CASE STUDY OF 'WAL-MART WOMEN'

GROUP ASSIGNMENT OF CASE STUDY OF ‘WAL-MART WOMEN’

Introduction

Wal-Mart Store is an multinational retail corporation which

runs the chain of large discount department stores and warehouse

stores in American. This Wal-Mart Store was founded by Sam Walton

in 1962. The company was incorporated on October 31, 1969 and

publicly traded on New York Stock Exchange in 1972. This Wal-Mart

Store is the second largest public corporation around the world

and it is also the biggest private employer in the world with

over two million employees. Wal-Mart remains a family-owned

business, as the company is controlled by the Walton Family, who

own over 50 percent of Wal-Mart. This company also one of the

world’s most valuable companies.

Although Wal-Mart Store is the second largest public

corporation around the world, it also face the biggest employee

headache which is the class action lawsuit claiming the company

discriminated against female employees. Essentially, there are

two main reasons why women will earn less than men. They may have

less education or less working experience or choose to work in an

occupations that pay less than those that men choose. The other

reason is that they may face discrimination which means that the

earn is not equally to the skills they do have. In this lawsuit,

it is claimed :

that Wal-Mart pays women less than men even when the women

have the same amount of experience,

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that earnings differences between men and women at Wal-Mart

grow wider over time,

that Wal-Mart does not offer equal training opportunies to

its women employees

that Wal-Mart prevents women from working in departments

typically staffed by men and which typically pay more,

and that Wal-Mart refuses to post all management openings,

thus limiting women's opportunities to apply for management

positions.

Case Background

The six female workers who working in Wal-Mart is

the largest ever in American civil rights history. This

is a case accusing Wal-Mart stores which is

discriminating cases against US female workers. Two points

had allege that women employed in Wal-Mart stores according

to the 2010 court of Appeals opinion which is women was

paid less than men, besides that the other opinion is

receive fewer and wait longer for promotions to in store

management positions than men. They were asking the Wal-1


Mart company compensate them or any other women who

worked for Wal-Mart since December 26, 1998 which suffered

from the sexual discrimination cases. If Wal-Mart were

loses the case, it would cost Wal-Mart company many

billions of dollar since the female workers who worked in

Wal-Mart Company had been estimated as many as 1.5

billion to 2 million.

Wal-Mart stores is the world's biggest retailer that

owns more than 8400 stores and had over 2100000 employees

worldwide. The law suit was launched in June 2001 that

by six female Wal-Mart employees was the class action

lawsuit that workers claiming the Wal-Mart company about

the promotions, pay, management training and also job

assignments. The six women asked for pay back and

compensation for all 1.6 million female employees against

who has discriminated . A statistical expect , Richard

Drogin, a professor at California State University at

Hayward was hired by the six women who filled the

discrimination lawsuit to analyze an employee records.

There was two main groups which is hourly employees at

lower levels such as store cashiers, associates and stock

people and the salaried management employees. Salaried

management employees can be divided into two groups, the

lower level are those manage a single store while the

higher level are those manage an entire district or

region. Since Wal-Mart promotes predominantly from within,2


workers typically progress from being an upper hourly

employee to management trainee, to store manager and

finally to region manager.

The six women also hired Marc Bendick, a labor

economist to against Wal-Mart. Marc Bendick noted that the

company had no trouble in promoting women in their

management. 34.5 percent of in-store salaried managers

were women while 56.5 percent of 20 comparable large

were female salaried managers. The Wal-Mart would have

about 4000 in-store female manager, 466 more in corporate

headquarters female managers, about 150 for “blue-collar”

nonstore establishments, 107 more in other nonstore

establishment and about 100 in reporting establishment.

William T. Bielby, a professor at University of

California, who also hired by the women stated in his

analyze and report of Wal-Mart ‘s hiring practices that

the managers at the Wal-Mart was given no written

policies to select candidates who met the minimum

criteria of promotion and in setting the exact salaries.

So, gender stereotypes always influence personal decisions

moreover women not considered by their actual skills but

was shaped by their manager’s stereotypical beliefs about

them. Arturo Mireles who is a store manager proving that

he only rely on subjective factors such as team work

and ethics in making decision about promotion to

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Department Manager or Support Manager because he has no

written criteria to be a guideline in his decision. The

company policy not state the detail about when and how

to adjust the payment or monitoring the number of

employee who receive increases.

