Imagine, if you will, that you are Coleman H. Peterson, the former executive vice president of people for Wal-Mart Stores, Inc. You retired from that position in 2004, but have just received a confidential call from the CEO of Wal-Mart requesting that you consult directly to him, and your replacement, regarding Wal-Mart’s plans to expand into China (no – don’t run out to buy stock; this is an imaginary scenario for purposes of this case, because Wal-Mart is already IN China, with at least 60 stores with 28,000 employees, and it plans major expansion in the next five years to add 150,000 more!) The plan is to develop an international U.S.-China management team to work together to open five stores in major cities in mainland China in the next year!
Wal-Mart’s Unique Strengths in Getting, Keeping, and Growing Good People
Wal-Mart is one of the most popular retail giants in the global retail industry. The company has been dominating the industry since the 70s when it started expanding into the different market segments and geographical regions in the United States. Now, the company has been able to establish itself through its flagship chain of stores as well as its subsidiaries like ASDA in the international market as well.
The strategies which have been employed by the Wal-Mart Company for recruiting, expanding as well as retaining its human resource about the following.
Wal-Mart focuses on getting feedback from its employees on a regular periodic basis. The feedback is collected in terms of their work experience at Wal-Mart and the implementation of the beliefs and values of Wal-Mart amongst its employees.
The company provides training to its employees on working with people and increasing the leadership skills of its managers. Wal-Mart provides its employees with state-of-the-art training resources. A proper career development and counseling division is made which enables them to guide their employees about their prospective career paths and how they can better achieve their career objectives (Peterson, 2005). Wal-Mart provides training to its employees through classroom-based sessions; computer-based learning, education through distance learning as well as corporate intranet sites. Additionally, mentor programs, satellite broadcasts as well as skill assessments are also performed for the employees.
To retain its employees Wal-Mart uses its strategic financial position in the market by providing them with Wal-Mart stock at discounted rates as well as performance-based bonuses and additional rewards in the form of monetary as well as fringe benefits.
In recent years the company has been actively perusing diversity in its workforce as well. The company is based on serving its customers, as well as the community it operates in. as a result any demographic and environmental change that takes place in its market and region of operation is reflected in its workforce competition. In recent years, the number of females hired by the company has increased, while around 15 percent of its employees are over the age of 55. Similarly, the company is also known for being one of the largest employers for Hispanic as well as African American employees.
Diversity challenges and opportunities related to entering the China market and to developing the U.S.-China management team (please also consider the first note below regarding the many ways to view diversity).
China is one of the prime markets available to retailers operating on a global scale in the international market, however major retailers like Marks & Spencer as well as Wal-Mart have to face major problems to operate in the local Chinese market “A massive country, China lacks reliable transportation infrastructure in many areas, making it hard to move goods. Fresh produce is difficult to transport without refrigerated trucks. China’s size means a diversity of local tastes prevent retailers from stocking every store with identical products” (Fong et al., 2006)
In most cases, the diversity issues in human resource management about racial, ethnic as well as gender-based issues. While Wal-Mart does have ethnicity and gender-based issue in terms of its diversified workforce in the United States of America and Europe, these will not be the factors that will affect Wal-Mart’s operations in China if the company is to start operating in the region. There exist other problems and challenges that are to be faced by Wal-Mart which pertain to the communication issue between the international management board and the management that would be present in China as well as the communication between the management and the workforce. Moreover, the region is quite different from Europe, the Americas as well as North America in terms of its traditions and the work practices which need to be adopted by Wal-Mart while trying to retain its standard of operation on an international level.
The work practices in China are based on careful deliberation at the development and planning level with quick action and implementation while the traditional Wal-Mart decision making and management approach are to make use of quick planning and development with implementation which might take extensive time due to discrepancies being revealed at later stages. While this strategy works in the west, China is a very different market for operation for Wal-Mart and can affect its performance in the international market.
