Hourly Employee Retention in Small and Medium Attractions - Case Study Example

Name: Professor’s Name: College Name: Date of Submission: Executive summary In this paper, the discussion will revolve around Wal-Mart Corporation, especially the issues that have arisen with the employees’ retention in the company. This article will focus and illustrate comprehensively the problems facing the Wal-Mart Company (the ability of the firm to retain workers) and also the solutions to the problem which are optimal. Dependent and independent variables will be recognized; primary and secondary sources of data, alternative and null hypothesis, requirement of the sample sizes and sample production explanations. Recommendations and observations will be provided throughout the paper based on the research conducted. Wal-Mart is cherished in some communities and hated in other communities. The corporation has created over 1.5 million jobs of which low wages paid. Insufficient pay can be a major factor in the company in driving the turnover rate. This high turnover rate can cost so highly since the government is spending more money in training the newbies in the corporation. The higher the rate of turnover, the higher the cost the company uses in the training of the new members in the company every year. Such costs are unnecessary which the Wal-Mart company can use in other investments in the business. Wal-Mart’s turnover rate is the depended variable. This is the variable which is to be estimated or be predicted in the corporation. Since dealing with workers retention is a human resource, it is a complicated department whereby there are several issues which take place among the employees. Currently, retention of the employees is one of the most significant factors in the organizations and managers are doing their best to retain the employees so as to build the organization’s human capital as a source of competitive advantage. Introduction Let us take a brief look of the company we are talking about in the introduction of our topic. Wal-Mart is a company which has a lot of stores across the globe. It has over 800 stores across the United States of America which gives the residents a pleasant shopping environment. The company was founded back in the year 1962 by someone called Sam Walton. As a leader in sustainability Wal-Mart was ranked first among the retailers by some magazine in 2009 (Zhixing& Horn, 2011). Wal-Mart is bringing to life its global vision since it has a vision which states that, “the price of leadership drives world performance.” The corporation management focus on price leadership in every market since the way to approach customers is the price strategy. The mission states that “save money, stay better,” which is relevant now just as it was back in 1962 with Sam Walton. According to the mission and vision, it might be seen that the company management concentrated mostly on cost of the products, its business strategy should also be related to price leadership as well. Financial strength:Wal-Mart is the largest world retailer with a turnover of more than $400 billion as by the year 2009. In order to be globally, any corporation needs money. Wal-Mart can be able to keep up with local competition and also have investments in new markets Computer system: this corporation has good computer link system to keep inventories in check in order to achieve in good time since it’s an advantage even to the other competitors. Culture: Wal-Mart has good culture together with strong work ethics as well as the commitment towards the consumers which made every employee an asset for the corporation such as open door, sundown rule and basic beliefs and values. Power: Wal-Mart has huge economy of scale since it has very good buying power; its suppliers are international organizations such as Pepsi and many others. When the whole operation becomes one, Wal-Mart has a full bargaining power. Weakness Wal-Martdiversifies its products across several sectors such as food and stationary and also clothes. Although it does that, it is not able to focus on one of them compared to the local competitors. We can have an example of Jusco which is among the best hypermarkets which pay more attention on cosmetics and clothing. Wal-Mart has little presence in few of countries worldwide although it is a global company. Opportunity After financial crisis in 2007, the economy has recovered in most of the countries, and the power of purchasing increased among the customers, as a result it is an opportunity in business expansion to more countries since there is an increase in demand (Zhixing& Horn, 2011). Threats to the company Competitors: In the retail industry the competition is fierce in that Wal-Mart is the leader in retail industry which means that it will be target of the competition locally and globally. It is easy for the competitors since they have a target to compete with but hard forWal-Mart since it has no target to compete with because it is the leading. Currency rates of exchange: this is an issue which faces almost all global enterprises. It can influence the profit directly. Currently, the exchange rate is fluctuated majorly in US and china currency (Zhixing& Horn, 2011). Global Focus Recently, expansion became part of the strategic direction in Wal-Mart. Although it operates in more than 10 markets, the focus is quite clear which is to deliver price leadership to the customers. “Save money and live better” mission may translate to many to many languages which Walmart operates and the information behind the mission is universal. Everyday low cost, everyday low price, the management continues in building this strategic framework. Customers globally dwell so much on value and due to that the leaders are focusing on continuing to improve productivity and managing cost which will enable price leadership. It should come to our minds that low cost does not mean low quality of product and services but it rather means that the company does it all to satisfy customer needs as well as the products sold to the customers and the services are of best condition and quality. In this company, managers’ decision is based on saving money and making people’s lives better. Wal-Mart promises its social corporate responsibility as a world company to