Introduction
Strategic Human Resource Management (SHRM) is an indispensable element for the performance of the enterprise since it supports the activities of each departments or business division and helps the organization achieve its long-term objectives. The tasks of the human resource manager are focused on the continuous improvement of the labour force. His/her strategies should be in line with the needs of the organization, its mission, and vision.
Their responsibilities of the professionals include selection and recruitment, recognition and rewarding, appraisal, employee development, and succession planning. This paper is aimed at analyzing SHRM in such a company as Wal-Mart Stores, Inc. In particular, it is necessary to determine whether SHRM in this company is consistent with its overall business strategy and with its current needs. This paper will also discuss the impact of internal and external environment on HR polices, pursued by the management of Wal-Mart.
By doing that we will be able to single out strengths and weaknesses of SHRM and make recommendations that could improve it. Yet, at first it is vital to understand the overall business strategies at Wal-Mart, the structure of this company, its organizational culture, and most importantly the role of SHRM.
Overview of Wal-Mart
Wal-Mart is one of the largest retailers in United States and all over the world: the company handles operations through super centres, and discount stores. Currently it operates such as China, Canada, Brazil, Japan, and United Kingdom. Among its major strengths, we can single out effective distribution system, satellite information system, and effective inventory management (Cravens et al, 1998).
They enable the company to reduce operational expenses and subsequently pursue the policy of cost leadership. Overall, the current mission of the enterprise is to retain the status of the world’s leading chain store by “helping people save money so that they could leave better” (Wal-Mart, 2010, unpaged). SHRM is instrumental for the achievement of these objectives. One of the major characteristics of Wal-Mart is decentralized structure.
The Organizational Chart of Wall-Mart
Local and Foreign Suppliers
Overall, HR managers serve the needs of every division of the organization; the only exceptions are suppliers. It is an inherent part of every department. At the given moment, the company employs more than two million employees (Wal-Mart, 2010, unpaged), and it would not be an exaggeration to say that the role of SHRM becomes crucial.
We need to mention that the organizational Wal-Mart can be described as role culture, which means that each of the employees has clearly delineated duties and authorities. More importantly, there is a very distinct and complex hierarchy, for example, there are heads of departments, location managers, facility managers, technology managers, and so forth (Peterson, 2005).
To some extent, this complex hierarchy makes employees believe that they will be able to climb career ladder. As Coleman Peterson argues, this structure makes people believe that “true opportunity exists” (2005, 88). This argument can be better elaborated by means of chart.
As we can see, Wal-Mart cannot be called a flat organizations since there are many layers between top-management and front-line personnel. On the hand, the culture and structure of the company helps to retain employees; thus, Wal-Mart does not have to spend extra money on hiring and recruitment; however, this hierarchical culture may slow down the decision-making within the company.
Therefore, it can be viewed as both advantage and disadvantage. These are the key issues that a person should take into account while assessing strategic human resource management in the company.
The assessment of SHRM in Wal-Mart
The Influence of External and External Factors
At this point, we need to describe those factors, which drive SHRM in this organization. At first, we need to speak about legal, political, and economic environment and their impact on HR policies in Wal-Mart. Over recent years, this company has recent years, this company has been often criticized by political activists, who believe that it does the company does not want to raise the wages of its employees, and does not offer health insurance to them (Spotts. 2005).
To some degree, it forced the company to increase the remuneration, offered by employees. More importantly, one should not overlook the increasing legal pressure, since the company has faced numerous lawsuits that were caused by poor working conditions and discriminatory policies toward the employees, supporting unionization (Spotts, 2005, p 87). This pressure induced the management to focus more in the needs of the workers.
It is possible to argue that the SHRM in the company is affected by two opposing forces: 1) willingness to be or at least to appear a responsible corporate citizen, and 2) the willingness to remain profitable. Yet, one should not overlook the importance of competition : the thing is that Wal-Mart’s major rivals, for example, Costco offers better health insurances to the workers. In turn, the management of Wal-Mart attempts to improve its work practices.
The objectives of SHRM in Wal-Mart
The importance of an active, healthy human resource management system is recognized throughout Wal-mart. At the business level the key human resource staff working to promote a culture supportive of the business strategy is the human resource director, although there are other staff groups that address particular aspects of the issue for example quality and management development. The human resources managers serves as internal consultants to the various operations within Wal-Mart.
The people perform the following functions: 1) raise awareness on issues of productivity, quality, and a quality work life; 2) facilitate information transfer among Wal-Mart’s operations; 3) conduct practical research related to productivity, a quality of work life, and team issues; and develop team and human resource management processes useful to line managers.
