Basically, there are mixed reactions to Wal-Mart’s policies on low prices which form the basis of all decisions made on the store. Though the strategy has influenced the retailing industry in the US and globally, it has impacted negatively on the employees. At Wal-Mart, payroll expenses are constantly being scrutinized, appraised and if need be, reviewed depending on the company’s business foundation model. As a result, many employees feel shortchanged for their hard work at the store.
‘Off the clock-work’
Ethical issues such as off the clock-work have not only affected Wal-Mart but also the entire industry. Almost all companies that utilize time clocks always misuse the system. Wal-Mart is not an exception since employees constantly complain of the management’s disregard to the clock system. Employees are frequently asked to work long hours without pay after they have clocked out. Workers are restricted to complete their daily tasks without which, they face severe punishment or even dismissal. To ensure that tasks are accomplished employees often work overtime after clocking out (DesJardins, 2005). Besides, the company strategy to minimize costs forces managers to strictly oversee in time clocking out to avoid overtime wages in the payrolls.
According to Stanwick and Stanwick, (2009), the workers are sometimes locked in the stores without clocking-in especially overnight. Thus, Wal-Mart is accused of not being able to pay such employees despite applying stringent rules like not leaving the workplace unless there is a fire outbreak. Wal-Mart management is also accused of removing overtime from the worker’s payroll in order to hit below the target set by top management. Hence, employees must work harder to ensure that tasks are cleared by the end of normal working hours.
Wal-Mart also cut costs in the area of health benefits by using measures that clump on the worker’s qualifications to be eligible for the health-benefits. In fact, Wal-Mart forces the workers to wait for over six months to be eligible for the health plan. The retirees are not entitled to the health benefits yet their remunerations were subject to health benefit program deductions. By pegging the deductibles on the amount of premium paid, Wal-Mart blocks many employees from the health benefits while some accept minimum coverage. Nonetheless, ten percent is allotted to all goods bought by workers of the company. Wal-mart also offers health benefits to the spouses and the family members of their employees though greater costs have to be incurred. The health benefits program is extended to part time workers Act action that is not practiced in the industry.
Wal-Mart’s global dominance is being hampered by the gender discrimination in its operations with women accounting for just 33%. It is now apparent that gender concerns were not given priority during its inception. A negative image about Wal-Mart emerge due to believes that women should not have careers in this corporation. Women are further discriminated against payment because there pay rates are averagely less than that of men. Conversely, the managerial positions are conserved for men especially departmental heads and senior management. In Wal-Mart, men were given priority in promotions before women were considered, and the latter was not endorsed on the grounds that they had less family responsibilities (Ferrell, Fraedrich & Ferrell, 2009). Women were at times denied job promotions on religious and cultural grounds.
Based on its old tradition, Wal-Mart has disallowed the formation of trade unions. It is to there belief the incentives they provide are enough such that there are no reasons for the workers to involve in trade unions. To date, Wal-Mart has used a number of methods to prevent its workers from participating in the formation of trade unions. Union disbandment and dismissal of the union members without pay are common practices. Wal-Mart also uses video campaigns emphasizing only the union drawbacks to discourage workers from forming unions. Wal-Mart is fully aware that unions will start agitating for pay rises and other unethical conducts that have been practiced by the management over the years (Shaw, 2007). The company would close the stores whose workers insists on forming unions citing financial loses and other managerial reasons as the cause of the closure. Although government pressure made Wal-Mart accept unions in its Chinese stores, it still believes that a direct connection between the management and the workers offers the best solution to all the problems that exist in the company.
Wal-Mart still finds itself on the wrong side of the law when it became apparent that the company uses illegal workers to clean up its stores. With its cost minimization policy, Wal-Mart might easily employ illegal immigrants to work in its stores at a lesser cost compared to the employment of legal workers who apart from receiving the compensation will also enjoy other benefits. In essence, Wal-Mart was found using illegal workers to clear its stores an offense that was argued to have been approved by the government (Stanwick & Stanwick, 2009).
Although some ethical acts were committed by Wal-Mart, the worst of all was the abuse of child labor. It was found that in Wal-Mart, children of less than eighteen years were working beyond mid-night, more than normal eight hours and during school days. In addition, the violation of state as well as the labor laws appertaining to time offs such as lunch time and other meal time was a daily occurrence in Wal-Mart. The gross violation of child and other labor laws resulted in the closure of over one hundred Wal-Mart stores worldwide.
Ethical issues that Wal-Mart is dealing with affect other companies in the retailing industry. For instance, in Wal-Mart the traditional cost cutting measures have increased the intense with which the violations of these ethical issues have occurred. Furthermore ethical issues such as child labor, gender discrimination, workers unions, and most importantly time clocking are unethical practices found in almost all American industries.
Management and women at Wal-Mart
Wal-Mart accuses women of not being interested in managerial positions as evidenced by few applications on any job advertisement. This might be true to some extent given that few women do actually apply for such kinds of jobs even in other companies. Contrary, it might also be an excuse to deny women a chance to occupy these positions. Women are faced with various obstacles that deter them from accessing information besides the qualifications required to get such jobs. Further, the cultural practices at Wal-Mart that devalue women equally hindered their chances of making applications. If the management knew that few women applied for the jobs, then they were supposed to be given first priority if not affirmative action.
Criticism of the health-care policy
Although health care policy is an area that raised many questions in Wal-Mart, to my view this was a non-mandatory incentive that Wal-Mart gave to its employees and therefore should not be taken as unethical issue. Health care programs are state policies and there are institutions that are put by the state to ensure that employees are covered. The cost of covering the employees rests on the employers as well as the employees themselves. It is therefore upon the individual employee to determine the type of cover that best suits the needs. Thus, the only unethical issue is the way the company implements the program.
Unionization of the stores
Workers unions are very critical in running the daily affairs of any company and Wal-Mart is not exceptional. In fact these unions serve as the bridge between the organization’s top management and the workers in the lower cadre. Moreover, the unions voice out any worker’s gross violations by the management. Any organization that is seen to be working against the formation and functioning of the workers union is considered to be oppressive to its employees.
It can be concluded that Wal-Mart’s application of its policies has left a thin line between ethical and unethical conduct when considering the correlation between cost cutting measures and the general handling of the employees.
DesJardins, J., R. (2005). An Introduction to Business Ethics. New York, NY: McGraw-Hill.
Ferrell, O., C., Fraedrich, J. & Ferrell, L. (2009). Business Ethics: Ethical Decision Making and Cases. Auckland, New Zealand: Cengage Learning.
Shaw, W., H. (2007). Business Ethics. Auckland, New Zealand: Cengage Learning
Stanwick, P., A. & Stanwick, S., D. (2009). Understanding business ethics. Upper Saddle River, NJ: Prentice Hall.