering educational benefits. They are even set to eliminate completely full time positions and instead hire part time employees who will be ineligible for expensive health insurance .Wal-Mart is also an anti-union company where they urge their employees not to form any unions arguing that they have no need to pay third parties to discuss problems with management sine it as a company has an open door policy where all the complains and suggestions by employees can be lodged

These factors have led to several symptoms that indicate a problem in the management of Wal-Mart to address the issues that relate to its employees. This include the warnings by disgruntled Wal-Mart employees, joined by labor unions and community groups to stage combined protests and educational campaigns during times that can hurt wal-mart greatly as a company like after thanksgiving which is the traditional start of the holiday shopping season. There have been also recorded walk offs by employees in many store to protest working conditions and poor wages, and this move to strike soon spread to other stores in other states. This has also made employees in Wal-Mart realize that there is power in unions which they are so much being denied the opportunity to form in Wal-Mart. Data from unions also indicates that Wal-Mart employees are the most recipients' of government assistance among people employed in many states. This is a clear symptom that the employees in Wal-Mart are really suffering. The employee walkouts and go slows will continue to take place among the employees of wal-mart attempt to make the management address the issues and treat them fairly. If these issues are not addressed then Wal-Mart will find itself in a situation they cannot come out of (DE-DE Group LLC, 2012) The numerous law-suits that Wal-Mart is faced with is another symptom that shows something is definitely amiss in Wal-Mart. They have been forced to pay millions in settlement for its employees; this is a clear indication that Wal-Mart is definitely doing something wrong otherwise there would be no cases against Wal-Mart.

Causes of the Problem

The problems in Wal-Mart that pertain to its employees can be linked to various causes. The lower prices that Wal-Mart offers to its customers may be the cause of the low wages that are offered to the employees. Wal-Mart offers lower prices on their commodities when a comparison is made with many of its competitors, the benefits of the lower prices are therefore implicitly clawed back when Wal-Mart drives down wages to its own workers and throughout the retail sector as a whole. The high cost of low prices, or the strategy of privatizing profits and socializing cost by Wal-Mart has resulted to overburdening of local governments' welfare and food stamp programs with undue numbers of underpaid Wal-Mart workers. Wal-Mart is therefore responsible for nearly as many unemployed, underpaid and overworked people in America and other countries where they have their stores.

The management of Wal-Mart argues that, price depressing effects of Wal-Mart out-run the wage depressing effect that, they claim leads to an increase in the purchasing power for the employees. However this reduced prices that are realized through the expansion of Wal-Mart make up an ever-shrinking share of the American families' expenditures. Essentially Wal-Mart gives people the ability to buy food, clothes, household goods and furniture at reduced prices. The real pressure that many families have on their incomes is from items that are not available in Wal-Mart like healthcare, housing and transportation that are going up over time. This products and services however can only be bought with higher wages. Wal-Mart pushes down its wage rates in two ways this are; substitution effect this is through the replacement of better paying jobs with lower paying ones.

The other way that Wal-Mart pushes its wage rate down is through competition whereby it pushes down wages in competing businesses. The low-wage levels and benefit programs are designed so that they can realize their policy of keeping costs down .in the process due to how economically influential Wal-Mart is and its market shares the prevailing wage rates are thus driven down. As much as Wal-Mart loves the low wages it becomes a problem when the wages go too low since its lowest income customers will no longer afford to shop at its stores. The many problems that employees face in Wal-Mart can be analyzed clearly with regard to Maslow's hierarchy of needs since this hierarchy of needs concerning the responsibility of the employers to provide a workplace environment that encourages and enables the employees to fulfill their self potential that is unique. Therefore according to Maslow's hierarchy of needs, the employees in Wal-Mart are not self-actualization when it comes to growth and fulfillment .this is because their wage level is very low, an average employee's income is about $8.23 per hour totaling to $13,861 annual full-time salary. Most of the workers work 24 hours a week and hence the average income translates to an annual income of close to $10,271 the poverty line being $14,630 for a family of three means that most of the workers in Wal-Mart lived below the poverty line (Ludensky, 2008).This means that they are barely able to satisfy their own needs and those of their families. Therefore this employee cannot grow in any way financially since what they earn in Wal-Mart is barely enough to satisfy their basic needs. They cannot therefore save anything and hence cannot register any growth. Therefore the desire of an employee in Wal-Mart to grow as a person cannot be realized and they cannot have self-fulfillment. When it comes to physiological needs that include the basic needs that are vital for survival the employees in Wal-Mart cannot afford this, this are the most basic and instinctive needs in Maslow's hierarchy since all other needs become secondary until these physiological needs are satisfied. The low wage rates in Wal-Mart make these employees not able to satisfy these physiological needs.

