HR Strategy - Wal-Mart - Essay Example

HR STRATEGY - WAL MART The Organization Wal Mart Stores, Inc is a company based in the United s which operates the famous range of retail stores identified by the brand of Wal Mart Stores, Supercenters, Neighborhood Markets and Sam's Clubs in America. It also has stores in Argentina, Brazil, Canada, China, Germany, Japan, Mexico, Puerto Rico, South Korea and the United Kingdom. (Wal Mart Changes: 2005). It has a significant on line presence through its web site www.walmart.com. This is supported by www.walmartfacts.com which provides details on management of the company including its human resources (HR) strategies. (Wal Mart Changes: 2005). Wal Mart is a typical US success story. Founded in 1962 as the vision of a single man, Sam Walton, the super stores today symbolize American entrepreneurship. Wal Mart has consistently been regarded as one of the best Fortune 500 companies in the United States over the years. This has been feasible because of the unflinching commitment of the management to the customer and its focus on people including its employees denoted as associates. Wal Mart is a global company with more than 1.3 million associates, 5000 stores and wholesale clubs in over 15 countries. It is the most admired retailer and generated over $ 256 billion in global revenue with an increase in $ 26 billion in sales in 2004. The company has consistently delivered high levels of growth and benefits to customers as well as share holders. Wal Mart has a vast business which includes a number of stores, centers and markets. These are summarized as follows:- (a) Wal Mart Stores. These are the flag ship of the company and is a national discount retailer offering a wide variety of general merchandise. (b) The Supercenters. The supercenters provide a one stop shop for groceries. (c) Neighbor hood markets cover convenience shopping centers for Wal Mart for groceries, pharmaceuticals and general stores. (d) SAM'S Clubs. This is a member's only ware house club formed by the company. (e) Wal Mart International. This provides international service in 15 markets with the typical Every Day Low Price promise. (f) Walmart.Com. Envisages combining technology and convenience by providing buyers facilities on the web. (g) Wal-Mart Pharmacy. This provides the customers best service. (h) Wal Mart Optical Department. Provides the customers superior goods and services at very low prices which they can afford. (i) Tire Lube and Express Division or TLE provides superior service to the customers by fast and accurate as well as dependable tire and lubricant service. (j) Wal Mart Vacations. These offer vacations at a very low price for cruises, packages, car rentals and discounts. (k) Alaska Bush Shopper. This is a special facility that the company provides to its customer's base in Alaska to order items which are shipped through the Alaska Bush Department. (l) Wal Mart Used Fixture Auctions. This enables purchasing used fixtures. (Wal Mart Stores: 2006). Wal Mart HR Strategy Personnel Selection, Development and Growth Strategy On the basis of its overall vision and culture, Wal Mart has based its personnel selection, development and growth strategies on the principles of transparency, equality of opportunity, diversity and effective use of automation. Growth is attained by providing personnel opportunities for aptitude and career alignment, training and continuous objective feed back. This achieves loyalty, affiliation and continuity for the company. The policy of diversity enables effective alignment of the associate with the customer base which is derived from all communities. The detailed nuances of the personnel development policies of Wal Mart in relation to the above facets are being covered herein:- (a) Non Discrimination in Selection. The company follows non discriminatory policy of hiring and selection of its Associates which is the first tier of employees. Wal Mart's HR Strategy comprises of development of effective processes for all its systems such as hiring, selection and so on. The appointing strategy entails utilizing state of the art hiring and promotional systems based on totally non discriminatory processes. This ensures that it draws from both internal and external applicants for positions based on qualification and interest. This enables the company to gain the best talent from a large resource pool both within and outside the organization. (b) Effective Reach to Prospective Employees. The policy of spreading the base of selection is ensured by establishing a net work of 6200 kiosks which are placed for external applicants who wish to pursue a position in the company. This resulted in receipt of 4.6 million applications for employment at the stores in a single year in 2005, providing a large base of prospective employees. (c) In house Management Opportunities. The company also has a management trainee career selection programme, wherein it is able to identify leaders amongst its associates and train and nurture them to be managers of the next generation. This ensures loyalty building and continuity in the organization. (d) The company also operates a Management Career Selection System, wherein promotional opportunities up to the market manager level are posted on the MCS system as and when these are available. This provides transparency in the system with 17,000 management positions being posted in the company for 2005 in all its divisions. (e) Career Choice. Career Preference is a unique system which is being implemented by the company as it provides career preference choice for individuals based on their qualifications and interests by pre registering. This also provides information to the hiring manager and provides for consistency in hiring and selection. Progressive implementation of this system is envisaged from hourly positions to the management posts. This is slated to replace the MCS and the MTCS system in the company in due course. (f) Leadership-in-Training Program. Wal Mart is also focusing on developing internal talent through programmes as the leadership-in-training program and a leader to leader project for managers. The aim is to develop in house talent to the extent possible. The company constantly tries to match the right people with right opportunities. This is becoming difficult as the company goes global. Towards this end it is developing programmes which can recommend to employees the work experience, training or online courses that can be pursued to reach their goals. This is seen by the company as a competitive