Walmart's Human Resource Management - Panmore Institute

Walmart Inc. (formerly Wal-Mart Stores, Inc.) is an example of effective large-scale human resource management, considering the business has millions of employees worldwide. The company is one of the biggest in the world in terms of organizational size, business value, and financial performance. The firm ensures that its human resources are supported in satisfying business needs and expectations. Walmart considers how its activities, such as internal organizational processes, support its human resources. For example, the company addresses its human resource planning and job design, and how these aspects contribute to high performance among employees. Human resource managers also consider how Walmart’s corporate culture and organizational structure, recruitment and selection, retention and training, performance management, compensation, and career development contribute to the productivity of the firm’s workers. Effectiveness in addressing HR needs affects the company’s performance and growth potential. Walmart’s strategies must support the continuing development of its workforce and related managerial practices.

Walmart’s human resource managers optimize the business and its workforce, effectively addressing issues and criticisms. As the company faces challenges in the competitive landscape described in the Five Forces analysis of Walmart, human resource development can increase business resilience, especially in supporting growth despite pressure from competitors, like Amazon and its subsidiary, Whole Foods, as well as Costco and Home Depot. HRM factors, like reduced turnover and high employee morale can boost Walmart’s performance amid changes in the retail industry environment.

Walmart’s Human Resource Planning

(Main article: Walmart’s HRM: HR Planning, Job Analysis & Design) Human resource planning at Walmart is stratified in terms of the programs and solutions developed and applied. For example, HR planning takes place at the top management level of the corporate human resources department. However, the company is a large organization. Each store has its own personnel responsible for HR management. As a result, each store translates the general human resource plan from the corporate HR department. The stores have varying interpretations of the corporate human resource plan. Such variations indicate that actual human resource planning occurs at different levels of Walmart’s organization.

In terms of forecasting, Walmart uses special software to automate the process of analyzing changes in the workforce. For example, the firm gets its employee or workforce data from its stores. The data is fed to the central database, and organized and processed to reveal trends in the company’s human resources and related operational needs. Through this forecasting system, Walmart forecasts possible future changes in the workforce, such as changes in HR demand per season or per region. This condition contributes to the company’s flexibility in the area of human resources.

In relation, in addressing the surplus or shortage of employees, Walmart uses its information system to determine which areas or aspects of the organization will face increased demand in human resources and which areas will have a surplus. The company’s HR management applies corresponding plans that stabilize the workforce. The HR plans specify the number of employees needed and the recommended schedules for increased recruitment, along with adjustments in related areas of the retail business. In this way, Walmart ensures adequate human resource support despite fluctuations in retail market conditions and corresponding business operations.

In balancing HR supply and HR demand, Walmart’s goal is to ensure adequate access to qualified workers. The company has a continuous process of hiring and training new employees. The continuity ensures that vacant positions are immediately filled. The nonstop recruitment activity helps Walmart access the labor market to maintain an adequate supply of human resources to match changes in demand for employees at its stores.

Job Analysis and Job Design at Walmart

(Main article: Walmart’s HRM: HR Planning, Job Analysis & Design) Walmart uses the matching approach in job analysis. This method involves interviews and surveys of applicants, employees and supervisors to determine issues and needs. Walmart’s aim is to align actual needs with available human resources, and to determine possible gaps between the two. On the other hand, Walmart’s job descriptions are diverse. Nonetheless, the company’s human resource management develops job descriptions that mostly involve activities in sales because the majority of the company’s workers are directly involved in sales. Thus, job descriptions at Walmart include those for sales personnel, sales supervisors, sales managers, and store managers, among others. Also, Walmart’s job specifications are diverse, but most of the specifications require knowledge and skills in sales and marketing.

A recommendation in this case of Walmart Inc. is to improve the company’s job analysis and job design by implementing more channels of communication. Employees can use these channels to give feedback to managers. This change will benefit the company’s human resources through increased employee morale, along with more accurate job analysis. Such higher accuracy can improve the outcome of HR managerial decisions and related business strategies.

