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.

Wal-Mart's just-in-time employees originally appeared on BloggingStocks on Wed, 03 Jan 2007 12:40:00 EST. Please see our terms for use of feeds.