Other staff groups, which contribute to the effort, include quality centre, which promotes improved productivity through the organized teams. The corporate human resource staff has grown in recent years and its range of operations has broadened. The challenge is to tie together a large array of activities into a coherent well-aimed strategy (Anon, 2009, unpaged).
If we are speaking about the relation between SHRM and the strategic objectives of this enterprise, we may say it is aimed at recruitment and retention of the best candidates, which will subsequently enable the company to reduce operational costs, that inevitably arise when the company has a high turnover (Peterson, 2005).
The human resource practices in the organization, for example, development and training, selection and recruitment, performance appraisal, performance contracts among others improve HR efficiency. These traditions are not only used by Human Resource Managers but also used by line managers.
The use of HR practices by line managers has been increasing over years due to the complexity involved in HRM. They play a very crucial role in the development of the workforce since they contact directly with employees (Daft, 2009). Their work is to serve as a bridge between the HR managers and the work force. They are better placed to understand the employee’s performance and frequently experienced problems such as turnover rates and absenteeism which can be used by the HR managers.
At Wal-Mart it is the duty of line managers to introduce any new member of staff into the corporate organization. Shortly after the line managers are informed about the arrival of a new member of staff, they should ensure that the work place is suitable, fully effective and well equipped, notify team members about the new employee, assign one member to act as the employee’s adviser and inform him of the new employee’s duties.
On the whole, it is possible to single out the following areas of HRM to which Wal-Mart pays close attention:
- Recruitment of the personnel. Prior to hiring the person, the HR managers of Wal-Mart scrutinize the background of the candidate. They focus on his/her education, references, previous work experience, especially, if we are speaking about those applicants, who have already been selected among many others. The HR managers may focus on such issues as the reason why the person left the previous job. They do not rely solely on interview, since they believe that this form of selection process can be invalid (Peterson, 2005, p 87).
- Retention of the Employees. In order to retain new hires, the company usually undertakes the following steps: 1) it offers regular orientation programs to the new members of the personnel; 2) the HR managers clearly explain the employee’s opportunities for career growth. It should be noted that approximately 70 percent of the managerial staff in Wal-Mart were hourly workers at the beginning of their career in Wal-Mart (Peterson, 2005, p 88).In the previous section of this paper, we have noted that complex hierarchical structure of this company and it role culture enable the hourly workers to climb the career ladder.
- Training and development of the employees. Unfortunately, training and development of the personnel is one of those areas where Wal-Mart is not very successful. The company focuses on the so-called “orientation training” given to the employees at the initial stages of their career. However, scholars believe that such courses should be offered on a regular basis (Ollek, 2009).
- Remuneration. Wal-Mart workers have a fixed hourly wages, for example, 10 or 12 dollar per hour. In the majority of cases, such approach to the assessment and remuneration of performance overlooks the individual contribution of the front-line personnel.
This discussion shows that certain areas of SHRM in Wall-Mart do not fully contribute to the achievement of strategic objectives, set by this corporation. Namely we may mention the training, offered to the employees. It cannot be limited only to the orientation programs. In the next section of the paper we will try to single out ways of improving HRM in the company.
Recommendations for the improvement of SHRM in Wal-Mart
- One of the first measures that we can suggest to this company is to simplify its managerial hierarchy, and now it is very complex and there are too many barriers between the front-line personnel and the top-management. There are several rationales for this change: first, the duties of middle managers frequently overlap and essentially these people do the same work. Secondly, the complex hierarchy may lead to excessive supervision of the employees, malpractices, and abuse of power. For instance, one may mention those scandals which broke out to the facts that many employees, who supported unionization of labour force were dismissed (Spotts, 2005). Overall, such incident pose a great threat to the public image of the company and they may prevent it from remaining the world leading retailer.
- Secondly, it is vital that the company introduced different methods of performance assessment. As it has been mentioned before, the majority of employees have fixed salaries. This is the most inadequate way of performance remuneration. The management of this organization should focus on both quantitative and qualitative aspects of performance, and there are ways in which they can be measured. Overall, such compensational policies can be the leading factor that forces the employees leave Wal-Mart because they feel they are not valued by the company.
- Thirdly, Wal-Mart should pay more attention to the regular training of the personnel. Every representative of the service sector makes sure that their employees are able to use new technologies, especially solutions. Additionally, it is vital that they can find an approach to each of the customers and assist him in every possible way. These are one of those skills that should be continuously elaborated.
In this ways, SHRM will help Wal-Mart achieve three objectives:
- customer satisfaction;
- employee satisfaction;
- increased competitiveness.
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