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After reading Wal-Mart Stores, Parts A and B, do you think the data make a convincing case for gender discrimination at Wal-Mart? Briefly describe what you think is the most important piece of information (i.e., data) that argues for or against (depending on your position) a gender discrimination conclusion.  Use 300 words.

For the exclusive use of L. Biggs, 2017. S w
904C06 STAFFING WAL-MART STORES, INC. (A)1 Ken Mark prepared this case under the supervision of Professor Alison Konrad solely to provide material for
class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial
situation. The authors may have disguised certain names and other identifying information to protect
confidentiality.
Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written
permission. This material is not covered under authorization from CanCopy or any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey
Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London,
Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail
Copyright © 2003, Ivey Management Services Version: (A) 2004-01-20 INTRODUCTION In 2003, an executive vice-president (EVP) at Wal-Mart Stores, Inc. (Wal-Mart),
wondered about Wal-Mart’s employment equity record. For the past few years,
Wal-Mart consistently appeared on Fortune’s list of the 100 best companies to
work for in the United States, most recently ranking 94 in 2002. Although the
EVP was aware of several lawsuits against the company alleging gender
discrimination, Wal-Mart’s published practices indicated that the organization was
committed to fair practices. The EVP wondered what employment-related
information should be requested from the People Division.
WAL-MART STORES, INC. In 2002, Wal-Mart was the world’s largest employer and the world’s largest
company. With net income of US$8 billion on sales of US$247 billion, Wal-Mart
was the subject of countless newspaper features and journal articles praising its
dominance and success. For a look at Wal-Mart’s selected financial information,
see Exhibit 1. One of the many reasons for this success was that, unlike its retail
counterparts in the grocery industry, Wal-Mart remained a non-unionized
1 This case has been written on the basis of published sources only. Consequently, the interpretation and
perspectives presented in this case are not necessarily those of Wal-Mart Stores, Inc. or any of its
employees. This document is authorized for use only by Lashawnda Biggs in 2017. For the exclusive use of L. Biggs, 2017.
Page 2 9B04C006 company, working incessantly to fend off organizing attempts in the United States
and around the world.
Wal-Mart’s Workforce Available data showed that by 2001, Wal-Mart employed 930,000 people in its
domestic U.S. stores, and this employment figure was up 50 per cent since 1996.
But during the same period, the percentage of women employed decreased from 67
per cent to 64 per cent. The number and composition of people at Wal-Mart was of
keen interest to company officials because of the sheer size of their workforce and
how employment costs affected the company’s financials. Analysts who examined
the company’s stores and financial performance estimated that payroll expenses
accounted for 50 per cent of Wal-Mart’s total operating, selling, general and
administrative expenses.
At Wal-Mart, there were retail store employees (including hourly and salaried
workforce), the store management, and high-level managers such as district
managers and regional vice-presidents (see Exhibit 2). In 2001, management
employees earned about $50,000 on average while hourly employees earned
$18,000.
Operations There were four types of domestic retail stores at Wal-Mart in 2002: discount
stores, supercentres, SAM’s Club, and Neighborhood Markets. A quick overview
of key 2001 store statistics is provided in Exhibit 3.
There were five levels of operations at Wal-Mart:
Level Description Corporate
Division Total Wal-Mart including domestic and international
Division One stores (discount stores, supercentres, Neighborhood
Markets) and SAM’s Club make up Wal-Mart’s two key domestic
divisions
There were 41 regions in the United States
Each region contained five to six Districts on average
Each District contained 10 to 15 stores Region
District
Store Corporate-wide human resource policy was the responsibility of Wal-Mart’s
People Division. Primary and secondary people policy committees met with
representatives from each of the company’s operating divisions and representatives
from home office in Bentonville, Arkansas, to formulate policies. This process
was overseen by the EVP of the people division. The EVP described his duties as This document is authorized for use only by Lashawnda Biggs in 2017. For the exclusive use of L. Biggs, 2017.
Page 3 9B04C006 “overall responsibility for getting, keeping and developing Wal-Mart talent
worldwide.” He reported to Wal-Mart’s president and chief executive officer
(CEO) and sat on the corporate executive committee. The company’s senior
human resource executives all had “dotted-line” reporting relationships to the EVP
of the People Division. For example, the senior vice-president of People for the
SAM’s Club division would report both to the president of that division and to the
EVP of the People Division.
Human Resources Reporting Relationships for Domestic Divisions Wal-Mart had similar human resources (HR) policies across its domestic divisions,
i.e., Division One and SAM’s Club.
