Monday, November 19, 2007

Strategy for Managing People Resources

Finally, the strategy for managing people is one of the three important strategies that lead Wal-Mart to be the biggest company in the world with the highest amount of employee. Human resource is defined by economists as a scarce resource to all businesses. Many businesses and organization have different strategies in managing this special resource. These strategies vary by the type, size and location of the businesses. Managing human resources at financial company will be different from government institution as well as managing human resource in mid-size firms will completely different and less complicated than managing human resource at the retailer businesses. In turn, effective human resource management will create a high perspective teamwork, fair competition, and respective employees. For the world biggest retailer like Wal-Mart, the success of managing this department is acquired through three basic activities which are motivation, internal promotion, and external recruitment.

One of the basic activities that lead Wal-Mart to successfully manage its people is motivation. Motivating employees into the same culture is one of Sam’s goals. Wal-Mart takes all of its effort to make employees feel like they are part of the company because they are sources of new idea for Wal-Mart to develop (Soderquist, 2005). Motivation is alive through all levels of positions at Wal-Mart. This company motivates employees in many different ways in order to prove that the company is not only care about profit they can gain from employees but also employees’ crises. One of the facts proved about this motivation is the used of term “association” instead of “employee”. Wal-Mart had agreed with J.C Penny by referring the employees as associates because it can make them feel more engagement with the company. After that, Sam had suggested a new way of treating his associates by calling all levels of them by their first name and displaying only the first name on the ID badge. Sooner, from hourly associations to top managers or even the founder of the company is calling each other by their first name only. Everyone in the company is getting more involves by calling the other’s first name because it can create a family-oriented business instead of boss-oriented one. Because of Sam’s belief that the company was built by the people, Wal-Mart had renamed its human resource department as a “people department.” Though, the word sound simple but it touches people’s heart deeply. Moreover, people at Wal-Mart are full with respect regardless of their position. Soderquist had told from his experience of visiting the Wal-Mart store in Bartless, Tennessee. He was unbelievable to see all associations and department managers had stood up with ovation to Gracie, who was a cleaner lady of the store for many years (Soderquist, 2005). Beside the way of treating people, Wal-Mart also encourage people through health care benefit and financial benefit. All associations at Wal-Mart and their immediate family can get a health insurance at a very low price which includes primary doctor, pharmacies, vision, and dental. For financial benefit, Wal-Mart started to share profit to its people in 1971. After that, Wal-Mart has enabled all associations an access to own company’s shares by selling stock to them at a discounted price and without brokerage fee. Wal-Mart also had implemented a cash incentive plan for employees to get additional income depend on company’s performance. Addition to these benefit plans, Wal-Mart also tries to get involve with associations’ crisis directly and indirectly. The program called door open which provides a direct access for all associations to express their problems to the store manager and if the manager cannot find the solution the next level of management such as supervisors, CEO, board of directors or even Sam will be in charged. Wal-Mart also helps the associations’ crisis by hiring a special psychologist team to counsel on their problems. As a result from all of these motivations, Wal-Mart has created an exciting environment workplace with respect, prospective, and value. Beside emotional motivation, Wal-Mart also provides educational motivation via many training programs such as technology, leadership, and management to all of it associates.

Another basic activity beside motivation employees is internal promotion that brings Wal-Mart to succeed in managing its human resource. Because Wal-Mart aimed at people’s involvement for all levels of association, it had developed many learning program to prepare them to be a leader. Reported by Soderquist, about more than three-quarters of the stores managers had started as an hourly association (Soderquist, 2005). As in the case of Larry English who started at one of Wal-Mart stores in Harrison as a stock boy, then became an assistant manager at Wal-Mart #1 in Rogers, Arkansas. In 1970, he had become a manager of the store 18 in Newport, Arkansas. After a financial management lesson given by his district manager, Larry became a field manager operating many giant stores after thirty-five years with the company (Fishman, 2006). Another case of Kevin Turner is also similar to Larry’s case. Kevin had started as a temporary cashier at one of Wal-Mart store in Ada, Oklahoma in 1986 (Soderquist, 2005). After he graduated from the East Central University, he decided to work full-time in the company as an auditor. Later on he was transferred to the technology department at the entry-level position. After gradually promotions, Kevin had become a senior vice president and the CIO of this company in 1999. Later on, Kevin was promoted to president and CEO of Sam’s clubs, a $30 billion division of Wal-Mart. Theresa Barrera also has the same story like Kevin. Started from a part-time cashier in Sam’s club in Texas, Theresa was granted a Wal-Mart scholarship in 1986 which let her finished her college degree. After five-year working in the home office of the company, she was transferred back to the Wal-Mart store division and was promoted to divisional merchandise manager in 1999. Until 2001, she is now a vice president of the company whom responsible for more than $5 billion of purchasing merchandise for the stores (Soderquist, 2005).

Beside bottom-up internal promotion, Wal-Mart also excels at external recruitment for both new associates and high-level managers. From Wal-Mart’s history, company had hired many small business owners when it first started. Those business owners were very important to the company because they possessed the entrepreneurial characteristics such as penny saving and risky. Moreover, Wal-Mart also hires external people who have experience in business management or expertise in a specific division to back up the business; for example, Wal-Mart’s pharmacy division. The pharmacy division was started by Clarence Archer, a pharmacist expertise. Based on Archer’s background, he was the ideal candidate for pharmacy division of Wal-Mart because not only he was a pharmacist but he also had experience in running pharmacies for drugstore chain like Kroger and Zales. Archer started his drugstore at Wal-Mart in 1981 in his forties when Paul Carter was the executive vice president. Pharmacy business at Wal-Mart at that time is very challenging. It moved very slow year for the first year because there are many well-known drugstores such as Kroger and SuperX. However, financially supported by Sam Walton, Archer had started up with some philosophy strategies such as hiring the best pharmacists in town to attract customers, giving out dollars coupons to increase sales, and always having important medicine in stock. Due to Archer’s competitive nature, now Wal-Mart has 3,535 pharmacies and is the fourth of pharmacy business (Fishman, 2006).

2 comments:

nolongerdemure said...

Not very helpful.

Bartender #1 said...

This article was very helpul when writing a paper on the organizing function of management. Wal-Mart shows how organize they are with their peoples department. Very Good.