Business strategy and HR Policies at WalMart Stores Order Instructions: •For your organization, or another organization that you know well, familiarise yourself with the organization’s business strategy and existing HR policies.
•Identify your chosen organisation and specify the HR policies that you will evaluate.
•Critically evaluate the HR policies for their alignment with the organisation’s business strategy.
•Recommend changes to specific aspects of HR policies and/or practices based on your analysis and provide a justification for each recommendation.
Business strategy and HR Policies at WalMart Stores Sample Answer
Business strategy and HR policies at Wal-Mart stores
When business executives develop business strategies and plans, in most instances they leave out a vital aspect of these business plans. The human resources (HR) personnel are usually not asked to take part in the process of planning. When finance, production, sales or marketing departments are required to execute their tactics and strategies for the next financial year, they often find themselves with team members or employees who do not possess the right abilities. It actually makes sense to align business strategies with the human resources and this has been found to help organizations attain their corporate goals (Binyamin & Carmeli, 2010). This paper provides a critical evaluation of the human resources (HR) policies of Wal-Mart stores for their alignment with the business strategy of Wal-Mart. The paper also provides a recommendation of changes to specific facets of human resources policies and human resources practices basing upon the analysis. A justification for the recommendations is provided.
Chosen company: Wal-Mart Stores
The chosen company is Wal-Mart supermarket chain. This retailer has a workforce of over 2 million globally and the corporation is one of the biggest firms worldwide not just based on the number of workforce, but also based on market capitalization. The firm was founded by Sam Walton and has its head offices in Bentonville, Arkansas (Reuters, 2016). At the moment, this retailer has nearly 8,000 retail stores in about 27 markets worldwide. In the United States, Wal-Mart is recognized as the biggest grocer and retailer. The retailer offers a wide variety of services and goods at everyday low prices. It carries out its business operations through 3 segments: Sam’s Club; Wal-Mart International; and Wal-Mart United States (Halzack, 2015). Wal-Mart competes with BJ’s Wholesale Club and Costco Wholesale in America.
Human Resources policies to evaluate
Compensation and benefits: compensation is an essential aspect of employment and an integral policy of human resources management. Compensation is not just about what a person is paid as it includes more than just salary. It also includes indirect and direct rewards as well as benefits which the worker is given in return for his or her contribution to the company (Holbeche, 2013). Career development and training: training and development are functions of human resources management which comprise leadership training, job skills training, orientation of new employees, as well as professional development (Buller & McEvoy, 2012). Employee relations: employee relations refer to the human resource management practices which ensure staff members are productive and happy. Tooksoon (2011) reported that employee relations offers policy development, employee recognition, in addition to all sorts of problem solving. These three are the HRM practices that would be evaluated in relation to Wal-Mart.
Wal-Mart’s business strategy – Low-cost leadership
This retailer has adopted the cost-leadership strategy as its business strategy, and its slogan, everyday low prices, is globally known. Ever since its founding in the early 1960s, the mission of this retail giant has been to save its clients cash and enable the customers to live better (Ferguson & Reio, 2010). By adopting a low-cost strategy, this corporation seeks to be the low-cost leader in the retail sector. The retailer imports a large amount of products cheaply from low-cost regions particularly China. By procuring goods from suppliers at a cheaper cost than its competitors, Wal-Mart is able to pass this lower cost to its customers by selling goods in its retail stores at comparatively cheaper prices than other retailers; although it makes marginal profits from each product. However, because it sells in high volume, it is able to make significant profits (Halzack, 2015).
HR policies aligned with Wal-Mart’s business strategy
Compensation and benefits: Wal-Mart’s HR management compensation and employee career development practices are centred on reducing costs. As a case in point, as part of the giant retailer’s cost leadership generic strategy, this firm always seeks to reduce spending for HRs (Halzack, 2015). Therefore, the HR management (HRM) at the company focuses on ensuring that its compensation packages are actually minimized, though not reduced to the point where it may compromise the employees’ job performance. It has been reported that Wal-Mart is an employer that exploits employees with extremely with low salaries and pay (Alfes et al., 2013). Wal-Mart is generally well-known for low wages and low prices. The low pay for its workers is often criticized for being inadequate to support the needs of the employee. At the moment, Wal-Mart pays an hourly minimum wage of $7.25; an amount that is considerably lower than the $9.93 national average (Binyamin & Carmeli, 2010). Even so, the retailer is planning to increase the minimum wage for its workers to at least $10.00.
