walmart’s hrm_ hr planning, job analysis & design - panmore institute

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A Walmart store in Quebec, Canada. Walmarts humanresource management has comprehensive efforts for humanresource planning and job analysis and design. (Photo: PublicDomain)

Walmarts human resource managementis a critical success factor for thebusiness. The companys retail serviceoffers goods in a way that is convenientand efficient for shoppers. In this servicecontext, Walmarts human resourcesdirectly determine business output. Thecompanys human resource managementaims to maximize employee performanceto correspondingly maximize capacity forsales. Human resource planning and jobanalysis and design are some of the majorcomponents of Walmarts human

resource management strategy. Through human resource planning, the firm develops anadequate workforce. Through effective job analysis and design, Walmart ensures thatjob descriptions and specifications relate with the HR needs of the organization. Thesecomponents of human resource management influence how Walmart maintains its morethan 2 million employees to provide adequate service to an expanding population oftarget consumers.

This article is part of a series on Walmarts Human Resource Management:

1. Walmarts HRM: HR Planning, Job Analysis & Design

BUSINESS, MANAGEMENT

Walmarts HRM: HR Planning, JobAnalysis & DesignUPDATEDSEP 1, 2015 | ANDREW THOMPSON

Panmore Institute



2. Walmarts HRM: Recruitment, Selection, Employee Retention3. Walmarts HRM: Training, Performance Management4. Walmarts HRM: Compensation, Career Development

Walmarts Human Resource PlanningForecasting. Walmarts human resource management forecasts its workforce needs toensure capacity to address changes in consumer demand. While other forecastingmethods and techniques are also used, these three are the most notable at Walmart:

1. Bottom-up approach2. Trend analysis3. Delphi method

The bottom-up approach analyzes human resource needs starting at the lowest level ofthe organizational structure. Walmarts human resource management objective for thisapproach is to ensure that all levels of the organization have adequate employees basedon HR needs at the frontline (e.g. hourly sales employees). The company startsforecasting HR needs of frontline employees. Walmarts HR managers then proceed toanalyze HR needs at the next higher level of the organizational structure. This humanresource management approach ensures that all human resource needs at the lowestlevels of Walmarts organizational structure are supported through an adequatenumber of employees at the upper levels of the organizational structure. On the otherhand, trend analysis is used in human resource management to predict future HR needsbased on current needs. For example, Walmart analyzes the series of recent HR changesand uses this information to extrapolate future HR needs. A current trend that shows anincreasing demand for human resources indicates a larger workforce requirement in thefuture. Walmarts human resource management uses trend analysis to determine HRneeds along with the companys global expansion. In addition, the Delphi methodforecasts future HR needs based on expert opinion. Walmarts human resourcemanagement uses the Delphi method to ensure adequate human resources inestablishing new brands, stores or other facilities. For example, HR experts can opineabout the HR needs in opening a new Walmart store of a certain size. The companyshuman resource management applies the Delphi method to estimate the number ofemployees needed in each type of job, such as supply chain jobs, inventory jobs, andsales jobs.

Surplus & Shortage of Employees. Walmart faces minimal concerns about the shortage



of employees, especially sales personnel. The company receives a continuous influx ofapplicants for sales positions. However, Walmart experiences HR surplus whenaggregate consumption declines. Such surplus is a challenge to human resourcemanagement because it translates to lower HR cost-effectiveness. Walmart uses thefollowing approaches to determine HR needs and prevent surpluses or shortages:

1. Sales performance analysis2. Turnover rate analysis3. Gap analysis

Walmarts human resource management changes recruitment efforts based on changesin sales performance, which is an indicator of HR needs. Turnover is the rate at whichWalmarts human resources leave and/or are replaced. Turnover, together with the rateof recruitment, is an indicator of changes in the size of the companys workforce.Walmarts human resource management ensures that the recruitment rate iscommensurate to the turnover rate. If the turnover rate is lower than the recruitmentrate, Walmarts workforce increases in size. An increase in workforce size usuallyhappens when the company expands or opens new stores. In addition, Walmarts humanresource management uses gap analysis to determine the gap between HR needs andactual HR capacity. A significant gap means reduced HR cost-effectiveness orinadequacy in meeting organizational needs. Walmart uses gap analysis to decide onchanging recruitment efforts. The company has a gap allowance or threshold. When theHR gap exceeds the threshold, Walmarts human resource management increases ordecreases recruitment efforts.

Balancing Supply and Demand. Walmart balances HR supply and demand by adjustingthe compensation strategy and recruitment efforts. These adjustments are based ontrends in internal human resource demand and the rate of applicant entry. Thus, thefirms human resource management uses the following approaches to balance HR supplyand demand:

1. Changes in recruitment2. Changes in compensation

Changes in recruitment are Walmarts main approach to balance HR supply anddemand. The companys human resource management changes the recruitment rate toaddress workforce requirements. Walmart can easily adjust its recruitment effortswithout significantly impacting financial performance. In prioritizing changes in



recruitment to balance HR supply and demand, Walmarts human resource managementminimizes changes in the firms compensation strategy. On the other hand, changes incompensation are also used to prevent an imbalance in HR supply and demand.Walmarts compensation strategy is designed to minimize HR expenditure. This strategyagrees with the companys cost leadership generic strategy. When HR supply becomesinadequate, Walmarts last resort is to increase wages. Theoretically, higher wagesattract more applicants. Walmarts human resource management uses this secondapproach to effectively compete in the labor market.

