Multinational corporations do business in a complicated environment where they have to harmonise divergent national management practices to form successful strategies. Countries have a different set of business regulations that concern employee treatment. Organisations that operate franchises in various localities around the world must ensure that their strategic human resource (HR) practices meet the local standards while at the same time align with their corporate philosophy. One of the tasks of HR managers of large firms is to transfer the same culture and knowledge to various organisational units to encourage the unity of purpose and uniformity of service delivery in all company branches (Minbaeva et al., 587). However, HR practitioners always assess the home country policies to ensure that they march the specific branch business environment and can effectively generate a competitive advantage over rival enterprises. This paper evaluates the significant challenges inhuman resource strategy implemented by Walmart and how the company responded to those pitfalls.
Company Description
Walmart Inc. is a multinational retail chain that operates 11,695 stores worldwide. The outlets sell general merchandise in the 28 countries where the business has established a presence. The corporation went public in 1970 and the stewardship of founder Sam Walton. Since the listing in the security exchange market, the multinational witnessed over 50years of extensive growth and continued to access new markets. The enterprise employees about 2.3 million people in their hypermarkets and boast an estimated $198.82 billion total assets as per 2016 valuation. The retail giant focuses on providing quality products at affordable prices to enrich the lives of the customers. The firm also has a clear framework to uphold environmental conservation practices, social responsibility and ethical standards (Walmart).
HR Strategy at Walmart
The predominant feature of the firm’s people resources management based on setting low-cost HR practices. The policy ensures the corporation maintains a long-held competitive advantage over most of the rivals in the industry. There exist three main types of strategic human resource theoretical models which include resource-based configuration, contingency or best-fit perspective and, the universalistic best practice strategy. This report examines the HR policies of Walmart using the contingency “best fit” theory. The approach is appropriate because the company employs varied corporate framework in engaging with different retailers and stakeholders through differentiation strategy. The HR strategy of any institution can be effectively examined through the notable activities which include recruitment, welfare, training, and compensation frameworks (Ferris " Hochwarter, 385).
The firm administers strict measures to ensure that employment costs remain with sustainable levels. Walmart has a thorough employee training and career development program that give the retail giant the ability to reap maximum benefits from the pool of human capital. The company encourages servant leadership and treats the employees as associates to maintain profitable relationships with the executives, managers and junior staffs. The idea enables the company employees to work as a team with a single purpose of attaining the set corporate goals. The enterprise implements currently implement lock-in and shrinkage procedures that work to align the workers to the company strategy further. The process aims to reduce unnecessary smoking breaks and quick trips during the shift to ensure that employees concentrate on executing their roles. The move also makes maximum use of the staffs and reduce the cost of recruiting more people because of shift inefficiency (Cox, 159).
The company’s performance management processes demand exemplary standards from the workers because of the job designs. The business has extensive policies that leave no chance for workers to take breaks or enjoy meals during service. The cost reduction measures extend to compensation packages for the employees. The salary rates of Walmart stand at 31percent less than competing firm in the US market. The human resource department also has a strong anti-union policy which puts the management of staff issues solely on the firm’s corporate and HR guidelines.
All the HR interactions in the organisation exhibit evidence of Walmart’s corporate culture of strict adherence to cost reduction measures of solving issues. The employment terms and packages truly reflect a firm that is set on minimal spending to keep operating charges as low as possible. The corporation’s HR culture is deeply engraved on procedures that aim to establish competitive advantage at the expense of employee welfare and reputable strategic HR management. The approach, therefore, can only be explicitly described by the contingency “best fit” theoretical model. All major HR decisions depend on whether they best fit Walmart’s corporate culture and strategy (Ferris " Hochwarter, 385).
HR Challenges
The company experienced some challenges to the effective implementation of the HR policies in recent years. The strict observance of cost-reduction employment procedures exposes the firm to child employment. There were revelations of gross violations of the child-labour laws and the United States rules which required businesses to allow employees certain breaks during their work and strict adherence to the stipulated working hours. Reports show that Walmart staffs serve for long sessions beyond the regulatory guidelines. There are also complaints about the unfair treatment of women members of the staff with irregular demotions and harassment of female workers from HR representative who consider the women incapable of serving in certain departments of the retail chain (Ferris " Hochwarter, 385).