advantage. (Story: 2006) (g) Training and Development. Wal Mart has very effective programmes for training and development of women and minorities in leadership. Organization of seminars has proved to be a success to enhance leadership skills of participating members of management. These are also seen to add to knowledge and create an inclusive culture. A typical survey of the topics covered in 2005 included "Focusing on Leadership," "Work/Life Balance" and "Women of Influence." A large number of seminars are conducted which catered for almost 20,000 women and minorities in 2005. (Wal-Mart Leadership: 2006) (h) Mentoring - Mentor Three. Another policy which is seen to develop associates is the Mentor Three program. In this salaried members of the management are required to develop three associates which can be developed from diverse race, sex or communities. The objective of mentoring is to provide an impetus for personal and professional growth, greater productivity and achievement. (Mentor Three: 2006). Rationale HR Strategy Wal-Mart's strategy has been aligned to the core philosophy, vision and beliefs of its founder Sam Walton. There were three basic fundamentals of the vision of Sam Walton. These were as follows:- (a) Respect for the individual. This is the primary principle and as such it is the driving force behind HR strategy at Wal Mart, it places people first to achieve better team work. Thus people from different backgrounds and beliefs are equally respected which develops a unique team spirit. (Vision: 2006) (b) Service to the Customers. This is done by offering quality merchandise at the lowest price with the best customer service possible. (c) Strive for Excellence. The company's policy of striving for excellence is another facet of its vision which contributes to providing the people with products at the lowest costs. Organizational Factors Impacting on HR Strategy. The processes which have been used by Wal Mart for development of its HR strategy emanate from its basic philosophy, organizational structure and geographical spread. Wal Mart is operating in the highly competitive discount segment of retail store operations. The ranges of services offered are many and are being continuously upgraded. Additional facilities required by the community are being readily provided. The turn over in this sector is rapid, customer contact is continuous, client aspirations and satisfaction levels are very high. Thus there is a need to have deep employee commitment to the customer which will come from favorable personnel development strategies by the company. Being a retail services organization spread over a large geographical area and in different countries, the aim of the HR policy is to provide basic principles which are adjusted to the local environment. Wal Mart has developed a concept of Associate which is the basic unit of human resource in the company. Respect for people is primary to its HR philosophy. Thus the company respects the customer as well as the associate. This generates effective bond and ensures a high level of employee loyalty. The large requirement of personnel to man retail counters has led to initial hiring or associates on a daily basis. Many of Wal Mart's executives are seen to start from the basic grade and have progressed in the organization to higher levels. The use of automation has been a powerful influence on Wal Mart which is seen in its HR Strategy as well. The vision of Sam Walton its founder has had great impact on the development of the HR strategy. Measures such as the company, "Cheer" were introduced by Walton after he observed this practice on a visit to a factory in Korea. (Cheer: 2006). Wal Mart has also been progressively upgrading its HR strategy keeping in line with developments in this field as well as the retail market. Thus Wal Mart invests in people for its survival as per Carol Mosely, VP of information systems responsible for human resources, help desk, store and specialty systems. The company's growth strategy is marked by matching growth to the right people with the right opportunities. The commitment of the senior management is indicated with 60 % of Carol Mosely's time spent on people development. (Story: 2006) Critique HR Strategy Effectiveness of Strategy. Wal Mart's effective implementation of induction, people development and progression strategy is a key to its business development and growth. The company has very successfully aligned its growth strategy with people development thereby ensuring that lack of talent does not hinder augmentation. The planners have been using the organizations strategy of promoting growth through transparency and development effectively as is indicated by continuous up gradation of programmes for people development. Management of the large pool of associates of over 1.3 million globally is a challenging task which the company seems to be doing well. However there are many areas of improvement keeping in view modern processes of HR management. Strengths of HR Strategy Use of Automation. Wal Mart has used automation very effectively right from the process of intake, with its large number of kiosks providing opportunities to a wide variety of population to apply for jobs at the company. The process of automation is carried even further in creating transparency in growth of for associates with systems such as Management Career Selection System, Career preference system and online training being all automated for the employee. Systematic Training, Development and Growth Programmes. HR strategy sustains systematic growth and development programmes which are related to the aptitude and preference of employees. Thus in house management development programmes ensure that talent can be developed progressively. Career Choice Programme. The career choice programme is one of the most interesting with employees being able to pre register their interests thereby enabling alignment of prospective growth with the employee as well as employer interests. Non Discrimination and Diversity Programmes. The non discrimination and diversity policy of the company is successfully implemented across the board in a very transparent manner. There is positive discrimination for development of women and minority leaders which is laudable. Transparency. The entire process of HR is transparent. This transparency is achieved by automation of most of the processes and their easy availability and access in the public domain. Areas of Improvement - HR Strategy Attracting Best Talent. The high level of transparency