Wal-Mart retailer recognizes that it cannot really attain its mission or realize its business strategy without the support of its millions of associates/employees. As such, Wal-Mart has various programs for the benefit of its staff members. For example, all employees along with their families are currently offered health coverage. Besides comprehensive health insurance plans, other benefits the company offers its employees include associate discounts, associate stock purchase plan, as well as company-matched 401(k) contributions to six percent of salary (Jiang et al., 2012). The retailer is able to maintain employee motivation by means of these employee benefits. It is worth mentioning that these employee benefits address the HRM objective of retaining employees and reduce turnover costs.
Career development: in addition, Wal-Mart has in place career development strategies which are aimed at minimizing employee turnover through maximizing the level of fit between staff members and their duties. These HRM considerations are crucial in ensuring that the employees at Wal-Mart are at all times adequate in supporting Wal-Mart’s continued international expansion (Halzack, 2015).
Employee Relations: employees at Wal-Mart are recognized as associates rather than workers. They are referred to as associates and there are in excess of 2 million of them. The company has realized that the human resources function is one of the most vital throughout the organization. For this reason, Wal-Mart’s HR department treats the company’s workers as a vital aspect of the business, and by calling them associates, the employees are inclined to feel as being part of the organization and actually become motivated to give their best even when the pay is low (Alfes et al., 2013). Furthermore, the retailer gives recognition to employees who perform highly. This helps to motivate and retain workers and avoid costs associated with employing new workers thereby keeping costs low.
Recommendations
All in all, the human resource management of Wal-Mart has done a really good job aligning the HR practices to the company’s overall low-cost business strategy which focuses on ensuring everyday low prices. However, it can still do more. As described above, Wal-Mart’s HR department has strived to align only a few HRM practices with the company’s strategy; career training and development; compensation and benefits; and employee relations. However, the HR department can do more to align HR with business strategy. Therefore, it is recommended that Wal-Mart’s HR department should adopt the following cost saving in line with the retailer’s cost-leadership strategy: use subjective performance measures extensively; apply consistent policies to decrease the costs of employee turnover; and carry out effective training programs aimed at improving the effectiveness and efficiency of employees (Holbeche, 2013). Moreover, the HR department should utilize performance evaluation as a control device; ensure that job descriptions are explicit; provide detailed work planning; give emphasis on job-based salaries/wages; emphasize on job-specific training; and emphasize on technical skills and qualifications (Buller & McEvoy, 2012).
These recommendations are suitable for Wal-Mart since they will ensure that all of the HR practices at Wal-Mart are truly aligned with the cost leadership business strategy and help achieve corporate goals and objectives. When Wal-Mart’s HR is properly aligned with the company’s business strategy, the HR department could actually contribute to successful strategy and the company’s fiscal bottom-line. Proper alignment will mean that the HR department of Wal-Mart ensures that the company’s human assets are effectively aligned with business strategy adopted by the company’s top leadership which would allow the company to attain a competitive advantage over its competition.
Business strategy and HR Policies at WalMart Stores Conclusion
To sum up, this paper has exhaustively evaluated the human resources policies of Wal-Mart stores for their alignment with the firm’s business strategy. The findings of the evaluation reveal that on the whole, Wal-Mart’s HRM has been rather effective in aligning its HR practices to Wal-Mart’s low-cost business strategy that is focused on providing everyday low prices. Several recommendations have been made that if adopted and implemented, would give this retailer a competitive advantage over other retailers.
Business strategy and HR Policies at WalMart Stores References
Alfes, K., Shantz, A. D., Truss, C., & Soane, E. C. (2013). The link between perceived human resource management practices, engagement and employee behaviour: a moderated mediation model. The international journal of human resource management, 24(2), 330-351.
Binyamin, G., & Carmeli, A. (2010). Does structuring of human resource management processes enhance employee creativity? The mediating role of psychological availability. Human Resource Management, 49(6), 999-1024.
Buller, P. F., & McEvoy, G. M. (2012). Strategy, human resource management and performance: Sharpening line of sight. Human resource management review, 22(1), 43-56.
Ferguson, K. L., & Reio, T. G. (2010). Human resource management systems and firm performance. Journal of Management Development, 29(5), 471-494.
Halzack, S. (2015). Wal-Mart to raise pay for 500,000 workers. The Washington Post.
Holbeche, L. (2013). Aligning human resources and business strategy. Albany, NY: Oxford University Press.
Jiang, K., Lepak, D. P., Han, K., Hong, Y., Kim, A., & Winkler, A. L. (2012). Clarifying the construct of human resource systems: Relating human resource management to employee performance. Human Resource Management Review, 22(2), 73-85.
Reuters. (2016). Profile: Wal-Mart Stores Inc (WMT.N). Retrieved from http://www.reuters.com/finance/stocks/companyProfile?symbol=WMT.N
Tooksoon, H. M. P. (2011). Conceptual framework on the relationship between human resource management practices, job satisfaction, and turnover. Journal of Economic and Behaviors Studies, 2, 41-49.
