The beginning of the article talks about how Wal-Mart is going to pay its workers more and train them better. After posting very low customer satisfaction numbers, they decided its time for a change. Wal-Mart has scored the lowest of all retailers for the last five years. Although Wal-Mart is going to take a hit at first with this idea, they say it will yield long-term benefits down the road. Wal-Mart also wants to work on its online presence. Amazon, Target, Kohl's, and Nordstrom all ranked above Wal-Mart. Do you think that by raising employee wages Wal-Mart can provide a better retail environment for its customers?
http://time.com/3715877/walmart-satisfaction-index/
8 comments:
This is an interesting situation. The first thing that comes to mind is whether they will be able to sustain their reputation of the lowest prices with their increase in costs. I think the main reason people go to Wal-Mart in the first place is the cheaper prices, not for the quality of the employees they interact with. So either this strategy may be unnecessary, or the customer satisfaction became so bad that going there wasn’t worth the lower prices, which letting that happen would be very poor management.
The simple answer here is no. Wal-Mart needs to change it's entire culture if they want customer satisfaction to be hire. Raising wages of employees doesn't directly result in customer satisfaction. It is a conglomerate of things that together create the overall experience for a customer. Improving things like product transparency, the flow of goods, as well as the quality of the goods being sold are all important things to consider when discussing Wal-Marts increasing efforts to change its perception in the eyes of the customer.
Wal-mart raising employee wages and providing more training alone will not provide a better retail environment for its customers. Wal-mart has been notorious for their terrible treatment of employees. Employees typically do not perform or are happy in there jobs when they are treated by their employer. Wal-mart's issue as the article states is beyond training and wage hikes, it is an institutional and cultural issue.
Raising wage would lead to higher cost; could Walmart maintains its price advantage if they put the strategy in practice? In order to increase the customer satisfaction, Walmart should encourage the employees to improve their services by Implementing incentive mechanism like bonus; which cost less than raising overall wages.
All empires eventually fall, and I hope its Walmart's time. I have my personal reasons for disliking the company, but I'm also aware of the power it holds over a huge section of American citizens, mainly those in the lowest economic demographic. Their "low prices" perpetuate a dangerous cycle of poverty and dependency that could be broken by fairer wages, but I'm skeptical when upwards of 80% of employees rely on public assistance in some stores.
Regardless of how you feel about Wal-Mart, they are an American success story. Additionally, while people hound Wal-Mart, they have outperformed the S&P over the past year, so investors believe that they are utilizing capital well. In response to Shichen, I know that Wal-Mart made this decision with the bottom line in mind. I anticipate growth due to their leverage and scale.
As someone who has interned for Walmart in the past, I have to disagree with most of what has been said on this topic regarding Walmart's culture and decision-making processes. While every person's experience at a company can be different, my own experience was excellent and was a major contributing factor to my decision to return to Walmart Logistics in a management role upon graduation. But Walmart has had problems with its stores for a long time, and a lot of that has to do with monetary incentives for store managers to be as efficient as possible with their labor, at the cost of some associates and customers. For example, Walmart stores are routinely understaffed to maximize efficiency and to beat the production goals of the previous year relative to itself and other stores (Walmart is very competitive with itself in this way), but it often leads to disarray of products in the store, as well as long lines at checkout, frustrated workers and a generally poor customer experience. On the logistics side of the operation, the company carried out an initiative several years ago to increase wages by as much as 50% (base hourly wage for experienced logistics associates jumped from $14 to $20). It worked out well, and employee satisfaction and productivity both increased. If the same plan is carried out on the retail front (wages would have to continue to rise), we could see similar results in the stores. In terms of economic impact, it should help increase standards of living for the bottom quin-tile, but to have a truly significant impact I think we will have to see all the major retailers continue to raise wages. It would be a good way of increasing economic activity without a huge jump in inflation
Post a Comment