Job Analysis and Design at WalmartOrganizational Design. Job analysis and design are successfully implemented inWalmarts human resource management through the companys organizationalstructure, which is a hierarchical functional structure. This organizational structuremakes it easy to specify distinct characteristics for each job. The structure has clear linesof authority, lines of communication, and lines of command. Walmart has clear anddistinct definitions for every job position and level of the structure. In effect, the firmshuman resource management minimizes uncertainty in job analysis and design.

Methods of Job Analysis. Walmart uses work-oriented job analysis and worker-oriented job analysis. The company applies work-oriented job analysis for salespositions. The purpose of this method is to provide information about tasks andoutcomes. Walmart applies this method in the form of interviews and directobservations. The companys human resource management uses direct observation ofsales personnels activities. Interviews are conducted to analyze the jobs of team leadersand supervisors. This method enables Walmarts human resource management toestablish expectable job outcomes. On the other hand, the worker-oriented job analysismethod provides information on interpersonal, cognitive and perceptual abilities.Walmart uses this method to analyze managerial jobs. A specific application of thismethod is through the Work Profiling System (WPS), which is designed for managerialpositions. This method enables Walmarts human resource management to pinpoint thenecessary capabilities of managers, such as store managers and corporate managers.

Job descriptions. As the largest retailer in the world, Walmart has a wide variety of jobdescriptions. Nonetheless, the firms human resource management uses the followingvariables as criteria for job descriptions:

1. Position



2. Functions3. Duties4. Performance standards5. Job factors6. Job knowledge

For managerial positions, Walmart emphasizes analytical and problem solvingknowledge, skills and abilities (KSAs). In contrast, for sales personnel, the companyemphasizes job knowledge and interpersonal skills. Walmarts human resourcemanagement considers interpersonal skills essential in sales personnel, who directlycommunicate with customers.

Job specification. The company has a wide array of job specifications. However, ingeneral, there are essential attributes and desirable attributes included in all jobdescriptions. For sales positions, Walmarts human resource management specifiesessential attributes as follows:

1. Communication skills2. Knowledge of the business3. Knowledge of products

These essential attributes are necessary in all sales employees throughout theorganization. However, there are also some attributes classified as desirable. Theseattributes are preferred but not necessary for a sales employee to effectively fulfill hisjob. Walmarts human resource management specifies desirable attributes as follows:

1. Likeable and sociable qualities2. Multi-tasking skills

References

Alfes, K., Shantz, A. D., Truss, C., & Soane, E. C. (2013). The link between perceivedhuman resource management practices, engagement and employee behaviour: amoderated mediation model.The International Journal of Human ResourceManagement,24(2), 330-351.Chadwick, C., & Dabu, A. (2009). Human resources, human resource management,and the competitive advantage of firms: Toward a more comprehensive model ofcausal linkages.Organization Science,20(1), 253-272.



Ferguson, K. L., & Reio Jr, T. G. (2010). Human resource management systems andfirm performance.Journal of Management Development,29(5), 471-494.Greenhouse, S., & Barbaro, M. (2006, June 2). Wal-Mart pushes to redefine its workforce. The New York Times.Jiang, K., Lepak, D. P., Han, K., Hong, Y., Kim, A., & Winkler, A. L. (2012). Clarifying theconstruct of human resource systems: Relating human resource management toemployee performance.Human Resource Management Review,22(2), 73-85.Muethel, M., Gehrlein, S., & Hoegl, M. (2012). Sociodemographic factors and sharedleadership behaviors in dispersed teams: Implications for human resourcemanagement.Human Resource Management,51(4), 525-548.Purce, J. (2014). The impact of corporate strategy on human resourcemanagement.New Perspectives on Human Resource Management (Routledge Revivals),67.Schuler, R., & E. Jackson, S. (2014). Human resource management and organizationaleffectiveness: Yesterday and today.Journal of Organizational Effectiveness: People andPerformance,1(1), 35-55.Skariachan, D., & Wohl, J. (2013, June 13). Wal-Marts everyday hiring strategy: addmore temps. The Denver Post.Slocum, J., Lei, D., & Buller, P. (2014). Executing business strategies through humanresource management practices.Organizational Dynamics,43(2), 73-87.Wal-Mart Names Chief of Office of Diversity (2003, November 19). LA Times.Wal-Mart Stores, Inc. (2015). Walmart Form 10-K, 2015.Wal-Mart Stores, Inc. (2015). Walmart Human Resources.Wal-Mart Stores, Inc. (2015). Walmarts Official E-commerce Website.

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PUBLISHED: SEP 1, 2015 UPDATED: SEP 1, 2015

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CASE ANALYSIS CASE STUDY HR MANAGEMENT HUMAN RESOURCES RETAIL INDUSTRY STRATEGYWALMART WALMART HUMAN RESOURCE MANAGEMENT

walmart’s hrm_ hr planning, job analysis & design - panmore institute

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