SHRI VILE PARLE KELAVANI MANDAL’S

NARSEE MONJEE COLLEGE OF COMMERCE & ECONOMICS

(AUTONOMOUS)

BACHELOR OF MANAGEMENT STUDIES (BMS)

2021-22

SYBMS SEMESTER IV

DIVISION A

SUBJECT NAME: BUSINESS ETHICS AND CORPORATE GOVERNANCE

PROJECT TITLE: WALMART AND ITS UNETHICAL HRM PRACTICES

SUBMITTED BY:

STUDENT’S NAME SAP ID ROLL NO.

HARDIK GANGAR 45401200055 A013

 DECLARATION OF ORIGINALITY

I, hereby declare that this assignment titled “Walmart and its unethical HRM practices” is
entirely my own work and that any additional sources of information have been duly cited.

I hereby declare that any offline/online sources published or unpublished, from which we have
quoted or drawn references have been referenced fully in the bibliography list. I understand that
failure to do so will lead to plagiarism and severe disciplinary action will be initiated against us.

I understand that I may be required to present the assignment and /or appear for viva (Offline and/
or Online). I acknowledge it is my responsibility to keep updated with the schedule of the
presentation/ viva and I will ensure I am available during the same.

Student Name: HARDIK GANGAR

Sign:

Date of submission: 19th January 2022

  WALMART AND UNETHICAL HRM PRACTICES

 WOMEN DISCCRIMINATION

The beginning of the 21st century brought with it a spate of problems for the world's largest
retailer Wal-Mart. The company found itself facing one of the biggest lawsuits ever. In June
2001, a former Wal-Mart employee, Betty Dukes (Dukes), had filed a case accusing the
company of 'sex discrimination in promotions, training and pay’

Many more employees joined Dukes, and by May 2003, the case had taken the shape of a class
action suit after the plaintiffs asked a Federal Judge to allow the case to proceed on behalf of
more than 1.5 million women. A study of Wal-Mart's own employee data (conducted by some
experts hired by the plaintiffs) revealed that women had been discriminated against in many
instances. Even the company's internal memos revealed that Wal-Mart was far behind its
competitors in promoting women at the workplace. Industry observers said that the company's
competitors had employed more female managers in 1975 than Wal-Mart did even in 1999.

Wal-Mart faced lawsuits (filed in more than 30 states in the US) that accused it of breaking many
Federal overtime laws (in some cases, company managers locked stores to prevent workers from
leaving the premises)

Wal-Mart was charged with discrimination against its female employees in compensation,
promotions and job assignments in violation of Title VII of the Civil Rights Act of 1964 (Title
VII) . The plaintiffs alleged that Wal-Mart mistreated women in various ways: they earned much
less than their male counterparts even when they had more experience than men or performed
better than them (Refer Exhibit II for a detailed note on the complaint filed by Dukes). The case
also alleged that Wal-Mart prevented women employees from advancing by.
  LOW & IRREGULAR WAGES

An average worker makes between $12,000 and 17,000 a year which is not much. As a result
employees have to apply for public assistance and this public assistance comes from our tax
dollars. Basically, one of the reasons for Wal-Mart low wages is because they want to cut
operating costs and they want to continue offering low prices. So, “Wal-Mart’s ultimate defense
is that it offers lower prices and somehow that justifies all sins”. It seems that Wal-Mart cares
more about keeping its prices low than to increase employee’s wages. Besides low wages, Wal-
Mart’s health insurance is so expensive that some of the employees cannot even afford to pay for
it. So, those employees who couldn’t afford the health plan will probably have to get their health
care benefits through their spouses or the state from our tax dollars. Wal-Mart responded to this
problem by offering discounts on health care coverage. “Members can save as much as 50% on
services not normally covered by medical insurance.

While wages are low at Wal-Mart, too often employees didn’t get paid at all for overtime. In
fact, according to Wal-Mart’s policy, they are supposed to pay employees for every minute they
work. But, since Wal-Mart is such a big company, there will be cases in which managers might
do unethical things. For instance, employees were forced to work unpaid overtime. As a result,
they filed a suit against Wal-Mart for not getting paid for overtime. So “in February 2004, a
federal judge ruled that Wal-Mart should pay workers for overtime hours”. But, the case is still
pending. In fact Wal-Mart claimed their policy is against such work. So Wal-Mart’s managers
who required overtime were disciplined and fired. In fact, it is Wal-Mart’s responsibility to make
sure that people get paid. They should settle the suit by paying their employees for unpaid
overtime.

