Nowadays, the concept of corporate ethics is developing as one of the most important subjects for any organization that wishes to stay competitive both in a local market and internationally. As society progresses, the understanding of what business practices can be considered acceptable changes. The process has become especially rapid with the development of Internet media and social networks, which instantly share news about companies to the wide public in different countries. Many organizations appear each year that aim to bring businesses to the response for non-compliance with the existing ethical standards. Some cases may even lead to the policy change on the firm, state, or government level.
To understand whether a company has ethical business practices, it is important to define the concept itself. According to the theory, it may be viewed as a set of guidelines that help to determine the level of appropriateness of corporate norms, policies, and activities (Carroll, Brown, & Buchholtz, 2017). In other words, there should be a list of principles that explain how management and employees should act and behave at work to comply with values and beliefs developed by a firm.
An important element of business ethics is that it usually has to deal with norms that are considered acceptable in society (Carroll et al., 2017). Thus, it may become challenging for a company that operates internationally to develop a single ethical code for all of its departments in various countries, as people of different nations may share opposing views on what is right and wrong.
Walmart is a huge retailing corporation that is commercially successful. Its size implies thousands of employees working under the same code of ethics. The document determines the company’s beliefs and scenarios that workers, or associates in Walmart’s language, must follow in different situations (Walmart, n. d.). However, there is evidence that the real case is far from what is stated in the document. Various reports and media stories claim that Walmart uses an unfair policy for punishing employees who were absent due to medical reasons.
The practice not only fails to comply with the company’s code of ethics but also violates federal and state laws of the U.S. associated with worker health safety. This case study reviews the facts of the situation and analyses them to determine whether there was a violation of ethical norms. In addition, several solutions for the issue are presented that might help to improve Walmart’s attitude towards its employees.
Background
Before trying to evaluate companies’ actions from the ethical point of view, it is important to understand how the industry works. Most retail and wholesale giants are experiencing high competition as products are similar in many stores. That is why the primary interest of any company like Walmart is to win customer loyalty and get as many revenues as possible. Setting attractive prices and offering deals on products is one way of achieving large buyer numbers.
Major sales that happen several times a year are also working towards stimulating buyer behavior. Choosing a place for a store is also critical, as it directly affects the number of customers. Finally, it is essential for retailers to reach people by promoting their products. A wise advertisement campaign can raise profits episodically and in the long run.
All these efforts to raise the business profitability cost retailers much money. Renting a popular spot for shopping is usually expensive, and the company must also keep the surrounding infrastructure. Promotion activities may also be costly, depending on the chosen channels. Moreover, attracting customers with low prices and special deals does not bring much profit for a retailer as it should pay most of the revenue to goods producers. As a result, businesses seek ways to cut costs in other spheres. Unfortunately, too often employees become the target for this goal having their salaries cut for various reasons.
Walmart is no exception from the model of retail business operations. Being a successful company, it is one of the most popular destinations among customers for buying various goods. The retailer is especially widespread in the U.S., with stores present sometimes as the only option in rural and suburban areas. The company, therefore, requires much workforce to ensure the customer service runs smoothly. Employees encounter high standards they have to meet and strict policies determining discipline rules.
Customer service in retail business does not require workers to have a degree or possess any advanced qualifications, making people easily substituted with other candidates. This makes it especially easy for companies like Walmart to pressure their employees to work more, threatening them with contract termination. This retailer has been chosen for the case study since it fails to ensure ethical treatment of its associates despite large resources generated through operations.
Walmart’s Policies for Medical Absences
The issue of fairly treating employees who were absent due to medical reasons is essential for many companies. Apart from the ethical side, the right of workers to take sick leaves for themselves or their family member is covered by federal and state laws. As Carroll et al. note, legislation and ethics often overlap, with the former being a representation of what society finds acceptable (2017). Thus, the government recognizes the human need in taking care of themselves and family members. The system of punishing workers for medical absences practiced in Walmart can be considered as the violation of both its code of ethics and the U.S. laws.
