In our continuing coverage of Wal-Mart’s labor and business practices, we now turn to some of the non-economic factors that influence employee satisfaction at the company. Part Two of this backgrounder, below, considers employee morale and the frequent complaints of sexual harassment and mistreatment lodged against Wal-Mart.

Daily Conditions at Wal-Mart

The first key factor that shapes the working culture at Wal-Mart is the store manager. The intermediary between corporate headquarters and individual employees, store managers are each responsible for increasing sales and reducing costs at their stores. While managers cannot always increase sales, they can reduce labor costs. The store manager figures out a “labor budget,” which details how many employees he can schedule and at what rates of pay, and forwards his calculations up the chain of command. It’s unclear how much discretion the store managers have over this determination, but at least some store managers are upset at the frequent understaffing problems that result from the constant attempts to cut labor costs. One complained about his “skeleton crew”: “Things get overbooked…There are three trucks with merchandise that have to be put in the store. Freight and merchandise sometimes sit on the floors in aisles and boxes. The housekeeping is poor. You will find fire exits blocked, broken pallet jacks and ladders; there are things all over the floor.”

Accordingly, this puts significant pressure on the employees who are working at any given time, since it is hard for managers to adjust the “labor budget” to account for a particularly busy day or shift. In addition, “employees often have to change their schedules, particularly part-time workers who have another job, or students whose academic schedules change frequently” – and Wal-Mart disproportionately employs people with unusual schedules (see below). Many employees whose schedules cannot be accommodated by management simply quit. Ellen Rosen writes that turnover at Wal-Mart is high compared to the rest of the retail industry: 35 to 45 percent a year among full-time workers, and 56 percent among part-timers.

Many Wal-Mart employees have reported that this creates a stressful environment because new hires are always learning on the job and are less efficient than management wants them to be. More permanent workers are expected to train the new hires, an almost constant task, while still maintaining the regular responsibilities of their own work.

Employee Morale

According to Barbara Ehrenreich, a journalist who worked as a Wal-Mart sales clerk in Minneapolis, there is little dignity in being part of the Wal-Mart rank-and-file. Her account is full of stories of harsh control by store managers, who psychologically manipulate their employees and scrutinize even the most banal tasks. She reports that because Wal-Mart’s philosophy prioritizes saving costs at the margins, workers are routinely sent home early or having their hours cut if business is slow. Those employees are not paid after they are asked to clock out and go home.

One anecdote here may stand in for many, in spirit if not in exact substance: “Katie Mitchell [a pseudonym] works from 10 p.m. to 6:30 a.m. She starts work after the unloading crew removes the merchandise from the trucks. Her job is to set the merchandise on pallets and bring it to the aisles, where it can be stacked. She has to “inventory” the merchandise after it is unloaded from trucks and remove the shrink-wrap from the packages. Using her telxon gun, Katie counts each item and enters it in the store computer. If she makes an error she has to check with the truck driver’s invoice and make the correction….There is always too much work to be done and no one to help her. She often misses work breaks and once missed lunch entirely – that is, she worked off the clock – but she had to get the work done by the end of her shift or be “chewed out” by her supervisor. The biggest problem, though, was that after 10 p.m. the workers were locked in the stores. No one could leave for an emergency…Wal-Mart, under the pressure of bad publicity, has subsequently changed this policy and does not lock the door at night.”

Wal-Mart’s low-wage mentality even filters down to the company’s managers, who make less than their counterparts at other companies. James Hoopes reports that “only by hanging on for nine years and getting vested in the stock-sharing plan do Wal-Mart managers begin to have a chance at big money.”

Wal-Mart tries to reconcile this emphasis on cost cutting with the values of its humble beginnings. Nelson Lichtenstein, a History Professor at UCSB, senses that “the ideological culture projected by Wal-Mart has several interwoven components, some not all that different from the welfare capitalism pioneered by paternalistic firms…in the years before World War I.” These themes include “family, community, and a corporate egalitarianism that unites $9-an-hour sales clerks with the millionaires who work out of the Bentonville corporate headquarters.” Wal-Mart tries to accomplish this, in part, by taking symbolic steps to create a “Wal-Mart family”: for example, labeling all employees “associates,” using first names in conversation and on identification badges, and by “coaching” employees to perform better rather than disciplining them.

Moreover, the company works hard to improve employee morale: On some accounts, employees participate “as enthusiastically as shareholders” at the company’s annual meeting, held in the University of Arkansas basketball stadium. According to one professor: “A Wal-Mart worker recently told me that though he personally feels humiliated by the daily Wal-Mart cheer, invented as a morale booster by Sam [Walton], where employees wiggle their rear ends on management’s cue, many employees enjoy and are energized by it.”

Complaints of Sexism and Sexual Harassment

While it is hard to extrapolate from any one group of employees’ complaints about their employer’s labor practices, Wal-Mart has been the subject of several high-profile labor complaints in recent years. Many of these complaints eventually were joined in Wal-Mart Stores v. Dukes, a case now famous for reshaping the certification requirements for class action lawsuits. It was one of the some 5,000 lawsuits that are filed against Wal-Mart every year.

In Dukes, the plaintiffs were a group of female Wal-Mart employees who alleged that the company discriminated not only against them as individuals but against women as a class. For example, Betty Dukes, the lead plaintiff, worked at Wal-Mart for nearly nine years and was making less that $8.50 an hour, while recently hired men in the same job were being paid more. Another plaintiff sought a promotion after working for Sam’s Club [Wal-Mart’s retail warehouse chain] for years, but despite repeated requests, was not told about the process for promotion. In fact, she was met with sexist statements such as, “You should brush the cobwebs off your makeup.”

The plaintiffs submitted over 110 affidavits from current and former female employees with similar stories of women being forced to work more hours and less desirable shifts than their male counterparts, while systematically losing out on pay raises and promotions. Finally, they supplemented their case with statistical information about disparities in average earnings between men and women that permeated every job tier (data from 2001): regional vice president ($419k for men vs. $280k for women), store manager ($106k vs. $89k), department head ($23.5k vs. $21.7k), and cashier ($14.5k vs. $13.8k).

Without addressing the merits of the discrimination claims, the District Court judge concluded that the plaintiffs had met the requirements to justify a class action, since they displayed significant evidence of companywide practices of gender disparities and stereotyping. The Supreme Court reversed, finding that Wal-Mart had only allowed its store managers significant discretion over hiring, which was not in itself discriminatory. It also cited problems with the use of the plaintiffs’ statistical evidence. Despite the outcome of this case, the lawsuit exposed significant questions about Wal-Mart’s commitment to gender equality and the needs of its female employees. These complaints have been echoed in many other female workers’ accounts of their time at Wal-Mart.