Walmart’s Recruitment Strategy

(Main article: Walmart’s HRM: Recruitment, Selection, Employee Retention) Walmart’s recruitment strategy uses different sources of new hires. Considering the company’s large organizational size and diverse workforce, the recruitment aspect of the firm’s human resource management has a decentralized system that uses local information as a basis for recruitment processes. In relation, the actual sources of workers are typically the localities where the company’s stores operate. Walmart’s methods in its recruitment strategy include online recruitment, direct recruitment at localities, and recruitment through academic institutions. These HR management methods in the recruitment strategy ensure a diversity of applicants. For instance, the online method allows the firm to reach applicants who are not near Walmart stores. Referrals help the company get qualified applicants based on reliable referrers.

It is recommended that Walmart improve its recruitment process through new strategies for global competitiveness of human resources. The company’s workforce is already locally competitive. This recommendation for international competitiveness should allow the firm to address changes in the global business environment. Global competitiveness is critical because Walmart is a multinational business. Emphasis must include diversity and the ability of employees to deal with diverse populations of customers.

Selection: Steps in the Selection Process at Walmart

(Main article: Walmart’s HRM: Recruitment, Selection, Employee Retention) The selection process at Walmart is based on the ability of applicants to handle sales transactions and human resource management. However, the following process is suited to the situation of the retail business:

1. Background check. This includes educational background and work experience. This step determines the applicant’s potential to satisfy the demands of the job. The applicant must possess the qualities for achieving the expected job outcomes.
2. Knowledge, skills, and abilities evaluation. The applicant’s knowledge, skills and abilities must allow for fulfilling the job position, based on Walmart’s standards.
3. Person-organization fit evaluation. Employees must match the company’s organizational environment. For long-term career growth, the applicant’s values must match those of the company. The objective is to align the workforce and the organization.
4. Assessment of the applicant’s willingness to work at the company. Among other considerations, the applicant must be flexible enough to contribute to the firm’s organizational flexibility.

The selection process steps outlined above are basic to the global retail business. Walmart’s human resource managers modify these steps to suit specific operational areas. For example, changes in some criteria are applied, based on the conditions of specific stores in some locations. A strategic objective is to maintain Walmart’s flexibility by aligning corporate measures with the management initiatives in individual retail stores.

Walmart’s Employee Retention Strategy

(Main article: Walmart’s HRM: Recruitment, Selection, Employee Retention) Walmart maximizes employee retention to minimize financial loss linked to turnover. Higher turnover leads to higher financial loss, considering human resource expenditure for recruitment, selection and training. Employee retention at Walmart is achieved through a combination of approaches. The following employee retention strategies are applicable:

1. Recognition based on the employee’s performance
2. Benefits based on the employee’s status or position
3. Incentives based on the employee’s status or position

Walmart Inc.’s Employee Training

(Main article: Walmart’s HRM: Training, Performance Management) In this area, Walmart uses needs analysis to determine how jobs fit employees, and how these jobs fit the business environment. For example, needs analysis is used to determine how workers’ needs are satisfied. The company’s human resource managers also use needs analysis to check if employees satisfy business needs. Store managers conduct needs analyses. The results are relayed to the company’s corporate HR at the headquarters, where corporate managers determine the changes and strategies needed in the workforce. A needs analysis at Walmart would reveal at least the following information:

1. The need for diversified human resources in all locations (stores and other facilities)
2. The need for a more technologically savvy workforce

In this regard, technological knowledge and skills are included in the company’s program design for training employees. Such design typically focuses on the performance of sales personnel. Online delivery of training programs is included. However, the company’s human resource managers prefer traditional face-to-face training programs to ensure quality of service at Walmart stores. On the other hand, in evaluating the effectiveness of training programs, the company’s HR managers use sales performance as a criterion, as well as feedback from supervisors and employees on sales performance. Customer feedback further adds information that the company’s managers use to evaluate the success of employee training programs.

Performance Management at Walmart

(Main article: Walmart’s HRM: Training, Performance Management) Performance management at Walmart involves a performance appraisal system. This system provides feedback to employees on their performance levels. The company also gives feedback to workers on how to improve their performance. In addition, the firm uses human resource management software that analyzes individual and team performance levels. In this business analysis case, an applicable recommendation is to use a micro-tailored appraisal system. Such a system allows variations based on the employee being appraised. The purpose of these activities is to enable Walmart’s human resource management to fine-tune job responsibilities, specifications, goals and objectives. The company’s career development plan is also based on performance plans.

