Employment Practices at Wal-Mart
Wal-Mart Company has been known to offer better prices to its customers than other retail stores. It has been a friend to the working class as well as to the families on budget for a long time (Fishman, 2006). This company has realized extra special growth beginning way back from the time it started its operations in the year 1962 and it now has over six thousand retail units all over the world (Fishman, 2006). The success of this company can be attributed to its values it embraces of hard work, satisfying the customer and appreciating its associations. This was a direction that was offered by its founder, Sam Walton (Walton and Huey, 1992). However, this company has a very grave weakness when it comes to employment practices. The company has been seeking to cut costs to the minimum level possible in order to maintain or derive higher profits. Wal-Mart has been seeking to maximize profits through cutting costs at the expense of the welfare of its employees.
Wal-mart is making a large number of its employees to remain in poverty. As on one hand claims are presented by the Wal-Mart Company that it is making efforts to help people belonging to lower class by providing them with “low-cost shopping” as well as offering them local job opportunities (Hemphill, 2008), on the other hand; in the actual sense, the company is ensuring preservation of a system that facilitates “low-wages” and insufficient benefits to the employees (Gereffi and Christian, 2009). By not offering the employees the wages and benefits that are sufficient to a level that can enable them to overcome poverty, this implies that the company is just ensuring perpetuation of a system that ensures people in the lower class remain in poverty (Goetz and Swaminathan, 2006). This practice violates the “The Fairness” principle, basing on the “Global Business Standards Codex”. Under this principle, the employees need to be treated and dealt with in a fair manner so that they can be able to receive satisfactory reward from their employers for the work they do.
Among the unfair practices carried out by Wal-Mart is that, even if it provides insurance, it makes it almost not possible for the employees to enroll in this insurance program. It has been reported that about two thirds of employees in this company do not have health insurance and this is for two main reasons; they either don’t afford the insurance cover or they don’t qualify to have one (Armour, 2003). For instance, an employee working on a full-time basis in Wal-Mart must work in the company for a minimum period of six months before he or she qualifies for insurance while one working on a part-time basis has to work for a minimum of one year before he or she becomes eligible for insurance. It is even sad to learn that, in the year 2006, the company changed its labor structure by shifting some employees to part time working, increasing the percentage of the part-time workers to 40 percent. This was aimed at making these workers to wait for a longer time before they could be enrolled in the insurance plan. This tends to indicate that the company is seeking to “phase out” the company’s tenured employees by making it not possible for the employees to stay. This gives room for the company to have a relatively lower number of the workers benefiting from the insurance plan because most of the employees will not be having the tenure to benefit from the plan. Therefore, this will continue to serve to add to the continually increasing population of people who are underpaid and without benefits in the United States of America (Fox, 2007). Here, it can be observed that there is violation of the “Dignity Principle”. Under this principle, the employees are supposed to be shown respect and appreciated for their efforts and their health protected and safety ensured. Employers need to understand how important being treated as a person with dignity is and take appropriate measures to ensure that this is realized among the employees. Denying an insurance cover or delaying it implies that someone’s dignity is not being recognized.
Wal-Mart has been accused of discrimination against women, paying low wages to the workers and using illegal tactics to frustrate the workers’ efforts to form unions. According to Armour (2003), in the year 2003, there were about forty lawsuits that had been filed by employees who presented claims that force was used in making them work to overtime and without receiving payment for the overtime work. This is a clear indication of the violation of the “Fairness Principle”. In addition, the company has also been sued in the law court for sexual discrimination, especially in California (Spangler, Britt and Parks, 2008). Under this claim, the sexual discrimination involves discrimination against the female gender in which women are not given equal opportunities as men in promotions, payment, being offered training and in job assignments (Armour, 2003).
Wal-Mart has not been supporting formation of labor unions by its employees. For instance, all the employees, who are more than one million in the U.S, working for the Wal-Mart Company are not union members. This has brought in questions in regard to how relevant unions can be in the current day in the world (Quinn, 2005). By the employees forming unions, they can be able to easily air out some pressing issues so that they can be addressed by their employer or employers (Resnick, 2004). The company has frustrated efforts by the employees to form unions. Coming in public, Wal-mart claims that the employees have not formed unions because they are satisfied in working for the company (Basker, 2005). This idea is supported by Hemphill in his article in which he points out that Wal-Mart gives competitive wages to the employees as compared to other retail merchandisers (Hemphill, 2008). However, blocking the employees from organizing labor unions is a violation of the “Responsiveness principle”. This principle is about having concerns being addressed. In any company, there is need to have a properly structured mechanism that can be employed in order to have concerns and issues to be addressed in order to avoid conflicts among people in the organization. Unions can actually be helpful in presenting some of the pressing issues to the management so that they can be dealt with. These may involve such issues as employee wages and benefits. By a company blocking formation of the unions, it might be having a hidden agenda that might not be favorable on the part of the employees.
To this end, it can be concluded that, Wal-Mart has been seeking to maximize profits through cutting costs at the expense of the welfare of its employees. The company has been paying low wages and offering no or little benefits. More so, a larger number of the employees working for the company have no health insurance basing on the idea that they do not qualify or in most cases, the employees can not afford the cover. In addition, the company has been blocking efforts by employees to form labor unions. As much as Wal-Mart might have built a good name to its customers as offering lower prices, it needs also to consider the issue of changing the employment practices. Having satisfied employees is equally healthy as having satisfied customers for the company’s image and the better future of the company.
Armour, S., 2003. Wal-Mart takes hits on worker treatment., USA Today. Available from, http://www.usatoday.com/money/workplace/2003-02-09-wal-mart-cov2_x.htm [Accessed on 28 May 2011]
Basker, E., 2005. Job creation and destruction? Labor-market effects of Wal-Mart Expansion. Review of Economics and Statistics, 87 (1). 14 – 38.
Fishman, C., 2006. The Wal-mart effect. New York: The Penguin Press.
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Goetz, S. and Swaminathan, H., 2006. Wal-Mart and County-Wide poverty, Social Science Quarterly, 87 (2), 211 – 226.
Hemphill, A. T., 2008. Demonizing Wal-Mart. Journal of Citizenship. Available from, http://www.britannica.com/bps/additionalcontent/18/37566407/Demonising-WalMart [Accessed 29 May 2011].
Quinn, B., 2005. How Wal-Mart is destroying America (and the world) and what you can do about it. Berkeley: Ten Speed press.
Resnick, J. T., 2004. Corporate reputation: Managing corporate reputation – applying rigorous measures to a key asset, Journal of Business Strategy, 25 (6), 30 – 38.
Spangler, M. A., Britt, M.M. and Parks, T.H., 2008. Wal-mart and Women: Good business practice or gamesmanship? Journal of Applied Management and Entrepreneurship. Available from, http://www.allbusiness.com/legal/trial-procedure-suits-claims/13482341-1.html [Accessed 28 May 2011].
Walton, S., and Huey, J., 1992. Sam Walton: Made in America. New York: Doubleday.