What does yesterday's pay scale announcement from Wal-Mart mean for employees? Well, starting with 1,200 of its 3,900 U.S. stores, Wal-Mart will initiate pay raises tied to performance and customer service. While it may be hard to rate how a Wal-Mart associate gives "customer service", these measurements are nonetheless a good, industry-standard way to tie pay to employee performance, and I agree with the system, insofar as the detail that has surfaced so far.One of the larger reasons Wal-Mart is starting new pay scale and merit-based pay systems is to, according to the retailer, help associates develop and hone the skills necessary to further their career efforts and build skillsets. This is an admirable goal, as the opportunities available are there if employees can build the skills needed to operate at a higher level and have the motivation to move up in their careers. But, is the real underlying reason really cemented by love for Wal-Mart employees or is there a larger, pressure-relieving reason for the pay scale move? Anything is conjecture at this point.
So, if this rather invigorating move by the world's largest retailer a response to the Economic Policy Institute's recent announcement that Wal-Mart could raise pay while still earning a decent -- if not smaller -- profit? Many in the media has said that the EPI announcement was furnished with pro-union bias, while others have stated the announcement was long overdue. Without specific economic details from either side -- except strong words -- one has to imagine that this recent development was a piece of the puzzle that made Wal-Mart look at its pay scale system for employees.
Brian White has worked in various executive positions in technology and telecommunications and now focuses on editing and writing.











Reader Comments (Page 1 of 2)
8-08-2006 @ 11:20AM
JOSEPH G. SHANAHAN said...
Pay raises are nice if they are big enough to matter, after taking into consideration the taxes deducted from pay checks. They must be sizeable enough to be really meaningful to an employee. Gas and utility prices alone have hit the public wuite hard, and health care costs are incredibly high. It is hard to imagine how people get along. I would rather see WalMart give health care benefits to employees.
8-08-2006 @ 11:44AM
MIKE said...
IT IS A SAD DAY FOR WAL MART EMPLOYEES... IF THEY ARE LONG TIME EMPLOYEES. THE COMPANY FROZE WAGE SCALES FOR HIGHER PAID HOURLY EMPLOYEES IN ORDER TO OFFER MORE TO PEOPLE BEGINNING EMPLOYMENT WITH THE COMPANY. THE PEOPLE WHO STARTED OUT MAKING LOW WAGES WITH THE GOAL OF EARNING MORE AS THEY PROGRESSED IN YEARS AND RESPONSIBILITY ARE NOW OUT OF LUCK... NO MORE PAY RAISES.
THIS IS A CRUEL BLOW TO PEOPLE WHO HAVE DEDICATED (AND I DO MEAN DEDICATED)DECADES OF THIER LIVES TO THE COMPANY AND NOW ARE A LITTLE TOO OLD TO BE STARTING OVER.
THE COMPANY ACTED TO COUNTER ALL THE NEGATIVE PUBICITY FROM THE UNIONS AND THIER BACKERS IN THE VARIOUS MEDIA. I CURSE THESE GROUPS FOR WIPING OUT THE PLANS OF THOUSANDS OF AMERICANS.
8-08-2006 @ 12:09PM
Mike said...
I dont for a second believe that this is being done in response to pressure from the unions (wakeupwalmart.com).
We're talking about a company with 1.5 million employees. It takes time to make such a sweeping change in base compensation. It's not going to happen overnight as a result of some hacks with a website raising a ruckus. I would imagine this has been in the works for a long time as Wal-Mart constantly compares itself to its competition.
As for the pay-caps, the way I read it employees are capped within their job category. That seems fair. You can only get paid so much for one skill set. They all have the opportunity if they wish to pursue other jobs with more responsibility - and therefore more pay - within the company.
Didn't many of Wal-Mart's management folks start out in the stores?
8-08-2006 @ 12:43PM
BOB LEWE said...