Another cause of problem in Wal-Mart is the affordability of health insurance coverage that is deplorable. According to Maslow's hierarchy of needs everyone has needs that include safety and security. The security needs may include ones desire to have a steady employment and also health insurance. Employees in Wal-Mart are denied from this need since they cannot afford the employer provided health insurance. Most of the employees qualify for Medicaid, welfare and WIC since they are offered adequate wages in Wal-Mart. In Wal-Mart, managers often encourage their employees to seek out the programs that are offered by the government such as Medicaid. There have been significant increases of health insurance coverage cost that is offered by Wal-Mart this is about 169% in single coverage and 117% for family coverage which means that the workers have to pay a fifth to a third of what they earn for healthcare coverage through Wal-Mart. Apart from raising the premiums, Wal-Mart has added many restrictions on the eligibility to their health plan that will bring a significant limit on the access to coverage at rates that are unaffordable to its employees. This includes working close to 30 hours a week for one to be eligible for health care as opposed to the 24 hours that was previously considered. Part time employees are also locked out of the ability to purchase

The reduction of full-time employees is another cause of problems that pertain to union formation among its employees. The bad treatment that employees in Wal-Mart runs rampant in the Americas largest private employer should exemplify the need for unions serving which is clearly indicate in Wal-Mart employees are not on full employment basis then they will not have any form of connection or unity among themselves hence Wal-Mart has succeeded in its no union policy. They are even set to open stores in states that support a worker's right not to join a union than in states that are pro-union statutes.

Solutions and recommendations for implementation

For nearly a year, employees in Wal-Mart have been coming together to seek change within the organization. They have spoken openly about the problems the face while working in Wal-Mart and have gone ahead to threaten and carry out strikes in an attempt to get the change that they badly want. Wal-Mart should strive to always act with integrity; the managers should always lead with integrity so that they expect the workers to work with integrity. The managers should strive to follow the laws at all times, this include adhering to the labor laws and rights of workers that are set by the government to be followed by each company or business. They should be always in line with fair labor standard act that guarantees rights to employees like overtime pay, equal wages regardless of gender and minimum wage (Ludensky, 2008) Therefore in an attempt to comply with this act Wal-Mart should not overwork its employees and pay appropriately incase the workers work overtime. They should also not assign tasks that will compel employees to spend more time than they should according to what their shift allows.

Wal-Mart should strive to raise the wages of its employees to $13 per hour and also make full-time jobs available for employees who want them. It should strive to offer competitive wages and the chance to grow and build a career for the employees who work in wal-mart.the growing costs of Medicaid should be a motivating factor for Wal-Mart to improve some of the benefits they offer to its employees. Wal-Mart should offer some benefits to those employees who work less than 24 hours in a week. They should not show any preference to hiring part-time workers over full-time workers who are not entitled to any benefits. Therefore Wal-Mart has a responsibility to make sure that its employees can easily support a strong middle class lifestyle. This will be achieved of only they are able to raise the wage levels of these employees. According to Maslow's hierarchy of needs for the satisfaction of physiological needs, it is essential for Wal-Mart to amend the changes in wage level so that its employees can be able to afford the satisfaction of these needs.

Wal-Mart should seek to empower women through pairing with women foundations to create partnerships that will help empower and employ the economically vulnerable women. This includes joining of Wal-Mart with foundations such as Washington Areas women foundation, the New York Women's foundation. This partnerships aim to help women gain stability and security in their finances as a solution to the discrimination in working area that was felt by women working in Wal-Mart (Unlimited marketing, 2012)

According to Maslow's hierarchy of needs it is essential for any individual to be able to have access to healthcare, Wal-Mart should therefore strive to make accessible affordable healthcare that will help workers, families and the whole community. According to Maslow's hierarchy of needs, personal safety and security is very important therefore the management also strive to create working environments that are safe for its employees such as giving protective clothing such as gloves to its workers. Wal-Mart should also strive to offer adequate hours for the employees to work. This will ensure efficiency in their work since they will get enough time to rest and do other personal things.

Wal-Mart should also consider reviewing the anti-unions policy that will see its employees being able to form and be part of unions. This will lead to greater communication between the management and the employees since the union will act as a voice for the employees to the management.

It is possible for Wal-Mart to make these changes without reducing their profits. They will be able to maintain their profits, offer their commodities at fair prices to their customers as well as offering the wage level that is sufficient to its employees. When this changes are made the law-suits against Wal-Mart will significantly go down since there will be no complains by the employees.