The HR function was organized
hierarchically: in Division One, the over 2,600 stores were organized into five or
six divisional areas, with five or six regions within each area, and 80 to 85 stores
within each region. Each store had an hourly employee, the personnel manager,
who co-ordinated hourly recruiting and performed payroll functions. Thirty-five
regional personnel managers (RPM) based in Bentonville oversaw these personnel
managers. These RPMs reported to one of three People Directors in the home
office; in turn, these People Directors reported to the vice-president of People at
Division One.
The company had a computerized information system that made personnel policies
and guidelines available to its staff. In addition to relying on information
generated by reports at store, district, regional and divisional levels, store visits by
district managers and RMP were frequent; district managers visited stores once
every two weeks and RPMs visited stores weekly. Reports from each visit were
immediately submitted to the regional vice-president.
Organizational Culture Wal-Mart prided itself on its strong culture, with numerous references to Sam
Walton’s personal biography, the history of the company and how Walton’s
personal values became core beliefs for the company. Wal-Mart public
information indicated that its customer-focused culture stemmed from the
company’s pursuit of everyday low prices (EDLP) and “genuine customer
service.” Founder Sam Walton had three basic beliefs on which the company was
built: Respect for the individual; Service to Our Customers; and Strive for
Excellence. In addition, there were two key “rules” at Wal-Mart that supported
the three basic beliefs: the sundown rule (attending to requests the same day they
were received); and the Ten-foot Rule (offering greetings whenever one was
within 10 feet of a customer). In his autobiography, Walton outlined his Rules For
Building A Business (see Exhibit 4) This document is authorized for use only by Lashawnda Biggs in 2017. For the exclusive use of L. Biggs, 2017.
Page 4 9B04C006 New employees learned the “Wal-Mart Way” by viewing videos about the
company’s history, completing computer-based learning modules about elements
of the culture and reading the associate handbook. At each store, a daily meeting,
held at shift changes, allowed managers to discuss company culture and encourage
employees to perform the Wal-Mart cheer.
The company indicated in its promotional literature that it received letters from
customers praising individual associates for exceptional service, citing examples of
employees who had gone above and beyond the call of duty. Walton had once
asked associates to practice what he called “aggressive hospitality” — striving to
be the most friendly, giving better service over what customers expected, and
generally exceeding customers’ expectations. This hospitality also extended to the
community in which Wal-Mart operated. The company frequently provided
charitable assistance, raised funds for organizations and provided scholarships to
students.
Ongoing training for store managers and home office employees consisted of
weekly Saturday morning meetings (the first meeting of the month was devoted to
a culture topic). In addition, instruction and orientation on the Wal-Mart culture
was given to managers at all levels of the company.
Rewards and Promotions Annual pay increases were tied to performance evaluation ratings, with a
percentage increase guideline specified by the home office. Typically, an annual
merit increase of four per cent or five per cent was the maximum given, although
this amount could not be granted within 90 days of an annual performance increase
or raise due to promotion.
Before 1998, higher-level jobs were not posted. In 2002, these and any other
openings were typically posted at stores and were usually available online, but
there were exceptions. Store managers could circumvent this process and rely on
filling positions with lateral moves. In addition, store managers had the authority
to waive minimum requirements regarding time in current position in order to
promote employees.
When employees were promoted to higher-level jobs, there was an implicit
expectation that they would be moved to other stores, districts or regions, as much
as business need required. For example, a district manager in Northern California
asked employees applying for the management training program to certify in
writing that they were willing to transfer “to any location within the Wal-Mart
trading area” to receive training and were willing to relocate post-training. A
former regional vice-president required co-managers to be open to relocate This document is authorized for use only by Lashawnda Biggs in 2017. For the exclusive use of L. Biggs, 2017.
Page 5 9B04C006 “whenever and wherever we need them.” See Exhibit 5 for relocation statistics by
job type.
In the late 1980s, Wal-Mart implemented and formalized a policy of creating
resident assistant manager positions for individuals who were eligible to be
assistant managers but were not able to relocate. These resident assistant managers
could move into co-manager positions without relocating. One company official
stated that the program had been phased out by 2002. Another official stated that
the program still existed but only on an “as requested” basis.
