Employees provide great resources to an organization in running its operations and in the attainment of set objectives. However, the achievement of these objectives depends on the motivation and commitment of employees. Motivation and commitment improve the productivity and attitude of the employees towards their work. It is important, therefore, for employees to ensure that effective human resource management. Effective human resource management will lead to business competitive advantage and achievement of organizational objectives. Walmart is a large employer that over the years has faced consequences due to their poor human resource management. The company has faced legal consequences due to poor wages to its employees. Poor wages have led to employee commitment problems.
Organizational Background
Walmart is one of the largest retailers in the United States offering grocery, clothing, electronics , and home products. The retailer has hypermarkets, departmental stores, and grocery stores. The retailer offers jobs in management, operations, customer service, and cashier. The retailer operates as a self-service with employees around to help customers. In recent years, the company has been in the public eye for poor wages.
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The company makes billions in annual profit but does not pay its employees accordingly – most of its employees will receive on average less than $250 per week . Full-time workers receive between $6 to $7.50 per hour. In the foreign countries that the company operates in, the company has been sued for paying below the minimum wage. There have been over 5,000 lawsuits on the company for poor employment practices including poor wages. In 2016, the International Labor Rights Fund filed a lawsuit against Walmart for not paying minimum wages and requiring overtime. The company has faced a series of lawsuits due to the mistreatment of employees in the Walmart stores.
Commitment Problem
Poor compensation is a problem that can have adverse effects on a company. Employees, over and above looking for experience, need good paying jobs as a reward for their work. Rewards in the form of wages, salary, and benefits play a major role in employee motivation to commit to their job. Walmart will pay its employees very poor wage rates even below the minimum. These employees are likely to look for greener pastures to get a better reward for their work. Human resource management is clearly struggling with reward strategies that will motivate employees to commit.
Over the years, many employees and unions have sued the company over poor wage rates. The company has very many stores; hence a large employee base, overall. However, despite billions in profits that the company makes annually, Walmart rewards employees very poorly. This evidence shows vividly lack of ethical decision making with the organization. Poor rewards push away employees leading to commitment problems. It is very likely that Walmart’s employees have no connection to their work – wish that their shift ends before it starts.
Relevant Topics
The function of compensation in the organization is very crucial. Compensation helps employees meet their basic needs – which according to Maslow, is the largest need in the hierarchy of needs. According to Maslow, employees will start by fulfilling the basic needs before getting to the other needs in the hierarchy. These are needs that are as a result of deprivation hence not meeting them will lead to motivation (McGuire, 2012) . This may explain why despite the poor compensation, Walmart still records high sales every year. However, though employees are motivated to meet their basic needs, they are not motivated due to the connection they have with their work. The job is more of a means to an end.
It is important, therefore, for Walmart to have an effective compensation system. This system will help compensate employees based on the work done and their commitment. According to the equity theory, the concept of input and output is very important in order for employees to derive job satisfaction and motivation. The theory emphasizes on the fairness as a key motivating factor. Employees will compare their input to what they get from their work to stay motivated and connected to their job.
The equity theory operates on the principles of fairness and equity. An employee wants to be paid a reasonable rate based on the effort-to-compensation ratio. They will compare their pay to their colleagues or friends to determine their level of perceived equity (Setiawan, Putrawan, Murni, & Ghozali, 2016) . An employee who is at this level is more committed to their work because they know their efforts are well compensated. Walmart should take the concept and principles of equity theory to change their compensation strategies.
Walmart should consider the principle of ethical decision making. Ethical decisions ensure that the decision will not lead to future conflicts. Obviously, Walmart does not apply ethics in their compensation decisions otherwise they would not face so many lawsuits . Ethical decision-making entails taking into account the ethics before taking action. Unfair compensation does not depict ethics but shows an organization that is unethical. Ethical decision making will help the company way the options it has in solving this commitment problem. The company then selects the best option to ensure effective problem-solving .
Recommendations
It is evident that Walmart employees have commitment problems due to the poor rewards they receive. It is important for Walmart to apply equity, fairness, and ethics in the compensation process of its employees. I recommend the company to take the following actions to ensure they solve the commitment problem;
Implement a strategic approach in its human resource management. This strategic approach will ensure effective human resource management functions including compensation.
Implement employee participation in the reward process. According to the equity theory, employees have a perceived equity level. When employees participate in decisions around compensation, they are likely to offer insight on the right effort-to-compensation ratio. Participation ensures that decisions will take into account the employees’ needs.
Creating an organizational talent mindset will also help the company appreciate the effort that employees put in their work; hence reward them accordingly. A talent mindset will help Walmart create a bond with its employees since their input in the company is recognized and well rewarded.
It is important for Walmart to understand the labor laws in each jurisdiction to ensure that the company operates within set guidelines. Ignorant will only cause legal issues. Awareness will also help in the implementation of ethical and legal labor-related decisions.
References
McGuire, K. (2012). Maslow's Hierarchy of Needs. An Introduction. GRIN Verlag.
Setiawan, B., Putrawan, I., Murni, S., & Ghozali, I. (2016). Effect of Organizational Structure, Leadership and Trust on Job Performance of Employee: A Case Study on Employee at Universitas Ternama. International Review of Management and Marketing, 6 (4), 711-721.
