The Healthcare Program for the Associates that Came to a Naught
The healthcare assistance and programs set by the speech by Wal-Mart CEO Lee Scott for the company’s associates came into a naught when an internal memo in a retreat held by the top brass of the retail firm was exposed to the media. In a report by the tandem of Greenhouse & Barbaro (2005) in New York Times, the two wrote about the company’s board proposition on numerous ways to hold down spending on health care and other benefits to the employees of the giant retail company.
One of the issues raised by the duo was the recommendation of the board to hire more part-time workers and discourage unfit or not healthy people from working at Wal-Mart (Greenhouse & Barbaro, 2005). This move would spurt the company of saving several billions on healthcare expenses and on its operational expenditures. It was said that that the executive vice president for benefits proposed a cut of 401 thousand health contribution of the firms employees on health insurance and at the same time the plan to woe younger and healthier people to work for the company in return of educational benefits.
In this proposition old employees of the giant retail store would have to stand aside to let this new batch of employees work for the company. The philosophy behind this suggestion was that “workers with seven years’ seniority earn more than workers with one year’s seniority, but are no more productive” (Greenhouse & Barbaro, 2005). Meanwhile, the discovered memo was a proof that the largest retailer Wal-Mart had to walk on a “fine line” in its plan of restraining benefit expenditure since critics of the company had been attacking it for being stingy on giving wages and health coverage to its employees.
Chambers (2006) on her part acknowledge that there were about 46% of the beneficiary of the company’s 1. 33 million employees in United States were uninsured. Wal-Mart’s executives justified the creation of the memo stating that benefit expenditure have increased by 15 percent on the average since 2002 and that the company was being squeezed by the hike in health expenses; the memo if applied would give the giant retailer the opportunity to save more that $1 billion per year up to 2011 (Greenhouse & Barbaro, 2005).
To reduce the heat that the company was getting from its critics, Wal-Mart announced a brand new program where by there would be an increase participation of employees in their healthcare issues by paying a measly sum of $11 a month in premiums. But the scheme still was not applicable especially for full-time associates who only earn an average of $17,500 per annum (Greenhouse & Barbaro, 2005).
In a gist, this leak on the Board Benefits Strategy document created by top honcho of the giant retailer Susan Chambers created an image for the company as a bad employer that goes the opposite direction on its purported claim to take care of its associates that has helped it where it is now today. This document of the Board Benefits Strategy was contrary to what CEO Lee Scott spoke in his “Wal-Mart: Twenty First Century Leadership. ”