However, William T. Bielby also note that the Wal-

Mart managers believe that in management position, women

have same qualified as men so the discrimination on the

women must be based on individual decision of the

manager-self not attributed to the Wal-Mart and the

company was trying hard to make sure their employees get

equal opportunity in their work.

There are about more than a hundred of female

employees who were came forward providing their received

critism about their work in the Wal-Mart. A store

manager in Utah for example was told to his female

assistant that retail is “tough” and “not appropriate”

for women while in Texas, a women were told by their

manager to be “bitches” in the Wal-Mart management and a

supervisor in the same state said to his female

management trainee that he don’t like college graduates

and female manager. The same woman also told by her

next manager to find a husband and have children. In

Florida, the manager explain they paid more than women

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because they are here to build career and housewives

just need to earn extra money in retail.

In contrary, the company’s lawyer claim that there a

large group of injured women to handle and every of

them may had different or varied experience of injury in

Wal-Mart not like the cases that were had by the six

women. Wal-Mart moreover used the different system for

compensating and promoting their employees while the wages

payment based on their individual manager not by the

uniform company policy. The company also claim they have

held so many programs to make sure everyone get same

regardless of race and gender.

The company has started programs for achieving

diversity in early year of 1990s with the everywhere

posted of written antidiscrimination policy while the

managers were told about the gender salaried composition

and support women as “reflect the community”. They must

set an annual goals which are “realistic”, “achievable”,

“made sense”, and “weren’t worse than the year before”

to increase the women representation in their area working

place. Late Sam Walton begun the program which allowing

the women entering the management job without relocate

their home however the program was be a stranger today

after the death of him.

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In April 2010, the women case was finally got a

class action and December 6, 2010, the Supreme Court

decide to hear the case and make decision for the final

determination which effect the fate of 1.5 million of

Wal-Mart female workers and impact on the company

significant material finance but some analysts the company

will settle the case before or after the Supreme Court

decided.

Ethical Issue

Ethical issue that was raised by the case of Wal-Mart Women

was discrimination women in the workplace. Job discrimination is

an unethical behavior. Discrimination means to distinguish

someone on the basic of prejudice or morally attitude. There are

six women who had worked in Wal-Mart sued Wal-Mart about their

paid and opportunity of promotion is less than the men work in

Wal-Mart although their experience, qualification and performance

is better than men.

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Firstly, we can found that women employee in Wal-Mart earn

money less than the men. Based on the research of Richard Drogin.

He is a statistical expert and professor come from California

State University. He found that Wal-Mart employees are divided

into two group. There are salaried management in high level and

hourly employees in low level. Salaried managers can earn $50,000

in but hourly employees just can earn $18,000 in a year in 2001.

For example, the annual salary of district manager, men can made

$239,519 but women just made $177,149. Among full-time employees,

women get less than $5000 compare to men.

Secondly, the opportunity of promotion of women is less than

the men. According to Richard Drogin, chance of women will be

promoted from an assistant manager to store manager is 10.12

years while men just need 8.64. In addition, he found that women

performance is better than men. For a performance rating of job

sales association, on scale of 1-7, 1 is low and 7 is high. Men

get 3.68 and women get 3.75. This figure showed that women has

high performance than women. Factors of women get less promotion

because of relocate and policy of company in staffing. Another

sociology expert William T. Bielby, professor University of

California. His report noted that however a company have

guidelines for the criteria of promotion, but didn’t have written

policies for manager’s guidance. Form the research, we can found

that glass ceiling will affect in making decisions about

promotion. In a case, a store manager told to his female

assistant about retail is not suitable to women. 7


Then, compensation received by the men and women worker in

Wal-Mart also different. A research from Drogin in 1996, women

were paid less $0.35 per hour than a men. The pay gap between men

and women continuous increase to $1.16 per hour in 2001. Another

statistic in 1996 showed that, male sales associations get more

$0.20 per hour than female sales associations. Employee in the

company have equity, they are fair to have benefit such as

retirement benefits, medical benefits, bonus and so on.

Compensation become a motivation for worker.

Next, we noted that less women participated in management of

Wal-Mart. A labor economist, marc Bendick noted another retailer

company has 56.5% of female included in management but Wal-Mart

just has 34.5%. So Wal-Mart need to have more than 4000 female

participated in high level of management position. Nowadays,

international company promote diversity in the company. Opinion

from men and women is different. So that, company can receive a

lot of vary business ideas.

According to the statistic above, Wal-Mart suspected in job

discrimination. Early in the 1990, Wal-Mart implement a written

antidiscrimination rule to overall company but not widely used.