Walmart’s corporate objectives are linked to performance management practices, standards and measures through sales performance. The firm is mainly concerned about maximizing sales revenues. Through its performance management activities, the company’s human resource management ensures support for sales performance through employee productivity, especially sales personnel productivity. Performance interviews are used at Walmart to provide more information for appraisals. These interviews are conducted so that the progress of employees is regularly monitored. The interviews also allow the company to obtain feedback from employees.

Measurements and standards are used to evaluate if the company’s human resource performance is satisfactory. For each performance measure, the company has a set of standards. Different HR standards are used for different areas of the business. The following performance measures are suitable in Walmart’s case:

1. Effectiveness of processes
2. Efficiency of processes
3. Quality of customer service
4. Timeliness of supply chain activities
5. Productivity of sales personnel

Walmart encounters performance problems, such as low employee morale and tardiness. These HR problems reduce the firm’s financial performance. Walmart can address low employee morale through job rotation and flexibility, incentives, and recognition for employees’ achievements, among other approaches. The company can address tardiness through motivation strategies and new policies, such as rules imposing a maximum percentage of tardy days per number of workdays.

Career Development at Walmart

(Main article: Walmart’s HRM: Compensation, Career Development) In addressing career development, Walmart’s human resource management uses training programs regularly conducted to increase knowledge, skills and abilities. Training provides the opportunity for employees to improve skills specific to the retail business. Also, the company supports employees in attending seminars and other programs outside the organization.

Walmart matches individual and organization needs through analysis of the person-organization fit. The person-organization fit ensures that each employee is aligned to the needs, demands and expectations of the organization. This fit also ensures that the organization is satisfactory to the worker. The person-organization fit is important in HR management because it helps the company minimize expenses on recruitment, selection and training of workers who do not fit the company. A higher person-organization fit leads to lower turnover.

Employee potential is assessed at Walmart through a number of ways. The following HR activities are suitable in this case:

1. Appraisals matched with standards of the organization
2. Feedback from managers, supervisors and colleagues
3. Productivity based on records
4. Individual employment record
5. Personal interview results

Career opportunities and requirements are identified through Walmart’s internal business processes, job positions and expansion plans. When the company expands, more career opportunities are created. Also, anybody pursuing a career at the company must satisfy the firm’s job positions and business processes. On the other hand, career development initiatives are instituted at Walmart through personnel involved in human resource management at the store level. For example, managers and supervisors implement the HR initiatives, and adjust them to suit the unique conditions of the individual store.

Walmart’s Compensation Strategy

(Main article: Walmart’s HRM: Compensation, Career Development) Walmart’s compensation strategy involves a stratified approach. Pay is based on the job level relative to the organizational structure. Compensation is also partly based on the worker’s performance. This combination involves pay grades and levels that correspond to different job positions in the company. The success of Walmart’s incentive plans is high. Sales performance is the core consideration in the business. The focus of these incentive plans is on sales productivity and performance. Thus, through these incentive plans, human resource management directly addresses such focus. These plans create a significant boost for the company’s business performance.

Walmart’s incentive pay is focused on managers. The company can improve the resulting imbalance by giving a more equitable emphasis on the incentives of managers, supervisors, and rank-and-file employees. A recommendation is to use an incentive plan that gives better incentives for low-ranking employees. Instead of focusing on supervisors and managers, Walmart’s human resource management can increase incentives for sales personnel, who are the frontliners and foundation of the retail business.

References

• Boselie, P., & van der Heijden, B. (2024). Strategic Human Resource Management: A Balanced Approach. McGraw Hill.
• He, K., Lei, H., & Liu, J. (2024). Comparative analysis of business strategy and compensation system in the US retail industry. Highlights in Business, Economics and Management, 24, 516-520.
• Walmart Inc. – Form 10-K.
• Walmart Inc. – Workplace Diversity and Inclusion.
• Working at Walmart.
• Wu, Z. (2024). The analysis of the effect of compensation strategy on corporate performance: An example from Walmart. Highlights in Business, Economics and Management, 24, 511-515.