lead and collaborate issues which are important to the customers, members, associates and the shareholders of the company. For instance, Wal-Mart creates more jobs yearly and gives training to the associates and it sets goals to supply 100% of its energy in order to generate zero waste and help in promoting the market for environmentally sound products. This company takes keen interest on charity business most of the time. It helps people in job opportunities; healthcare, training them on how to live better and also helping the communities come up after natural disasters with financial support and donations Human resource strategy Human resource management is the process of managing the workforce of a company or human resources. It is good for the attraction, training, assessing, rewarding and selection of the employees. Obviously human resource management which is effective will ensure creation of a high teamwork perspective, fair competition and a respective environment. Human resource plays a major role in Wal-Mart since it has more than 1.5 million associates to work. In Wal-Mart it is quite interesting since they don’t refer to them as workers but rather the associate since the founder believed that in his organization there is no worker and bosses. He concluded that people who work for the organization are just partners who work together to make profit. In regard to being the world’s biggest retailer, human resource managing is required to be done in three basic stuffs which include: internal promotion, external recruiting and motivation. Motivation Human resource management must motivate associates maximum in order to achieve server customer. It should create a comfortable environment which adds value. In Wal-Mart all the workers put on some cards and even the manager puts on the same card with some characters, to the associates they make difference but to the customers it indicates that there is no difference among employees and the directors. There are also platforms between the CEO and the associates and they have chance to complain. Besides then organization provides benefits to motivate the associates. In example, people who join the company and works more than 1000 hours annually, tend to share up to 5.6% of the revenue that year. In addition to that, the associate together with his/her family is given some discount whenever they shop in Wal-Mart. They as well can purchase Wal-Mart stocks in the associate stock ownership plan. Internal Promotion Since Wal-Mart aims at people of many levels of association, it developed learning program to enable associates to be leaders. According to (Yang, Wang & Fu, 2012), more than three quarters of the stores began as an hourly association. We have a best example of Larry English with regard to internal promotion. Larry began as an associate in one of the Wal-Mart stores in Harrison and then graduated to an assistant manager in Rodgers. In early 1970s, he had become the manger in Newport, Arkansas. He operated many giant stores after financial management training. During this time there were many instances of internal promotion and self-value added was achieved by the associates as well as they could be loyal to Wal-Mart. External recruitment Wal-Mart not only deals with internal promotion but it also recruits associates and high level managers. According to the company history, the company has hired many business owners when it began. Wal-Mart recruited external persons who were good at certain fields in the business management. Human resource strategies are utilized in Wal-Mart successfully and increases productivity and working efficiency. However, employees’ retention becomes now an issue. Although Wal-Mart can be good in motivating the associates, the employees can leave if the management cannot understand them and how to keep them in the organization. Employees’ retention is a common topic spoken by the managers. Enterprises are easy to look for a good employee but persuading them to remain in the organization becomes a problem. Literature Review Employee retention is a systematic employer’seffort in creating and fostering an environment that encourages employees to remain in the organization by having policies and practices in place which cater for their diverse needs. Retaining the employees is important since when an employee is lost, the cost of getting another one is high since it includes, interviewing, hiring, training and so forth which tend to be costly. Due to these factors, the organization opts to retain its workforce for their advantage. According to Yang, Wang & Fu(2012), equation, leadership=team=customers=$$. This meant that if management takes care of its team, customers will be taken care of with the team and hence profit will be made. This equation lookssimple but implementation is hard. Many leaders find it hard to start and seeemployees’ retention as a hard thing to do. Leaders should share ideas with teams and do investments with the teams. Management should make the staff know that they are concentrating on them and provide skills to them in order to achieve self-value added. Back in 2009, 65% of companies froze their salary plan, 25% cut back on employer contributions and 18% reduced work hours for some or all the employees. This made the companies to start losing on the workers since they started leaving. Top talents were leaving and since the organization can’t sit back and watch the top talent leave(Yang, Wang & Fu, 2012), advised the companies to use differentiated compensation strategies which is a means of retention. This meant that, more enterprises organized that pay differentiation is a precise strategy to keep top talents efficiently. Although the time is difficult, the retaining of employees must be implemented by the leaders of the organization. Critical Analysis Whyemployee retention doesbecome popular in organizations? This is a question which brings about difficult answer. We will look at the employee retention reasons, measurements and types of employee retention. Since it is a business problem according to our topic, we will find ways on which a leader in the business can overcome the challenge of retaining the employees in an organization (Ellet, Ellis, Westbrook & Dews, 2007). Reasons for employee