Critics Remain Wary of Wal-Mart’s Plans

By Jessica Marquez

Aug. 15, 2006

Wal-Mart’s plan to expand its HR operations to dedicate staff to each of its regions may be a step in the right direction, but some observers hope it’s just the first of more measures to come. Providing more HR support and training for its store managers is something Wal-Mart has needed to do for some time, critics say.

    The Bentonville, Arkansas, firm has based its culture around founder Sam Walton’s belief that anything associated with big corporate culture, including HR training, would lead to “big bureaucracy,” says Jocelyn Larkin, an attorney with the Impact Fund, the organization representing 1.5 million women in a gender discrimination suit against Wal-Mart.

    By not providing any guidance or HR standards, store managers were left to their own devices, she says.

    “You have someone with often a high school education who is horrifically overworked and without any training on how to make hiring decisions,” she says. “That’s a prescription for disaster.”

    Larkin says she would applaud any efforts Wal-Mart makes, but “the proof is in the pudding.”

    The gender discrimination suit brought against Wal-Mart won class-action certification in June 2004, but Wal-Mart appealed it in August 2005 to the 9th U.S. Circuit Court of Appeals in San Francisco. Larkin says she expects a decision any day.

    Getting HR people out in the field may help employee morale, says Susan Wehrley, an HR consultant in Pewaukee, Wisconsin. Soliciting employee feedback often makes workers feel more a part of an organization, but following up on that feedback is even more important, she says.

    Officials at Wal-Mart Watch and Wake-Up Wal-Mart, two union-backed groups critical of the retailer, agree that it’s going to take a lot more to address their concerns. Specifically, both groups have called on Wal-Mart to increase wages, which average $9.68 an hour for full-time employees.

    This makes it difficult for employees to afford the health care deductibles of Wal-Mart’s plan, which are $1,000 per person with a $3,000 maximum, says Chris Kofinis, a spokesman for

    “The percentage of workers who are covered by insurance by Wal-Mart has actually fallen over the past year” despite the changes the retailer made to its health care plan, he says. Last year, 54 percent of Wal-Mart’s workers were covered, compared with 48 percent this year, he says.

    “It’s pretty simple what Wal-Mart needs to do,” Kofinis says. “They need to pay workers better.”

    Perhaps Wal-Mart was listening. It announced last week that it was raising the starting pay rate at about a third of its stores.

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