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Analysis of the New York Times’ Article, “Walmart Workers Demand $15 Wage in Several Protests” based on Principles Highlighted in Chapter 13 of Lloyd L. Byars’s and Leslie Rue’s Human Resource Management
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1. Analysis of Business Issue 3
a. What is the situation in the Industry? Trends? Competition? 3
b. What is the strategy of this company? 4
c. What are the main reasons for the development described in the article? 4
2. Human Resource Strategy 5
a. Which HR strategy needs to be embraced to support the business strategy in the given context? 5
b. Which chapters of the textbook help to address the issue raised by the article? 6
3. HR Implementation 6
a. What are the next steps the HR Department of Walmart should take to address the issue? 6
b. How should HR go about it? What does what? Who is involved? 7
4. Alternative Solutions 7
a. Could the company have done something differently? 8
b. From a HR point of view, was this decision the best decision? 8
c. What else needs to be taken into consideration? 8
Analysis of the New York Times’ Article, “Walmart Workers Demand $15 Wage in Several Protests” based on Principles Highlighted in Chapter 13 of Lloyd L. Byars’s and Leslie Rue’s Human Resource Management
1) Analysis of Business Issue
a. What is the situation in the industry? Trends? Competition?
The situation that Hiroko Tabuchi and Steven Greenhouse (2014) described in their article, “Walmart Workers Demand $15 Wage in Several Protests” is the Walmart workers’ demands for a wage increase to $15 per hour. These workers made their grouses known by protesting outside the New York apartment of Alice Walton, an heir of the Walmart fortune (Tabuchi & Greenhouse, 2014). The Walmart workers even held protests at outside the Arizona home of Walmart’s chairman, Rob Walton (Tabuchi & Greenhouse, 2014). The protests follow on the heels of protests that were held by fast-food restaurant workers who also demand an increase in their wages (Tabuchi & Greenhouse, 2014).
The argument that labor activists posit is that when retailers, such as Walmart, refuse to give their workers a livable wage then these “businesses squeeze the very people they hope to sell to” (Tabuchi & Greenhouse, 2014, para. 3). In fact, LaRanda Rose, who works on the sales floor at a Walmart based in Cincinnati, complains that, at times, she is unable to afford “‘soap, toothpaste, and tissue’” (as cited in Tabuchi & Greenhouse, 2014, para. 4).
Nevertheless, the National Retail Federation (a retail industry group) contends that give the “tough winds” facing the retail industry, increasing the minimum wage would only “eat away at many retailers’ bottomlines” and eventually “threaten retail jobs” (Tabuchi & Greenhouse, 2014, para. 6). In addition, the federation sought to explain the high concentration of low wage jobs in the retail industry by indicating that the industry offered jobs to “millions of younger, inexperienced workers” and workers who are “teenagers and college students” seeking “scheduling flexibility” (Tabuchi & Greenhouse, 2014, para. 6).
Furthermore, the group argued that retail workers (including persons hired for the holidays) earn “above average” salaries if temporary workers are excluded (Tabuchi & Greenhouse, 2014, para. 8). The federation estimated that full-time retail workers with the age group of 25-54 who work at least “three consecutive months” earn an average of $38, 376 annually (Tabuchi & Greenhouse, 2014, para. 8). The group confirmed that this “slightly more” than what is earned in non-retail jobs (Tabuchi & Greenhouse, 2014, para. 8).
Matthew Shay, who is the president of the federation, is quoted as saying that the time was not right to be “‘mandating a minimum wage increase’” (as cited in Tabuchi & Greenhouse, 2014, para. 9). Shay advised that the retail industry should focus more on stimulating growth (Tabuchi & Greenhouse, 2014, para. 9).
Nevertheless, the article mentions that a number of organizations in the retail industry are re-considering how they compensate their workers. Ikea, for instance, has made the decision to increase the base salaries of all of its workers employed in the United States to $10.76 per hour in June 2015 (Tabuchi & Greenhouse, 2014). Additionally, Gap has already decided to increase the minimum wage of its workers “across all of its brands” to $9 in June 2014 (Tabuchi & Greenhouse, 2014, par. 18). The company has also decided to increase the wages of its workers to “at least $10” per hour in June 2015.
b. What is the strategy of this company?