and availability of information across the board in the organization is probably militating against the process of attracting the best available talent. Instead persons who have access to the Wal Mart kiosk have greater scope of getting hired. This is affecting the overall growth of the company by its inability to attract the best talent for sales jobs which seem to have been converted into human automation led retailing. Business Technology Leaders. At times Wal Mart IT managers have to contend with goods being supplied by 600 U.S. suppliers to include varied products and it is challenging to match diverse product names and criteria with 100 variables. (IT 2006). Wal Mart is unable to attract high quality business technology leaders, a fact admitted by executive VP and CIO Linda Dillman. The ability of people to think as business persons is the key to growth for Wal Mart. This can be achieved only by seeking better business technology leaders. The programmes developed by Wal Mart are good for internal growth of employees but for high end assignments particularly in information technology, there is a need for opening up more avenues for induction from external sources. The challenges for Wal Mart's HR in the field of information technology thus are many. Effective Global Placement Plan. Though operating on a global scale, the company is lacking an effective plan for global placements. Thus Tony Puckett, VP of international systems, openly admitted that it had a major problem to ensure that somebody who has been hired in one part of the World will fit in a store which is operating in Spain or in Japan. Assessing simple skills as language and communication was also proving to be difficult. (Story: 2006). Exploitative Hiring Policies and Work Hours. There are many accusations against Wal Mart that it has exploitative hiring policies and work hours. The company's open hiring policy has also led to allegations of it indulging in child labor and making minority groups work longer hours than legally permitted. Employing undocumented immigrants is another problem that has probably arisen due to its wide geographic spread and ability to ensure implementation of uniform working norms across the board. (Wal Mart Labor Laws: 2005). Recommended Changes and Improvements The recommended changes and improvements pertain to areas identified above. Each facet is discussed separately as given below. Base Standards for Selection and Intake. Wal Mart has to denote base standards for selection and intake more widely and transparently. This will enable it to evade a number of allegations in this regard. The company's profile of dissuading unhealthy workers from joining will also be corrected. (Hiring: 2006). HR Audit. There are apparently no policies adopted by the company for HR audit which enables assessment of pay offs from strategy. While sheer numbers may be impressive, it would be more practical to evolve a policy for HR audit to denote the success of its HR strategies for business growth. Compliance of State Specific Laws. The wide expanse of the company has also led to accusations of its inability to comply with varied laws of different states and companies related to labor and HR. The company is following a uniform policy and there is lack of adaptive strategies for compliance of state specific issues. (Story: 2006). Induction for Technology Stream. The company is facing problems for induction of talent for its technology stream. This can be overcome by having specific guidelines and proactive induction programmes both in house as well as from the open environment. The prospects for growth in this field should also be clearly indicated as there are large number of people apprehensive of IT jobs being out sourced with impending lack of job security. (Story: 2006). Global Training and Development Plan. There is lack of an effective global training and development plan which could enable the large pool of associates and particularly managers of the company adopt similar standards and thus remain competitive in any given environment. This needs to be adopted at the earliest to foster uniform growth of the company. Actions Suggested to Implement Change Transparency Through External Agencies. Greater Transparency through display of hiring standards in the public domain is recommended over and above the kiosk strategy followed by the company. Since kiosks are an internal arrangement, there is scope for accusations by those denied jobs. This anomaly will be overcome by displaying hiring information in the public domain. Online Training and Development. An online training and development plan for the company is recommended. Having a global presence, online training will facilitate standardization of instructions and tests and also enable economy in imparting training. HR Audit. HR Audit is strongly recommended, as there is apparently limited information on the pay offs obtained from the large amount of investments in training and development by Wal Mart. There are no definitive indications of contribution of the HR strategy to the company's core philosophy. HR audit builds up employee loyalty as well as establishes links between pay and rewards to creativity, thereby providing a quantitative as well as qualitative tool for assessment by the management of the effectiveness of HR function. (Crosby: 1999). This needs to be adopted by the company at the earliest. References 1. Crosby, David. Ed. 1999. Portfolio of Human Resource Audits. Cambridge Strategy Publications. Cambridge 2. Cheer. 2006. http://walmartstores.com/GlobalWMStoresWeb/navigate.docatg=259. (25 May 2006) 3. Hiring: 2006. http://www.walmartfacts.com/newsdesk/article.aspxid=1436. (25 May 2006) 4. IT: 2006. http://www.informationweek.com/story/showArticle.jhtmlarticleID=47902774. (25 May 2006). 5. Mentor Three: 2006. http://walmartstores.com/GlobalWMStoresWeb/navigate.docatg=519&contId=5887. (25 May 2006) 6. Story: 2006. http://www.informationweek.com/story/showArticle.jhtmlarticleID=47902700. (25 May 2006). 7. Vision. 2006. http://walmartstores.com/GlobalWMStoresWeb/navigate.docatg=259. (25 May 2006) 8. Wal Mart Stores. 2006 http://www.walmartstores.com/GlobalWMStoresWeb/navigate.docatg=504. (25 May 2006). 9. Wal Mart Changes. 2005. http://walmartstores.com/GlobalWMStoresWeb/navigate.docatg=26&contId=5650. (25 May 2006). 10. Wal-Mart Leadership: 2006. http://walmartstores.com/GlobalWMStoresWeb/navigate.docatg=519&contId=5887. (25 May 2006). 11. Wal Mart Labor Laws: 2005. http://www.wakeupwalmart.com/facts/. (25 May 2006) Read More