I gave a keynote address last Friday at the University of Connecticut Law School's Wal-Mart Symposium where I began by asserting that “Wal-Mart is like the genius kid who lives in your neighborhood who heads into the woods and starts killing frogs.”
Wal-Mart has been on a bit of a PR roll lately.
From lowering the prices of generic drugs to cutting prices on toys, they have enacted policies of late that are by and large beneficial. I often tell audiences in talks that Wal-Mart is not a store, it is an I.T. company, and it is their logistical models, not management expertise, that are primarily responsible for the startling efficiencies that drive the stores.
However there is often a disconnect between the propellerhead nerds in Bentonville and the folks that actually work on the floor in the stores. The subtext of my film “Why Wal-Mart Works” was that it was the common folk at Wal-Mart that make it work, not management or logistics. Last year on CNN's Lou Dobbs broadcast, I stated Wal-Mart's management sometimes acts “like Inspector Clouseau.” Recently, they proved me right.
Last August, Wal-Mart announced that they would “cap” wages for certain positions, such as a cashier, at a certain level that could not be exceeded, no matter how long you had worked there. So, for instance if you had been a cashier for 20 years and through annual raises worked your way to making $16/hour, you could be capped at $15/hour forever, with no hope again for a raise. Clearly this is a form of accelerated attrition, in which Wal-Mart hopes to replace those who have worked their way up to $15 with new workers willing to work at a starting wage of $8-10/hour.
Wal-Mart will tell you one reason for this new policy is to “encourage” long-term workers to move into management positions. This is utterly disingenuous. Let's move you 50 to 100 miles away from home, have you work twice as hard, for 50 cents more per hour. Thank you sir, may I have another? New hires at Wal-Mart are aware going in of these wage caps, so they are fully informed, but the long-term loyal workers have had the rug pulled out from under them by having these caps foisted on them.
Bentonville does not get the fact that a lot of people are perfectly happy cashiering or stocking at Wal-Mart, and that is all they want to do. I believe most people in life are simply trying to make it through the day, do their jobs, think about their kids, and go home. The logistics/accounting magicians at Wal-Mart need to understand that a person is not a forklift, a palette, or a shelving unit. Wal-Mart's long-term employees are their first line of defense in giving the 5000 customers who enter a superstore a good shopping experience, i.e. a more Target/Costco type experience. People are additive to Wal-Mart (and their share price), especially the long-term employees. You can't enter loyalty and experience into a spreadsheet.
I became aware of this issue when a Wal-Mart employee from my film got wage-capped and called me. I frequently get calls from Wal-Mart employees relating their experiences, and have gotten more than a few about this issue, as well as Wal-Mart's sneaky scheduling and their childish directive that all employees call an 800 number to report in sick.
200 Wal-Mart employees in Florida recently staged a walkout. This has never happened before, and if they'll do it in Florida, you can be sure they'll do it in Michigan and California. 3 weeks ago I resigned from the steering committee of Working Families For Wal-Mart over the wage cap issue. Don't get me wrong. I still feel Wal-Mart is a great company and the largest non-governmental resource to the poor in this country. Millions of people need to shop at Wal-Mart.
I just wish Wal-Mart would value their long-term employees as much as they do their shoppers.
