Wal-Mart is an example of a learning organization that is in the process of a constant change. Whilst all of the elements of the organization are encouraged to change in order to fit the larger social and political climate, there are a number of factors concerning HR that positively affected the success of Wal-Mart as an organization. From this point of view, it might be helpful to pay a closer attention to the HR practices employed by Wal-Mart.
Recruitment Strategy at Wal-Mart
Given the size of the organization, Wal-Mart uses diverse recruitment strategies and methods. More specifically, as to the recruitment sources that the organization uses, they include internal and external sources. Internal sources are typically composed of trainees, transfers, and current employees. From this point of view, the company uses current employees in order to fill new or open positions. As to the external sources, they include campuses, previous applicants, and respondents to job advertisements. In the meantime, respondents to job advertisements are perhaps the largest recruitment source used at Wal-Mart.
The company employs direct and indirect recruitment methods. To be more specific, Wal-Mart sometimes directly contacts prospective employees. One of the main advantages and also the reason why the organization uses this recruitment method is that it is time-effective. Namely, the company is not forced to wait for applicants. As to indirect recruitment methods, the goal of Wal-Mart is to reach larger populations of potential applicants. In order to achieve this ambition, Wal-Mart publishes advertisements on its website and other media.
The selection criteria heavily depend on the job position. However, typically Wal-Mart focuses on such aspects of employees as training and educational background, and criminal background checks. As to the methods and techniques used in the process of selection, Wal-Mart heavily relies on job knowledge evaluations and structured interviews. Whilst structured interviews help to determine how well an applicant will potentially fit organizational culture and job, personality tests and situational judgment tests are used in order to determine whether an applicant possesses the needed personal characteristics to function effectively in business environment.
Employee Training
Wal-Mart as an organization pays specific attention to the importance of professional development of its employees. Specifically, the introduction of new technology typically leads to new task requirements and individual skills. Working with new electronic system demands new skills and abilities that employees might not possess as technology changes quicker that workforce’s respective skills. Therefore, Wal-Mart has its own training programs in order to address the above-mentioned gaps in knowledge. This, in its turn, significantly increases employee motivation. Although in the past the Theory X had a stronger explanatory power when applied to the case of Wal-Mart, today the theory Y works better in terms of explaining employee motivation.
The training programs at Wal-Mart typically focus on the performance of sales personnel. Although the company also has online training courses, it focuses primary on traditional face-to-face trainings in order to guarantee the highest quality of its services.
Retention Strategy at Wal-Mart
Wal-Mart as an organization needs to increase employee retention in order to decrease the negative effect of employee turnover. More specifically, higher rates of turnover are linked to financial losses, considering the financial losses of HR department due to recruitment, selection, and training. Wal-Mart combines several approaches in order to maximize its employee retention rates, including the incentives based on employees’ statuses or positions, recognition based on employees’ performance, and benefits based on employees’ status or positions.
Leadership Styles and Organizational Culture at Wal-Mart
The culture of Wal-Mart organization focuses on the problem of elimination of status differences among employees and increase in the level of employee autonomy. There has been a change in organizational structure of the company that also brought about changes in leadership styles. To be more precise, Wal-Mart is characterized by democratic leadership style. Democratic leadership creates a situation when employees have a greater potential in terms of influencing the decision-making process within the organization, which eventually leads to higher morale among employees. The company also benefits from it as different perspectives are taken into account. Also, the democratic leadership has an embedded element of the so called ‘open door’ policy, when all employees in Wal-Mart are actively encouraged to share their concerns, speak freely, and express their ideas.
It would be logical to assume that in the case with Wal-Mart, culture and leadership styles are the transformational factors that contributed to the success of the organization. Namely, by increasing employee autonomy, leadership style at Wal-Mart and its organizational culture also increase employees’ actual and perceived potential in terms of influencing the process of decision-making. Although the company still has some elements of classical Weber’s bureaucracy, it is possible to observe a distinctive shift to the work environment that is more egalitarian and free of status differences. As to transactional factors that influenced Wal-Mart’s success, it is important to mention structure and climate. Yet, it is important to understand that they are related to transformational factors because both of them led to the establishment of the system of power within Wal-Mart that is more horizontal.
Wal-Mart proved to be effective in terms of solving the problem of cultural barriers. Appreciating diversity today is crucial for organizations, especially such large organizations as Wal-Mart. In the context of intercultural communication, an organization’s failure to appreciate diversity will eventually lead to conflict and will negatively affect the functioning of an organization. In a contrast, promoting cultural diversity expands the potential of an organization as it creates a situation when different unique perspectives are taken into account. Language barrier is often listed as one of the most important barrier to intercultural communication. Indeed, language presents one of the most important elements of culture that contains a big amount of information. Wal-Mart managed to effectively address this problem by designing special language courses for non-English speakers (Wolf, 2014).
