Board of Directors Proposal
New and Improved Walmart

I would like to thank the executives at Walmart for giving me the opportunity to provide insight and expand upon Walmart’s horizons for the 2014 business year. I graciously accept the appointed board member position with great integrity and plan to maintain the company’s great successes for this year and the future. While Walmart is a well renowned super store, it has been scrutinized for its labor rate as well as its overall unfair treatment of employees. The scrutinized label of this establishment allows me to offer an alternative perspective and therefore propose a solution to preserve the Walmart name. The possible future operations and procedures which I would like to see changed within each practicing Walmart is related to employee’s salary, pay, manufacturing and labor. My proposals incorporate much consideration in regards to maximizing the return to shareholders, providing for employees and serving the larger community and overall society as a whole. My considerations and proposals will also serve the consumer portion of the community because when employees are satisfied, customers are satisfied.
Previous to my appointed role as a board member for this company, I made assumptions regarding the way Walmart operates and functions as a business. Walmart has always been about saving, which in my mind is not only great for the people, but it is great for business. It is great for the people because the goods that Walmart provides are affordable for everyone including lower socioeconomic status citizens. The idea of saving is also great for business because it increases a company’s profits. I believe that these two notions is what Sam Walton believed in, and what Walmart represents today. I made the assumption that Walmart was a positive establishment in the community based on its slogan of “saving,” however, that was before I conducted my own research. I was extremely curious as to how Walmart has the ability to manufacture and charge so little for products but they still receive billions of dollars in profit almost every year. Walmart has a dirty secret that it does not want its employees or consumers to know; Walmart ends saves by its current practices of under compensating their fellow employees. The practice of cutting costs leads to unfair treatment of all hard working employees. After conducting my thorough investigation and research, I began to think that Sam Walton’s beliefs are not being truthfully represented in regards to its employees at the company today.
Labor Issues
There have been many issues within the past couple of years surrounding Walmart in regards to their labor practices. Child labor has been perceived as an issue within the company as well as the overall issue of employment. Children working in foreign countries, such as Honduras and China, are as young as 11 years of age. These young children have been reported and linked to making and creating some of Walmart’s products. These children, from a 2006 report, are making approximately 6.5 cents per hour while working 14-20 hour shifts. The idea that Walmart is a participating member in the terrible act of child labor is atrocious. Walmart is enabling the current trend of “saving” by overworking children for a minimal compensation and therefore is an opposing force in the war against child labor.
There have also been reports in regards Walmart’s employment of children which Steven Greenhouse recorded. Greenhouse stated that from as early as 2005 children under the age of 18 were operating dangerous machinery which includes chain saws and cardboard balers. There were also reports of children working late nights, during school hours, or too many hours in the day during a 2004 week long audit. Walmart denied any wrongdoing based off of these accusatory reports and their reasoning was heavily debated by employees at the stores where these audits took place.
Another incident which landed Walmart in some hot water regarding their employment is the firing of a staff member, James Wynn, after he publically revealed some of the practices Walmart currently has in place. According to Walmart they allegedly terminated the employee due to inappropriate relations with another employee. There has been some debate to if this is truly the reason for his firing. Mr. Wynn exposed the horrendous working conditions in the Central American factories. According to James there were factories in Honduras that had: padlocked exits, lacked drinking water, lacked toilet paper, were extremely hot which caused employees to pass out, dismissed hiring of pregnant woman, and there was no paid overtime to some employees.
Based off of these three specific labor issues that caused this company to be seen in a bad light, I would like to propose ideas that can benefit Walmart as well as the employees that are being negatively affected as a result of our current practices. The fact that this company has ran into many instances beyond these three mentioned is alarming, and they need to be fixed immediately to ensure our company runs with integrity and excellence.
First and foremost, there shall be no child under the age of 14 working for Walmart’s manufacturing facilities domestically and internationally. To ensure that this rule is followed, there will be random audits of manufacturing facilities that provide products to Walmart (approximately 4 per year per facility). If there happens to be a child working under the age of 14, the employer that hired the employee shall be terminated as well as a fine to the manufacturing facility. The auditors will be an entity outside of Walmart to ensure no conflict of interest as well as no bias reporting.
These audits will also investigate the working conditions associated with the manufacturing facilities as well as the stores domestically and internationally. The auditors will inspect if the working conditions are suitable and sustainable. The auditors will also administer tests to the employees to rate their happiness and if they have any additional improvements that can be made to the facility/store that will enable or help them to sufficiently complete their working objectives. There will also be a temporary shutdown of the facility until the auditor’s recommendations are met. The temporary shutdown will not affect the workers who are working there under the laws in that they will receive their normal pay.
