Compensation And Benefits Essay

1858 words - 7 pages

Course Project 1Walmart Compensation and Benefits IssuesLuis A. RubillosDeVry UniversityHRM 430 Compensation and BenefitsApril 18, 2014IntroductionArguably considered as one of the most successful retail companies around the world, Walmart employs over 2.2 million associates in over 11,000 stores located in 27 countries worldwide. The company implements an effective business strategy, focused on innovative thinking, customer service, and a commitment to save the hard earned money of valued customers. Walmart's business strategy has enticed over 245 million patrons, and generated sales worth $466 billion in fiscal year 2013, making the Walmart brand a formidable competitor in the retail industry.Although Walmart can boast such formidable statistical data through the implementation of an effective business strategy, the company has a history of compensation and benefits issues that has been brought to light in recent years. These company internal issues, if not resolved, could serve as the critical reason for continued negative publicity which may adversely impact future sales. In fairness to Walmart, the company was one of the first large retailers to offer profit sharing and stock options to all full-time employees. Walmart also pioneered a system of performance-based incentives, with a bonus structure tied directly to the profitability of each individual store. In fact, Walmart has an expansive benefits package, which includes a health care savings plan, dental insurance, contributions to employee 401k, and company discounts for family members of employees. These benefits, however, do not extend to Walmart's part-time workforce and casual staff. Although Walmart historically implements an expansive benefits package for their full time employees, the company is forced to scale back on employee benefits in order to save costs and continue to provide lower prices for its patrons. Walmart's organizational controls may have inadvertently limited the company's compensation and benefits plans and has caused a controversy in recent years. The purpose of this essay is to highlight Walmart's wage law violations and inadequate healthcare as a result of tight organizational controls, and provide possible alternatives that may improve the retail giant's compensation and benefits issues.Compensation and Benefits IssuesWalmart is considered as one of the nation's largest private employer. However, in recent years, the corporation has been embroiled in legal battles due to employees citing inadequate compensation and benefits. Walmart can be viewed as the archetypical transaction-based company, emphasizing on efficiency of operations that can be attained with minimal HR investment (Shub and Stonebraker, 2009). This system will usually display standardized job design, with low end compensation and very few benefits (Shub and Stonebraker, 2009). The company has run into issues of "perverse" incentives as a by-product of their performance related pay initiatives....

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