Walmart is the world’s largest company by revenue and is the world’s top retailer with more than 2.3 million employees. In the United States, Walmart operates more than 5,300 stores, including about 4,570 Walmart stores and 655 Sam’s Club warehouses, and a growing number of smaller format stores. The company’s faster growing international division (26% of sales) numbers more than 6,100 locations. Walmart is the number one retailer in Canada and Mexico and has operations in Asia (where it owns a 95% stake in Japanese retailer SEIYU), Africa, Europe, and Latin America.92 How can Walmart continue to expand successfully in the United States as well as internationally? Walmart’s human resource management (HRM) is a critical success factor for the business’s growth and influences how Walmart maintains its more than 2 million employees to provide service to an expanding population of consumers. How does human resources (HR)
perform such functions? Job analysis and design are implemented through the company’s hierarchical functional structure. Walmart uses work oriented job analysis and worker-oriented job analysis. The company applies work-oriented job analysis for sales positions in the form of interviews and direct observations. HR uses direct observation of sales personnel’s activities while conducting interviews to analyze the jobs of team leaders and supervisors. This method enables HR to establish expectable job outcomes. On the other hand, the worker-oriented job analysis method is used to analyze managerial jobs and provides information on interpersonal, cognitive, and perceptual abilities. A specific application of this method is through the work profiling system. This method enables Walmart’s HRM to pinpoint the necessary capabilities of managers, such as store managers and corporate managers.
HR uses the following variables based on job analysis as the criteria for job descriptions: Position, Functions, Duties, Performance Standards, Job Factors, and Job Knowledge. The company uses a wide array of job specifications that are broken down into essential attributes and desirable attributes and included in all job descriptions.
For managerial positions, HR’s essential attributes accentuate analytical and problem-solving knowledge, skills, and abilities. In contrast, for sales personnel, HR emphasizes the essential attributes of job knowledge and interpersonal skills. More precisely, HR specifies communication skills, knowledge of the business, and knowledge of products. However, there are also some attributes classified as desirable (preferred but not necessary for a sales employee to fulfill the job). Walmart’s HRM specifies desirable attributes as likeable and sociable qualities and multitasking skills.
HR forecasts its workforce needs to ensure they have the capacity to address changes in consumer demand while not being oversized. The three most notable forecasting techniques are the bottom-up approach, trend analysis, and the Delphi method. The bottom-up approach analyzes human resource needs starting at the lowest level of the organizational structure. HR’s objective for this approach is to ensure that all levels of the organization have adequate employees based on HR needs at the frontline (e.g., hourly sales employees); forecasting therefore begins with these frontline employees. HR managers then proceed to analyze HR needs at the next higher level of the organizational structure. This approach ensures that all human resource needs at the lowest levels of Walmart’s organizational structure are supported through an adequate number of employees at the upper levels of the organizational structure.
On the other hand, trend analysis is used to predict future HR needs based on current needs. Walmart’s HRM uses trend analysis to determine HR needs along with the company’s global expansion. In addition, the Delphi method forecasts future HR needs based on expert opinion.
Walmart’s HRM uses the Delphi method to ensure adequate human resources in establishing new brands, stores, or other facilities. For example, HR experts can discuss the HR needs in opening a new Walmart store of a certain size. The company’s HRM applies the Delphi method to estimate the number of employees needed in each type of job, such as supply chain jobs, inventory jobs, and sales jobs.
Walmart faces minimal concerns about the shortage of employees;
however, Walmart experiences HR surplus when aggregate consumption declines. Such surplus is a challenge to HRM because it translates to lower HR cost-effectiveness. Walmart uses the following approaches to determine HR needs and prevent surpluses or shortages: sales performance analysis, turnover rate analysis, and gap analysis.
HR changes recruitment efforts based on changes in sales performance, which is an indicator of HR needs. Turnover, together with the rate of recruitment, is an indicator of changes in the size of the company’s workforce. HR ensures that the recruitment rate is commensurate to the turnover rate. An increase in workforce size usually happens when the company expands or opens new stores. In addition, HR uses gap analysis to determine the gap between HR needs and actual HR capacity. A significant gap means reduced HR cost-effectiveness or inadequacy in meeting organizational needs. Gap analysis is used to decide on changing recruitment efforts. The company has a gap allowance or threshold. When the HR gap exceeds the threshold, HR increases or decreases recruitment efforts. HR supply and demand is balanced by adjusting compensation strategy and recruitment efforts. These adjustments are based on trends in internal human resource demand and the rate of applicant entry.
Changes in recruitment are HR’s main approach to balance HR supply and demand. HR changes the recruitment rate to address workforce requirements. Recruitment efforts can easily be adjusted without significantly affecting financial performance. In prioritizing changes in recruitment to balance HR supply and demand, HR minimizes changes in the firm’s compensation strategy. On the other hand, changes in compensation are also used to prevent an imbalance in HR supply and demand. The compensation strategy is designed to minimize HR expenditures. This strategy agrees with the company’s cost leadership generic strategy. When HR supply becomes inadequate, Walmart’s last resort is to increase wages. Theoretically, higher wages attract more applicants. Walmart’s HRM uses this second approach to compete effectively in the labor market.93

 Questions 

1. How is job analysis performed at Walmart? What job analysis methods are employed?
2. What are the pros and cons of the job analysis methods used for Walmart’s salesforce?
3. For which position does Walmart use task- or competency-based job analysis?
4. What are the main differences in job specifications between Walmart’s sales force and their managers?
5. What are the methods Walmart uses for HR forecasting? Which are quantitative and which are qualitative?
6. How does Walmart try to prevent labor shortages or surpluses?