I WISH EVERYONE WOULD STOP GETTING SO EXCITED ABOUT THIS "NEW" PAY SYSTEM FOR HOURLY EMPLOYEES. ITS THE SAME THING I HAD AT MY LAST COMPANY 20 YEARS AGO. THERE IS NOTHING NEW ABOUT IT, EACH HOURLY POSITION HAS A MINIUM AND MAXIUM PAY RATE. EACH YEAR YOU ARE EUALUATED ON YOUR PROFORMANCE, IF YOU DID REAL GOOD YOU GET 60 CENT PER HOUR PAY RAISE IF YOU DID OK YOU GET A 40 CENT PER HOUR PAY RAISE, AND IF YOU DID POORLY WELL YOU ALL CAN FIGURE THAT ONE OUT. WHEN YOU HIT YOUR MAX IN THE PAY GRADE, NO PAY RAISE. THE INCENTIVE IS TO MOVE UP IN THE COMPANY. IF YOU DON'T WANT TO MOVE UP FULLWELL KNOW THAT THERE ARE NO MORE PAY RAISES FOR YOU. ITS SIMPLE NO MATTER WHERE YOU WORK GOOD EMPLOYES MOVE UP, BAD ONES MOVE OUT.
8-08-2006 @ 1:26PM
Richard said...
I'm a 15 year EMPLOYEE no longer do I consider myself an Associate I'm just a slave to corporate office of Walmart Store Inc. Their attitude is "if you don't like it use the front door." After 15 years my job tile has been eliminated (Lead Accounting Office) and I lost $1.30/HR because of it. And now I'm being told no more pay raise because I'm make more than the company wants me to. So much for "Respect for the individual." I want to stay with the company and they want to keep me as far down the latter as possible. What kind of Respect is this? I don't like unions but if any Company needs one it's Walmart. If Sam Walton could come back to life today I'm sure he would be on a major Killing spree right now on the people who are running his good company to the ground because the only respect they see is for themselves and the "Almighty Dollar." If it wasn't for the customers and the workers in the stores (#1 is the Cashiers) the tight wads in Corporate wouldn't have any jobs themselves. Yet they are the one Screwing the employees the must. Like we need them and they don't need us attitude. I think now is the time for all workers to walk out on Walmart the way Walmart is walking out on us. And shoppers need to stop shopping at the store and show them they can be replaced as #1 just like their employees can be replaced. Every week it's a new program to save the CEO money and take it away from the real works the People that work in the stores. MONEY MONEY MONEY MONEY MONEY MONEY MONEY MONEY MONEY
That's what it's all about keep it from the slaves so the masters can get more for themselves. I think now is the time for everyone to cry for what Sam Walton has lost.
8-08-2006 @ 1:40PM
Richard said...
As for the pay-caps, the way I read it employees are capped within their job category. That seems fair. You can only get paid so much for one skill set. They all have the opportunity if they wish to pursue other jobs with more responsibility - and therefore more pay - within the company.
Mike, hello my job was cut and my pay was lowered is this Right?
8-08-2006 @ 2:47PM
evelyn said...
wal-mart no longer cares for the older empolyees.it is to get new people in with a lower pay rate,and with the no care attitude.no one in upper mgmt.shows the people that they do good jobs for the company anymore.when mr.sam was alive and came to the stores he would never leave without getting on the intercom and thanking the associates for all they do.now when the higher ups come in they will almost knock you down and not speak.where is the 10ft.rule for them.
wal-mart needs to remember if it was not for us the associate where would they be???????????????
8-08-2006 @ 3:21PM
Skippy said...
Oh so this is interesting, does it mean only new employees come in with a new pay scale? but the older guys like us remain with what we have? Ive heard so many false promises, Incentive Raises that never come Bonuses promised Ive never seen, promises to move to a different department but when it comes time they simply hire someone else and you stay in your dept. is this to get you to just stay or quit? so to speak? I really dont think 7.95 an hour is adequate for a Truck Unloader, they try to say its comparable wage, not really as a former fed ex ground employee who started out at 10.50 to unload trucks i find 7.95 a very demeaning wage especially if you have prior expierience. What I found also was you can break your back, trying to get that 50 cent raise only to see in your review you got 40? although its just a dime its the principle of it. What I say is there are too many managers and not enough employees, one manager will tell you one thing and then another says another, then in six months they bring in new management and its a new game all over again. Kinda like Musical Managers lol. Anyway lots of people have left the Walmart near me, and more are leaving in droves, so that does tell me something is wrong. yeah pay raise lol but only for new employees coming in, otherwise the existing ones stay at thier scale.
It Figures
8-08-2006 @ 3:24PM
Tony D said...