From the lawsuit, Wal-Mart may face a problem of reparation about

$10 billion and have to increase 60% the pay to employee. As a

result, Wal-Mart’s shares already fell 3.9%. Government and

agencies especially Equal Employment Opportunity Commission

(EEOC) need to enforce the law, Civil Rights Act of 1964 to

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prevent from discrimination and protect them based on hiring,

compensation, religion, race and sex.

Question 1

What financial impact do you think the lawsuit could potentially

have on Wal-Mart? Do you think the women deserve to win their

lawsuit? What if the outcome of the case cost Wal-Mart so much it

had to lay off thousand of its workers and close stores?

Financial impact is an expense or fall in revenue arising

out of a disaster, change in market conditions, failure of

a product, or other events under or beyond

a management's control. Wal-Mart is such an effective competitor

that it is gradually forcing down the wages and living standards9

http://www.businessdictionary.com/definition/control.html

http://www.businessdictionary.com/definition/management.html

http://www.businessdictionary.com/definition/events.html

http://www.businessdictionary.com/definition/product.html

http://www.businessdictionary.com/definition/failure.html

http://www.businessdictionary.com/definition/market-condition.html

http://www.businessdictionary.com/definition/change.html

http://www.businessdictionary.com/definition/disaster.html

http://www.businessdictionary.com/definition/revenue.html

http://www.businessdictionary.com/definition/expense.html


of retail workers who aren't even employed by Wal-Mart. The

company could face billions of dollars in demands for back pay

and punitive damages. The real Wal-Mart conflict isn't between

capital and labor. It is a battle involving consumers and cost-

efficient producers against traditional retailers, organized

labor, and community activists.

Women deserve to win this lawsuit because they also has a

rights as a worker or employee. Every working female enjoys the

same employee rights that are bestowed on a male colleague. It is

illegal to discriminate against a female employee at any stage of

employment. A qualified female applicant cannot be denied

employment because of being a women. She has equal right to

promotion, vacation leave and other benefits provided by the

employer. The Equal Pay Act requires that both women and men be

given equal pay for equal work in the same organization.

The Wal Mart company will face of problem from their

shareholders because they doesn’t trust them anymore and maybe

they will go away to find other company and wanted their money

back. From this matter,Wal Mart also decrease their profit

because they cannot run a bussiness properly due to lack of

worker and so on. So it seems that during the recession when

management cost saving strategy appeared to be foremost, with

layoffs being the first action usually taken, the impact on

surviving employees, their productivity, the reputation of the

company and real costs savings has been underemphasized.

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Question 2

What are the major moral complaints of the females suing Wal-

Mart? Do you believe those complaints are justified? Why? Wal-

Mart has said that the case should not be heard as a class-

action, but that each woman should be considered individually and

an individual determination should be made regarding whether she

specifically was discriminated against by Wal-Mart, because each

woman’s situation is different. Do you agree?

The major moral complaints of the females suing Wal-Mart is

the discrimination against female employees in promotions, pay,

management training and job assignments, such as:

1. Female employees also receive fewer and wait longer for

promotions to in-store management position than men.

2. Female employees are paid less than men in comparable

positions, despite having higher performance ratings and

greater seniority.

3. There is unequal distribution of management training among

the male and female employees.

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4. Male employees are allotted a better job assignment compare

to women employees even though they are equally qualified,

ranked and experienced.

Yes, I strongly believe that these complaints are justified

because it is clearly stated above that the female employees in

Wal-Mart were not treated fairly and equally.

Richard Drogin, a statistical expert found out that

employees in Wal-Mart are divided into two main groups: hourly

employees who occupied the lower levels and sand salaried manager

who occupied the higher levels. Since Wal-Mart promotes

predominantly from within, workers typically progress from being

an upper hourly employee, to management trainee, to store manager

or assistant manager, and finally to district, regional or

cooperate manager. Compensation increases from one level to

another. In 2001, salaried managers made about $50,000 a year

while hourly employees made $18,000. Drogin found that 65% of

hourly employees were women, but only 33% of salaried managers

were. At both levels, women earned less than men. Drogin found

that, on average women earned less than men at each in-store

salaried management job, as well as in hourly pay rate.

Drogin also found that female employees are stayed in the

workforce longer than male employees at Wal-Mart and so had more

on-the-job experience on average than men did. Drogin discovered

that while it took female employees 4.38 years from their date of

hire to be promoted to assistant manager, male employees were12


promoted after only 2.86 years. And while it took female

employees 10.12 years to become store managers, it took men only

8.64 years. Drogin also found that, on average, female employees

had higher performance ratings than male employees. Drogin noted

two factors that might affect women’s promotion into management.