Company Overview
Walmart is one of the most successful companies in the world regarding its revenue. According to its annual report for 2017, the company has received around $468 billion, which is 0.8 percent more than the previous year (Walmart, 2017). Walmart operates in 28 countries and runs 11,695 stores worldwide (Walmart, 2017). In the U.S., the number of its associates reaches 1,5 million people (Walmart, 2017). As an employer, Walmart is especially significant in small towns and rural areas, where not many work placements are available, and it is difficult to travel every day to cities.
Nowadays, customers and households are becoming more technically advanced, and retailers wish to make use of this factor. The current strategy of development includes Walmart’s course on becoming more digitalized (Walmart, 2017). Firstly, the company implements services like free order shipping made in its Internet store. The number of Walmart’s online stores is also increasing worldwide. Secondly, there is an initiative to introduce technology in stores for improving customer experience. For instance, associates will be supplied with tablets and applications that will enhance the buying process for customers.
All Walmart associates are expected to follow the corporate code of ethics. For example, the current document released by the company covers topics like rules in the workplace, the marketplace, and the community (Walmart). Another subject featured in the statement determines the ways of how associates may share their concerns regarding ethical issues. Environmental responsibility, health, and safety are among the things discussed within the community scope. Including such element in its statement of ethics provides that Walmart recognizes employees’ health as an important matter.
Employee Treatment for Medical Absences
Problem description
Despite its mentioning as a part of the corporate statement of ethics, health safety of workers seems to be a major issue in Walmart. In 2017, the Better Balance organization published a report describing the company’s attitude towards associates who have to be absent from work due to medical reasons (Bakst, Gedmark, & Suvall, 2017). It appears that Walmart has continuously violated the rights of its employees to take days off work if they or their relatives become ill.
Like most similar companies, Walmart’s in-store managers must ensure that associates arrive to work regularly and on time as it is essential for smooth operations and customer service. Schedules for each associate are planned beforehand, so there is a little possibility to make changes in shifts without affecting other similar level employees. All absences must have a sufficient grounding, or a worker receives a disciplinary point for each full shift missed or even staying for less than half of it.
Moreover, if an associate cannot notify management about the absence at least one hour in advance, he or she receives four of them (Bakst et al., 2017). The acceptable number per period is limited, and outreaching it means contract termination. Bakst et al. call this a system of pointing out and claims that it is a common practice at Walmart (2017). New employees have a limit of four points, while those who have been in the company for longer are fired after receiving nine of them in six months.
The only way to escape the disciplinary punishment is to ensure all absences are authorized. Besides, associates must follow a range of other policies that guide employee behavior in various situations. It is supposed that any associate may easily be acquainted with all rules that apply to him or her. However, Walmart has created a scheme which makes this process significantly more difficult. All policies can be found on the Wire, the corporate internal system, while employees must do this during their work hours, often with manager supervision and sessions being logged (Bakst et al., 2017). Therefore, many associates do not know what rights they have and how they should act to defend them.
However, strict policies are only half of the problem, as Walmart makes it even harder to comply with them. While the company accepts what is known as excused absences, it is rather difficult to become eligible for such a case. For instance, the rule of notifying a manager about a lack of possibility to come to work more than one hour in advance is not always realistic. The model does not work in cases like emergency health states, where associates or their family members must be taken to ER.
Moreover, managers across different Walmart stores do not accept doctors’ notes that serve as evidence of a serious situation that prevented employees from coming to work (Bakst et al., 2017). Finally, most associates receive written information about rules and penalties, but there are no details on which absences may be qualified as excused. As a result, workers may become misled, believing that there are no situations that may allow them to miss their shift without disciplinary consequences.
By acting this way towards its associates, Walmart violates its code of ethics and several federal and state laws. It becomes evident after comparing the pointing system with corporate guidelines and official regulations. For example, the information from the company’s statement of ethics provides that Walmart cares for its employees and communities, and protects their health and safety (Walmart, n. d.). The ethical approach towards the matter is explained by the necessity to reach the goal of a safe environment for both workers and customers. Moreover, the text mentions that the corporation follows laws which regulate the sphere (Walmart, n. d.). This is a mandatory element for any business that wishes to legally operate in the country.