retention There are only to major things that make an organization to retain an employee, these are, cost and customer. According to Rift (2012), it costs the employer, when an employee leaves; it costs the employer possibly up to a third of the employees annual salary. These are separation and replacement cost. Separation costs include the interview, paper work cost and disbursement while on the other hand replacement cost consist of job advertisement, testing, recruiting and applicant selection. When an employee leaves, it means that all costs are gone and the organization is to invest in another person. When employees leave, it means less clients and diminished revenue. As a consequence, retention of employees is a good approach in saving cost and achieving economies of scale. Measurement of Employee Retention The measurement can be categorized into two that is monetary systems and non-monetary system. Monetary is mainly about bonus, compensation and internal promotions to satisfy employees. On the other hand in order to meet employees psychological needs, organizations provide training courses, communication and rewarding them. This means the company to spend a lot of money on the employees which in turn becomes hard for many companies to practice employees’ retention hence losing them.(Zhixing& Horn, 2011). Since Wal-Mart has been experiencing problems in employees’ retention, as a manager and a leader of the company the following measures should be taken in order to curb the problem of employee retention. At first, people may look at the steps as so obvious since it has only three steps which include: finding good people, keeping good people and growing good people. Finding Good Employees There are several strategies in finding good people and one of them is to obtain highly qualifiedpersonnel. The human resource management focuses on education, references and experience together with other background information. Nevertheless, they should also observe; interviewer always cares so much about the answer and so they should observe things like eye contact, gesture and so forth. Management should provide interview training courses which will teach some behavioral instruments and validation process in the interview. Maintaining Good Employees In keeping or marinating good people, leaders should maintain if the company could answer three questions well which was a good way to enhance the relationship with the employees. The questions include: do you care about me? What do I need to go ahead? And, where can I go to get justice? (Jinkerson& Mattox,2005). Connell & Philips (2003)states that treat the staff like the garden of flowers and trees which need special spiritual encouragement, job promotion and better treatment to water them so as to ensure timely transplant and also cultivate it to remove weeds. Staff should be treated well so as they should treat the company as their own. This will make the brand awareness to be enhanced more and more. Growing Good Employees Wal-Mart should base on the strong belief theta “let each colleague achieves the value of the individual and the colleagues are not only seen as tools to work but also as rich intellectual source of creation of our colleagues as remarkable indeed. Recommendation Employee retention strategies in Wal-Mart should be complete and its logistic should be outstanding in the retailing industry.It can achieve its mission – save money, live better and also maintain the leader in the industry. To begin with, management should define the term key talent clearly. Generally key talent is a person who is able to react within the shortest time possible to new circumstances, willingness to take risks and generate revenue. The term also means that a place of a person is difficult to replace with others, since he has high potentials and unique techniques or skills to handle problems in the department. In Wal-Mart, retention strategies should be used in the group of key talents effectively since only retaining key talent can save cost in the organization. In getting the good people, Wal-Mart should choose face to face in data collection in order to find the key talent. Since interview alone can’t provide enough evidence in finding the key talent, some tests should be done by candidates because the results can reflect people’s ability such as intelligence test. Last but not least, in growing good people, the advice is that promotion training causes and rotation courses should be mixed in order to achieve economies of scale. Associates can create potential profit to company if they receive skills and techniques as soon as possible. Furthermore the managers should have some tasks delegated to the potential persons so that they can have a feedback of creative ideas or use different cost leadership to finfish the tasks. (Carrell, 2007). Conclusion A good and a strong company have its philosophy and culture. Wal-Mart has its culture and philosophy which governs it. It has a clear vision which is price leadership to drive the world’s performance. Saving cost is the major goal in the organization. Management should monitor all the time the labor cost in terms of human resource management. Employee turnover should be the key point the resource department should focus. Retention strategies can stimulate associates creativity to make supernormal profit to the organization. The employee loyalty is high to build human capital at Wal-Mart. Getting a good company is easy but finding a good boss is hard. In similar terms, finding a good employee is easy but maintaining the good employee is hard. A top talent can make wealth for a company but difficult to be loyal to the company. In retaining key talent, three steps retentions strategies should guide people and let top talents become human capitalsin corporations. Wal-Mart should use these retentions strategies in showing that it is actually the leader in retailing industry globally. Because of the strategies of retention of employees, Wal-Mart can be more competitive more than the other retailers since it is the leading retailer in the world. Wal-Mart should device on the methods which is favorable in employees’ retention (Way & Lee, 2010). References Carrell, E. S.(2007). 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