Beyond higher pay — Walmart’s next steps
Since 2015, Walmart abandoned its low wage policy and started paying employees a more reasonable rate — a story wonderfully detailed by Neil Irwin in his October 16, 2016 New York Times article And in This Aisle, Higher Pay. Walmart’s new wage policy was certainly the right thing to do for their employees, but believing higher wages is the magic bullet solution to put Walmart back on track to regain and sustain success would be both a mistake and a missed opportunity. While higher wages have resulted in improved talent/loyalty of Walmart’s workforce as well as higher customer satisfaction ratings, Walmart must now take appropriate steps to strengthen the connection of the workforce to their jobs and to store success for these benefits to be sustainable and translate to sustainable success for the organization.
To strengthen the connection of the people to their jobs, Walmart must focus on creating meaning. Any loyalty that higher wages may be building is tied to money not meaning, so this loyalty is precarious and can be easily overcome by competitors wishing to attract the most talented employees. Even the prospect of advancement that is mentioned in Irwin’s article, will not keep the most valuable employees loyal when their value is recognized by a competitor who can easily offer comparable pay and an instant promotion. To create sustainable loyalty, Walmart must ensure all their employees have a more meaningful purpose than just collecting a paycheck or being promoted to assistant manager.
To strengthen the connection of the people to store success, Walmart employees should be held accountable for the success — which should not be limited to profitability — of the store that they work in. But rather than make accountability a punitive exercise, Walmart should empower their employees — everyone from the store manager to the people who sweep the floor — to contribute to success, with appropriate rewards for achieving it.
In Irwin’s article, Brian Yarbrough presented a challenge that should be taken very seriously by Walmart if they have any hope of regaining and sustaining the success they once knew: “The better question is what happens next year and the following year. The low hanging fruit has been harvested.”
If Walmart rests on the laurels of its new wage policy and thinks that customer satisfaction will rise indefinitely with store profitability following along on its coattails, they will eventually find themselves right back in a death spiral. However, if Walmart takes advantage of this opportunity by ensuring that their employees have a meaningful connection to their jobs that transcends money and title, and that they are also empowered to make each store successful, then Target and Amazon might have a reason to start losing sleep again.
