According to the Wall Street Journal (subscription required), Wal-Mart Inc.'s (NYSE: WMT) latest innovation is to treat its employees just the same as its inventory. For too long, many of Wal-Mart's employees have had regular work schedules. Wal-Mart excels at stocking each store with the items that customers want to buy and shunning the rest; and it's finally dawned on management that Wal-Mart can apply this same just-in-time approach to putting employees in its stores.
Using a computer system similiar to one from Kronos, Inc. (NASDAQ: KRON), Wal-Mart will be able to schedule employees to maintain a constant ratio of employees to customers. (KRON's system tracks individual store sales, transactions, units sold, and customer traffic in 15-minute increments over seven weeks, and compares data to the prior year's, before scheduling workers.) Workers will need to be on call so they can arrive in the store in case they're needed. And more importantly for Wal-Mart's profits, workers who previously had regular shifts will have variable ones instead -- this should reduce Wal-Mart's labor costs.
I'm not a big Wal-Mart shopper but every time I've been in one of their stores, I've found the employees to be surly and unhelpful. And I would imagine that this new system will make Wal-Mart employees even more angry -- an emotion they'll share with customers. As I noted in Value Leadership, Sam Walton believed that if you treat employees well, they'll do the same for customers.
Treating Wal-Mart employees like just-in-time inventory must be making Walton turn over in his grave.
Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm, and a Professor of Management at Babson College. He has no financial interest in Kronos or Wal-Mart.











Reader Comments (Page 1 of 1)
1-03-2007 @ 2:10PM
teddtlove said...
This is ridiculous. Expecting a Wal-Mart employee to be on call like a doctor. Doctors get paid big money to be on call. Not like the poor Wal-Mart workers. This is ridiculous.
1-03-2007 @ 3:13PM
Alessandro Machi said...
Why not just turn Walmart Stores into Hollywood Location Studios. Each store would feature a different Hollywood theme and television shows could be created around different themes.
Reality TV; "WalMed" Watch as WalMart employees are coerced into applying for State Run Health Care for the good of the company...
SitCom; "On Call" WalMart employees have beeping devices inplanted in their foreheads so they can be "buzzed" at a moments notice to come in for work. Mayhem ensues.
-Murder Mystery- "Who Killed American Manufacturing?" Walmart Employees try and figure out why they have jobs but nobody else does.., Walmart employees use Walmart products that are proudly made in China in their ongoing investigation.
1-03-2007 @ 3:41PM
Robert Cunningham said...
Peter Cohan and I must shop at different Wal-Marts.
1-03-2007 @ 3:30PM
Jerry said...
Walmart might get better results with their "on time" work schedule method if they took it one step further. Hire only the homeless and provide a room full of cots for them to use. When sales demand more workers these employees can punch in and wait on the customers and punch out when the sales slow.
1-03-2007 @ 7:18PM
D.Mcvay said...
I think wal-mart has forgoten all they used to stand for. I would only shop there if I didnt have a choice of someplace else which I do . I think it is a sad day when you screwover your people to make a little more profit than needed to run a good store. poor old sam he wouldnot be proud of his kids
1-03-2007 @ 4:16PM
BILLY said...
ANOTHER LIE FROM ANOTHER HYPOCRITE, WALMART DOES NOT EXPECT THEM TO BE "ON CALL" THEY HOWEVER WILL ONLY BE GIVEN HOURS FOR SHIFTS THAT THEY ARE "AVAILABLE" FOR, THUS IF KRONOS SAYS YOU NEED A CASHIER TO WORK 4P-11P, AND I ONLY WANT TO WORK 7A-4P, I WILL NOT BE SCHEDULED! BECAUSE THE SHIFT I DESIRE IS NOT NEEDED!@
1-03-2007 @ 4:24PM
Kelly E said...
Scheduling your employees to meet your business demands is done in ALL retailers. Those who are the most flexible in their availablity will naturally get the most hours. Retail is NOT a Monday - Friday 9-5 job. Period. If you want those hours, get an office job. I finally did when I couldn't take the weekly schedule changes anymore.
When I was a retail manager for a big box store, we were slow in the mornings, busy for a couple of hours around lunch time, slow in the afternoons, busy in the early evenings and slow the last couple of the hours of the day. It did not make sense to hire and schedule full time cashiers to stand around all day during the slow times when I could use part time employees on shorter shifts to have additional (needed) coverage during the busy times.