Basic elements of your plan, the rationale for each element, and how each element addresses the diversity challenges that you have identified. Elements of your plan should address vital HR needs including:
The recruitment process for Wal-Mart specific to its operations in China will have to take into account the community demographics and characteristics as per the companies’ global workforce diversity program. The company would need to know the community in which it wants to set up operations, and determine what percentage of minority people, as well as those of different ethnicities, reside. Similarly, the company should also take into account the gender ratio in the area of residence and offer positions specific to the percentage of the diversified population in the community. Moreover, the recruitment programs need to cater to the traditional method of Chinese business operation and decision making while respecting the beliefs and the values of the workforce being recruited, as well as corresponding with the global human resource management function. “Market research into your potential recruitment pool; building a business case to influence line managers and other stakeholders as to the need to recruit for diversity; using a variety of communication channels to reach your target candidates; and rewarding employees when they successfully increase diversity through recruitment” (Tipper, 2004)
The selection criteria of the applicants who have applied through the various recruitment channels in the region of China will need to be based on the qualification and the performance of the candidate in the specific recruitment tests and interviews. However aside from this the different ethnicities and races, genders as well as minority groups need to be represented in the workforce in the same percentage ratio in which they reside in the local community. In this manner, the company would be able to aptly cover the proper diversification of its workforce as per its regions of operation.
All recruits need to be oriented before they can be designated to their specific jobs. The orientation of the newly recruited staff at Wal-Mart will need to be performed as per the business practices in the local region as well as according to the business operation standards of the Wal-Mart Company. For this, the Wal-Mart company will have to take blend its international business operation practices with those employed by the business in the region of China. The orientation as a result should be performed through seminar-based as well as mentoring and apprenticeship programs which correspond with both the Chinese as well as the Wal-Mart business philosophy.
Training and Development
The training and development for the staff hired for operations in China will need to be performed through technology as well as human resource-intensive strategies. The Chinese tradition of doing business and training is, based on master-student or mentor-apprentice-based training. This approach can be taken up by Wal-Mart as well as the company already employed Mentor based human resource development program in the west. However, to modernize this training, the company can make use of its training software as well as the company intranet to relay information to the staff and provide channels of communication to their mentors and masters in the company.
Other crucial success factors for Wal-Mart’s entry into the China Market 150
Other factors that can help the company in increasing its diversity in human resource management for its operations in China include “having a strategic plan for diversity initiatives, integrating diversity initiatives into the corporation’s strategic plan, recognizing that diversity is a business imperative, having a culture that values diversity and having top management support were the factors most likely to assist in the success of diversity initiatives” (Wentling, 2004) On an international, or global level the company can develop affirmative action plans for diversity in the workforce specific to its different markets and regions of operations including China.
The Wal-Mart company needs to foster the understanding of the Wal-Mart concepts in its staff, address the various diversity issues, as well as promote pioneering spirit amongst its workforce by giving them realistic expectations of reward and growth (Thomas, 1999).
A supplier diversity program can also be launched to promote diversity of staff and workforce amongst the suppliers of the Wal-Mart Company.
A formal diversity office can be created which can monitor the compliance of the human resource department with the developed workforce and operations diversity policies developed by Wal-Mart.
Fong, M., Linebaugh, K., Fairclough, G., Feng, S., Piling, C., (2006), Retail’s One-China, Wall Street Journal – Eastern Edition, Vol. 248 Issue 96, pB1-B12, 2p, 1 graph, 1 color, Web.
Peterson, C.H., (2005), Employee Retention: The Secrets Behind Wal-Mart’s Successful Hiring Policies, Human Resource Management, Vol. 44 Issue 1, p85-88, 4p.
Thomas, Jr., R. R. (1999), Diversity Management, Executive Excellence, Vol. 16 Issue 5, p8, 1p, 1 bw.
Tipper, J., (2004), How to increase diversity through your recruitment practices, Industrial & Commercial Training, Vol. 36 Issue 4, p158-161, 4p.
Wentling, R.M., (2004), Title: Factors that assist and barriers that hinder the success of diversity initiatives in multinational corporations, Human Resource Development International, Vol. 7 Issue 2, p165-180, 16p.