I came across this article in Huffington post about Walmart. The company’s compensation policy does not give room for employees to advance in their career. The pay structure is very rigid and it is difficult for the employees to rise above the poverty level wages. First employees start with minimum wages and have the potential to a raise of only 20 to 40 cents an hour through incremental promotions (Wilkie, 2012). This would mean that an employee who starts with the rate of $8 per hour and receives only one promotion which is the average in the company will be earning $10.60 per hour after being in the company for 6 years.
However flawless performance attracts a raise of 60 cents per year. As employees it is hard for one to be flawless. We are all humans and we make mistakes. The reasoning behind the policy is that the company only gives opportunities to the hardworking and motivated employees who can then work their way up to get the higher paying jobs. The company argues that it pays competitive rates as compared to other competitors (Wilkie, 2012). This plan helps the company to maintain the costs at low levels which benefits the shareholders.
As a result of this, there are groups representing the employees who plan for strikes like the one which happened on black Friday (Wilkie, 2012). Black Friday is the biggest shopping day and if a company like Walmart is closed on such a day, it would lose a lot of money. Though the first loyalty of the company lies with the shareholders, I think the employees need to be well treated because without them, the shareholders will not get anything. They are the reason why the shareholders invested in the company in the first place. Employees should be well compensated to keep them motivated and give room for promotions.
Wilkie, C. (2012). No Way Up: Walmart’s Workers Decry Dead-End Poverty. The Huffington Post. Retrieved 5 June 2016, from http://www.huffingtonpost.com/2012/11/16/walmarts-internal-compensation-plan_n_2145086.html
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