A spokesman of Walmart, Kory Lunberg pointed out the strategy of the company by indicating that Walmart does not allow many of its workers to remain minimum wage workers but they are quickly “‘prompted to better-paying jobs’” (as cited in Tabuchi & Greenhouse, 2014, para. 10). Lundberg acknowledged that Walmart had promoted “170,000 people” in 2013 with higher pay (Tabuchi & Greenhouse, 2014, para. 11). Therefore, the strategy of Walmart, as inferred from Lunberg’s statements, is not to allow its workers to remain at the minimum wage level but offer its workers the opportunity to “‘grow and advance’” and eventually “‘take home higher pay’” (as cited in Tabuchi & Greenhouse, 2014, para. 11).
Moreover, the business strategy of Walmart is to improve its profits but it has been difficult to do so because, as indicated by the Center for American Progress, an increasing number of retail companies are citing “stagnating incomes and weak spending as a threat to profits” (Tabuchi & Greenhouse, 2014, para. 16).
c. What are the main reasons for the development described in the article?
One of the main reasons for the development described in the article is the recent fast-food industry protests inspired workers in the retail industry to make their own demands related to a wage increase. Another reason is that the wages being provided by the retail industry is no longer considered as livable. As it was previously mentioned, LaRanda Rose is unable to buy toiletries for her household and has to go “‘without washing’” her clothes (as cited in Tabuchi & Greenhouse, 2014, para. 4). Additionally, another problem is that persons have been made to reduce the amount they take home for their wages. Walmart is doing this by forcing persons to work as little as “25 hours a week” (Tabuchi & Greenhouse, 2014, para. 13).
2) Human Resource Strategy
a. Which HR strategy needs to be embraced to support the business strategy in the given context?
The HR strategy which needs to be embraced to support the business strategy in the given context is use a job evaluation which can be used to assess the present situation of pay grievances at Walmart. This job evaluation could do three functions.
Firstly, it could analyze and compare jobs and pay rates with those of other organizations in the retail industry. Tabuchi and Greenhouse (2014) noted that Ikea, another retailer, plans to raise the base pay of all of its workers who are employed at stores based in the United States in 2015. This would raise the “average base pay” for an Ikea employee to $10.76 per hour (Tabuchi & Greenhouse, 2014, para. 16). Additionally, the article noted that Gap raised the “minimum hourly pay” of its workers in June 2014 to $9 (Tabuchi & Greenhouse, 2014, para. 17). The company also plans to raise that further in June 2015 to “at least $10” per hour (Tabuchi & Greenhouse, 2014, para. 17). Gap explained that this decision to increase the minimum hourly pay of its workers would have a “‘positive impact’” on its workers and was “‘was good for business’” (as cited in Tabuchi & Greenhouse, 2014, para. 17).
Secondly, the job evaluation can underscore how the wage increase will ensure that Walmart’s workers (and the persons their wages support) could have disposable income that they could use to spend in their establishments.
Lastly, the job evaluation could also highlight the mechanisms which can be implemented to remove barriers which may prevent workers, who are suitably qualified, to be promoted and increase their earnings. This job evaluation could also indicate how incentives could be improved so that persons are more motivated to be promoted in the company.
b. Which chapters of the textbook help address the issue raised by the article?
Chapter 13 of the text, Human Resource Management by Lloyd Byars and Leslie Rue, helps to address the issue of base wages. The chapter, “Base Wage and Salary System,” points out that a job evaluation can be used to “provide information for wage negotiations,” and to reduce “pay grievances” by reducing “their scope and providing an agreed-on means of resolving disputes” (Byars & Rue, 1997, p. 339). In addition, job evaluations assist in providing a means of “comparing jobs and pay rates with those of other organizations” and providing “incentives for employees to strive for higher-level jobs” (Byars & Rue, 1997, p. 339). Based on the situation of Walmart, which was highlighted by the article, the use of a job evaluation will be the best tool to be used to address the situation, and achieve the objectives which are in alignment with Walmart’s business strategies.
The type of job evaluation which could be used by Walmart is the point method. This is because it is detailed and specific, most employees accept this method since it is mathematical in nature, and because of its quantitative nature, it is “easy to assign monetary values to jobs” (Byars & Rue, 1997, p. 345).
3) HR Implementation
a. What are the next steps the HR Department of Walmart should take to address the issue?
The first step which needs to taken by Walmart’s Human Resource Department is to inform protesting workers of the company’s decision to perform a job evaluation of persons who currently receive minimum wage.
The HR will then conduct this job evaluation within the space of three to four months. The HR will use the job evaluation to compare Walmart’s base wages to other base wages of organizations within the industry, determine if these salaries are enough to provide disposable income to which can be used to spend in their establishments, and the job evaluation should be used to discover the ways in which persons can be motivated to be promoted to higher paying jobs in the company.