The retail giant’s HR practices concerning compensation are continuously in the spotlight because of the disparity in compensation. The corporation is among the lowest payers in the US market despite the huge sales revenues and operating profits that the firm posts. Because of the vast inventory and operating costs demanded by the top level executives, store managers have their options reduced and consider salary reductions as the only viable means of stabilising their profits. With other supermarket workers paying nothing for health insurance, Walmart suffers accusations of exposing their employees to expensive medical schemes due to their cost reduction procedures. The company’s anti-union policy and the low-cost strategy puts the HR practice in poor light of rights activists and labour authorities. The firm had series of employee unrest in the recent years with dispute escalating to unimaginable levels when the company held back the initial 10 percent pay rise offer to over 700 employees. The HR executives deemed this group of workers stubborn because of their insistence to be allowed to negotiate through the GMB trade union.
Walmart’s Response to HR Challenges
In response to growing external pressure from labour unions and continued employee unrest in the company, the retail chain responded by ratifying the incentive structure. The current procedure stipulates salary ranges based on different staff ranks in the organisational chart. In addition to the pay grades, the firm introduced a compensation structure that incorporates the work performance of the staff members. There is a percentage of sales commission that serves to encourage diligence among the employees. Those who attain a certain minimum standard of job outcomes receive rewards for their efforts. The problem with Walmart’s system, however, is that it benefits store supervisors and managers while still sideling the lower level staffs (Thompson).
The company has also ratified the performance management system to improve employee morale and work ethic. The current approach allows for sufficient shift scheduling and rotation of staffs. There is increased recognition for exemplary task performance through the new policies such as those that govern the number of tardy days. In line with the recommended strategic HR approaches, the enterprise increased the frequency of performance interviews. The present system stipulates that the employees complete the surveys twice every year. Through the questionnaires, the executives gain substantial information regarding concerns and feedback which assist in decision making (Thompson).
Reflective Statement
The assignment enriched me with favourable qualitative research skill. I learned to analyse and distinguish reputable sources of information about the topic of study. The writing process developed my ability to present thoughts and ideas in an organised and logical manner. I improved personal communication skills such as the ability to attract audience attention and the knowledge of how to present opinions, facts, and arguments.
Apart from the common writing and research skills, the assignment also enriched me with valuable knowledge of how to evaluate an organisation strategic human resource positioning. Through research, I learned how to determine the best model that fits any particular firm’s HR practice. In this particular case, I gained valuable insight on how managers implement the ‘best-fit contingency model’ of strategic management.
I obtained substantial insight on how to maintain research ethics. The specific study question involved examining very sensitive company HR philosophy to explain how it works and why the managers prefer the given approach. I concentrated on relaying information that did not compromise the organisation’s privacy and avoided any issue that can interfere with the corporation’s social or financial stability.
Finally, the whole experience of conducting this examination represents a valuable addition to my knowledge base and will be critical in completing future studies. The assignment provided a memorable learning opportunity that allowed me to utilise the theoretical knowledge obtained from class in conducting a critical examination of a real-world scenario.
Works Cited
Cox, Anne. “Human resource management in multinational companies.” University of Wollongong, Faculty of Business-Papers, 2014, pp. 159–167.
Ferris, Gerald R, and Wayne A Hochwarter. “Human Resource Management: some new directions.” Journal of Management, 1999, vol. 25, no.3, pp. 385–415.
Minbaeva, D., Pedersen, T., Bjorkman, I., Fey, C. F. " Park, H. J. “MNC knowledge transfer, subsidiary absorptive capacity, and HRM.” Journal of International Business Studies, 2003, vol. 34, pp. 58699.
Thompson, Andrew. “Walmart: Human Resource Management.” Panmore Institute, 17 May 2016, panmore.com/walmart-human-resource-management-hr-management.
Walmart, 2018, corporate.walmart.com/our-story.
