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Description of the Company
Who could have imagined that such a man as Samuel Walton, born on the 29th of March, 1918, in Oklahoma, one day would have an opportunity to build a huge dynasty that is now known to the public as the Walmart company. At the age of twenty-six, Samuel Walton took under control his small variety store. Fortunately, by the end of the decade Walton succeeded in opening 276 retail stores in eleven states on the territory of the USA (Basker 2005).
Up to 1989, the number of Walmart department stores increased to 1,402. The profit of the store constituted $1 billion in 1980 and $26 billion in 1989. According to the statistics provided by Walmart annual report, the number of Walmart department stores constitutes 8,416 units (Basker 2005).
Nowadays, Walmart is not only the largest company on the territory of the USA but also the most powerful food retailer. According to Burton (2012), this company influences all sectors of economics in the USA. At present, Walmart is the biggest employer in the private sector. It employs more than two million people around the globe, with 1,4 million of employees on the territory of the United States of America (Burton 2012).
Despite the fact that the Walmart company is recognized international, according to many observers, Walmart stores influence some sectors of the US economy negatively as it leads to the loss of jobs and to the decay of small businesses (Angotti 2010).
Appearance of Walmart on the new market decreases retail activity as well as opportunities of employment (Angotti 2010).
Moreover, according to Angotti, the trend of appearance of new Walmart stores unfavorably influences existing retailers. The result is that existing retail stores suffer from considerable sales declines that usually exceed 30 percent. At the same time, retail stores situated not far from Walmart have to give up business. Taking into consideration the recent statistics, after one retail store of Walmart was opened in Chicago in 2006, eighty two out of three hundred small stores on that territory got no profit and were finally closed down in two years (Angotti 2010).
In spite of the fact, that the exceeded number of Walmart stores sometimes lead to negative consequences, it is not possible to dismiss the point that Walmart “globalization” or expansion has a positive impact on the retail employment on the country level (Basker 2005). First of all, the Walmart corporation employs more than one million of workers on the territory of the USA.
Furthermore, this private corporation provides with jobs more than 300,000 of people around the globe. It is said that the company aims to employ up to 800,000 workers in the next half of the decade. It has been estimated that the Walmart corporation created more workplaces in the last decade of the twentieth century than any other company. Thus, Walmart is not aimed at destroying jobs, but at providing the population worldwide with new workplaces (Basker 2005).
It is possible to draw the conclusion from the data analyzed above that Walmart is a private corporation that receives a considerable amount of critique and complaints for its strategies of running business. However, what is the “recipe” or “ingredients” of success of the Walmart corporation? The major part of success is to be indebted to employees and to methods of managing employees because efficient performance management has a crucial effect on the performance of the corporation as a whole.
Employees’ performance is directly connected with motivation of the workforce (Angotti, Paul, Gray & Williams 2010). The research and analysis of performance management methods will be effective for the analysis of employees’ motivation. Furthermore, the data will be applied for determining motivation methods and techniques in the Walmart corporation .
Employees Motivation: Theories and Methods
Motivation of workforce has been a central research topic for a long time. Motivation plays a key role in job performance of employees. There are many definitions for determining essence of motivation, but it is important to concentrate on those related to workplace. The definition of motivation is closely related to the word “motive”. According to Webster’s Dictionary, a motive is something that forces people to act (Herzberg 1968). With connection to employees, a motivation can be described as disposition to behave in an intentional manner to achieve the purpose and to accomplish private goals. People become motivated and strive to reach both types of goals: personal and organizational. The more motivated the workforce is, the more likely employees will reach organizational commitment. Motivation is orientation towards reaching the goal or purpose of an employee (Herzberg 1968).
Correspondingly, motivation is a phenomenon that is different for each person. The reason for it is that each individual is distinctive and is characterized by different purposes, needs, goals, moral values, and expectations (Basker 2005). For instance, the employer should not presuppose that what motivates them will definitely motivate the workforce in the store, supermarket, or anywhere else. Hemmerschmid supports the idea, that it is rather difficult for employers or managers to motivate employees towards doing something. Nevertheless, employers can influence the workforce with help of different methods and techniques in a special manner that forces them to feel motivated (Hemmerschmid 2011).
There are two basic types of motivation: intrinsic and extrinsic. The first subtype of motivation is closely connected to personal fulfilment that is typical for employees who like the job they are doing (Yudhvir & Sunita 2012). For instance, a person who is fond of music will be motivated to practice a particular instrument and to attend a music school. On the other hand, extrinsic motivation comes from factors outside of a person. A typical example of extrinsic motivation is an employee who works too hard and too much because of the strong will to get a promotion. Apart from this, extrinsic motivation is stimulated by the following factors: leadership, high salary, fame, and recognition in the society (Yudhvir & Sunita 2012).
Motivation of the workforce plays a crucial role in achieving business goals. Motivating employees can be considered as a primary responsibility of managers. Motivation is crucial for each company as it provides “healthy” working environment and prevents frustration (Basker 2005). Therefore, employees with a high degree of motivation work harder and easily overcome challenges at work. Motivation boosts and intensifies job performance as the fuel gives energy to the engine in a car (Basker 2005).
