STRATEGIC HUMAN RESOURCE MANAGEMENT

HUMAN RESOURCE MANAGEMENTHRs focus is on attraction, retention, and motivation of employeesIn many organizations, employees are key to creation of sustainable competitive advantageQ: For Wal-Mart, in what way does HR contribute to creation of sustainable competitive advantage?

HRS TOUGHEST CHALLENGES FOR 2006Ensuring compliance w/ federal and state employment lawsRetaining talent in an improving economyManaging performanceDeveloping leadershipDealing w/ rising health care costs

LISTENING TO HRS CRITICSQuantify people-management results into dollarsProductivity of workforceCost of vacant positionCost of keeping bad managerDollar impact of hiring and keeping top performers vs. average ones in mission-critical jobsAdopt fact-based decision-makingNot I think or I believe but I know re: cause and effectCauses of turnoverWhat motivates workers to produce moreWhich HR actions can turn business unit around

EFFECTIVE HR STRATEGY FORMULATION AND IMPLEMENTATIONOrganizationalStrategiesOrganizationalCharacteristicsOrganizationalCapabilitiesEnvironmentHR StrategiesConsistencyConsistencyConsistencyConsistencyImprovedFirmPerformanceFitFitFitFit

SELECTED HR STRATEGIES THAT FIT PORTERS THREE MAJOR TYPES OF BUSINESS STRATEGIESBusinessStrategyCommon OrganizationalCharacteristicsHR StrategiesOverallcostleadershipSustained capital investment and access to capitalIntense supervision of laborTight cost control requiring frequent, detailed control reportsLow-cost distribution systemStructured organizationand responsibilitiesProducts designed for ease in manufactureEfficient productionExplicit job descriptionsDetailed work planningEmphasis on technicalqualifications and skillsEmphasis on job-specifictrainingEmphasis on job-based payUse of performanceappraisal as a control device

SELECTED HR STRATEGIES THAT FIT PORTERS THREE MAJOR TYPES OF BUSINESS STRATEGIES BusinessStrategyCommon OrganizationalCharacteristicsHR StrategiesDiffer-entiationStrong marketing abilitiesProduct engineeringStrong capability in basic researchCorporate reputation forquality or technologicalleadershipAmenities to attract highly skilled labor, scientists, or creative people.Emphasis on innovationand flexibilityBroad job classesLoose work planningExternal recruitmentTeam-based trainingEmphasis on individual-based payUse of performance appraisal as development tool

WOMEN VS. WAL-MARTWal-Mart culture built on inspirational leadership, autonomy, trustBring Ekes into org, convert them to principles: respect for individual, customer service, excellence, and imperative to buy and sell at lowest price possible

But practices also may create barriers, e.g., job postingWal-Mart famous for promotion from within more than two-thirds of managers started as hourly EkesHourly job posted within stores, but until current suit, Co had never posted openings for management training positions Not the Wal-Mart way, thought to be too bureaucraticWal-Mart way was to trust that store mngrs will promote those who merit promotionCo now also developing formula for pay increases based on evaluation ratings, experience, and other factors to make raises more uniform

Another aspect of culture which may create barrier is willingness to move for the jobSingle mother Asset Manager involved in litigation moved nine times in eight years across three states

Key for Wal-Mart is making processes fair without losing culture that makes it special

BIG RETAILERS FACE OVERTIME SUITS AS BOSSES DO MORE HOURLY WORKRetailers such as Wal-Mart, RadioShack, Dollar General facing lawsuits accusing them of using low-level managers to do work of non-managers in order to avoid paying overtimeSuits claim little difference between job duties of hourly ees and asst mngrs, esp nighttime asst mangers (glorified stockers)RadioShack mangers required to work at least 52 hrs/wk

Under FLSA, mngrs may be entitled to overtime if more than 40% of their time is not spent supervising or if jobs dont include decision making

Wal-Mart tries to hold labor costs to 8% of sales, cf. 9-10% on average at other large-store retailersAlleged that to stay within budget, Wal-Mart district mangers have encouraged store managers to send hourly ees home before shift is over, then asst mangers (who are required to work at least 48 hrs/wk) may stay on job for as much as 75 hrs/wk to coverPortion of store manager compensation is annual bonus pegged to store profit

