Walmart’s stature as the world’s largest company by revenue is tarnished by a long list of issues it has had in terms of relations with its employees. Employee complaints range from poor working conditions to low pay to an unnecessarily harsh absenteeism policy. This activity is important because a company like Walmart must take some kind of action before these issues (and low worker morale resulting from them) have negative effects on its customer service and the company’s overall reputation with the public.
The goal of this activity is for you to think about these problems, consider which ones represent Walmart acting inconsistently with its stated values, and prioritize which ones need to be addressed most urgently.
Read about Walmart’s various labor grievances. Then, using the three-step problem-solving approach, answer the questions that follow.
Sam Walton founded Walmart in Rogers, Arkansas, and the company grew from that single store in 1962 to more than 11,300 locations spanning 27 countries by 2019. Today, the multinational retailer is the world’s largest company by revenue—generating over $500 billion in 2018—and the largest private employer with more than 2.2 million employees. The retailer also owns Sam’s Club, a chain of warehouse clubs that sell groceries and general merchandise in bulk.1 Walmart is known for its “everyday low prices,” but critics say prices are not all that’s low at the retailer. Individual employees, advocacy groups, and government agencies have brought numerous labor-related lawsuits against the company, scrutinizing its internal values. Let’s take a closer look at what’s going on at the massive retailer.
A Series of Workplace Abuses
Walmart prides itself on its values. The retailer states that, “We define culture as our values in action. It’s how we deliver superior customer service, create a great front-line work environment and improve performance…” Moreover, Walmart’s stated values are centered on being “guided by good,” which includes “respect for the individual” and “acting with integrity.2 Allegations against the company suggest a different story.
Consider a report by a workers’ advocacy group that says Walmart “routinely refuses to accept doctors’ notes, penalizes workers who need to take care of a sick family member and otherwise punishes employees for lawful absences.” The report is based on a survey of more than 1,000 Walmart employees and accuses Walmart of violating the American with Disabilities Act and Family Medical Leave Act, among other labor laws.3 Katie Orzehowski was a cashier at the Walmart in North Huntingdon, Pennsylvania, and completed the employee survey. She suffered a miscarriage in 2016 and provided doctors’ notes and hospitalization records to excuse her missed shifts, but the company refused to excuse her absences. She was so worried that another absence would get her fired that she returned to work, while still in recovery. “I still had a lot of bleeding going on, and that’s embarrassing,” Orzehowski told the New York Times.4
Walmart’s focus on the bottom line over its employees’ welfare didn’t end with those who suffered from an illness. The Equal Employment Opportunity Commission (EEOC) filed a lawsuit against the retailer in September 2018 alleging it unlawfully discriminated against pregnant workers in Wisconsin. The complaint was filed on behalf of Alyssa Gilliam, who became pregnant in 2015. Gilliam requested light duty or transfer to a less physically demanding job in which she would avoid heavy lifting due to her pregnancy. The company declined to accommodate her in any way, including providing her with a chair, shorter work days, or additional breaks. The EEOC alleges that Walmart retaliated by cutting Gilliam’s benefits, reducing her work hours, and eventually forcing her to take unpaid leave. Interestingly, Walmart had a robust light duty program that allowed workers with lifting restrictions to be accommodated, “But Walmart deprived pregnant workers of the opportunity to participate in [this] program. This amounted to pregnancy discrimination, which violates federal law,” said the EEOC.5
Gilliam wasn’t the only employee denied a chair. Adam Catlin, who suffers from cerebral palsy, has been a Walmart greeter in Selinsgrove, Pennsylvania, for almost ten years. Catlin was told in 2019 that due to a change in corporate policy, he would need to stand for his entire eight-hour shift and lift up to 25 pounds or be fired. Caitlin’s mother urged Walmart customers on Facebook to support her son. “I know corporate decisions are corporate decisions, if [that’s] where this originated from, but does anyone ever make any decisions anymore by putting any heart or care into it?” she wrote.6
Walmart’s Alleged Bait and Switch
Walmart CEO Doug McMillon’s compensation for fiscal 2018 was $22.8 million, which is 1,188 times the annual compensation of its median employee. In contrast, CEO pay at S&P firms averaged 361 times more than the average employee in 2018.7 Overall, the company “has been the defendant in scores of cases, including class actions, or group suits, accusing the company of wage-law violations,” according to Jonathan Tasini, president of the Economic Future Group.8
Walmart decided to raise its minimum wage from $10 to $11 in 2018. With much fanfare, CEO McMillon stated, “Today, we are building on investments we’ve been making in associates, in their wages and skills development. … It’s our people who make the difference and we appreciate how they work hard to make every day easier for busy families.”9 Now consider that Walmart closed dozens of its Sam’s Club warehouses on the same day it announced the pay increases.10This brings into question whether the retailer had positive intentions in raising employee pay. The United Food and Commercial Workers International Union, for example, called the wage increase a “public relations stunt” meant to distract from the closing of 63 stores.11 The closures resulted in approximately 10,000 workers losing their jobs.12 The timing of the announcement wasn’t the only issue as many Sam’s Club employees had no idea their stores would be closed until the day of the announcement. According to The Times, some workers showed up for work only to be informed that their stores were closed.13
Poor Job Satisfaction Impacts Customer Service
Walmart’s minimum wage hikes may raise the pay of some of its workers, but they may not be enough to solve the retailer’s continued customer service problem, according to Forbes.14 Walmart’s American Customer Satisfaction Index (ACSI) score dropped between 2016 and 2017. The ASCI measures the quality of products and services American consumers receive by major department and discount retailers. The drop placed Walmart at the bottom of a list of department and discount retailers (even below a bankrupt Sears).
Making Change at Walmart (MCAW), an organization dedicated to transforming the lives of Walmart employees, believes the company’s poor customer service ratings are related to the way it treats its workers. “Walmart lacks the ability to improve its customer experience when it refuses to focus on what we all know to be true—quality jobs create quality experiences for both shoppers and workers,” says MCAW director Randy Parraz.15 Walmart needs to do more for its employees if it wants to improve their attitudes with customers. For example, wages and benefits are so poor at Walmart that thousands of its employees qualify for food stamps, Medicaid, and other government assistance programs, according to MCAW.16 Walmart says it has a “common purpose of saving people money so they can live better.”17 It seems its employees will need to live better as well if the company wants to continue its success.
Which of the following hypothetical statements by a Walmart employee demonstrates poor “perceived organizational support”?