Average Wal Mart Employee example essay topic

Wal-Mart Stores, Inc. is currently entangled in a legal battle that will decide if the company has engaged willfully in gender-based discrimination. Underlying causes, organizational culture and ethical issues will be examined in determining how the largest private employer in the United States could have fallen prey to unfair labor practices. "In 1999, women constituted 72% of Wal-Mart's hourly employees, but only 33% of its managerial employees" (Bhatnagar, 2004). This fact and many others are the reasons many people allege that Wal-Mart has unfair labor practices. The Dukes vs. Wal-Mart case challenged the hiring, promotion and pay practices of Wal-Mart. The case was filed in June 2001.

When the case reached class certification status it became the largest class action civil rights suit against employment discrimination in American history. The case represented approximately 1.6 million women that had worked for Wal-Mart from 1998 to 2001 who felt that they had been discriminated against because of their gender. Many women involved in the Dukes case alleged that Wal-Mart's policies vary from gender to gender. The managerial staff is comprised mostly of men. The relocation policy in place has a distinct impact on female employees. To become a manager, one must relocate multiple times at each management level.

Female employees claimed that this could potentially have a disparate impact on single and married mothers, therefore the policy is not fair to all; favoring the chances of a male getting a promotion over a female. According to the Berkeley Women's Law Journal (2004), Wal-Mart pays its employees about one-third less than what similarly unionized employees earn. Wal-Mart's slogan is "Everyday low prices", and they accomplish this by keeping wages low and by suppressing any efforts made by unions to unionize Wal-Mart. In addition to paying low wages, some Wal-Mart stores allegedly violate the Federal Fair Labor Standards Act. The Federal Fair Labor Standards Act regulates overtime pay and child labor standards.

Many employees have claimed that Wal-Mart makes them work more than 40 hours per week without overtime pay. When management realized how much overtime pay they were logging, they would call in managers to adjust the time sheets. An internal audit exposed the violations of the Federal Fair Labor Standards Act. Many of the facts stated in the Dukes case were alleged by employees and were not always seen within all Wal-Mart stores or by the public. Employee Cleo Page actually experienced the effects of Wal-Mart's unethical labor practices. Ms. Page began working for Wal-Mart as a cashier in one of their super centers in Tulsa, OK making $6.50/hr.

Page resigned from her job three years later from a store in California where she was making $10/hr. Over the three years of employment, she received above standard evaluations, but despite her desire for advancement, she was passed over twice for promotions by less qualified male applicants. Page had also encountered other women who had similar experiences, some who were in the same position for eight years. Three years of earning low wages adversely affected Page's financial situation. She had little savings and as a result, she lost her house in California in addition to the foster children she was caring for. Page declared that she would not have lost her home and children if she had been given the well deserved promotion.

The promotion came with many great incentives and better bonuses. This alone would have improved her financial situation. Wal-Mart is the largest retail store in the United States. The root cause of the problem with Wal-Mart is that they try to increase their profits by minimizing their costs. Many internal policies are used to maintain this philosophy.

First and foremost is the strong organizational culture that is dictated from the home offices. Store level managers receive discipline ranging from written reprimands to termination if they do not maintain the high goals set by the Corporate Office. Managers try to cut expenses locally by reducing one of their largest expenses, payroll, especially overtime wages. Another root cause of Wal-Mart's problem is their lack of a formal job posting policy. Associates are not made aware of management level openings.

Those who selected to move up in the organization are picked by store and division level management staff without regard to skill or educational requirements. This system is described as a "tap on the shoulder" process (Betty Dukes vs. Wal-Mart Stores, Inc 2004). Another underlying problem for Wal-Mart is the company's policy to promote from within the company. This reinforces the organizational bad culture and practices. There are many unresolved issues with Wal-Mart that have made the news.

The hourly pay scale for employees at the store level is below the Federal poverty level, many of the employees can't afford health care, and inequality of hiring women for management positions. "The average Wal-Mart employee earns $8.00 an hour, with the average work week being about 32 hours. This equates to $256 a week or $13,312 a year. The Federal poverty level for a family of three is $14,630" (Brownstein 2005). Wal-Mart's personnel polices are directed to keep wages cheap.

Wal-Mart does this so they can maximize their profits. The health benefits for a Wal-Mart employee costs 20% of the average employee's paycheck. Of their 1.2 million employees, 2/3 of the employees can't afford the health benefits. Over the last 12 years, Wal-Mart has been raising the costs of premiums for the workers by 200%. There are few women in managerial positions in Wal-Mart. Also, women are paid a lot less than their male counterparts.

"A female full-time hourly employee, working at least a 45 hours / week at Wal-Mart, made about $1,150 less per year than men in similar jobs" (Bhatnagar 2004). One of the root causes of problems with Wal-Mart is that they try to minimize costs to raise their profits. They try to buy goods cheap from suppliers so they can sell the same product for less than the competitors. Wal-Mart puts financial strain on the suppliers to give them what they want, when they want.

Wal-Mart can suffocate a business into giving them what they want at the price they want it at. The main reason Wal-Mart can do this is because they have a large number of stores in the United States as well as Mexico and Canada. In 2005, Wal-Mart had a workforce of more than 1.2 million workers. Wal-Mart's total revenue in 2004 was $258.7 billion. Management has many responsibilities. Many of those responsibilities have to do with keeping the company profitable and its costs low.

