Walmart: Operations Management – Problems, Solutions, Advantages, Disadvantages, And Recommendations

Operation management in the Wal-Mart is given higher importance still certain issues arise due to the way they manages their different operations. Some of them are:

• Continuous training: Since the company is making changes in fields of operation hence their employees must be ready for these changes. Providing training to such a large workforce is a problem for human resource management team (Kramer & Pfitzer, 2016).
• Business model Complexity: The amount of flexibility that company has provided in its operations management has resulted in making the business model highly complex. The changes are very fast hence problems become much bigger.
• Higher turnover: Due to reasons such as low wages given to the employees as compared to other companies in the industry, there is very high employee turnover. Due to this company has to invest a lot of time in recruiting new employees and training them.
• Data security: Wal-Mart is using information Technology in various operations. With such a large amount of data being gathered from different sources, the problems related to data security increases especially when large amount of cyber-attacks are going on.
• Quality concerns: Most of the products that are manufactured by Wal-Mart are of lower quality. The three tier quality can reduce their chances of achieving higher employee satisfaction.

Wal-Mart is facing issues in retaining their staffs. High employee turnover has led to many kinds of challenges for the company. Due to this they have to spend high amount of money in their training and development programs. Some of the alternatives that can be chosen by the Wal-Mart are as follows:

• Rewards and Benefits: In a state when the company cannot increase their pay scale so as to reduce the cost of operations, it is essential that company gives rewards and incentives to the employees. This must be based on the performance of the employees (Roberts & Berg, 2012). The criteria for earning the rewards must be on the lower side so that most of employees could earn it.
• Reacting towards other demands: Apart from the financial needs of the employees, there are certain other needs of the employees. It is possible to retain the employees by fulfilling their other demands. This must be done by taking the feedbacks from the employees (Wakamatsu & Wakamatsu, 2017). Some of these needs are higher pay on the occasions such as Christmas or Sundays, Flexibility in working hours and shifts in which employees works.

Both the solution has different kinds of advantages and disadvantages attached with it. Some of these are mentioned below.

Rewards and benefits: They advantages and disadvantages attached with each of the solution are as follows:

Advantages

• Rewards and Benefits do increases the spending of the company to a much larger extent hence will not have impact on the cost leadership strategy of the Wal-Mart (Pearson, 2017).
• Financial rewards are excellent motivators which is very much required in the modern day business. It also has a very positive impact on the employee relations.

Disadvantage

• If the employee does receive bonus or rewards for the longer period of time then it may act as a demotivation and the problem gets worse when one employee receives the benefits while other fails due to any reason (Bonanno & Goetz, 2012).
• Performance evaluation is not easy in the companies like Wal-Mart which is having large workforce. This must be done appropriately so as to reduce the chances of anxiety in the minds of employees.

Reacting towards other demands: For this alternative the advantages and disadvantages are as follows:

Advantages

• It will not affect the company’s strategy of giving products and services at lower cost.
• Employees feel that company cares for them and for their different types of needs.

Disadvantage

• It is not a motivator for longer period of time. This is because non-financial rewards affect the morale of the employees for limited period of time (Shi, Zhang & Ru, 2013).
• It creates situation where managing employee’s strength could be a problem for the company.

In the two above mentioned solutions, the most appropriate solution is giving financial rewards and bonuses based on the performance of the employees. This is more appropriate as it is capable of motivating the employees for longer period of time when compared with fulfilling non-financial needs.

For retaining employees for longer period of time, it is crucial that company increases their salaries and reduces the expenses of the company in other areas of operations. Performance management system must be supported by the use of technology.

References

Bonanno, A., & Goetz, S. J. (2012). Walmart and local economic development: A survey. Economic Development Quarterly, 26(4), 285-297.

Kramer, M. R., & Pfitzer, M. W. (2016). The ecosystem of shared value. Harvard business review, 94(10), 80-89.

Pearson, B. (2017) Wal-Mart’s Employment Deployment And 6 Ways To Curb Retail Turnover. Retrieved from: https://www.forbes.com/sites/bryanpearson/2017/01/24/wal-marts-employment-deployment-and-6-ways-to-curb-retail-turnover/#6b2b5e271008

Roberts, B., & Berg, N. (2012). Walmart: Key insights and practical lessons from the world’s largest retailer. Kogan Page Publishers.

Shi, R., Zhang, J., & Ru, J. (2013). Impacts of power structure on supply chains with uncertain demand. Production and operations Management, 22(5), 1232-1249.

Wakamatsu, M., & Wakamatsu, H. (2017). The certification of small-scale fisheries. Marine Policy, 77, 97-103.