Walmart Case Study

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- Realign eligibility requirements for health insurance, making them even more competitive in the labor market.

- Decrease cross-subsidization of spouses, this change will allow more funds to be put toward the associates and their families.

- Give Associates more information about how to use healthcare and health insurance. Educate the associates on their healthcare decisions.

- Lower company-paid life insurance coverage levels.

- Capture savings from current initiatives to improve labor productivity.

(walmart_bd_benefits_strategy_fy06.pdf)

- Add a combination of best practice care-management programs, this programs would primarily improve the quality of care.

- Further develop high-performance provider networks, to ensure associates are receiving the most efficient and effective healthcare services from the healthcare providers.

- Offer Associates bundles of other benefits from which to choose, allowing the associates the opportunity to choose from several different benefit packages.

- Continue to explore adding health clinics in stores, this would be helpful in generating more revenue for Wal-Mart and help to lower healthcare costs for associates. (Walmart_BD_benefits_strategy_fy06)

And yes, in my opinion damage was done by leaking the Board benefit strategy memo. The memo noted the Boards lack of respect by not feeling the need of better benefits for the associates and also, they did not value the associate’s wealth to the overall or the success of the company. The memo also damaged the company’s reputation by showing the stats of workers without healthcare coverage and average wage for a full time employee which average around $17,000 a year. “Ms. Chambers proposed that employees pay more for their spouses’ health insurance. She called for cutting the 401(K) contributions to three percent of wages to 4 percent and cutting company-paid life insurance policies to $12,000 from the current level, equal to an employee’s annual earnings.” The document further noted, workers a getting sicker than the national population, particularly in obesity, including diabetes and heart disease. It was also noted the Wal-Mart workers tended to overuse emergency rooms and underuse prescriptions and doctor visits, perhaps due to their experience with Medicaid. The memo went on to say, “The least healthy, least productive associates are more satisfied with their benefits than other segments and are interested in longer careers with Wal-Mart. To try and combat the critics, and attract younger, healthier workers, the memo proposed incorporating physical activity in all jobs and promote health savings accounts. (walmart_health_cost_strategy_nyt_26oct2005.pdf)

Wal-Mart’s initiative from the standpoint of Strategy is the new wage model. With this strategic change Wal-Mart hopes to redact themselves from its long reputation of being one of the lowest paying employers. As stated earlier, the new wage model increased starting pay to $9.00 an hour in April 2015 and by February 2016 all current associates will earn at least $10.00 an hour. As well as, the pay of department managers starting at $13.00 an hour and by early next year 2016 to $15.00 an hour. One way to get a more dedicated and experienced workforce is to pay workers more. They'll stay longer, and they'll be very eager to keep that job. While, we're all very excited for the workers getting the pay increase. But I’m also a little confused about why this is happening after such a long and drawn out process of ignoring not just the labor activist, but the working associates. This could be a good move for the retail giant but only time will tell.

From the PR standpoint, hiring of veterans. “Through their service, veterans gives a land of freedom. When they return, it must be to a land of possibility.” (Bill Simon, Wal-Mart US President and CEO). Furthermore, Wal-Mart has committed $20 million through 2015 to helping veterans and their families transition from the military into the civilian workforce trough programs that provide education, job training and transition support. Wal-Mart has received numerous awards for their commitment to hire and transition veterans along with their families back into the civilian world. Most recently, this year they received an award from Military Time Best for Vets 2015, for the second consecutive year. January 2015, on behalf of Walmart Stores, Inc., Gary Profit, Walmart Senior Director of Military Programs, accepted the Lincoln Award in the Corporate Citizen category, recognizing outstanding achievement and excellence in providing opportunities and support to our nation’s veterans and military families. (walmartcareerswithamission.com/why-walmart/recognition)

The social challenges Wal-Mart faces along with other competitors is the fact they choose to ignore sociopolitical factors, which combines both social and political issues. Below are examples of sociopolitical issues:

- Manage slow reaction – Although, Walmart employ a vast number of people, they have been slow in reacting to the negative pressure from critics revolving around low wages and affordable healthcare for their associates. However, companies now must try and understand the expectations and implement them in their business strategy.

References:

walmart_environmental_stores.pdf

walmart_21st_c_vision_lee_scott_24oct2005.pdf

walmart_bd_benefits_strategy_fy06.pdf

why_walmart_is_playing_nicer_buswk_03oct2005.pdf

Walmart_as_Leviathan_NYRBks_16Dec2004.pdf

strategic_social_issues_mckinseyq_sp2006.pdf

walmart_and_carrefour_home_region_strategies.pdf

walmart_health_cost_strategy_nyt_26oct2005.pdf

walmartcareerswithamission.com/why-walmart/recognition/

newsmax.com/Finance/Wal-Mart-wage-workforcepay/2015/02/19

stock.walmart.com/files/doc_financials/2015/annual/2015-annual-report.pdf

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