First, many store managers believed that employees going into

salaried management positions had to be willing to relocate

geographically, and they communicated this belief to women.

Second, while the company had a policy of posting available

management positions, and to communicate the availability of

these positions by word of mouth to potential candidates they

picked.

Another expert hired by the six female employees who brought

the discrimination lawsuit against Wal-Mart, Marc Bendick, a

labor economist, noted that Wal-Mart’s top retail competitors had

no trouble promoting women into management. While Wal-Mart’s in-

store salaried managers were 34.5% women, salaried managers at 20

comparable large retail chains were 56.5% female. If Wal-Mart had

achieved the same female manager-to-nonmanager ratios as

comparable chains in 1999, it would have had at least 4,004 more

in-store female managers, 466 more female managers at corporate

headquarters, 144 more at “blue-collar” nonstore establishments,

107 more in other nonstore establishments, 97 more in separately

reporting establishments.

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The six women suing Wal-Mart also hired an expert in

sociology, William T. Bielby, a professor at the Universitiy of

California, Santa Barbara, to analyze and report on Wal-Mart’s

hiring practices. He noted that “a large body of social science

research demonstrates that gender stereotypes are especially

likely to influence personnel decisions when they are based on

subjective factors, because substantial decision-maker discretion

tends to allow people to seek out and retain stereotype-

confirming information and ignore or minimize information that

defies stereotypes”. Moreover, he added, “in such settings

stereotypes can bias assessments of women’s qualifications,

contributions, and advancement potential, because perceptions are

shaped by stereotypical beliefs about women generally, not by the

actual skills and accomplishments of the person as an

individual.”

I do not agree that each woman in Wal-Mart is being

considered individually and an individual determination should be

made regarding whether she specifically was discriminated against

by Wal-Mart, because each woman’s situation is different.

Important statistical evidence being used by the female

employees is a report conducted by Richard Drogin, a professor at

California State University at Hayward, to analyze Wal-Mart’s

computerized employee records of 3,945,151 employees who had

worked any time during 1996-2002. Among the results, Drogin found

that it took longer for women to rise to a management position,

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at an average of 10.12 years since date of first hire, as opposed

to 8.64 years for men. In general, women make up 92% of Wal-

Mart’s cashiers, but only 14% of store management. The average

proportion of female managers in the nation’s 20 largest retail

stores is 20% higher than at Wal-Mart. Female employees are being

compensated unfairly compared to male employees.

According to Drogin, female employees earned about $ 5,000

less than male employees overall in 2001 at Wal-Mart. Dorgin also

examined that women hired as sales associates in 1996 received

$0.20 per hour less than men hired as sales associates that year.

These evidence conducted by Richard Drogin are clearly pointed

out Wal-Mart has discriminated the female employees and do not

treat them fairly and equally.

QUESTION 315


What factor do you think might account for the discrepancies the

Drogin report uncovered?

The factor that I think might account for the discrepancies

the Drogin report uncovered are wrong perception of higher level

between men and women employee, subjective analysis of

performance (job experience), and wage and promotion

discrepancies. Firstly, the factor of wrong perception of higher

level between men and women employee. Drogin found that 65

percent of hourly employees were women, but only 33 percent of

salaried managers were. The hourly employees such as store

cashiers, associates, stock people, department heads, and support

managers while salaried manager like store manager and assistant

manager, above them are district manager, regional vice

presidents, and senior vice president. Apart from that, based on

the Drogin report said women employee perhaps to raise children

or for some other reason and it causes women left their jobs more

than men. Means that, most of the women employees were hired at

the lower level compare to men employee.

Secondly, the factors that I think might account for the

discrepancies the Drogin report uncovered is based on the

subjective analysis of performance or job experience. Based on

the assumption Drogin report that women left their jobs mare than

men, perhaps to raise children of for some other reason. This

would give women higher turnover rates and men greater experience

and seniority. However, Drogin found that women stayed in the

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work force longer than men at Wal-Mart and so had more on-the-job

experience on average than men did. Besides that, based on the

Drogin report said the women employee is not suitable going to

Salaried managers because most of the salaried manager must be

ready with more challenging in their work such as had to be

willing to relocate geographically, and they communicated this

belief to women. This causes many women are not willing to go out

of their accommodation. Then, while company had a policy of

posting available management positions, manager had the

discretion to not post some positions and to communicate the

availability of these position by word of mouth to potential

candidates they picked.

