Employee Dissatisfaction @ Walmart

Walmart: An OB case study

Team - 4 project in Organization Behavior

Introduction

•

Walmart: American multinational retail corporation

•

Over 4,000 stores

•

•

Annual Revenue: USD 476 billions (2013)

Employee: 1.3 million (USA)

•

Black Friday Strike

Cause

•

Low pay:

• •

Average salary for sales associates and cashiers is about $9/hour. [1] Hourly compensation: $7.54 - $10.81 [2]

•

More than 475,000 Walmart associates earned a salary of over$25,000. Then almost two-third of the company’s employees earned less than $25,000. [3]

• •

Walmart healthcare cost to employees to increase by 20% from 1 Jan, 2015. [4] Walmart employee pays 33% of the cost of their health premiums. In comparison, Costco employee pays only 8% of their premium. [5]

Mashable.com: http://mashable.com/2014/11/28/walmart-black-friday-strike/

Payscale.com: http://www.payscale.com/research/US/Employer=Wal-Mart_Stores,_Inc/Hourly_Rate Huffington Post: http://www.huffingtonpost.com/2013/10/23/walmart-salary_n_4151131.html Wall Street Journal: http://online.wsj.com/articles/wal-mart-to-end-health-insurance-for-some-part-time-employees-1412694790 HBR: The high cost of low wages, Wayne F. Cascio

Source:

1.

2.

3.

4.

5.

Recommendation

Walmart Costco

Turnover

Cost of replacing a worker in skilled and semi-skilled job Average salary

44%

17%

1.5 – 2.5 times worker’s annual salary. For our estimation, we take a conservative 60% $18,720 $43,680

Cost of replacing employee

Number of workers

$11,232

1.3 million

$26,208

174,000

Total cost of replacing employees

~$6.4 billion

~$780 million

How Did We Get Here?

•

•

Any relevant historical information.

Original assumptions that are no longer valid.

Available Options

•

• •

State the alternative strategies.

List advantages & disadvantages of each. State cost of each option.

Recommendation

•

• • •

Recommend one or more of the strategies....