In order to understand whether Walmart’s pointing system complies with the law, it is necessary to provide an overview of the existing regulations. The primary one of them is the Family and Medical Leave Act passed in 1993 (Bakst et al., 2017). The law applies employees who serve for not less than 12 months in a company with more than 49 workers and have spent at least 1,250 hours on shifts. The FMLA provides the right for such people to receive twelve weeks of unpaid leave to take care of oneself or a family member regarding health conditions, as well as for childbirth and taking care for a newborn.
Moreover, it is the employer’s responsibility to check whether a worker is eligible for FMLA coverage in each case. Another federal law is the Americans with Disabilities Act issued in 1990 (Bakst et al., 2017). Apart from providing that there must not be any discrimination against people with serious medical conditions, the ADA makes companies responsible for implementing accommodation for such workers that would facilitate their duties. Other regulations include the Pregnant Worker Fairness Act and the sick time laws acting in several states.
Evidence from employees
While Walmart determines employee health and safety as one of its top priorities, the reality is rather opposite. The Better Balance report contains stories from current and former associates who have decided to share their experience with the company’s pointing system (Bakst et al., 2017). The featured monologues prove that Walmart frequently violates the FMLA, the ADA, and other mentioned laws. Below is the summary of several stories found in the report.
Brittany had been working in Walmart for two years before moving to North Carolina (Bakst et al., 2017). However, she had to move back to a small town in Texas after hearing that her mother was seriously ill with cirrhosis. Brittany started to work at Walmart again to support her living. She intended to take care of her mother while combining it with full-time shifts at the store. Unfortunately, Brittany began receiving disciplinary points every time she had to attend the hospital.
Managers explained that she was not eligible for the FMLA due to not working more than 12 months in Walmart. Moreover, they used the situation with points and Brittany’s mother health condition for manipulation and threatening. One day, managers did not let her go to the hospital instead of work, threatening to terminate the contract. As a result, Brittany’s mother died alone as there was nobody else to visit her. Finally, Brittany learned after some time that she had been eligible for FMLA coverage since her previous experience in Walmart had to be considered as well.
Another story also features the difficulty of choosing between a family and a job. Tracey and Brian began working for Walmart in 2016 and discovered the same year that they were expecting a child (Bakst et al., 2017). Since the pregnancy was difficult, the couple had to stay at home many times, as the husband was supporting his wife, and both were receiving points for that. After all, Brian got ill and was fired for too many points. While he never received another job in the following three months, Tracey was planning to go back to work as soon as possible. She blamed Walmart for making her pregnancy time full of uncertainty.
The story of Charmaine shows Walmart’s real attitude towards people with special health needs. She used to work for the company for six years and managers knew about her asthma (Bakst et al., 2017). In winter 2016 she caught a cold but was forced to go to work threatened by disciplinary punishment. As a result, Charmaine had an asthma attack during her shift. When she tried to leave for the hospital, her management warned her that it would be considered an unauthorized absence. The employee chose her health over her job, leading her to receive a point. The story is clear evidence of the ADA violation.
Another situation of having to choose between health and work happened with Kayla. She started to work in Walmart in 2016 while having a polycystic ovarian syndrome (Bakst et al., 2017). One day she had to go to the ER as the cyst burst. Unfortunately, she had to leave the hospital on the fourth day to come to work since she was receiving points for every missed day despite warning her manager about the situation.
By acting this way, Walmart violates the ADA by failing to start an interaction process with associates. As a part of it, the employee status must be approved of whether he or she has a disability, and then the steps should be planned to offer a reasonable accommodation. Instead, Walmart chooses to ignore such information and to simply not accept any notes from doctors mentioning their patients need some exceptions from the company’s strict attendance rules.
Finally, there are numerous cases of Walmart acting unethically and unlawfully towards its pregnant associates. For instance, the Better Balance report features the story of Ciana, who is a deli department worker in Colorado (Bakst et al., 2017). After becoming pregnant, she encountered bad nausea, which was getting even worse at the workplace since the woman had to be constantly around food.
The prescribed medication did not help much, so Ciana had to miss several shifts due to morning sickness. After all, she received too many points and was eventually fired. The PWFA’s that work in Colorado, as well as 19 other states and 5 localities, imply that there must have been a different treatment of the situation. Like the ADA, these regulations make companies offer reasonable accommodations to their pregnant employees. In Ciana’s case, it could be a change in a schedule so that there would be no work in the morning.
