Performance Management in Wal-Mart
PERFORMANCE MANAGEMENT IN WAL-MART 2
With advancement in technology and globalization, the success of a company depends
on efficient planning of organization activities, having a team of motivated employees and
efficient management of workers. Therefore, performance management is paramount to ensure
that business activities are thriving, and employees are motivated to work towards achieving
corporate sustainability. Employees and all stakeholders should work together in an effective
and efficient manner to enable the company to meet its goals. This can be achieved by aligning
of performance measurement with human resource practices as well as the company’s strategic
goals and objectives. A performance management system needs to be harmonized with
organization Human Resource activities such as training, development, and compensation
system for it to be efficient (Bhave & Brutus, 2011).
However, this paper focuses on various ways that can help improve the performance
management of Wal-Mart and improve its efficiency and competitive edge over its competitors.
To achieve this goal, the paper looks into the importance of performance management for Wal-
Mart and how the company can integrate performance management with human resource
activities to improve the overall organization performance.
Wal-Mart Supermarket is an American Company whose headquarters is in New York.
Wal-Mart is one of the biggest multinational companies in the globe. The company’s success is
attributed to its famous low-cost structure strategy (Wal-Mart Stores, 2014). Wal-Mart is one of
the largest retailers boasting of 8,498 stores and 2million workforce to help in serving clients
all over the world. The firm is successful because of its performance management system that
gives the company a competitive edge in the market.
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Performance measurement refers to the process by which the administration in
conjunctions with the staff works together as a team to plan, examine and assess the
employee’s employment objectives, and the overall involvement of each and every member of
staff to the company (Van Dooren et al., 2015). On the other hand, strategic planning is a
number of procedures performed in the organization to idealize a number of plans that can
assist a company to provide organization direction and attain its ultimate goals (Aswathappa,
2013).
The Importance of Performance Management to Wal-Mart
Previous researchers indicate that organization strategy should be linked to performance
management to help in achieving organization goals (Bhave & Brutus, S 2011). Performance
measurement is imperative in enhancing the efficiency of strategic planning. Performance
management offers vital data and controls for the human resource of Wal-Mart that enables the
company to develop and implement strategic plans. Wal-Mart uses performance measurement
as a instrument that assists to offer a sense of direction for the organization by directing on the
distribution of capital based on the performance of different retail stores in various locations
(Wal-Mart Stores, 2014). By properly allocating scarce resources appropriately in various Wal-
Mart Stores, the company utilizes the limited resources to provide optimum services to
customers and increase enterprise revenue.
Performance measurement enables an organization to ascertain whether they are
meeting customer requirements (Jiang et al., 2012). Performance measurement allows Wal-
Mart to assess and understand the customer’s tastes and preferences through evaluation of sales
data, customer feedbacks obtained through customer complaints among other performance
PERFORMANCE MANAGEMENT IN WAL-MART 4
appraisal methods geared towards understanding the customer buying behavior. This
information plays a significant role in letting the management know if the company is
providing products that customers require (Hajmohammad et al., 2013).
Performance measurement also helps the management to identify areas that need
improvement in the organization. Measuring performance from all spheres of the organization
such as financial performance, employee performance, customer satisfaction and benchmarking
against other organizations enables Wal-Mart to identify areas with weakness (Wolf, 2014).
And develop plans that help in improving the organization standards.
Performance measurement also plays an important role helping Wal-Mart to converse
and evaluate the progress of the company towards accomplishing its strategic objectives.
Assessment of administrative performance through balanced scorecard and evaluation of staff
by the human resource based on their job performance is necessary for Wal-Mart. In
ascertaining that the company is working towards attaining it’s the strategic plan. Having a well
prepared performance measurement plan helps in addressing the company and staff
performance issues that are essential to develop an efficient and sustainable premeditated plan
(Gruman & Saks, 2011).
Linking Performance Management with Human Resource Activities
Employees play an important role in ensuring that an organization achieves its strategic
goals. Therefore, a well-motivated staff improves job performance enabling an organization to
achieve the company’s goals and objectives resulting to corporate sustainability. Performance
management is interconnected with human resource activities in various ways.
