Bashing Wal-Mart has been the sport du jour for quite awhile, and, although I can’t stand the company for may reasons and won’t shop there, I haven’t bothered to join the fray, since it was all being said so well by others. However, since I preach and push for really open, honest management communications I just couldn’t let the most recent example of callous-demotivation-given-positive-spin go by without commenting.

First, the demotivation. How would you like to work your tail off for 10, 15 or more years only to find that your next promotion or lateral move would require a cut in pay?

That, in a nutshell, is the effect of Wal-Mart’s loudly proclaimed pay increases with caps. And if you happen to be at the top of your category you won’t have to worry about a raise, there won’t be one—ever again—in that position. But, gee, you might have a shot at a $400 bonus at year-end. (Being the cynic that I am, I wouldn’t hold my breath.)

Bless the Associated Press for obtaining an internal Wal-Mart memo written by then executive VP of benefits Susan Chambers, who now heads personnel (watch out Wal-Mart workers), that said, “Given the impact of tenure on wages and benefits, the cost of an Associate with 7 years of tenure is almost 55 percent more than the cost of an Associate with 1 year of tenure, yet there is no difference in his or her productivity.”

Wow! That is the absolutely first time I have ever heard it claimed that a new hire’s productivity equaled that of someone with years of experience who knows all the ins and outs of the job. Yes, there are ins and outs to every job and I’d like to see a new hire who can handle inventory control as well as someone with experience. But then I’m sure that Susan knows far more than Frederick Reichheld about the true value of workers and loyalty (AKA, retention).

Now for spin. Try and wrap your mind around this: Wal-Mart claims that there is absolutely no link between the memo quoted above and the pay caps. If you can swallow that one, the rest should be easy. Wal-Mart claims that their new policy brings them in with other big retailers. Well, I’m no expert, but I know that Costco and Lowe’s don’t work that way, but, then again, maybe they aren’t considered “big.”

Finally, and this is purely my own thought, you can rest assured that this policy will have no effect on the company’s executives (I’m sure Susan’s pay isn’t capped) and that Wal-Mart will continue getting help from Congress if it needs to upgrade the private road leading to it’s headquarters again.

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This entry was posted on Wednesday, August 16th, 2006 at 1:34 pm and is filed under Business info, Communication, Compensation, Culture, Motivation, Retention. You can follow any responses to this entry through the RSS 2.0 feed.
Tags: Wal-Mart
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