In recent months, Wal-Mart Stores Inc. has only hired temporary workers at many of its stores in the Unites States. This is the first time the world’s largest retailer has done so outside of the holiday shopping season. A survey of 52 stores, including one in every U.S. state, revealed that 27 were hiring only temporary workers, 20 were hiring a combination of full, part-time and temporary employees, and five were not hiring at all. Wal-Mart U.S. Chief Executive Bill Simon confirmed this new strategy, saying, “Their hours flex by the needs of the business from time to time.” Both the human resource frame and the political frame demonstrate numerous issues with Wal-Mart’s new strategy, which could be detrimental to organizational health. The human resource frame illustrates certain key points that would advise against Wal-Mart’s new hiring strategy. First and foremost, one of the oldest views regarding motivation, which is still popular among many economists today, is that workers’ primary motivation is based on financial rewards. Wal-Mart spokesman David Tovar defended his new strategy in a recent interview, saying that temporary workers will be paid the same starting salary as full-time employees. However, Tovar clearly lacks understanding that current research in the field of motivation demonstrates that employees are more motivated by things beyond money, such as doing good work, getting better at what they do, bonding with other people, and finding meaning and purpose. According to Lencioni’s “The Advantage,” compensation and rewards should connect to one or more of the Big Six Questions and contrary to what many leaders believe, praise is the most effective motivator of employees, not money. Immediately, there are multiple issues with Wal-Mart’s new strategy. It is difficult for employees to improve when they are working for a short amount of time with fluctuating hours. Further, workers are not bonding with other employees when off-days are constantly changing and jobs are unstable. Under the human resource frame, Lawrence and Nohria’s (2002) Four Drive Theory of Human Nature states four key drives for motivation, one of which is a bond with others in a mutually beneficial, long-term relationship. Under Wal-Mart’s new hiring strategy, temporary workers are usually being hired on 180-day contracts, which prohibit them from creating anything close to a long-term relationship. Also, “Basic Human Resource Strategies” involves keeping employees, protecting jobs and promoting from within. With 180-day contracts, all of these strategies are violated as there is constant turnover and employees rarely, if ever, have any job security or opportunity to advance in the company. A member of Organization United for Respect at Walmart, Mary Pat Tiff points out, “Long-term associates are particularly distraught by this short-term hiring as many are looking for more hours and full time work.” One of the assumptions of the political frame is that scarce resources and enduring differences put conflict at the center of day-to-day dynamics and make power the most important asset. This is precisely what Tiff is referring too, where hours are limited, and the hiring of temporary employees creates constant conflict, competition, and frustration among workers battling for scarce resources. Conflict is inevitable in an organization, but the key is how it is managed. Poorly managed conflict leads to infighting and power struggles which can be detrimental to productivity. After receiving criticism regarding Wal-Mart’s hiring of temporary employees and its effect on workers, store managers continue to implement the policy, articulating, “it’s a company direction at the present time.” These leaders are showing no signs of changing their strategy, even in the face of clear conflict at the center of daily operations. One of the four major political skills under the political frame is agenda setting. An effective leader creates an “agenda for change” with two major elements, one of which is a vision balancing the long-term interests of parties. In this case, the long-term interests of full time and temporary employees are not being satisfied as constant fluctuation and uncertainty is causing workers to clash and compete with one another on a daily basis. Lencioni’s “The Advantage” argues that “organizational health trumps everything else in business.” It highlights five behaviors necessary for a healthy organization, the first three of which are building trust, mastering conflict, and achieving commitment. Trust cannot be built between management and employees when the workforce is constantly altered. Mastering conflict is nearly impossible when there are many employees battling for limited hours and management is sending a clear message that employees are easily replaceable by hiring more temps instead of promoting from within. Finally, management is demonstrating little effort towards achieving commitment from their workers, who are on six-month contracts and must reapply once their contracts expire.
Employers often fail to develop a cadre of committed, talented employees. Even though a skilled and motivated workforce is a competitive advantage, Wal-Mart has developed a new hiring strategy that involves short contracts and frequent turnover. Conflict is an inevitable result of this approach, yet Wal-Mart believes that it is saving money by trimming labor costs at a time when profit margins remain under pressure. The company is not investing in people or responding to the needs of its employees. As a result, Wal-Mart’s new strategy may lead to declining health, morale and ultimately, productivity.