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/
Hey,
ReplyDeleteInteresting article! I remember in another unit I did at uni we discussed a similar article about Wal-Mart's poor work conditions. Unfortunately I can't remember the link to it but it also discussed the poor wages that employees at Wal-Mart received.
I agree with the fact that a large majority of Multinational corporations are greedy when it comes to profits and don't treat their employees as they should be treated. If employees in Multinational corporations are well respected, valued and paid well then not only will the corporation make profits but they will have satisfied customers as a result of happy employees.
I also agree with you on the fact that we need to bridge the gap between fair and unfair work practices. In today's society, people are more educated than ever before and people know when they are being treated unfairly in the work place. It is easier for complaints to be made and it only damages a company's reputation. In order to avoid this companies should just comply with fair work practices and avoid any unnecessary problems.
Well, that's my rant out of the way, haha! Nice work :)
Hi,
ReplyDeleteI think it’s great that you chose to focus on employees in this post. Sometimes MNCs forget that it’s their employees who do the hard yards so they can reap the benefits. I find it sad that MNCs are still taking advantage of their employees and not looking after the people who help them achieve their bottom line.
This article is such a good showcase of how many Multinational corporations only look at achieving their bottom line and not caring too much about the working conditions of their employees. I guess you could say that some corporations like Walmart see their employees as ‘replaceable’. There will always be people who need a job. So if an employee leaves because they are unhappy with pay, working conditions and benefits, then it’s not too hard for Walmart to replace them.
I agree with what you said about employees being more likely to care for a company who cares about them. Speaking from experience in my line of work in retail; it’s totally true that when employees feel like their employer cares about their working conditions that they are more motivated to work harder. Even more so when an employer invests time and money into training and development programs to help the employee be the best that they can be in their job. I don't see why MNCs can't invest in their employees!
I found an article that compares Costco and Walmart in a whole heap of areas such as turnover rate, percent of workforce that is unionised, number of employees receiving health insurance etc. It was actually really interesting to see the difference between the two giant organizations. I’ve added the link if you wanted to check it out.
http://jobs.aol.com/articles/2013/06/12/walmart-costco-comparison/
Hi Hayley!
ReplyDeleteI quite enjoy reading your insights on the differences between how Wal-Mart and Costco value their employees. I sincerely believe that although Wal-Mart is making record profits annually, it's long-term sustainability is undoubtedly in question. The US' economy is not in its best shape in shape and improvements are only significantly found in financial markets rather than in 'job-building real economies'. One would hope that with greater social and economic mobility, workers are able to demand better benefits or leave to find a better job somewhere else (maybe Costco).
Hey Hayley.
ReplyDeleteI thoroughly enjoyed reading this blog post as I feel quite strongly on this topic. Having studied Human Resources, it really makes you aware on how important it is to utilise the resources you have in an organisation and one of the best resources is human capital! So many organisations overlook the fact that treating their employees well not only creates a better working environment but it also enhances performance. It has been said that employees can be used to gain a competitive advantage.
I believe this is definitely true in the case you have looked at between Wal-Mart and Costco. As has been said, I believe in the long run Costco will continue to rise and remain popular whilst the future of Wal-Mart may be in jeopardy. This is largely due to the way employers have treated their employees - Costco treat their employees properly, meaning they are happier and are more likely more productive. From my experience in the work force so far, I can definitely agree with this sentiment!
A similar case study in Sri Lanka looked at fourteen different bank branches within Jaffna peninsula. From this study it was found that there was a positive relationship between job satisfaction and employee performance. It is written in the article that high levels of fair promotions, reasonable pay systems, appropriate work itself and good working condition leads to high level of employees’ performance.
MNCs quickly forget about the 'little people', in other words their employees and this can actually have adverse impacts for them. I believe they need to start focussing more on their employees as it will benefit both them and their employees which leads to a better employment relationship.
Here's the link to the case study I have referred to: http://www.academia.edu/2412890/JOB_SATISFACTION_AND_EMPLOYEES_WORK_PERFORMANCE_A_CASE_STUDY_OF_PEOPLES_BANK_IN_JAFFNA_PENINSULA_SRI_LANKA
Thanks for a great post, look forward to reading your next one!