Perceptions of Gender Equality in Corporate America

Wal-Mart Case Study

Study Group 1

Perceptions of Gender Inequality

• Women comprise 15.7% of Fortune 500 corporate officers**

• Earnings gap – 76 cents to the dollar – less for minority women*

• CA lawsuit against Wal-Mart – America’s largest employer - one of many suits

*Source: Brunner, Borgna. The Wage Gap: A History of Pay Inequity and the Equal Pay Act** Source: Baue,William. Women Sit in Less Than a Seventh of Fortune 500 Board of Director Seats. December 11, 2003. www.socialfunds.com.

EEO-1*

• EEOC requires reporting data for companies with over 100 employees

• Information is useful in tracking hiring, promotion and retention of minority and female employees

• Most companies do not disclose this information to the public

• Wal-Mart has joined only 6 other corporations in the S&P100 to make their information publicly available

*Source – Baue, Bill. Wal-Mart Discloses Equal Employment Opportunity Data. April 26, 2006. www.socialfunds.com.

 

Providing transparency through public disclosure of EEOC data*

*Source: www.walmartstores.com, September 22, 2006

EEOC definitions*

Source: www.walmartstores.com. September 22, 2006.

EEOC definitions*

Source: www.walmartstores.com. September 22, 2006.

Video Clips

• http://www.pbs.org/newshour/bb/business/july-dec04/walmart_7-5.html#

• http://www.walmartfacts.com/articles/4369.aspx

Important questions the EVP needs to ask are:

• Should Wal-Mart make its managers be immediately available to relocate?

• Is it really necessary for management trainees to relocate or to promise to relocate?

• Does this relocation rule create EEO violations?

Impact to the management trainees.

• The majority of workers seeking managerial positions:

– Enjoy where they live.

– Have established community ties.

– Have established families in the community.

Impact on New Trainees.

• One can see why men and especially women would not want to commit to this agreement.

• Can you imagine accepting a job only if you agree to be relocated every two years!

Has Wal-Mart created an equal employment opportunity issue?

• No, they have not.

• There are many plausible reasons for this policy.

Pro’s of relocation

• One reason is to keep fresh ideas ranging throughout the company;

• Wal-Mart may hire managers to fill existing company needs nation- or world-wide.

• By making the relocation stipulation, Wal-Mart precludes regional managerial shortages and keeps new ideas flowing.

• Having the leaders move from store to store helps make these managers more:

– aware of differences,

– possibly learning new techniques in the process.

Pro’s of relocation

• They learn to deal with all types of people

• Can be motivated to run Wal-Mart the ‘Wal-Mart Way.’

• One effective way for a person to get experience is for that person to move every few years to a new location.

Pro’s of relocation

Con’s of relocation

• Employees with families are often not able to move as readily and may not want to commit to the management track.

Con’s of relocation

• Women can be affected more adversely than men because single mothers would experience a greater impact than other applicants;

• This would preclude their advancement to these managerial positions as well.

The result of the relocation rule

• If this rule of relocation has created a situation where only men, or specifically white men, are allowed or are willing to take on management positions,

• Then this will ultimately belie a situation that does not follow the EEO rules.

The relocation idea has merit.

• However the federal government will coerce Wal-Mart to create a top end structure

• This structure must meet what is called the four-fifths rule.

Where Wal-Mart’s plan failed;

• Wal-Mart inadvertently created a white male majority in upper management.

• Now Wal-Mart needs to bring talent from other Wal-Mart locations around the world into the upper management positions.

• This will help create a diverse upper management team.

The EVP needs to:

• Ensure that each store is working towards maintaining equal opportunities for everyone employed,

• Ensure that there are opportunities for people to come up the ranks without having to relocate.

A significant approach that the EVP can take is to:

• Employ more HR managers

• This will ensure a more balanced allocation of the protected classes.

FINANCIAL PERFORMANCE

•6100+ STORES INTERNATIONALLY

•1.8 MILLION ASSOCIATES

•STEADY INCREASE IN SALES AND NET INCOME

•>20% RETURN LAST FIVE YEARS ON SHAREHOLDER EQUITY

ORGANIZATION CULTURE

• INSTINCTIVELY FRUGAL

• CORE VALUE – “EVERYDAY LOW PRICES”

• DIRECT OVERSIGHT OF PAYROLL AND SALES COSTS BY HEADQUARTERS

• EXECUTIVES AND MANAGERS – EXTREMELY HARD WORKING

EXECUTIVE AWARENESS

• ALL EXECUTIVES, MANAGERS AND ASSOCIATES ARE TRAINED ON COMPANY CULTURE, VALUES AND POLICIES

• WEEKLY MANAGEMENT MEETINGS ARE HELD REGARDING CORPORATE CULTURE

• SOME MANAGERS ACT UNETHICALLY OR UNLAWFULLY TO MEET EXPECTATIONS OF HEADQUARTERS

LEGAL TROUBLES

• CLASS ACTION LAW SUIT ON BEHALF OF 1.6 MILLION CURRENT AND FORMER FEMALE ASSOCIATES FOR SEX DISCRIMINATION

• FEDERAL INVESTIGATION FOR USE OF ILLEGAL ALIENS TO CLEAN THE STORES

• SEVERAL OTHER LAWSUITS FOR UNFAIR LABOR PRACTICES, “MOST SUED COMPANY”

#3 Management Practices that Exacerbate EEO Problems

• No Policy (straddle the fence)

• Weak Policy (in name only)

• Double Standard Policy

• Bare Minimum Policy

Wal-Mart the Organization & Policy Creation

• Top Down/Not from the Bottom Up

• Local Sensitivity

• Management Input Only

Wal-Mart the Organization & Policy Creation

• Financial Performance/Process Efficiency Focused

• Great Latitude

• Favors Management

Wal-mart the Organization & Information Dissemination

• Local Autonomy

• Training

• Management Network

• Store Meetings

• Internal Website (Mgmt Only)

Wal-Mart the Organization & Goals

• Maintain Low Cost Strategy

• Provide Consistently Great Service

• Good Neighbor/Corporate Citizen

• Strengthen Supplier Relationships

• Workplace Diversity

• Environmental Sustainability

Wal-Mart the Organization & Commitment to Various Issues

• History of Supporting Local Charities• Latest Issue – The Environment• “Support America First”• Employee Volunteerism• Managing its Image • Fighting Labor Unions – Working Families

for Wal-Mart

Sources

Baue,William, Women Sit in Less Than a Seventh of Fortune 500 Board of Director Seats. December 11, 2003. www.socialfunds.com.

Baue, Bill. Wal-Mart Discloses Equal Employment Opportunity Data. April 26, 2006. www.socialfunds.com.

Brunner, Borgna, The Wage Gap: A History of Pay Inequity and the Equal Pay Act. September 23, 2006. www.infoplease.com

• www.walmartstores.com