Trade Union and Wal-Mart
Regardless of the size of an organization, there were no successful attempts to unionize Wal-Mart in the recent years. It is possible to define three main reasons for it, including economically unsatisfied workforce, high employee turnover rate, and anti-union tendencies at the organization. Wal-Mart is often criticized in the context of its low wages. It is important to note, however that the problem of low wages was perceived as rather unimportant as a big part of Wal-Mart employees was composed of students working at the company as temporary summer employees. Yet, there has been a shift in the characteristics of the workforce at Wal-Mart, which eventually resulted in adults working for the company as their full-time jobs. The low wages offered by the company are often not enough for this category of employees to support their families. As a result, Wal-Mart attracts a very specific type of workforce. This issue, among other factors, contributes to the high turnover rate at Wal-Mart. To be more precise, 70% of employees leave Wal-Mart during their first year of working for the company. This factor makes it difficult to make any major unionization attempts. Finally, as it has already been mentioned above, the organization has strong anti-union policies. Employees are often encouraged or even pressured not to join any union. These attempts to create strong anti-union policies were justified by the notion that the unions allegedly have the only goal of enriching themselves. The issues described above can to some extent explain why the company has not been successfully unionized, compared to other major Wal-Mart’s competitors. Yet, one should note that relatively recently there has been a change and the company has made some attempts to unionize its employees as a team.
Wal-Mart and Performance Appraisal
There is a strong performance appraisal system in Wal-Mart. Namely, the company provides employee with a detailed feedback on their performance together with instructions on how to improve their performance. In addition to this, the organization uses a special software product that helps to analyze team and individual performance levels. Wal-Mart typically incorporates five performance measures – efficiency of processes, effectiveness of processes, quality of customer service, productivity of sales personnel, and timeliness of supply chain activities. In order to regularly monitor employee performance, performance interviews are conducted at Wal-Mart twice a year. Apart from the fact that these interviews provide information for appraisals, they also help managers to receive feedback from employees. Wal-Mart incorporates four major performance evaluation levels, including below standard, above standard, standard, and outstanding. Workers, whose performance has been evaluated as outstanding, typically get development of pay.
Conclusion
Wal-Mart is an example of a learning organization that is in the process of a constant change. Whilst all of the elements of the organization are encouraged to change in order to fit the larger social and political climate, there are a number of factors concerning HR that positively affected the success of Wal-Mart as an organization. From this point of view, it might be helpful to pay a closer attention to the HR practices employed by Wal-Mart. Given the size of the organization, Wal-Mart uses diverse recruitment strategies and methods. More specifically, as to the recruitment sources that the organization uses, they include internal and external sources. In addition to this, the company employs direct and indirect recruitment methods. Wal-Mart as an organization pays specific attention to the importance of professional development of its employees. The training programs at Wal-Mart typically focus on the performance of sales personnel. Although the company also has online training courses, it focuses primary on traditional face-to-face trainings in order to guarantee the highest quality of its services. The culture of Wal-Mart organization focuses on the problem of elimination of status differences among employees and increase in the level of employee autonomy. There has been a change in organizational structure of the company that also brought about changes in leadership styles. To be more precise, Wal-Mart is characterized by democratic leadership style. Democratic leadership creates a situation when employees have a greater potential in terms of influencing the decision-making process within the organization, which eventually leads to higher morale among employees. Regardless of the size of an organization, there were no successful attempts to unionize Wal-Mart in the recent years. It is possible to define three main reasons for it, including economically unsatisfied workforce, high employee turnover rate, and anti-union tendencies at the organization. There is a strong performance appraisal system in Wal-Mart. Namely, the company provides employee with a detailed feedback on their performance together with instructions on how to improve their performance. In addition to this, the organization uses a special software product that helps to analyze team and individual performance levels. Wal-Mart typically incorporates five performance measures – efficiency of processes, effectiveness of processes, quality of customer service, productivity of sales personnel, and timeliness of supply chain activities. Wal-Mart incorporates four major performance evaluation levels, including below standard, above standard, standard, and outstanding.
- Wolf, A. (2014). Walmart Outlines Strategies At Shareholders’ Meeting. TWICE: This Week In Consumer Electronics, 29(12), 4.