Wal-Mart is the same as any other company yet they have the added pressure of making sure that they offer their customers everyday low prices. In order to maintain this promise to their customers, leadership had to find ways to offset expenses. Company management receives handbooks upon joining the company and part of the handbook guides managers in ways to pick and choose employees along with ways to inspire them in helping keep the company union-free (Featherstone, 11). Keeping the company union-free allows them to keep their wages lower and thus not spend as much on company payroll.

Some of the gender discrimination problems may stem from the fact that most of upper management is made up of mostly men. Since they are in charge they make the decisions of who gets hired and who gets promoted into management positions. An assistant manager involved in the Dukes case stated that she was requested to change employee time sheets so the company did not have to pay overtime (Bhatnagar, 251). Cleo Page and Donna Adair are just two of over one hundred women who worked for Wal-Mart that are now involved in large civil rights class action suits. All of these women stepped forward in order to bring these many wrongdoings out in the public eye. In doing so they are taking many risks, such as being fired from their positions.

The company that was founded on Sam Walton's old fashion values of putting people first seems to be at a crossroads. Do they continue down the road that has put them in this position, or does management take a good hard look at where they are and work to put the company back on track with some drastic changes? Wal-Mart is facing numerous unfair labor practices disputes. The company is facing a large suit from over one hundred women declaring that they were discriminated against. The main charge is that the company does not promote its women and keeps them in departments that do not allow them to make as much money as the men in higher positions (Bhatnagar, 249).

According to the suit of Dukes vs. Wal-Mart, the company makes it much more difficult for women to climb their way up the corporate ladder to management positions as well as paying them less money than their male counterparts. The company has also been accused numerous times of not paying many of its employees deserved overtime. Employees are alleging that the company changes the amount of hours worked on time sheets and forces employees to work off the clock in order to avoid paying the time and a half required for overtime work (Bhatnagar, 251). There have been numerous suits filed in multiple states in this respect and the company has settled out of court and found guilty of making employees work overtime without pay (Sellers, 42). The public was made aware of child labor issues in the early nineties when a story appeared on television showing young children making Wal-Mart clothing (Sellers, 43). These issues seem to keep repeating against this company making the public wonder how big the problem really is and if the low everyday prices are really worth it all.

As the industry leader in the retail sector, Wal-Mart has a responsibility to it's stakeholders to provide fair and ethical treatment to all. The management, at the store level, has implemented their philosophy of "lowest prices" to the consumers by putting undue pressure to perform illegal acts. In the beginning, Wal-Mart was operating under the agency theory. This theory is to maximize profits at the cost of other stakeholders. It is imperative for the company to return to the values of the founder, Sam Walton. The company became successful by practicing the American values system of equality, fairness, and respect for the dignity of individuals.

A major reason for correcting this pattern of illegal and unethical behavior is that Wal-Mart has a higher responsibility in the industry, and to society, because of other companies has begun mimicking these behaviors to stay competitive. Recommendations for Wal-Mart to change from an unethical mode to an ethical one include five changes to the Company's internal policies. On the issue of discrimination of women, the company should continue with its Leadership Development Program that will train and mentor up and coming females and minority associates to enhance the likelihood of their advancement in the organization. Ensuring this program is successful the "top executives' bonuses will be cut if the company does not promote women and minorities in proportion to the number that apply for management positions". (Wal-Mart Announces 2004).

Each member of the management team will complete a full course in diversity training with annual workshops. The violations of Wage and Labor Laws will not be tolerated. The company has placed undue pressure for cost savings at each store level, and the lack of proper training of the store managers has resulted in unethical and illegal practices. To remedy this situation each store manager will receive intensive training at the division level on labor laws. An Ethics Officer should be named in the near future whose responsibility will be implementing an ethics program, training all members of management, and the establishment of a confidential hotline for employees to voice concerns regarding unfair treatment practices. This will be communicated to every member of the organization via the company's computer network system known as "Managers Workbench".

(Dukes vs. Wal-Mart, 2004). The strong corporate culture that is in place at Wal-Mart will need to be replaced. The Ethics Officer will be responsible for implementing and communicating the new ethics program. The new standards will be communicated from the Chief Executive Officer down the entry level associates. Management level positions will continue to be filled from within the company along with recruitment from outside the organization. This will help ensure that the old culture does not flourish.

All management jobs will be posted throughout the company with formal criteria for each job function. The company should employ the stakeholder theory as opposed to the agency theory. Each member associated with Wal-Mart will be treated fairly and honestly. In incorporating the deontology perspective as opposed to the Utilitarian viewpoint, the company will show its desire to right previous wrongs.

Wal-Mart has to implement a number of changes to correct the problems it has created. Attention must be paid to ensure the employee is treated fairly. Other ways must be sought to maintain profit levels and make the stockholders happy.

Bibliography

Bhatnagar, Rite. (2005).
Dukes vs. Wal-Mart as a Catalyst for Social Activism. Retrieved July 12, 2005, from the University of Phoenix Library EBSCOhost database Dukes vs.
Wal-Mart, Inc. (2004).
Class Certification Status Decision, United States District Court, Northern California. Retrieved July 15, 2005 from web Liza.
2004).
Rollback Wages! Retrieved July 12, 2005, from the University of Phoenix Library EBSCOhost database.
Sellers, Jeff M. (2005).