ORGANIZING FUNCTION

Knowledge and Human Resource Optimization for Wal-Mart's Success

Knowledge and Human Resource Optimization for Wal-Mart's Success

Introduction

Wal-Mart is the largest retailer in the world providing all you need under one roof in literally every sense of the word. It is well recognized both locally and internationally for its EDLP (Every Day Low Pricing) model. It is present in nine countries across the globe. The Company's mass merchandising operations serve its customers primarily through the operation of three segments. The Wal-Mart Stores segment includes its discount stores, Supercenters, and Neighborhood Markets in the United States. The Sam's club segment includes the warehouse membership clubs in the United States. The Company's subsidiary, McLane Company, Inc. provides products and distribution services to the retail industry and institutional food service customers. It now has more than 4,700 stores including some 1,475 discount stores, 1750 combination of discount and grocery stores and 538 membership-only warehouse stores (Sam's Club) (Bianco, 2003).

The organizing function in management refers to synchronizing human resource, intellectual, physical, financial and knowledge resources of an organization to help it achieve its objectives.

Human Resource Management

Wal-Mart understands that to keep its customers happy it has to first take care of the people who will be keeping customers happy on its behalf. Hence, its Human Resource Management department is working very hard to keep the bottom line ever increasing through induction of quality human resource. Wal-Mart employs around 1.2 million employees in US alone and 1.7 million in the entire world. Wal-Mart's primary strategy in effective human resource management is to keep this large number of employees from forming unions. Taking care of quality employees, retaining them and hiring quality employees is one of the most imperative human resource management strategies at Wal-Mart as it falls in the product-service continuum at a point where employees play a vital role in enhancing the overall shopping experience of its customers.

Benefit Administration

Managing this large human resource is not easy and Wal-Mart has an excellent retention rate despite some rumors in the market about Wal-Mart's discrimination against females, low wages, poor working conditions and worker strikes etc. Wal-Mart refers to its employees as associates to give them a feeling of belonging and unity. It is the pioneer in creating the concept of profit sharing and stock options for performing employees.

Performance Based Rewards System

By adopting performance based bonus strategy, Wal-Mart motivated its employees to meet and exceed their targets thereby becoming a significant contributor in Wal-Mart's success.

Employee satisfaction trickles down to customer satisfaction. Hence, Wal-Mart has adopted a fair performance evaluation system which reflects in the company's policy whereby 70% of managerial level employees are hourly workers who got promoted.

International Expansion Challenges

Wal-Mart's presence in the international market also presents language barriers. The company solved this circumstance by decentralize management authority from headquarter to International operation. Individual country leaders have more freedom to run the business, especially in the areas of operations and merchandising (Zellner, Schnidt, et al, 2001).

Policy Shift to Enhance Employee Satisfaction

Managers at Wal-Mart do not have permission to ask employees ...