- Motivated workers do their job more persistently and with more enthusiasm.
- Motivated employees take pride in their job.
- Motivated workforce cares about clients.
- Motivated workers are far more productive.
As a result, employees’ motivation has an immediate connection with the profit of the company or organization. Consequently, the more motivated workers are, the more profitable and successful will be the establishment (Yudhvir & Sunita 2012).
Many experts in the sphere of social sciences distinguish various methods or techniques of employee motivation. There are two best-known subtypes of motivation methods: traditional methods and modern (contemporary) methods. There are five most prominent professionals whose methods of employees’ motivation are applied in business sphere nowadays: Maslow, Alderfer, MgGregor, McClelland, and Herzberg.
Maslow’s Hierarchy of Needs
Abraham Maslow discovered his motivation theory in 1943. He explains the sense of the theory of needs with help of a triangle with the following levels:
Every employee starts from the bottom of the pyramid and works hard to pass all stages and to achieve the peak of it. According to Maslow, the first level is the level of psychological needs. Basic needs of human beings include survival, water, food, sleep, and shelter. The second level of the pyramid is based on security. It means that the person and the person’s whole family are in safety.
The third level involves affiliation or, in other words, the need to be loved. The fourth level is the level of esteem. There are two components of esteem: self-esteem and respect from the surroundings. The final level of the pyramid explains self-actualization. In this stage, talents of a person are being definitely utilized (Maslow 1943).
Herzberg’s Two-Factor Theory
The theory of Herzberg created in late 1950s is connected with the theory of hierarchy of needs by Maslow. The philosopher believes that the mental health of an employee has a direct connection to performing the job. He distinguishes two basic factors that influence the quality of job performance: job content factors and hygiene factors. Job content factors, as the author of the theory states, have a primary focus on a job (Herzberg 1968). Correspondingly, these factors include: recognition, responsibility, growth, improvements, and advancements. Similarly, hygiene factors are explained as factors that are connected with dissatisfaction with a job. Hygiene factors include salary, security, status, administration, and personal life. The sense of Herzberg’s Two-Factor Theory is that employees are motivated by job content factors and unmotivated by hygiene factors. Herzberg suggests that in order to motivate an employee, the manager has to complete the following stages: cancel job control; implement gradually more complicated tasks; make monthly reports directly to employees; and provide job freedom (Herzberg 1968).
McGregor’s “X” and “Y” Theories
According to the “X” theory, managers have to follow the system of harsh control and punishment in order to motivate the workforce. On the contrary, the “Y” theory is based on development of a healthy working environment for employees (Yudhvir & Sunita 2012).
Victor Vroom’s Valence X Expectancy Theory
The theory of Victor Vroom is focused on three major factors:
- relationship between performance and efforts;
- relationship between reward and performance;
- relationship between goal and reward.
Goal Setting Theory
This theory is connected with the notion that employees have to make numerous efforts to achieve the goal. This goal should be neither too simple nor extremely complicated or impossible to achieve. At the same time, employees want to feel that there is a great possibility of their success (Yudhvir & Sunita 2012).
Having analyzed the phenomenon of motivation and various theories and methods of motivation, it is possible to make a conclusion that every company and organization wish employees to be flexible and to work hard and with enthusiasm. Consequently, it can be achieved with the help of a range of motivation methods and techniques. Proper use of positive motivation methods has the power to change business environment for the better. Nowadays, companies with effective motivational techniques continue to “shade” any other businesses and, as a result, stay far ahead of their competitors. Analysis of a vast number of employees’ motivation techniques will provide with the opportunity to establish what motivation theories and methods are usually applied by managers at the Walmart corporation (Ryan 2013).
Motivation Techniques at Walmart Corporation
Except great marketing and leadership, motivation of employees is one of the most important strategies that have led the Walmart corporation to become the largest company around the world with the highest level of the workforce. At the same time, all profitable companies apply different strategies for managing workers. Strategies differ because of the type, location, and size of companies (Re’em 2011).
The Walmart corporation motivates employees in many different ways. First of all, Walmart applies McGregor’s “X” and “Y” theories because it creates for all workers of the corporation a healthy environment and atmosphere. According to Bish, managers at Walmart treat employees as associates as it makes them feel more engagement and connection with the company (Bish 2011). Top managers and employees call each other by the first name only. It has positive consequences as it creates a “friendly-oriented” atmosphere instead of the “boss-oriented” one. Workers at Walmart are respected despite their position in the corporation (Bish 2011).
One more Walmart motivation strategy, no less effective, is the strategy of reward (Basker 2005). That means workers at Walmart are encouraged through financial as well as health care benefits. All employees without exception get health insurance.
Furthermore, Walmart gives opportunity to all associations a direct access to own shares in a way of selling stocks to them at a low price and without brokerage fees. The Walmart corporation has implemented the project “Door Open” that provides access for association to express personal challenges to a manager, supervisor, or even board of directors. Moreover, experts in the sphere of psychology are hired to assist people in solving their problems (Kamery 2004).