Lastly, terminations of employees will be investigated thoroughly to detect if there are any underlying reasoning for the termination that isn’t brought to light. The “terminated” employee isn’t technically terminated until they have signed a document accepting that their termination was done lawfully and truthfully.
These changes will be rather expensive for the company to administer. However, I believe that with these new operations in place, it makes Walmart more sustainable and creates a safer environment for the employees. We have the necessary funds available to put these changes into action. I also believe that if these changes are made, it will reduce the amount of fines and penalties we could incur if nothing is changed. This will end up saving the company money in the long run if we follow these protocols. We can save up to 640 million dollars in lawsuits if the lawsuits themselves are avoided. Therefore, why can’t we do the right thing and treat our employees fairly. The employees of Walmart are what keep us afloat, and to treat them fairly under these practices is what will make this company more successful in the future in that it will be a company that people will want to work for thus expanding opportunity for all.
Compensation
Furthermore, another large issue that also affects the employees at Walmart is their pay. Walmart employees on average make $8.81 an hour which if the employee worked 34 hours per week for 52 weeks (1 year) equals a whopping $15,576 before taxes. This amount of income does not sufficiently cover the federal poverty level of $22,050 for a family of four. How could we let this happen? Our employees are the lifeblood of this company, and we cannot provide them with enough funds to survive? Put yourself in their position and ask yourself if you would want to work for a company that cannot sufficiently provide a suitable yearly salary. The fact that the CEO makes approximately 1,201 times the amount of the average Walmart sales Associate is staggering. This imbalance of compensation is astounding and it paints the company in a negative light.
There is a solution to this problem however; Walmart can afford to give our employees more per hour. If Walmart paid its employees $12 per hour it would increase their yearly salaries to $21,216, which is still under the national average, however it would definitely make the employees financial situation more reasonable while improving the company’s image. According to making a change at Walmart, we can pass this cost directly to the shopper. The average customer would only have to pay $.46 per transaction to absorb these costs. I would argue that this increase in pay for our employees will boost morale thus increasing customer service which would meet or exceed the $.46 per transaction needed for absorption.
Another change that would benefit the workers of our company is to provide the workers with a free meal during their lunch break. If we provided our workers with a compensated meal of $10 during their shifts it would save the employee approximately $3,120 per year. Of the 7,500 employees at Walmart it would cost the company $23,400,000. This is only .003% of the net income of 17 billion dollars the company earns per year. This would not significantly affect the company in a negative sense but in a positive sense. It would directly increase how the company is presented thus leading to more people wanting to shop and support our business.
We need to ensure that all of our employees can sufficiently live comfortably. This doesn’t just benefit the employees, but it positively enhances Walmart’s image as well. If employees are better compensated, it can directly lead to a more positive outlook on working. If an employee has a better outlook during the workday, it can lead to better customer service, which then leads to more sales and thus profits. I would also argue that if employees are better compensated, it will bring out more competition meaning that more people will want to work for our company. We will start to see an increase in applications resulting in higher quality workers. However, one problem that could occur and that could paint the company in a negative light according to a New York Times article is that this competition will result in a large sum of educated teenagers from high income families applying for positions which will hinder the lower skilled workers opportunities. Based off of this notion, we shouldn’t just primarily base our hiring on education and we should keep an open mind during the hiring process upon those who truly need and not just want the position. Employers should base their decisions on a number of things such as experience and how successful the interview was. Those that truly need to work for our company to provide for their family and that exemplify characteristics that will benefit our company will be hired.
Thank you for listening to my position on certain complications this company has faced and will continue to face if nothing is changed. We are in a new era of business; one that focuses on the benefits of our employees. The fact of the matter is that if we do not treat our employees fairly regarding their work environment and wages, it negatively affects us as a company in the eyes of the general public. If we are painted in a more positive light to the general public, we will see a direct increase in revenue and profits. My hope is that our company will no longer be scrutinized. We can and will be a successful company as long as we follow the necessary guidelines I have provided. I hope that you take all of these guidelines into consideration in that it will better our company for long sustained growth internally and financially.

Sources
Burkhauser, Richard V. "Making More Pays Less." The New York Times. The New York Times, 18 July 2004. Web. 19 Jan. 2014.
"Children Found Sewing Clothing For Walmart, Hanes & Other U.S. & European Companies – National Labor Committee." Children Found Sewing Clothing For Walmart, Hanes & Other U.S. & European Companies - National Labor Committee. N.p., n.d. Web. 19 Jan. 2014 http://www.law.harvard.edu/programs/lwp/NLC_childlabor.html
"Fact Sheet – Wages." Making Change at Walmart. N.p., n.d. Web. 19 Jan. 2014.
Greenhouse, Steven, Rosenbloom, Stephanie. “Walmart Settles 63 Lawsuits Over Wages.” The New York Times. The New York Times, 24 December 2008. Web. 19 Jan. 2014.

Greenhouse, Steven. “Fired Officer Is Suing Walmart.” The New York Times. The New York Times, 1 July 2005. Web. 19 Jan. 2014