Employee Relations at Wal-Mart Case Study - Economics Assignment Help

Assignment Task:

Employee Relations at Wal-Mart

Wal-Mart was founded in 1962 and is now the world’s largest retailer. The firm employs 2.2 million people and total sales in 2012 are likely to be $444 billion. However, the firm has courted controversy for a number of reasons. As Jantzen et al (2009) state, “The Wal-Mart Corporation has come under media scrutiny for a myriad of reasons in recent years. It continues to be the focus of countless news stories, case studies, and organizational analyses— some lauding its business acumen, others decrying its negative social, environmental, and economic impacts. The company’s expansion plans are increasingly subject to referendums as local governments question whether a Wal-Mart presence produces net economic and employment gains. In recent years, residents have turned back Wal-Mart penetration plans in the states of California, New York, Illinois, and Vermont, among others” (page 297). Indeed, the firm’s critics argue that Wal-Mart causes small businesses to close and replaces high-paying jobs with lower-paying ones. Human Rights Watch has accused the firm of adopting unlawful anti-union tactics.
 
In May 2012, the US Labour Department announced that Wal-Mart Stores would have to pay $4.8 million in back wages and damages to more than 4,500 employees nationwide for unpaid overtime. The company was also required to pay nearly $464,000 in civil penalties for violating federal overtime laws. These violations covered current and former managers at a range of Wal-Mart outlets. The Labour Department ruled that the company had improperly considered the workers to be exempt from overtime pay. A Wal-Mart spokesman said in a media interview that the company had taken the allegations seriously when they were first raised in 2007 and immediately corrected the way it classified employees: “We adjusted our pay practices at that time and determined that back wages should be paid for the associates involved.” The head of the Labor Department’s wage and hour division, Nancy Leppink said she hoped the case would put other employers on notice that they could not avoid paying overtime by improperly classifying their workers as exempt.

Activity

1. What does this case tell us about the nature of employee relations at Wal-Mart?
2. What theory, concepts or models can be applied to develop your understanding of the employment relationship at Wal-Mart?

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