Introduction
Work is basic to the individual condition. It establishes what we accomplish during much of our active lives. It encourages human interaction and it enables people to establish their sense of uniqueness.
It enables people to fulfill their material needs and to benefit from modern inventions and achievements of civilization. “Our views towards work and its management have undergone significant changes over the past couple of decades, with much of it being the product of national contexts being increasingly subject to global economic influences” (Abbott 2006, p. 187).
As a result, Administrators should try to devise better organizational strategies that can enable them to deal with workers efficiently. This paper examines causes of conflict in employment relationship with specific reference to Wal-Mart Company.
One of the evident challenges in many organizations and companies is the occurrence of disagreements among employees and their managers. Workers can settle disputes that strain their relationships through various mechanisms. Generally, “most squabbles in organizations often revolve around issues related to wage demands, terms of service, administrative strategies, and company goals” (Dunlop 2008, p. 276).
In broad terms, “employment relationship is concerned with the theory and practice associated with the management and regulation of the employment relationship” (Dundon 2007, p. 234). Specifically, it deals with social and sometimes political aspects of the workers association and the sharing of authority between the administration and workers. It is also concerned with the occurrence and expression of disputes and the legal and social regulatory structure in which workers relationships exist.
Employment relationship is a modern expression that defines industrial relations. Industrial relations generally refer to the upholding of the association that exists between labor organizations and administration, and related processes that encompass collective bargaining, dialogue and discussion and industrial dispute (Daniels 2006, p. 24).
The application of the expression ‘employment relations’, instead of industrial relations indicates the socio-economic and legal progress made in the employment relationship that have been witnessed over the past few decades (Stone 2005, p. 124). Disputes usually arise in employment relationship due to the absence of consultation by administrators with their laborers.
For example, workers can frustrate the restructuring plans of a company if they are not involved in making such decisions. “Since participation is often concerned with negotiation, conflict may occur between employees and management, particularly, where employees participate in higher-level decisions and differing interests are most likely to be visible” (Stone 2005, p. 127).
Wal-Mart is a leading retail chain in the United States of America. Founded in 1962, the company has since doubled its fortunes to become the dominant player in North America’s retail industry. Wal-Mart has since opened 3,800 stores in America and 2,800 stores across the globe.
In 2010, the company hosted over 2.1 million workers in America and other parts of the world. Notwithstanding its financial fortunes, Wal-Mart has faced serious challenges in managing its multicultural and large labor force. It has not been able to provide a work environment that meets the expectation of its workers and the public.
Wal-Mart’s failure to manage its human resources appropriately has had negative effects on its reputation and financial performance. Thus, there is a need to make changes in the company’s human resources management system.
Application of Theories in Analyzing Workplace Relationship
A number of theories can aid the analysis of the causes of conflict in employment relationship. The Unitarism theory begins from a number of suppositions and values which states that employment dispute is a preventable feature of interactions between administrators and workers.
Disputes in the work environment may occasionally occur between these two parties, and they are an irregularity in a relationship, which is intrinsically likely to be helpful. “Those holding this perspective perceive managers and employees as having a common interest in the survival of their organizations, such that when conflicts occur it is unlikely to manifest itself to a point that will render the firm insolvent” (Fox 2006, p. 56).
Personality challenges, unsuitable staffing, and promotion activities, usually cause separations and lack of unity in an organization. A rational administrative team should eliminate potential causes of disputes that may interfere with the normal operations of an organization.
In other words, the management team should execute impartially and equitably staffing and promotion activities. Administrators should establish proper communication channels and alert workers about the core interests of the organization. Human relations theory that is guided by unitarism will form the basis of analyzing the employment conflict at Wal-Mart.
Human relations theory states that minimizing workplace disputes depends on the capacity of workers to gain self-satisfaction in the organization. In this case, employees are a distinct entity from other materials applied in the production (Legge 1995, p. 345).
Thus, “if workers are denied autonomy on the job, or are reduced to acting as mere extensions of the machinery they operate, it is argued that they will invariably find ways to subvert the methods of control that enforce these conditions” (Gennard 2002, p. 202). The most important job of administrators is to influence industrial relations to make workers feel comfortable in serving in an organization.