 LABOR UNION OPPOSITION

Wal-Mart is a non union organization that feels it does not need third party intervention. So,
instead of unions, Wal-Mart has an open door policy that encourages employees to take their
complaints beyond management. But the open door policy does little to help its employees but
gives the business the leverage it needs to terminate unwanted non compliant help. In addition,
Employees start out at lower wages than unionized corporations and end up quitting by the end
of the first year.

Wal-Mart also prohibits employees from talking to union representatives. It is unethical for Wal-
Mart to prohibit employees to talk to union representatives since according to the National Labor
Relations Act; Therefore, the United Food and Commercial Workers Union filed a complaint
with the National Labor Relations Board against Wal-Mart. “The complaint, filed with the
National Labor Relations Board, alleges that Wal-Mart violated federal labor law by “bribing”
employees to report on co-workers who favored a union.”. But Wal-Mart denied the charges that
were brought against the company.

 CONSEQUENCES

As a result of all the above negative publicity, Wal-Mart lost a lot of its carefully built up
goodwill. Wal-Mart also did not feature in the Fortune Magazine 2002 list of the '100 Best
Companies to Work For' for the first time in four years.

Reportedly, this was a direct result of the company's failure to provide affordable healthcare
coverage to its workers, which forced them to forgo health insurance. Allegations that Wal-Mart
monitored union activities and asked employees to spy on co-workers added to the company's
problems.

 CONCLUSION & MY OPINION

It seems that Wal-Mart needs to periodically examine its pay practices to make sure that all
employees are getting paid for all the hours worked. Wal-Mart is wrong by bribing employees
for it encourages dishonest behavior. If Wal-Mart wants to avoid a hearing or a lawsuit in this
situation, they need to post notices saying the retailer will not oppose employees talking to union
representatives. In addition, if Wal-Mart takes more seriously the employees’ complaints, it
might encourage them not to unionize.

In today’s competitive world no company is immune to problems. The companies that survive
are the ones that can spot ethical issues and correct them before they become problems. In this
case Wal-Mart failed to acknowledge those potential problems and they are probably going to
pay for it. Thus, Wal-Mart’s unethical business practices have hurt its company’s reputation. If
Wal-Mart wants to survive they will have to try hard to improve their image. That is, they need
to show that they care about ethics by treating employees fairly. As a result, it will attract good
employees and people will have no reason to complain about the company. In addition Wal-Mart
needs to be socially responsible in order to avoid economic harm and in order to maintain the
legitimacy granted by society.

 HRM Ethics
Human Resource Management (HRM) deals with work force management, manpower planning
and other employee related activities in an organization. Therefore, we can say that it is a
special branch of management where ethics play a crucial role. HRM concerns human issues,
especially those related with compensation, development, industrial relations, health and safety
issues.
Out of all organizational issues or policies, ethical considerations are the most difficult to deal
with. Issues arise in employment, remuneration and benefits, industrial relations and health and
safety. Like in the case we saw a leading retail brand not being able to suffice to ethical
expectations of its employees and hence facing the consequences.
This highlights the fact that no matter how big or small a business might be ethical conduct is
must in order to develop and maintain great reputation in the market. And the importance of
ethical HRM can’t me over-emphasized because it is directly linked with employees morale and
performance. Once disturbed can leave a long lasting effect on the efficacy of the company as a
whole. The increased government intervention is also an obstacle no owner would like to have
on their company’s freedom. Hence we can conclude that ethics in HRM is a must.

 BIBLIOGRAPHY
 http://www.pbs.org/itvs/storewars/stores3.html
 http://kansascity.bizjournals.com/kansascity/stories/2001/11/12/story8.html
 http://home.earthlink.net/~local1613/nlra.html
 http://www.washingtonpost.com/wp-dyn/articles/A48056-2005Apr12.html
 http://www.ufcw.org/issues_and_actions/walmart_workers_campaign_info/facts_and_fig
ures/walmartandwomen.cfm
 http://www.ufcw.org/issues_and_actions/walmart_workers_campaign_info/facts_and_fig
ures/walmartandwomen.cfm
 http://www.flagstaffactivist.org/fan/study.phtml
 http://www.walmartfacts.com/keytopics/default.aspx