Wal-Mart plans to employee treatment, equalize pay

Saturday, June 5, 2004

FAYETTEVILLE, Ark. -- Wal-Mart Stores, facing lawsuits for alleged gender bias and unfair treatment of workers, pledged Friday to work harder to promote women to management and announced a new pay system for hourly employees.

CEO Lee Scott told employees and shareholders at the company's annual meeting that executive bonuses, including his own, would be cut up to 7.5 percent this year and 15 percent next year if the company does not meet its goals for promoting women. The aim is to promote women and minorities in proportion to the number that apply for management positions.

"If 50 percent of the people applying for the job of store manager are women, we will work to make sure that 50 percent of the people receiving those jobs are women," Scott said.

The annual meeting comes at a time when Wal-Mart's image has been battered by a series of lawsuits and fierce opposition from communities trying to block the company from building stores in their towns.

The lawsuits allege that Wal-Mart discriminates against women and does not pay employees overtime. Other opponents say the company pays substandard wages and drives mom-and-pop stores out of business.

Wal-Mart addressed the wages issue Friday by announcing changes in job classifications and pay structure for hourly workers -- a system the company said would lead to fairer wages. Scott did not give details.

Critics were skeptical of Wal-Mart's planned changes in work conditions and pay scales.

"None of it sounds like huge improvement in the lives of Wal-Mart workers," said Ross Eisenbrey, vice president of Economic Policy Institute, a liberal think tank in Washington.

Tom Coughlin, Wal-Mart executive vice president in charge of the Wal-Mart and Sam's Club divisions, complained about criticism that has been heaped on the company and thanked employees who "hung in there."

"The fact of the matter is we do need to tell our story better," Coughlin told a crowd packed into the 19,000-seat Walton Arena.

Scott also complained about the scrutiny, but said the glare of the spotlight has helped the company function better.

He said Wal-Mart created a compliance office this year that now has 140 people working to ensure the company follows the rules and its own procedures. Scott said the office is working to make daily improvements in how workers are treated.

Coughlin also pointed out that the company spends nearly $40 billion on food produced in the United States and that Wal-Mart's aggressive expansion has created 40,000 construction jobs.

The company has 1.5 million workers in the United States and abroad. It had $256 billion in sales last year.


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