Friday, August 1, 2008

Wal-Mart Warns Against Unions

We live in a country where – in spite of what we’d like to think – employees are mistreated. Worker satisfaction among Americans is at an all-time low and is dropping even further with each successive survey. What is really unfortunate about this situation is some executives have gotten so blatant about it that they actually think it is good business practice to mistreat workers.

On page 1 of the August 1 Wall Street Journal is an article about Wal-Mart’s warnings about what will happen if Barack Obama wins the presidential election. According to the article, Wal-Mart human resource managers are holding meetings with store managers to warn them that a Democratic win in November will mean changes in federal law to make it easier for workers to unionize. In a bizarre twist to the message, though, company management is claiming that employees would be forced to join unions and pay dues while getting nothing in return. So they’re not concerned about what unions would do to stop the company from taking advantage of workers – as they’ve been doing for many years - they’re merely looking out for the welfare of their employees.

Whenever there is talk of unionizing within a company, cries of socialism, work stoppages, and higher costs are thrown around. And to be fair, there have been times in this country’s history when unions have taken advantage of their power sending companies – and entire industries – to ruin. What many people don’t understand, though, is that unions only exist because of poor treatment of workers by managers. If workers are satisfied with their jobs, feel fairly compensated, and trust management, they have no need to unionize.

In Wal-Mart’s case, the company has had years of accusations and charges of unfair labor practices – which is just as destructive to the company as union strife (one actually causes the other). Wal-Mart management is not known for respecting workers – and this move is strengthening that perspective even further. According to a person who attended one of the Wal-Mart meetings, the person running the meeting said, “I am not telling you how to vote, but if the Democrats win, this bill will pass and you won’t have a vote on whether you want a union.” It is really amazing how little respect company managers have for the intelligence of their workforce.

Wal-Mart has long followed several practices that lead to destruction, and it is only a matter of time before the company enters the same death spiral that has plagued so many other American institutions. It’s a question of leadership and always acting in a way that is best for all of the company’s stakeholders (which, believe it or not, includes workers). Undervaluing employees, squeezing suppliers, and losing sight of the fundamental purpose of the company are all practices that break down the company’s ability to survive.

As long as the market remains strong, the company can appear to be successful with no sign of breakdown. It’s when something external occurs that the weakened immune system becomes evident.

I led a company in the past that had been unionized for many years. Although I had no intention of eliminating the union, I did want to improve the relationship with workers so they did not feel they needed the union to make things better. By walking around the operation to talk with people and inviting the union representative into our planning meetings, a level of trust between workers and managers began to develop.

As a result, worker morale improved along with productivity, quality, and our financial results. Besides the financial success, the company became a more satisfying place to work.

It’s time we stop wasting our energy on fighting against workers and start realizing the potential value they bring to the company. By allowing workers to take pride in their jobs, there will be no need for workers to unionize or managers to waste money on misinformation campaigns to tell people how to vote. In the end, we will all win.