Unfortunately, all the featured stories show the lack of compassion from Walmart’s management towards the company’s associates. The company has violated different laws protecting employee health numerous times, and there is a clear lack of dialogue between the parties. It is surprising that so many cases of ignoring associates’ needs have not yet resulted in serious changes within Walmart’s policies. Most of the communication regarding the subject is done verbally, thus making it difficult to prove the illegal and unethical actions taken by the company towards its employees.
Outcomes for Walmart
The report published by the Better Balance organization made the issue of punishing Walmart’s employees for medical absences available for the public. The stories and opinions of more than a thousand current and former associates made it clear that the corporation has double standards and is leading an unethical business. Such negative attention would mean an immediate loss of reputation for any other company. However, Walmart is such a huge retailer that it is not an easy task to influence it with the help of public opinion.
Probably, that is the reason why the company has taken a passive position in this conflict. At the same time, the pressure from the legislative system may become the power to change Walmart’s practices. Specialists from the Better Balance organizations have filed several claims on behalf of the former workers who have lost their jobs due to discipline points earned for being absent from work because of pregnancy issues (Abrams, 2017; Sainato, 2018).
While the significant results are still expected, it is understood that Walmart is the leading power of the retail business in the U.S., and the way it responds to the situation will most likely serve as an example to smaller companies and competitors.
Unfortunately, after the year since the report of the Better Balance was released, not many changes took place in the company. The news article published in October 2018 mentions that the issues discussed in the study still take place in Walmart (Sainato, 2018). For instance, one of the situations related to the health and safety topic happened just months after the report became published in the media. Yolanda Gonzales started working at Walmart in August 2017 while already being pregnant and informing managers about that fact (Sainato, 2018). Despite the doctors’ instructions not to perform heavy duties, Gonzales still had to lift heavy weights.
Thus, the company did not provide reasonable accommodations to her, although Texas, where the story took place, was one of the states covered by PWFA’s. In the end, the woman gave birth through a cesarean section, which made her stay in the hospital longer than usual. Her management gave her points for each day off despite the clear need for absence from work. Being a new associate at Walmart, Gonzales soon went over the point limit and was fired. The event created a negative financial situation, as she lost a car.
To some extent, it is understandable why Walmart is slow in reacting to the situation. Despite the evident violation of ethical and legal norms, the company has not lost a significant number of its customers. After all, the existing policies are developed to ensure there is enough staff in every store to help people with buying goods. Moreover, Walmart is sometimes the only retailer option for citizens living in rural areas.
That is why shareholders, the majority of which are the Walton family members, were not affected by the issue. Currently, the situation around foreign trade seems more important to the management, as global supply chains are changing. Growing tariffs, gas prices, and other macroeconomic factors make it challenging for Walmart to be dedicated to one of its primary goals mentioned in the annual report, which is to be the lowest cost operator (Walmart, 2017). From this point of view, cutting costs on employees seems like a practice targeted at achieving it.
At the same time, ignoring the situation may result in negative effects on Walmart in the long run. The corporation may seem successful at the moment, as yearly reports show a steady growth of revenues and a global expansion. However, markets are now oriented on developing ethical practices, since there is a demand from society for a business with a human face. It is now early to determine whether the Better Balance report has caused a significant influence on Walmart. However, it has set the base for further work regarding the company’s compliance with health and safety regulations. Some policies may evolve as a result of legal procedures like the ones following claims done by the Better Balance specialist, while others can develop from within Walmart.
Critical Review
Issue Analysis
All the stories of Walmart’s current and former associates show major ethical issues within the company associated with health and safety. Numerous events show that the pointing system used for punishing employees is a pattern rather than an occurrence. Apart from the failure to comply with its statement of ethics and the U.S. legislation, Walmart is engaged in dealing with additional problems derived from the case study.
One of the deeper ethical issues is that Walmart pressures its associates to choose between life and work. While a profession is an important element of self-realization, it has to be balanced with other spheres like family and leisure time. Of course, the character of retail business often implies workers to be an asset that is used to achieve corporate goals. However, unlike other operations elements, workers show different results depending on the treatment they receive.