Newsflash: for those who haven't heard, walmart has officially renamed their store to BEAN-MART, where respect is for the boardmember and the big time investor. As the Walton's die off the board, the company is heading more and more like the companies that they abhore (KMart/Sears and Target). Can't wait to see what the beancounters will do when ol' Helen W. passes. Just think of what she'll have to say to ol' Sam, "they've sh*t on the emplo, er, associates and they've changed the name!" BEAN-MART "used to" pride itself on being the leader. Now it's too worried what people are saying about them, and these people don't even shop there. RIP to what it was, and what it SHOULD have been!
8-08-2006 @ 3:31PM
Tony D said...
Time to adjust those 401k's and stock purchase plans. I wonder if they'd notice if 2.16M shares where to sell on one day? hmmm intresting isn't it??
8-08-2006 @ 3:53PM
Sharon said...
Sam rewarded his dedicated employees with larger saleries so they could feel like they were really associates in the company. Now the "ONES" in charge have decided these older dedicated employees are making a living wadge but they are also using medical insurance. In their devine wisdom they have decided to cap the associates wages so they will no longer make a living wage and drive the associates out before they medical. WalMart is also in the process of canibalizing itself with all the stores they are putting in. I'm sure Mr Sam is turning in his grave. Everything going on at WalMart is the exact opposite of what he believed. The Managers on the East coast laugh at the old man in the suit with the dorky ball cap. They show no respect for Mr Sam and his beloved store. SO SAD! SO SAD!
8-08-2006 @ 4:13PM
ss said...
just wanted to add that their pay caps seem a bit skimpy too. At my store a cashier caps out at around 13.33 and the highest hourly pay grade can only make up to 16.14 per hour. If they were going to put a cap on wages, they could a least a been a bit more generous.
8-08-2006 @ 6:01PM
Bob said...
As for the Pay-Cap for the long term employees who have maxed out at their hourly rate, I agree it is a dishonorable way in which to treat these long term employees who have stayed with the Company, while at the same time granting a higher starting rate to new employees.
It tells me that the Company apparently is not so great to work for; the reason for raising the starting rate is that they are having a difficult time finding employees to work there. Therefore, they should not penalize the term employees who have dedicated so much of their life to build the stores to the level they presently enjoy.
In finishing, the CEO and other top executives should also Cap their salaries, since many of them have reached levels wherein their present salaries are not comensurate with the individual executive performance, which has lagged behind that of some associates.
8-08-2006 @ 9:43PM
Shannon said...
I am completly disgusted with Wal-marts cap on associates wages. The long term employees of this company have played a major part in making them what they are today! We have worked for years to get to a decent wage, and now we have become to much of a liability. Corporate greed continues once again.
If this was a company that was not making billions of dollars it might be a little easier to swallow, but everyone knows that is not the case. I say all associates need to think about the long term effect on this. Even if you have not been employed with them a long time, you will reach your cap sooner than you think.
I say its is time for associates to wake up and realize that if we dont get some type of representation, we are screwed!!! Wal-mart wants us to be scared of loosing our jobs. But I say they are sinking our ship anyway. So come alive and make this company treat us fairly. Its getting to the point that we will loose no matter what.
8-09-2006 @ 8:37AM
steve o said...
this is a money saving ploy,nothing else.no matter how they spin it.they are screwing over employees at every turn,then release crap to media how it's good for the associates.sure we don't have to work there.but those of us who have been loyal.feel like we've been back stabbed.i've bought the last share of stock ever.as for incentive to "move up".walmart treat assistants like crap.if you have family concerns ect and go into management they pretty much own you.the hours,and the possiblityof being transferd at the whimm of the district.so go ahead wally screw over the peons,do away with layaway.phase out all the things that set you aside from the rest of the compitition,the things that made you number one.it will take a few years,but that number one spot will belong to another .
8-09-2006 @ 6:49PM
Sue said...
Folks, this "cap" is right in line with their Employee Benefit Cost Reduction Plan -- the memo that leaked out of home office almost a year ago.( "Wal-Mart Memo Suggests Ways to Cut Employee Benefit Costs" By STEVEN GREENHOUSE and MICHAEL BARBARO Published: October 26, 2005
http://www.nytimes.com/2005/10/26/business/26walmart.ready.html?pagewanted=2&ei=5009&en=49a8b8de6378b786&ex=1130990400&partner=MSN_NYTHOME )
The memo said Wal-Mart's work force was older than average in the retail market, which raises their health care costs; they need to find ways to attract a younger, healthier work force. Those older dedicated, friendly, and most helpful associates who know the store inside out are now considered a 'liability.'