Based on the data gathered, the HR will provide a recommendation to Walmart’s executive body as to how it could increase the wages, if the data points out that if it should be increased. However, if the data does not support that wages should be increased then the HR can make recommendations to maintain the wages but improve benefits.
b. How should HR go about it? What does what? Who is involved?
The approach that should be taken by Walmart’s Human Resource Department should be an approach which involves intense negotiations with management and employees. The HR should ensure that all parties are able to meet most, if not all, of their goals. Therefore, it is important that the HR Department be conciliatory and be mindful of the fact that Walmart will have a vested in interest in keeping costs as low as possible but the employees will like to ensure that they earn a livable wage, and are able to have disposable income to spend. Understandably, these negotiations should be informed by the data provided by the job evaluation that was done and the recommendations made based on this job evaluation.
In order to ensure that negotiation process goes smoothly and is successful, there need to be a clear definition of the aims and goals of each side, a clear understanding of the issue being negotiated, and ensuring that the disputes presenting by each side is the “real problem” (Price, 2015, para. 8).
The person who should be leading these negotiations is the HR Manager. The compensation and benefits specialist who could be involved in facilitating the negotiations as it pertains to designing a suitable compensation and benefits package.
4) Alternative Solutions
a. Could the company have done something differently?
The HR Department could use a wage and salary survey to “collect comparative information on the policies, practices, and methods of wage payment from selected organizations” in the retail industry (Byars & Rue, 1997, p. 346). Wage and salary surveys are helpful because they help to provide “knowledge of the market” and ensure “external equity” (Byars & Rue, 1997, p. 346). Furthermore, wage and salary surveys can “correct employee misconceptions” concerning specific jobs (Byars & Rue, 1997, p. 346).
In order to conduct this wage and salary survey, Walmart’s HR Department needs to determine the organizations that must be studied as well as the method of data collection (Byars & Rue, 1997). Byars & Rue (1997) explains that this wage and salary survey should be done alongside the factor comparison or point method of job evaluation. Byars and Rue (1997, p. 347) mentions that a “good rule of thumb” is that a “minimum of 30 percent of the jobs in an organization” should be surveyed to make a fair assessment of the organization’s pay system.
However, one should be aware of the pitfalls when conducting wage and salary surveys. One of these pitfalls includes that survey data can often be “difficult to interpret and use” (Byars & Rue, 1997, p. 347). Byars & Rue (1997, p. 347) admits that survey data can have a “negative impact on merit pay plans” and the company can run the risk of conducting “too many surveys.” Therefore, if Walmart’s HR Department is supposed to conduct this wage and salary survey it would be best do this survey in conjunction with the point method of job evaluation, and limit the survey to just five major retailers. This will ensure that too many surveys are used and prevent the HR Department from being overwhelmed with data.
b. From a HR point of view, was this decision the best decision?
The decision given above is the best decision that can be made by the HR Department of Walmart because the point method of job evaluation along with the wage survey will provide Walmart with a clear understanding of by how much the base salaries of their workers should increase. It should clearly show the industry trends as it relates to wages in the retail industry. However, it should be noted that when wage surveys are done, it has proven that data from these surveys can help “fuel inflation” (Byars & Rue, 1997, p. 347).
c. What else needs to be taken into consideration?
A factor which needs to be taken into consideration when conducting these wage surveys is the cost-effectiveness of conducting such a survey. If the survey will be too costly for the company then Walmart could consider reducing the number of organizations that it allows to participate in its survey, or simply focus on the point method of job evaluation.
When conducting these surveys, the HR Department could analyze trends in not only consumer spending and relate them to low wages, but it could use available data to analyze the present costs of living. This analysis could enable the Walmart HR Department to determine what would be considered a ‘livable wage’ by today’s standard.

References

Byars, L., & Rue, L. (1997). Human resource management (5th ed.). Chicago: Irwin.
Mayhew, R. (n.d.). Six Main Functions of a Human Resource Department. Retrieved January 14, 2015, from http://smallbusiness.chron.com/six-main-functions-human-resource-department-60693.html
Price, A. (2015, January 7). The Negotiating Process. Retrieved January 14, 2015, from http://www.hrmguide.co.uk/employee_relations/negotiating-process.htm
Price, A. (2007). Human Resource Management in a Business Context (3rd ed.). Bath: Thomson Learning.
Tabuchi, H., & Greenhouse, S. (2014, October 16). Walmart Workers Demand $15 Wage in Several Protests. Retrieved January 14, 2015, from http://www.nytimes.com/2014/10/17/business/walmart-workers-seek-wage-bump.html?_r=2