Lastly, the factor that I think might account for the

discrepancies the Drogin report uncovered are about wage and

promotion discrepancies. Drogin found that, on average, women had

higher performance ratings than men. Drogin found that women

hired with the same position as the men paid less than men. For

example, he found that women who were hired into hourly jobs in

1996 were paid $0.35 less per hour than men hired into hourly

jobs that same year. By 2001, the gap between the wagea of these

same employees had increased to $1.16 per hour also,women hired

as sales associates in 1996 received $0.20 per hour less than men

hired as sales associates that year. By 2001, the difference had

grown to $1.17 per hour. Finally, Drogin performed several

statistical tests to determine whether the discrepancies in

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promotions and pay could be the result or women not being

available when promotion came out.

QUESTION 4

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What if anything, do you think, Wal-Mart should do to correct

these discrepancies? Should the company institute an “affirmative

action” promotion program for female employees? If so, what

should this program be like?

If discrimination is happening within the company. In order

for Wal-Mart to correct these discrepancies they should make

opportunity for women employees to advance in the organization.

The women employee are also able to manage and develop an

organization to successfully based on the skills, knowledge, and

talent found within them. Women are also able to hold an office

as an integrity and the best manager.These shouldn’t be a pay

difference between males and females, and it shouldn’t take women

longer to get promoted then men employees. The women employees

are also entitled to get paid better than male employees based

out of their work and the right to get promotion earlier than men

if women employees are more capable and performance compared to

male employee.

Everyone needs to be trained on their legal rights. The

employers and competent manager should abide by the laws set

forth in the Employee Act and Trade Union Act to give proper

rights to workers without looking down on women workers. I don’t

think that the company should institute an “affirmative action”

promotion program for female employees. Managers just need to

promote fairy based on potential and knowledge. To institute an

affirmative action program would be to show favoritism to women.

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Men should start to get discriminated against, and if the company

starts to show favoritism towards women, then the men will

complain.

Conclusion

Refer back to the case background, Wal-Mart stores are the

world’s biggest retailer and had over 2100000 employees worldwide

but there are six female of Wal-Mart employees had launched a law

suit which claiming that the Wal-Mart company had discrimination

against female about the promotions, pay, management training and

also job assignment in June, 2001. By this, Wal-Mart could face

billions of dollars in demand for back pay and punitive damages.

This matter will let the shareholders of Wal-Mart doesn’t trust

them anymore and maybe they will go away to find other company

and wanted their money back.

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Besides that, according to our opinions, the six female

workers should win the lawsuit and gain benefits to all 1.5

billion to 2 million of female employees in Wal-Mart. This is

because every female should enjoy the same employees’ rights that

are bestowed on a male colleague. It is illegal to discriminate

against a female employee at any stage of employment. A qualified

female applicant cannot be denied employment because of being

women. She has equal right to promotion, vacation leave and other

benefits provided by the employer. The Equal Pay Act requires

that both women and men be given equal pay for equal work in the

same organization.

To prevent this lawsuit in future, Wal-Mart had a written

antidiscrimination policy posted everywhere. In 1990s, Wal-Mart

had started a number of programs to achieve diversity. Managers

were told that women’s representation should “reflect the

community”. By many efforts had been done by Wal-Mart to

antidiscrimination, Wal-Mart was named in the “Top 40 Greatest

Organizations for Women of Color to Work” in year 2008 by Women

of Color magazine as well as one of the “ Top 10 Best Companies

for Women” by PINK magazine. On May 2007, Wal-Mart announced it

was named one of the “ Top 50 Companies for Diversity” by

Diversity-Inc magazine.

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Reference

Frank, T. (2006, April ). A Brief History of Walmart. Retrieved November2013, 16, from reclaimdemocracy.org: http://reclaimdemocracy.org/brief-history-of-walmart/

Musgrave, J. (2012, 0ctober 04). Female ex-Walmart employees file federal discrimination suit over promotions. Retrieved November 15, 2013, from palmbeachpost: http://www.palmbeachpost.com/news/business/employment/ex-female-walmart-employees-file-federal-discrimin/nSTP4/

Velasquez, M. G. (2012). Business Ethics. United States: pearson.

Young, C. (2011, July 8). Wal-Mart and Gender Discrimination. Retrieved November 2013, 10, from reason: http://reason.com/archives/2011/07/08/wal-mart-and-gender-discrimina

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CASE STUDY OF 'WAL-MART WOMEN'

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