Health is one of the most important factors, as sick employees cannot perform their duties properly, which leads to a company losing revenues. Moreover, management cannot expect loyalty from workers who do not feel that they are valued as human beings. This, in turn, results in the unwillingness of associates to stay in business for a long time. By practicing such a strict punishment system for medical absences, Walmart pushes its employees to chose between work and personal well-being, which is one of the reasons for the turnover.
Another ethical issue that is not mentioned in the report directly but can be derived from the case study is the safety risks provided by Walmart to its customers. By forcing associates to attend work even in bad health conditions, the corporation increases the possibility for customers of getting sick while shopping. Moreover, some viruses and bacteria are extremely viable and can be transferred to households with food from a supermarket. This factor compromises Walmart’s dedication to its customers and the community mentioned in the statement of ethics.
Media Coverage and Reaction
The report by the Better Balance organization has received wide coverage in media. In addition to separately featuring the work, the HuffPost published an article with the Walmart’s medical leave policies overview, claiming that women are especially vulnerable as they are usually the ones taking care of families (Peck, 2017). Apart from summarizing the employee stories, there was a note about Facebook’s renewed policy regarding sick leaves. It was mentioned that the company introduced six weeks of family leave, as well as three days for family member short-term health condition care (Peck, 2017).
The New York Times also released an article summarizing the Better Balance’s findings (Abrams, 2017). Apart from that, there was information describing the Walmart’s attempt to improve its associates’ wellbeing by increasing minimum wage per hour. Moreover, both the HuffPost and The New York Times featured the story of Katie Orzehowski, an employee whose pregnancy ended in a miscarriage due to the Walmart’s policies preventing her from visiting a doctor (Abrams, 2017; Peck, 2017). The articles proved that it is easy to find other Walmart associates that have suffered from the same ethical issues and are eager to share their experience.
The articles found on the media contain the responses from Walmart’s officials regarding the situation. For instance, the company’s spokesman Blake Jackson denied that employees with excused absences were penalized (Peck, 2017).
Corporate representatives also explained that the point system was required for preventing staff shortage on shifts. As for the report itself, Walmart told that it did not study it in depth and could not know if the presented stories were accurate. The same reaction of the company’s officials was described by The New York Times (Abrams, 2017). Walmart’s spokesman also said that the story of Ms. Orzehowsky could not be checked as there was no evidence of her bringing documents proving the medical reasoning behind her absences (Abrams, 2017). As it is easy to understand, the corporation obviously denies the unethical and illegal practices taking place in its treatment of associates.
Recommendations
One of the solutions to the issue of punishing employees for medical absences is raising awareness among them regarding their rights. All associates must have written explanations of the laws and policies covering their cases. Walmart must make the process of classifying the nature of absences more transparent. In other words, the process must go beyond a simple explanation of rights to workers. There must be a full-scale dialogue between managers and associates, with the former initiating changes and providing reasonable accommodations whenever possible.
Another solution for Walmart to make its business more ethical is to change its attitude towards customers. The current situation shows that the company values them only as income sources. Pushing ill employees to serve customers does not benefit any of the parties, and Walmart must show more respect towards a community where it operates. After all, if the extent of the health and safety issues among Walmart’s workers reaches many people, the company will find itself losing thousands of customers in the long run.
References
Abrams, R. (2017). Walmart is accused of punishing workers for sick days. The New York Times. Web.
Bakst, D., Gedmark. E., & Suvall, C. (2017). Pointing out: How Walmart unlawfully punishes workers for medical absences. Web.
Carroll, A. B., Brown, J., & Buchholtz, A. K. (2017). Business & society: Ethics, sustainability, & stakeholder management (10th ed.). Boston, MA: Cengage Learning.
Peck, E. (2017). Walmart’s sick leave policy is terrible, especially for women. HuffPost. Web.
Sainato, M. (2018). Too sick, too pregnant, too well paid: Walmart workers on why the company fires them. Splinter. Web.
Walmart. (2017). Walmart 2017 annual report. Web.
Walmart. (n. d.). Global statement of ethics. Web.