Not only have they stayed around long enough to earn a few pay raises – which have all along been based on an annual evaluation of job performance (subject to human flaw of the evaluator's favoritisms – remember, there is still a class action lawsuit of sex discrimination pending against the company) but the long term associates have also gained an extra week or two of vacation time over the years... Not to mention being ‘vested’ in the 401k retirement accounts! The number crunchers would rather replace all those experienced workers with a revolving door of part-time college students...
Did someone say they have been greeted by ‘indifference’? Ask one of those indifferent associates how long they have been with the company & if they plan on making a career of it – chances are they are a college student “just passing through.”
But the powers that be, think it is in the company’s best interest to encourage EVERYONE to ‘move on’ before they have been with the company seven years – the point we become 'vested' in their retirement plan...
Something outsiders don’t understand is, the “Merit Raise” was an extra raise that could be given in between annual evaluations – those were most commonly given to the squeakiest wheel, not necessarily the hardest workers – and was most likely the reason for the wage disparity between male & females.
They say, that monies that used to be allotted to the handful of Merit Raises, will be used to up the “Exceeds Expectations” annual raises across the board... BUT we have already seen them find undeserved fault to avoid giving anything more than “Meets Expectation” evaluations this year. If only those handing out the evaluations had to live up to the “expectations” they are currently demanding from us!!!
In my store, we are extremely shorthanded; they had a hiring freeze and although that has officially ended, they have still not hired enough to fill all the slots that were emptied during the freeze. So those of us who have stuck it out are having to cover extra areas...
You tell me, how it is that all these people who previously rated “Exceeds Expectations” are now doing twice as much work, but only “Meet Expectations” when pay raise time rolls around?
The ‘evaluation’ is not being based on job performance; it is based on “We can’t afford to give you a fifty cent raise right now.” Do you really think any of us can expect to be given sixty cents next year?
Many of the items on the check list had been marked as not applicable, because it was not part of my regularly assigned duties, though I actually do many of the things fairly often. But by putting “N/A” it made me look just average on paper.
It is still not what you know, but who you go bowling, hunting &/or fishing with – only the brown noses are seeing any extra green & they are often times the laziest associates!
Mr Sam isn’t just rolling over in his grave, by now he should be spinning like the blade on a box-fan!
8-10-2006 @ 1:48PM
ctw said...
i work as a 7 year associate and got the news about this pay cap. i feel that the company has shafted everyone who works there. as for bean-mart. we refer the company as wally-world, because we all get the big ride by the corp. there has not been a cost of living raise for 5 years, no merrit raises, with the cost of living ans gas prices there should be a federal mandate for cost of living raises for all companys. i lost 1.50 per hour due to this action they did.
8-10-2006 @ 2:59PM
JOSEPH G. SHANAHAN said...
I have read a lot of these comments------------and it all boils down to two sections---------Management
vs. employees-------------------that's how it is and will always be. People have to try to make plans to switch jobs, if they can---------------go to night school, study for a trade, etc==== try to make yourselves more independent (not always easy)
8-10-2006 @ 7:42PM
walmartvet said...
The company is not the same one I joined long ago when our expertise was highly thought of. My pay was capped and I will not ever be given another increase. Why? Because I have been given lots of merit raises and good annual increases and raises as I have moved to new positions offered to me as I did what I thought our company was all about- "swimming upstream, being entrapenueral, thinking out of the box" ...today it is no better than any other retailer, only larger. Our only choice, really is to leave, as they want us to. It isn't our Walmart any longer, no matter how much we feel like we helped make it what it once was. Time to cash in our stock and go to Costco or Lowes or someone ???? who appreciates us? Is there anyone? Let it die.
8-10-2006 @ 8:02PM
VICKI said...
I have been a walmart assoc for 19 years, and what they are doing is not right. I feel like there is a loop hole or has got to be one somewhere where we can get a lawsuit going on about our pay. With a $400 incentive that is not right either, if they are going to offer us money it needs to be more than 400 that is not even half of our salary. Time to call in dateline