IN AD BLITZ, WAL-MART COUNTERS PUBLIC IMAGE AS HARSH EMPLOYERWal-Mart bought full-page ad space in January 2005 in more than 100 newspapers nationwideCo said ads are attempt to set record straight on labor issuesIts becoming clear that we have to do more and be more aggressive in telling our story. The purpose is to be proactive and initiate debate.New web site: www.walmartfacts.com Amid criticism of labor practices, in 2004 Co initiated new wage structure to increase pay of some hourly Ees, created 40-person compliance team to ensure labor laws adhered to and diversity goals metAlso linked percentage of executive bonuses to certain diversity goals

THE WEGMANS WAYWegmans labor costs run between 15% and 17% of sales, cf. 12% for most supermarketsAnnual turnover rate is 6%, cf. 19% for grocery chains w/ similar number of storesIndustrys annual turnover costs can exceed entire profits by more than 40%Gallup survey found that over one-month period, shoppers who were emotionally connected to supermarket spent 46% more than shoppers who were satisfied but lacked emotional bond w/ store

CURRENT DEVELOPMENTS IN UNION ORGANIZINGWal-Mart has won all but one of seven union votes in U.S. (as of 10/02)One U win was butchers dept in TX store, which was disbanded two weeks after electionCo announced plans to phase out butchers and use prepackaged meat in 180 stores, said timing of decision was a coincidenceWhen Wal-Mart acquired Woolworths operations in Canada, it bought 120 stores, but not the seven that were unionizedWal-Mart EVP of People: Where associates feel free to communicate openly with their management, why would they need a third party to represent them?Co gives managers 56-page guide, The Managers Toolbox to Remaining Union FreeIts important for you to be constantly alert for efforts by a union to organize your associates

CURRENT DEVELOPMENTS IN UNION ORGANIZINGIn the 1970s, General Motors was the nations largest corporate employer, and thanks to its contracts with the UAW, it not only set the standards, but it raised the standards for all workers. Wal-Mart is doing the exact opposite. Nowadays it is the nations largest corporate employer, and it is lowering standards for everyone.Organizing director for UFCWWal-Mart says its average hourly pay for FT eves is $9.68/hrUFCW counters that its only $8.23/hr (based on independent statistical analysis)BLS estimates average hourly wage for all non-supervisory retail ees is $12.34Wal-Mart spokesman says BLS data inflated by overtime, and that Wal-Marts pay scale is competitive

WORKFORCE PLANING Work force planning and preparation of all your options before going into the real work set for the staff to get the organizational goals is very important issue It is well understood principle that the people are organization's important asset. Because without the capable staff it is difficult for all organizations to reach towards their goals The bulk of organizational improvement will come only after ensuring that the right staff with the right skills, knowledge and behaviors present in the organization.

EMPLOYMENT REQUIREMENTS Critical stage in the recruitment of human resources management. It should be well planned and structured so that the organization can recruit the right person for the right place instead of just making the availability of another person at work There are many of the problems faced during this process and managers for some time and the inability to focus, time and financial resources necessary to make this process effective. Wal-Mart that always take qualified personnel and according to it, and it makes employees with proper education and skills efficiency MANAGEMENT OF WORKFORCE AND OTHER PRACTICES AT WALMART.

DEVELOPMENT AND TRANING Appointment comes after the development and training stage. Most the organizations unfortunately sometimes even for technical jobs do not provide adequate training for their employees before hiring and employment There must be made sound system which can ensure that the Organization the necessary arrangements to work before and on the job training and development for their employees The-job training is the main part in the field of human resources at Wal-Mart is now not only offers these courses for their employees, but in times of recession, they offer training courses for some people who are by this time of recession

External RecruitmentExcept of internal promotion, Wal-Mart also recruits for associates and high level managers. According to the history of Wal-Mart, company has hired many business owners when it first started.

CONCLUSIONWal-Mart hiring more than 1 million employees over next five yearsAdvancement opportunities65% of store managers began in hourly jobsCollege recruitingInternships in pharmacy and merchandisingManagement trainee program for college students

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*The success of HR strategies depends on the situation or context in which they are used. An HR strategys effect on firm performance is always dependent on how well it fits with other factors. This slide depicts the key factors that firms should consider in determining which HR strategies will have positive impact on firm performance: organizational strategies, environment, organizational characteristics, and organizational capabilities.*These next three slides illustrate Porters three major types of business strategies. The overall cost leadership strategy is aimed at gaining a competitive advantage through lower costs. Cost leadership requires aggressive construction of efficient plant facilities, intense supervision of labor, vigorous pursuit of cost reductions, and tight control of distribution costs and overhead.*A differentiation business strategy attempts to achieve a competitive advantage by creating a product or service that is perceived as unique. Approaches to differentiation can take may forms, among them: design or brand image; technology; features; customer service; and dealer networks.