In addition, workers should contribute on matters related to the management of the organization (Beardwell & Holden 1994, p. 456). The management should also enhance the workers’ skills so that they can have a better capacity to dispense their services to the organization. In whatever form, “the aim of this managerial approach to employee relations is one that seeks to reduce internal tensions by developing the sense of workplace satisfaction” (Gardner 1997, p. 94).
The amount of wage compensation is one of the possible causes of strained relationships between workers and their managers. Wage disagreements often arise when workers increasingly find it hard to convince their managers to improve their salaries (Blyton & Turnball 1998, p.156). For instance, the global financial crisis has pervaded many labor markets and the wage earners have been one of the key victims of its pernicious effects.
In response to this crisis, many wage earners have tried to ameliorate their financial status by prodding for better wages from their employers. However, many employers often respond harshly to their employee’s demands for better wages. The endless bickering of Wal-Mart employees over meager wages exemplifies this problem. The Wal-Mart wage earners not only complain about skimpy remuneration, but they also lament about income discrepancy in the company.
There is a huge difference between the salaries of the top management employees and the junior employees. Besides, junior employees’ wages are below the average industry rates. Thus, the management of this company needs to change the compensation structure in order to improve employee satisfaction and productivity.
Poor terms of service can spark-off conflicts, which can impede cordial employment relationship (Lewis & Thornhill, p. 25). Disputes concerning terms of service revolve around work schedules, retirement funds, promotion, and safety in the work environment. “Employers need to monitor physical working conditions and provide adequate protective clothing and equipment, first aid facilities, quality working equipment and amenities such as lunch rooms, change rooms and toilet facilities” (Salomon 2001, p. 57).
At Wal-Mart, the level of employee dissatisfaction is also very high. Employees are not happy with the terms and conditions of their work. The workers have since accused Wal-Mart of providing inadequate medical cover, and refusing to pay for extra work hours. Therefore, it is necessary for Wal-Mart management to change the terms and conditions of employees’ contracts.
Finally, Wal-Mart is experiencing a very high turnover, especially, among the junior employees because they find the terms of service at the company intolerable. Wal-Mart should reorganize and improve its retention program immediately to motivate the workers.
Labor organizations, Christian associations, and the nongovernmental organizations have often made serious protests in response to the poor terms of service that employees at various outlets of Wal-Mart are facing. Notably, trade unions are against the anti-union policy that the company uses to wall-off its workers from accessing the benefits of unionization.
The management of this company has put many obstacles that bar employees from seeking union membership. For instance, “Wal-Mart rejected the Employee Free Choice Act (EFCA), that would make it easier for workers to unionize by removing the employer’s ability to demand a secret ballot in union elections, and which would require mandatory arbitration of labor disputes” (Zimmerman, A & Maher, K 2008). Wal-Mart imposed serious penalties on its employees seeking unionization.
For example, Wal-Mart more often than not penalizes its employees that report violation of their labor prerogatives. Wal-Mart managers either dismiss antagonistic workers unethically or relegate them to secondary roles in the company so that their experiences can dissuade others from demanding for better terms. Wal-Mart managers also use such penalties to muzzle the workers; hence, they cannot share their work related problems with the media.
In 2005, Wal-Mart faced two serious protests by consumer associations in the USA, which expressed their great disappointment due to the failure of the company to sort out its labor disputes amicably. In addition, the Norwegians government barred Wal-Mart in 2006 from participating in their savings scheme of the Retirement Fund since a social audit that was conducted to evaluate its labor practices revealed that it was violating the stipulated labor codes in many counties in which it operates.
Some time ago, Wal-Mart was subjecting its workers to long-night shifts without giving them commensurate compensation. Some workers also complained that they locked inside their workstations at night so that they could do more work.
The high levels of investment returns that Wal-Mart has registered over the past few years, shows that it is engaging in industrial relations malpractices. In 2007, Wal-Mart’s female workers sought legal action to end the prevalence of gender discrimination that meted against them, especially, on payment and promotion matters.
Since the retail industry is labor intensive, the employees play a critical role in achieving the goals and objectives of retail companies. The implication of this fact is that Wal-Mart’s failure to implement the above changes is likely to result into the following consequences. First, high levels of employee dissatisfaction will result into low productivity due lack of motivation. Second, Wal-Mart is likely to lose its talented employees due to high turnover (Andreeva 2006, pp. 141-150).