The Maslow’s hierarchy of needs is applied by the corporation as well. Basing on the first level of the pyramid that is called psychological and deals with basic human needs, the Walmart corporation provides high salaries for employees to give them an apportinity to earn for living. This salary completely satisfies all basic needs of people. The second level of the Maslow’s pyramid foresees security (Maslow 1943).
On the basis of Maslow’s hierarchy of needs, the reward strategies suggest that the staff, earning relatively low wages, will be motivated by receiving monetary refunds (Maslow 1943). The “extra money” will provide people with a basic opportunity to satisfy their physiological needs. When workers get higher salaries, consequently, the reward becomes less important, comparing with other basic needs in Maslow’s hierarchy. As a result, job security as well as an opportunity to achieve one’s potential and the sense of being needed prevails (Ryan, 2013).
Furthermore, according to the statistics provided by The New York Times and the Associated Press, the Walmart company has developed a program in which employees are able to receive college credit for their in-store training (Bish 2011). In simple words, Walmart is accrediting training programs of employees so they will receive free credits for their training towards college degrees.
Moreover, the corporation has provided within three years more than $50 million of financial assistance to help employees to pay fees for tuition and to pay for books. At the same time, the company has established various kinds of assistance programs for workers that have a wish to finish the DEGs. In 2010 Walmart company has conducted a poll concerning tuition programs of employees. As a result, more than 60% of workers has stated, that online courses better suit the schedule of workers than studying at the university on a permanent basis (Re’em 2011). The board of director and executives at Walmart are convinced that education programs beneficially influence the efficiency of work. The tuition assistance is necessary for Walmart, because it influences the prestige and reputation of the company.
Herzberg’s Motivation-Hygiene Theory is extensively applied by management at Walmart company. On the basis of this theory of hygiene factors, a conclusion can be made, that educational assistance program is applied at Walmart in order to motivate employees at Walmart “indirectly” (Ngima & Kyongo 2013). In other words, it keep employees at corporation from being dissatisfied with their salary and even relations with coworkers. Furthermore, online assistance programs, provided to employees at Walmart reduces workers’ stress with regard to organizational constraint. As a result, Walmart corporation has implemented education programs with the purpose to provide an image and to ensure competitive benefits against other corporations (Ngima & Kyongo 2013) .
However, this type of motivation has some negative consequences. One of the biggest drawbacks is based on the fact that if employees are not able to afford education even with the discount provided by Walmart, the program turns into a misguided reward for “selected” employees (Bish 2011).
The goal setting theory developed by Latham and Locke in 1979 is applied at the Walmart corporation by managers as well. According to this highly productive motivation theory, managers at Walmart set goals for their workers and encourage them to achieve these goals (Basker 2005). At the same time, the Walmart corporation applies the strategy of rewards. The management of this company is sure that motivating other people forces employees to move in the specific direction the company wants employees to follow in order to achieve good profit. Managers at Walmart help employees to see that they can easily satisfy their private needs and, at the same time, they can help the enterprise to gain profit (Crofoot 2010).
Furthermore, managers believe that success as well as failure of Walmart definitely depends on employees. Apart from this, employees at Walmart stores are motivated to work in teams. The logo of the company “Go Together” can be regarded as an absolute proof of company’s intentions. Working in a team has positive consequences as it helps the workforce to enhance work performance (Crofoot 2010).
The acquired need theory is one more technique applied by Walmart’s leadership in order to enhance motivation of workers.
According to this theory, Walmart is good at satisfying basic human needs. There are the following reasons for it. First of all, the company offers a competitive salary to workers. Secondly, employees are usually rewarded for a good job. Besides, Walmart gives an opportunity to its employees to give suggestions or even complain. However, one of the negative sides of the acquired need theory is that this technique is very limited as it provides people only with basic needs in order to survive (Ngima & Kyongo 2013).
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Having analyzed the leading motivation strategies, applied at Walmart, a conclusion can be made, that motivation techniques are crucial for managers at Walmart corporation in today’s constantly changing business sphere. How well managers use motivation strategies to motivate workers directly influences the efficiency of employees. In order to motivate employees, managers at Walmart perform the following tasks:
- express thanks to employees for performing their job;
- praise employees in sincere and friendly manner;
- listen to the advice of employees;
- hold meetings with workers;
- strive to create open, franc and friendly atmosphere;
- encourage and support new ideas and initiatives, offered by employees;
- provide data on the ways how the company makes a profit;
- encourage employees to participate in decision-making process;
- give employees an opportunity to learn new skills, to develop and to promote;
- celebrate together the successes of corporation;
- conduct morale-building undertakings (Kamery 2004).
With the help of motivation theories and methods, Walmart has become the market leader in less than no time and has managed to “conquer” the world. Despite effectiveness of techniques applied at Walmart stores, the following benefits could result in increased motivational levels: life insurance cover, better relations among employees, salary increment, improved working conditions, house allowance, sponsorship for further studies, annual leave, and 100 % provision of safety gear. The following suggestions will be beneficial in the process of improvement of motivational management strategies at Walmart.