In his 1992 autobiography, Sam Walton discussed the changes he had made to his
original management philosophy of requiring managers to be extremely flexible:
Maybe that was necessary back in the old days (that one had to be
ready to relocate on a moment’s notice to move into management),
and maybe it was more rigid than it needed to be. Now, though, it’s
not really appropriate anymore for several reasons. First, as the
company grows bigger, we need to find more ways to stay in touch
with the communities where we operate, and one of the best ways
to do that is by hiring locally, developing mangers locally, and
letting them have a career in their home community — if they
perform. Second, the old way really put good, smart women at a
disadvantage in our company because, at the time, they weren’t as
free to pick up and move as many men were. Now I’ve seen the
light on the opportunities we missed out on with women.2
ADDRESSING DISPARITIES Wal-Mart established the goal that the percentage of women employed should
reflect the community — 50 per cent of the workforce. This was a well-known
target throughout the organization, and all managers insisted they were aware of it
and were striving to meet it. In fact, numerous company memos since 1999 had
raised the issue of employment equity and urged managers to address inequalities
if they existed.
The executive vice-president wanted to know what types of information should be
requested to evaluate the state of Wal-Mart’s employment practices. Simply
asking for “everything” would be illogical as there were literally thousands of
documents that could be retrieved, requiring months, if not years, to sift through. 2 Sam Walton, “Sam Walton with John Huey” Made in America, Bantam Books, New York, 1992. This document is authorized for use only by Lashawnda Biggs in 2017. For the exclusive use of L. Biggs, 2017.
Page 6 9B04C006 Exhibit 1
WAL-MART HISTORICAL FINANCIALS
(years ending January 31)
(US$ millions, except per share data)
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Selected Financial Information
Net revenues
Cost of sales
Operating, selling and general
and administrative expenses
Net income
Shareholders' equity
Return on shareholders' equity
Total number of associates (000)
Shares outstanding (millions)
Book value per share 67,977
53,444 83,398
65,586 94,765
74,505 106,152
83,510 119,248
93,438 139,025
108,725 166,628
129,664 193,116
150,255 219,671
171,562 246,525
191,838 10,333 12,858
2,333
2,681
10,753 12,726
21.7% 21.1%
528
622
2,299
2,298
4.68
5.54 15,021
2,740
14,756
18.6%
675
2,294
6.43 16,946
3,056
17,143
17.8%
728
2,266
7.57 19,358
3,526
18,503
19.1%
825
2,240
8.26 22,363
4,430
21,112
21.0%
910
4,450
4.74 27,040
5,377
25,834
20.8%
1,140
4,454
5.80 31,550
6,295
31,343
20.1%
1,244
4,470
7.01 36,173
6,671
35,102
19.0%
1,383
4,451
7.89 41,043
8,039
39,337
20.4%
1,400
4,386
8.97 Source: Company files. This document is authorized for use only by Lashawnda Biggs in 2017. For the exclusive use of L. Biggs, 2017.
Page 7 9B04C006 Exhibit 2
JOB HIERARCHY AT WAL-MART This document is authorized for use only by Lashawnda Biggs in 2017. For the exclusive use of L. Biggs, 2017.
Page 8 9B04C006 Exhibit 3
2001 STORE STATISTICS Store Type Division Discount Stores Division
One
Division
One
SAM’s
Club
Division
One Supercenters
SAM’s Club
Neighborhood
Markets Average
Number of
Employees
per Store
(Estimate) Number of
Domestic
Stores Average
Size (in
Square
Feet) Annual
Sales per
Store
(US$
Millions) 1,736 125,000 39 15.0 207 85 888 200,000 75 15.7 540 85 475 135,000 60 14.5 172 85 19 30,000 14 16.0 81 85 Operations
Expense
(% of store
sales) % of
Workforce
Full-time Source: Company files. Exhibit 4
SAM’S RULES FOR BUILDING A BUSINESS
Rule 1
Commit to your business. Believe in it more than anybody else. I think I overcame every single one of my
personal shortcomings by the sheer passion I brought to my work. I don't know if you're born with this kind
of passion or if you can learn it. But I do know you need it. If you love your work, you'll be out there every
day trying to do it the best you possibly can, and pretty soon everybody around will catch the passion from
you — like a fever. Rule 2
Share your profits with all your Associates, and treat them as partners. In turn, they will treat you as a
partner, and together you will all perform beyond your wildest expectations. Remain a corporation and
retain control if you like, but behave as a servant leader in a partnership. Encourage your Associates to
hold a stake in the company. Offer discounted stock, and grant them stock for their retirement. It's the
single best thing we ever did.
