Walmart’s human resource management is a critical success factor for the business. The company’s retail service offers goods in a way that is convenient and efficient for shoppers. In this service context, Walmart’s human resources directly determine business output. The company’s human resource management aims to maximize employee performance to correspondingly maximize capacity for sales. Human resource planning and job analysis and design are some of the major components of Walmart’s human resource management strategy. Through human resource planning, the firm develops an adequate workforce. Through effective job analysis and design, Walmart ensures that job descriptions and specifications relate with the HR needs of the organization. These components of human resource management influence how Walmart maintains its more than 2 million employees to provide adequate service to an expanding population of target consumers.
This article is part of a series on Walmart’s Human Resource Management:
- Walmart’s HRM: HR Planning, Job Analysis & Design
- Walmart’s HRM: Recruitment, Selection, Employee Retention
- Walmart’s HRM: Training, Performance Management
- Walmart’s HRM: Compensation, Career Development
Walmart’s Human Resource Planning
Forecasting. Walmart’s human resource management forecasts its workforce needs to ensure capacity to address changes in consumer demand. While other forecasting methods and techniques are also used, these three are the most notable at Walmart:
- Bottom-up approach
- Trend analysis
- Delphi method
The bottom-up approach analyzes human resource needs starting at the lowest level of the organizational structure. Walmart’s human resource management objective for this approach is to ensure that all levels of the organization have adequate employees based on HR needs at the frontline (e.g. hourly sales employees). The company starts forecasting HR needs of frontline employees. Walmart’s HR managers then proceed to analyze HR needs at the next higher level of the organizational structure. This human resource management approach ensures that all human resource needs at the lowest levels of Walmart’s organizational structure are supported through an adequate number of employees at the upper levels of the organizational structure. On the other hand, trend analysis is used in human resource management to predict future HR needs based on current needs. For example, Walmart analyzes the series of recent HR changes and uses this information to extrapolate future HR needs. A current trend that shows an increasing demand for human resources indicates a larger workforce requirement in the future. Walmart’s human resource management uses trend analysis to determine HR needs along with the company’s global expansion. In addition, the Delphi method forecasts future HR needs based on expert opinion. Walmart’s human resource management uses the Delphi method to ensure adequate human resources in establishing new brands, stores or other facilities. For example, HR experts can opine about the HR needs in opening a new Walmart store of a certain size. The company’s human resource management applies the Delphi method to estimate the number of employees needed in each type of job, such as supply chain jobs, inventory jobs, and sales jobs.
Surplus & Shortage of Employees. Walmart faces minimal concerns about the shortage of employees, especially sales personnel. The company receives a continuous influx of applicants for sales positions. However, Walmart experiences HR surplus when aggregate consumption declines. Such surplus is a challenge to human resource management because it translates to lower HR cost-effectiveness. Walmart uses the following approaches to determine HR needs and prevent surpluses or shortages:
- Sales performance analysis
- Turnover rate analysis
- Gap analysis
Walmart’s human resource management changes recruitment efforts based on changes in sales performance, which is an indicator of HR needs. Turnover is the rate at which Walmart’s human resources leave and/or are replaced. Turnover, together with the rate of recruitment, is an indicator of changes in the size of the company’s workforce. Walmart’s human resource management ensures that the recruitment rate is commensurate to the turnover rate. If the turnover rate is lower than the recruitment rate, Walmart’s workforce increases in size. An increase in workforce size usually happens when the company expands or opens new stores. In addition, Walmart’s human resource management uses gap analysis to determine the gap between HR needs and actual HR capacity. A significant gap means reduced HR cost-effectiveness or inadequacy in meeting organizational needs. Walmart uses gap analysis to decide on changing recruitment efforts. The company has a gap allowance or threshold. When the HR gap exceeds the threshold, Walmart’s human resource management increases or decreases recruitment efforts.
Balancing Supply and Demand. Walmart balances HR supply and demand by adjusting the compensation strategy and recruitment efforts. These adjustments are based on trends in internal human resource demand and the rate of applicant entry. Thus, the firm’s human resource management uses the following approaches to balance HR supply and demand:
- Changes in recruitment
- Changes in compensation
Changes in recruitment are Walmart’s main approach to balance HR supply and demand. The company’s human resource management changes the recruitment rate to address workforce requirements. Walmart can easily adjust its recruitment efforts without significantly impacting financial performance. In prioritizing changes in recruitment to balance HR supply and demand, Walmart’s human resource management minimizes changes in the firm’s compensation strategy. On the other hand, changes in compensation are also used to prevent an imbalance in HR supply and demand. Walmart’s compensation strategy is designed to minimize HR expenditure. This strategy agrees with the company’s cost leadership generic strategy. When HR supply becomes inadequate, Walmart’s last resort is to increase wages. Theoretically, higher wages attract more applicants. Walmart’s human resource management uses this second approach to effectively compete in the labor market.
Job Analysis and Design at Walmart
Organizational Design. Job analysis and design are successfully implemented in Walmart’s human resource management through the company’s organizational structure, which is a hierarchical functional structure. This organizational structure makes it easy to specify distinct characteristics for each job. The structure has clear lines of authority, lines of communication, and lines of command. Walmart has clear and distinct definitions for every job position and level of the structure. In effect, the firm’s human resource management minimizes uncertainty in job analysis and design.
Methods of Job Analysis. Walmart uses work-oriented job analysis and worker-oriented job analysis. The company applies work-oriented job analysis for sales positions. The purpose of this method is to provide information about tasks and outcomes. Walmart applies this method in the form of interviews and direct observations. The company’s human resource management uses direct observation of sales personnel’s activities. Interviews are conducted to analyze the jobs of team leaders and supervisors. This method enables Walmart’s human resource management to establish expectable job outcomes. On the other hand, the worker-oriented job analysis method provides information on interpersonal, cognitive and perceptual abilities. Walmart uses this method to analyze managerial jobs. A specific application of this method is through the Work Profiling System (WPS), which is designed for managerial positions. This method enables Walmart’s human resource management to pinpoint the necessary capabilities of managers, such as store managers and corporate managers.
Job descriptions. As the largest retailer in the world, Walmart has a wide variety of job descriptions. Nonetheless, the firm’s human resource management uses the following variables as criteria for job descriptions:
- Performance standards
- Job factors
- Job knowledge
For managerial positions, Walmart emphasizes analytical and problem solving knowledge, skills and abilities (KSAs). In contrast, for sales personnel, the company emphasizes job knowledge and interpersonal skills. Walmart’s human resource management considers interpersonal skills essential in sales personnel, who directly communicate with customers.
Job specification. The company has a wide array of job specifications. However, in general, there are essential attributes and desirable attributes included in all job descriptions. For sales positions, Walmart’s human resource management specifies essential attributes as follows:
- Communication skills
- Knowledge of the business
- Knowledge of products
These essential attributes are necessary in all sales employees throughout the organization. However, there are also some attributes classified as desirable. These attributes are preferred but not necessary for a sales employee to effectively fulfill his job. Walmart’s human resource management specifies desirable attributes as follows:
- Likeable and sociable qualities
- Multi-tasking skills
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