PERFORMANCE MANAGEMENT IN WAL-MART 5
Performance Management provides critical information for the Human resource to
enable the department to plan activities such as the development of training systems, workforce
planning, make recruitment and hiring decision as well as developing compensation and
motivation schemes (Kehoe & Wright, 2013).
Performance management helps an organization to identify each and every employee
strength and weakness. Human resource department uses such information to develop efficient
training programs to help improve employee skills and performance level. Human Resource of
multinational companies such as Wal-Mart develops regular training schemes. These plans are
tailored towards improving the employee’s knowledge base to help developing their skills and
steer the organization towards achieving corporate goals.
Performance management is paramount for feeding the human resource department
with important data for developing an efficient allocation plan for the workforce. It is the
responsibility of the human resource department of Wal-Mart to allocate duties and
responsibilities for all the employees. Data obtained from performance measurements such as
performance review enable the human resource to make an important decision to allocate the
employees where they are best suited to work.
Performance management provides critical performance appraisal data that enable
human resource managers to develop effective compensation and motivation schemes. By and
large, the goal of performance management is to achieve a fully engaged, productive and well-
motivated workforce. Therefore, Performance management enables Wal-Mart Human Recourse
managers to set performance expectation and evaluate the employees based on performance
standards, organization goals. Wal-Mart can adopt competency models as a way of evaluating
PERFORMANCE MANAGEMENT IN WAL-MART 6
employee performance by articulating employee characteristics, skills, knowledge and other
abilities that are imperative in helping the company attain its long-term strategic goals.
Thus, enable the organization to develop an efficient reward system that rewards
employee performance rather than the outcome of employee actions. Human resource managers
offer reward and recognition for good performance as a way of motivating employees to meet
their targets and surpass them. The human resource requires developing fair and equitable
reward systems based on the formal record of outstanding performance obtained through
effective performance measurement systems.
In some organizations, performance measurement has been received with doubts by
employees who are lazy or unmotivated. Such employees view performance management as an
instrument used to divide and judge their performance negatively. On the contrary, some
managers feel that performance management in a way brings division among the employees.
The relationship between performance management and strategic planning
The vision, the mission, and corporate values of Wal-Mart should be aligned with the
organization strategic plan. On the same note, the performance management system should be
developed and modeled in a way to reflect the corporate values of Wal-Mart. Strategic
forecasting is basically a regimented effort geared to fabricate fundamental actions based on a
sound judgment that assist to provide direction to the organization. Consequently, performance
measurement plays the significant role of improving individual performance to facilitate the
overall perfection of staff. This propensity harmonizes strategic planning efforts to amplify the
overall company efficacy.
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Performance Management System in Wal-Mart is linked with strategic plans of the
company to check that the organization’s strategic plan is adhered to at all levels of the
organization (Wal-Mart Stores, 2014). Wal-Mart evaluates the managerial performance of the
company’s branch managers through balanced scorecard and assesses all its employees based
on their job performance. So as to ascertain if all the stakeholders of the company at all levels
are working towards satisfying the customers in providing high-quality products and services
all the time. Therefore, enable Wal-Mart to achieve organization strategic goals and business
sustainability.
Performance management plays a central role in transforming policies into realistic
plans. At Wal-Mart, directors build up overarching measurement scales to assist in tracking
business activities through performance measurements (Hahn & Kuhn, 2012). Such
measurement scales transforms to the overall goals of the organization. Each department
centers on particular performance measurement attribute to assist enhance departmental
performance. For example, the marketing team at Wal-Mart is concerned more with sales
made, suitable leads and translation rates at the section. The operation staff centers on assessing
performance about delivery time, quality fulfillment and number of orders filled. On the other
hand, the customer care department, measure performance based on customer satisfaction and
feedback. These different performance measurement scales assist the organization in attaining
the overall strategic goals by translating strategy into action.
In conclusion, Wal-Mart low-cost structure strategy has brought a tremendous success
for the company. However, by incorporating performance management and aligning it with the
organization strategic goals, core values, and mission of the company. Wal-Mart will achieve
even more success by obtaining a competitive edge over other retail companies (Bhave &
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Brutus, 2011). Therefore, enabling the organization to achieve its strategic goals and
organization sustainability.
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