Wal-Mart's Compensation and Benefits the Thesis

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As can be seen from the Table 1: Comparing Store Statistics, Wal-Mart on average has the least amount of full-time employees of any given regional or local competitor and therefore has the ability to control benefits and compensation costs. In addition this strategy alleviates the potential for union organizing as well.

This strategy alleviates the need to pay medical benefits and also makes the company more resistant to labor organizing efforts. Wal-Mart uses a unique organizational hierarchy to manage its predominantly hourly workforce, distributed throughout the many departments in a SuperCenter. The median annual salary of hourly workers hovers in the $20,000 a year range, with in-store management earning a median salary in the range of $54,000 to $60,000 a year.

Figure 1: Wal-Mart Organizational Structure

Conclusion

Wal-Mart's organizational structure is specifically designed to enable hourly workers for complete nearly every position in a Wal-Mart SuperCenter yet the benefits and compensations structures have a wide variation in them between part-time workers, full-time workers and managers. From an economic impact standpoint, with a $470,331 run rate per week necessary to keep any given SuperCenter breaking even and delivering onto to company-wide overhead, the competitive practices necessary to reach this level disrupt smaller local and regional competitors severely. The average Wal-Mart employee earns $9.70 per hour and is often kept to part-time status so the company does not have to pay medical benefits. With evidence of discrimination to women and monitories (Drogin, 2003) and investigations into the hiring practices of part-time staff (Adamy, 2008) the benefits and compensation practices of Wal-Mart will continue to face scrutiny. Compensation and benefits are more oriented towards keeping any given SuperCenter profitable and growing in efficiency, often having full-time associates fulfill a variety of roles, some focused on keeping the supply chain functioning efficiently and others focused on retailing.

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Appendices:

Wage Analysis Table By Department Showing Wage Rates

WAL-MART DEPARTMENTS ASSOCIATES NEEDED BY DEPARTMENT (assumes 24 hr. operation) SUPERVISORS REQUIRED BY DEPARTMENT ASSOCIATE HRLY AVERAGE WAGE SUPERVISOR HRLY AVERAGE WAGE ASSOCIATE WAGES PER WEEK BY DEPT (40 hrs x avg. wage x # associates) SUPERVISOR WAGES PER WEEK BY DEPT (40 hrs x avg. wage x # associates) OVERNIGHT ASSOCIATES

NIGHT RECEIVING

DAY RECEIVING

SERVICE DELI

MERCH DEPTS

INFANTS/TODDLERS

DOMESTIC GOODS

FRONT END

HORTICULTURE

OPTICAL PROFESSIONAL

RECEIVING

SECURITY

TOYS

PRODUCE

SPORTING GOODS

BACK OFFICE

AUTOMOTIVE

DAIRY PRODUCTS

HARDWARE

HOUSEWARES

MAINTENANCE

PAPER GOODS

PHARMACY

PIECE GOODS

SHOES

DEMOS

HEALTH AND BEAUTY AIDS

PETS AND SUPPLIES

STATIONARY AND BOOKS

GROCERY DRY GOODS

JEWELRY

BAKERY

CANDY, TOBACCO, COOKIES

ELECTRONICS

HOSIERY

LADIES SPORTSWEAR

MEAT

MENS WEAR

Full Calculation of Associate and Supervisor Benefits

WAL-MART DEPARTMENTS ASSOCIATES NEEDED BY DEPARTMENT (assumes 24/7 shift) SUPERVISORS REQUIRED BY DEPARTMENT ASSOCIATE AVERAGE BENEFITS COST ($1 PER LABOR HOUR) SUPERVISOR AVERAGE BENEFITS COST ($1.50 PER LABOR HOUR) ASSOCIATE BENEFITS PER WEEK BY DEPT (40 hrs x avg. benefit x # associates) SUPERVISOR BENEFITS PER WEEK BY DEPT (40 hrs x avg. benefit x # associates) AUTOMOTIVE

BACK OFFICE

BAKERY

CANDY, TOBACCO, COOKIES

DAIRY PRODUCTS

DAY RECEIVING

DEMOS

DOMESTIC GOODS

ELECTRONICS

FRONT END

GROCERY DRY GOODS

HARDWARE

HEALTH AND BEAUTY AIDS

HORTICULTURE

HOSIERY

HOUSEWARES

INFANTS/TODDLERS

JEWELRY

LADIES SPORTSWEAR

MAINTENANCE

MEAT

MENS WEAR

MERCH DEPTS

NIGHT RECEIVING

OPTICAL PROFESSIONAL

OVERNIGHT ASSOCIATES

PAPER GOODS

PETS AND SUPPLIES

PHARMACY

PIECE GOODS

PRODUCE

RECEIVING

SECURITY

SERVICE DELI

SHOES

SPORTING GOODS

STATIONARY AND BOOKS

TOYS.....

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