Please stop picking on WalMart for taking care of its business needs. How many of us have shopped there late in the evening and had to stand in long lines because only two cashiers were scheduled after 9pm? Since more families have both parents working, the bulk of the grocery and other shopping is no longer done during traditional work hours. These retailers need the staffing flexibility to meet the needs of the overwhelming number of customers who shop in the evenings and on the weekends.
1-03-2007 @ 8:02PM
Kelly E said...
While my old company did not use the Kronos software, we had a program that did the same thing. Each employee was asked to fill out their availability and their desired shifts. We put that information into the system which matched it up to sales trends and produced a schedule for the store to maximize coverage during the busiest times of the day. We also entered criteria on strengths and weaknesses so that theoretically, we would have an expert for each area on each shift to better assist customers. The stronger your ratings, the more hours you would get which was an added incentive for our employees to learn about our products and polish their selling skills.
We hated it when it started and as managers, we did tweak the system produced schedule a little. (I didn't think it was fair to bring someone in for just an hour or two) However, it minimized the number of employees standing around doing nothing during our slow times and eliminated favoritism on the schedule. After we got over the inital shock, we realized that it did help our staffing ratios and our customer service. Yes, we lost a few employees who were upset that they could no longer have set schedules or that their favorite shift no longer existed. That's retail.
Every now and then, I would ask an employee to be on call when we weren't sure how a certain busy a certain day was going to go. It wasn't binding but I always had a few who wanted extra hours and would be more than willing to come in for an extra shift on short notice if we needed them.
1-04-2007 @ 8:08AM
RON LASH said...
HAVING OWNED AND MANAGED A RETAIL GROCERY STORE FOR 20 YRS, I HAVE HANDS ON EXPERIANCE. THE .COM EXPERTS HAVE NO VALIDATY. JIM CRAMER IS AN EXAMPLE OF THE SUPER WELL OFF TELLING YOU AND ME OF LIFE IN WALMART. WHAT A JOKE. CERTAINLY WALMART HAS STAFFING PROBLEMS, BUT THIS IS THE NATURE OF RETAIL. FLEXIABLE HOURS HAS BEN A WAY OF LIFE FOR MANY SUCH AS WAITERS AND WAITRESS.
1-03-2007 @ 5:29PM
Eric George said...
This move makes Wal-Mart more competitive, lowering costs for consumers (many of which are low-income) and improving customer service. If an employee doesn't like it, they have the freedom to quit their job at Wal-Mart and find a company to work for which gives them a set shift. By the way, I work at Wal-Mart. No, I'm not in upper management or any management position there at the present-I'm an hourly grocery stocker, whose life would be affected by this change.
1-04-2007 @ 7:39AM
Mike said...
By the way. Wal-Mart is not the first retailer to use workforce optimization. Target and Lowe's have already rolled it out company wide in the U.S.
When you're the biggest guy on the block, everything you do attracts attention. This just gives the unions something else to whine about for a while.
1-04-2007 @ 10:47AM
KM said...
The article also forgot to mention that variable shifts might actual suit employee personal schedules. Employees might be ble to choose from available shifts. Perhaps the author should conduct more research before automatically assuming that change is a bad thing.
1-08-2007 @ 11:26AM
Tina said...
You say welcome to retail? I say welcome to still waiting in those lines. When you force employees to have open availability you limit your work force. How can mothers find child care? How can you hire students? Wal-Mart is rooted in small town America where you have a limited work force to begin with. There is not an endless supply of people out there willing to be available from sun-up to sundown, willing to work for minimum wage and willing to accept Wal-Mart's healthcare.
Giving your people a schedule that is at least somewhat predictable isn't unrealistic. It shows your people a minimal amount of consideration.
3-01-2007 @ 1:51PM
Michael Askwith said...
To be upfront, I happen to be associated with Asgard Systems, who are publishers of employee scheduling software. We are not the suppliers of Wal-Mart’s employee scheduling software and are on unaware of what product they are using.
Even if Wal-Mart (0r any employer) used a pencil and paper to produce their employee schedules, they might still implement policies and procedures that could be viewed as promoting their own corporate interests. The promotional literature that we provide regarding our product, does directly address organizational scheduling needs. However, such needs include taking the employees personal life into perspective as well. An example is the priority given to personal conflicting events such as night school, taking care of sick parents, weddings etc. Such issues are promoted at our website (www.asgardsystems.com), in our free trial version and our instructional movies. I am very pleased to say that, most employers express the need of having to contend with the humanistic aspects of managing an organization. Their needs dictate our products.