Employees who are aware of their worth are likely to move to other firms if their expectations cannot be met at Wal-Mart. As Wal-Mart loses its talented employees to competitors, its competitiveness will also reduce. Wal-Mart is currently facing dozens of lawsuits for failing to provide acceptable work environment.
Such lawsuits are associated with compensations, which will cost the firm millions of dollars. Finally, cases of fraud will increase due to poor employee compensations. Studies reveal that employees tend to embezzle funds if their wages are insufficient. Wal-Mart can circumvent these consequences by implementing changes in the compensation structure, retention program, and work conditions.
In 2011, “Wal-Mart sub-contractors, Impact Logistics and Premiere Warehousing Ventures, which were employed through Schneider Logistics warehouses in Mira Loma, California, were fined by the California State Labor Department for disregarding federal and state wage laws” (California Department of Labor Relations, 2011).
Wal-Mart’s management should first plan for its human resources and then attract or recruit the right employees. Human resources planning refer to “a process of identifying current and future human resources needs for an organization to achieve its goals” (Stefanescu 2011, pp. 104-107).
This process involves identifying the optimal number of employees, the needed competencies, and the timeline in acquiring the needed human resources. Effective human resource planning will enable Wal-Mart to employ only the number of workers that it can afford to compensate at the prevailing industry wage rate. Hence, the problem of dissatisfaction attributed to poor pay will reduce.
Wal-Mart should focus on both internal and external recruitment strategies. Internal recruitment involves giving existing employees an opportunity to fill existing vacancies. On the other hand, external recruitment involves hiring workers from outside the company. Internal recruitment will help in reducing employee dissatisfaction in the following ways.
First, it will give the employees an opportunity to develop their careers through promotion (Abe 2007, pp. 567-570). Second, promoting employees is a way of recognizing their capabilities. Employees are likely to be highly motivated if their efforts are recognized and rewarded accordingly. External recruiting gives the company an opportunity to hire people with fresh ideas, which will be instrumental in implementing acceptable labor practices in the future.
Developing a Quality Workforce
Employee development is a mutual and continuous process in which the employee and the managers work together to improve the employee’s knowledge, skills, as well as, ability. It helps in improving employee satisfaction by enhancing high motivation levels. High levels of satisfaction will result into financial gains through high productivity.
Thus, Wal-Mart will have enough funds to offer attractive compensation packages. Employee development will also help in reducing turnover by enabling employees to improve their skills through training. Introducing appropriate on-the-job training programs will help Wal-Mart to improve the knowledge, skills, and abilities of its employees.
An effective performance appraisal procedure will be required to aid employee development. Performance appraisal involves the analysis of the successes and failures of an employee. This process helps in determining the training needs of individual employees, and the criteria for rewarding top performers.
A fair performance appraisal system is, therefore, an essential tool for enhancing satisfaction among employees and reducing turnover. Employee orientation is also important in retaining employees. In this regard, Wal-Mart should provide its newly hired employees with information about its policies, goals, procedures, and organizational culture. Turnover is likely to reduce if employees are fully aware of the goals of the organization, as well as, the terms and conditions of their contracts.
Maintaining a Quality Workforce
Wal-Mart can retain its valued employees through the following strategies. First, it should rework its compensation and benefit structure. Employees’ salaries should reflect their efforts, and be comparable to the prevailing industry salaries. Performance and competence is one the feasible mechanisms for setting wages that this company can adopt. The company must provide incentives such as medical cover, compensation for overtime hours, and retirement benefits.
The company must adhere to the labor laws when giving such incentives. Wal-Mart can realize employee retention and turnover reduction by engaging the employees in making decisions. Workers will be more committed if they are allowed to contribute ideas and suggestions that inform management decisions.
This gives employees a sense of belonging, and reduces their chances of leaving the company. Introducing reward programs and reinforcing appropriate behavior will also help in retaining the employees. Employees have a basic need to feel appreciated. Thus, recognizing their efforts and rewarding them through incentive programs such as bonuses make them more satisfied with their jobs.
