Hello! Welcome to my blog about employment
relations. As I make my fortnightly blog posts, I would love to hear some of your thoughts and comments. Enjoy!
My first blog post for this semester looks
at the article ‘Wal-Mart or Costco: Australia’s 21st century
choice?’ by Goodwin and Maconachie (2006) and liberal market economies with
a focus in North America. I found this topic to be very interesting, and in particular
I wanted to discuss more about the human side of this story: the employees.
The key difference
between Costco and Wal-Mart are their treatment of their employees, and in this
case Wal-Mart plays right into the hands of those who believe Multinational
Corporations are only concerned with their greed for profits, even at the
expense of their workers. The issue with Wal-Mart is that their employees can
expect low wages, no employee benefits—healthcare or otherwise—and don’t even
mention being paid for working overtime. In this day and age it is worrying
that we still need to bridge the gap between fair and unfair work practices.
But why should this
matter to Wal-Mart? Apart from building their brand to reflect amiable
qualities such as being honest, fair and trustworthy, Wal-Mart should realise
that if they want to positively impact their business’ bottom line, they need
to first invest in their employees. In his Forbes article, Rick Ungar believes
that the downfall of Wal-Mart is their lack of attention to their employees’
wages and benefits, leading to a culture of lazy customer service, low
motivation and low productivity. Ungar compares Wal-Mart to Costco, and finds that the difference
lies in their treatment of their employees. Whilst Wal-Mart fails to deliver
fair wages and employee benefits, Costco’s employees are paid decently, which
motivates them to take pride in their work. This makes sense, because, as employees, we are
more likely to care for a company who care about us.
Wal-Mart’s current
way of operating is not viable for a long term and sustainable future, as the
deteriorating culture of the company will result in little or no growth as time
goes on. Consumers want the lowest prices, but the cost to the employees is not
worth that extra cent, and it should serve as a lesson for all businesses.
For anyone who is
interested, here is the article I looked at in my post: http://www.forbes.com/sites/rickungar/2013/04/17/walmart-pays-workers-poorly-and-sinks-while-costco-pays-workers-well-and-sails-proof-that-you-get-what-you-pay-for/