Rule 3
Motivate your partners. Money and ownership alone aren't enough. Constantly, day-by-day, think of new
and more interesting ways to motivate and challenge your partners. Set high goals, encourage
competition, and then keep score. Make bets with outrageous payoffs. If things get stale, cross-pollinate;
have managers switch jobs with one another to stay challenged. Keep everybody guessing as to what your
next trick is going to be. Don't become too predictable. This document is authorized for use only by Lashawnda Biggs in 2017. For the exclusive use of L. Biggs, 2017.
Page 9 9B04C006 Exhibit 4 (continued) Rule 4
Communicate everything you possibly can to your partners. The more they know, the more they'll
understand. The more they understand, the more they'll care. Once they care, there's no stopping them. If
you don't trust your Associates to know what's going on, they'll know you don't really consider them
partners. Information is power, and the gain you get from empowering your Associates more than offsets
the risk of informing your competitors.
Rule 5
Appreciate everything your Associates do for the business. A paycheck and a stock option will buy one
kind of loyalty. But all of us like to be told how much somebody appreciates what we do for them. We like
to hear it often, and especially when we have done something we're really proud of. Nothing else can quite
substitute for a few well-chosen, well-timed, sincere words of praise. They're absolutely free — and worth a
fortune. Rule 6
Celebrate your successes. Find some humor in your failures. Don't take yourself so seriously. Loosen up,
and everybody around you will loosen up. Have fun. Show enthusiasm — always. When all else fails, put
on a costume and sing a silly song. Then make everybody else sing with you. Don't do a hula on Wall
Street. It's been done. Think up your own stunt. All of this is more important, and more fun, than you think,
and it really fools the competition. "Why should we take those cornballs at Wal-Mart seriously?" Rule 7
Listen to everyone in your company. And figure out ways to get them talking. The folks on the front lines —
the ones who actually talk to the customer — are the only ones who really know what's going on out there.
You'd better find out what they know. This really is what total quality is all about. To push responsibility
down in your organization, and to force good ideas to bubble up within it, you must listen to what your
Associates are trying to tell you. Rule 8
Exceed your customers' expectations. If you do, they'll come back over and over. Give them what they
want — and a little more. Let them know you appreciate them. Make good on all your mistakes, and don't
make excuses — apologize. Stand behind everything you do. The two most important words I ever wrote
were on that first Wal-Mart sign, "Satisfaction Guaranteed." They're still up there, and they have made all
the difference. This document is authorized for use only by Lashawnda Biggs in 2017. For the exclusive use of L. Biggs, 2017.
Page 10 9B04C006 Exhibit 4 (continued) Rule 9
Control your expenses better than your competition. This is where you can always find the competitive
advantage. For 25 years running — long before Wal-Mart was known as the nation's largest retailer — we
ranked No. 1 in our industry for the lowest ratio of expenses to sales. You can make a lot of different
mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of
business if you're too inefficient. Rule 10
Swim upstream. Go the other way. Ignore the conventional wisdom. If everybody else is doing it one way,
there's a good chance you can find your niche by going in exactly the opposite direction. But be prepared
for a lot of folks to wave you down and tell you you're headed the wrong way. I guess in all my years, what
I heard more often than anything was: a town of less than 50,000 population cannot support a discount
store for very long.
Source: https://allaplusessays.com/order, accessed June 5, 2003. Exhibit 5
RELOCATION STATISTICS BY JOB TYPE
Percent of Promotions Where Employee
Changes Store, District, or Region
1996 and later
Target Job
Store Manager
Co-Manager
Assistant Manager
Management Trainee
Area Manager, SAM's
Support Manager Changed
Store
91.2%
81.3
63.3
62.2
17.4
4.8 Changed
District
69.4%
57.0
40.2
32.5
5.4
7.6 Changed
Region
35.6%
32.6
22.0
17.0
2.8
6.0 Average Number of Changes in Store, District and Region
After Entering Store Management Jobs
Changed Changed Changed
Target Job
Store
District
Region
Store Manager
3.6
2.8
1.7
Co-Manager
3.0
2.2
1.3
Assistant Manager
2.8
2.0
1.2
Management Trainee
3.0
2.0
1.2
Area Manager, SAM's
1.2
0.6
0.5
Support Manager
0.8
0.6
0.4
Source: Richard Drogin, “Statistical Analysis of Gender Patterns in Wal-Mart Workforce,” Drogi, Kakigi & Associates,
February 2003. This document is authorized for use only by Lashawnda Biggs in 2017.

 


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