Finally, Wal-Mart can implement the intended changes through labor-management relations. Labor-management relation is concerned with recognizing the rights of all parties in an organization or an employment contract. In this context, Wal-Mart should recognize and respect employees’ right to fair compensation, acceptable work conditions, and career development (Sparrow 2000, pp. 213-218).
Conclusion
The inevitability of disputes in an organization is a view that is widely held by pluralists. It can assist in making recommendations that can be used to end the strained industrial relations experienced at Wal-Mart. “By recognizing the inevitability of workplace conflict, those holding this perspective tend to regard conflict as necessary for the health of an enterprise as it serves to bring grievances held by workers to the surface” (Leat 2006, p. 68).
Therefore, managers should take the occurrence of disputes at Wal-Mart positively, and they should use it as an opportunity to search for innovative mechanisms for dealing with it in a manner that will provide the best outcomes. Recognition of the existence of various sources of power, especially, from shop stewards can enable Wal-Mart to handle industrial relations disagreements collectively.
In this regard, “it will not only minimize the level of workplace conflict, but it will also encourage fairer outcomes by enabling employees to organize and counter-balance the power of managers when negotiating workplace contracts” (Rose 2008, p. 87). It is against this background that Wal-Mart should recognize the lawful prerogative of workers to negotiate jointly and labor organizations to serve at this level on their behalf.
Addressing these challenges necessitates changes in the company’s compensation and benefits structure, employee retention programs, and work conditions (Guest, Peccei & Thomas 1993, p. 194). Failure to implement these changes will lead to adverse effects on the competitiveness of the firm. Wal-Mart should formulate and implement these changes through appropriate methods of attracting, developing, and retaining employees.
Reference List
Abbott, K 2006, ‘A Review of Employment Relations Theories and Their Application’, Problems and Perspectives in Management, vol. 3 no. 4, p.187.
Abe, M 2007, ‘Corporate Finance and Human Resources Management’, Journal of Urban Economics, vol. 56 no.11, pp. 567-570.
Andreeva, T 2006, ‘Human Resources Management During Organizational Change in Russian Companies’, Russian Management Journal, vol. 3 no. 2, pp.141-150.
Beardwell, I & Holden, L 1994, Human Resource Management: A Contemporary Perspective, Pitman: London.
Blyton, P & Turnbull, P 1998, The Dynamics of Employee Relations, Macmillan: London.
California Department of Labor Relations, 2011, California Labor Commissioner Issues Additional $616,250 Citation in Riverside County Warehouse. Web.
Daniels, K 2006, Employee Relations in an Organizational Context, CIPD: New York.
Dundon, T 2007, Understanding Employment Relations, McGraw Hill: Maidenhead.
Dunlop, J 2008, Industrial Relations Systems, Rhinehart & Winston: New York.
Fox, A 2006, Industrial Sociology and Industrial Relations, Oxford University Press: London.
Gennard, J 2002, Employee Relations, Wimbledon: London.
Guest, D, Peccei, R & Thomas, A 1993, ‘The impact of employee involvement on organisational commitment and ‘them and us’ attitudes’, Industrial Relations Journal, vol. 2 no.14, pp.191-200.
Leat, M 2006, Exploring Employee Relations: An International Approach, Butterworth Heinemann: Oxford.
Legge, K 1995, Human Resource Management: Rhetorics and Realities, Macmillan: London.
Lewis, P & Thornhill, A 2003, Employee Relations: understanding the employment relationship, Prentice Hall: New York.
Rose, E 2008, Employment Relations, Prentice Hall: New York.
Salamon, M 2000, Industrial Relations: theory and practice, Prentice Hall: New York.
Sparrow, P 2000, ‘New employee behaviours, work designs and forms of work organisation: what is in store for the future of work?’, Journal of Manegerial Psychology, vol. 4 no.1, pp. 202-218.
Stefanescu, F 2011, ‘The Human Resource Management in the Context of Economic Crisis’, Romanian Economic Bussiness Review, vol. 6 no.1, pp.104-117.
Stone, R 2005, Human Resource Management, Wiley & Son: Milton.
Zimmerman, A & Maher, K 2008, Wal-Mart Warns of Democratic Win. Web.