Author: Marta Moakley, XpertHR Legal Editor

October 31, 2013

Wal-Mart has started the process of promoting about 25,000 employees in surprise, on-the-spot ceremonies as part of its larger corporate plan focusing on leadership development. The promotions will continue throughout the busy holiday hiring season and into the corporation's fiscal year-end. The world's largest retailer expects to promote more than 160,000 employees to jobs with higher pay every year. Wal-Mart's strategic actions follow what has been a challenging year in terms of employee relations.

The nation's largest private employer appears to be following through on its refined staffing strategy, which was announced earlier this fall. Nonexempt, hourly employees will be promoted to different jobs, and other employees will be promoted to management positions. In addition to hiring seasonal workers, Wal-Mart has also pledged to transition 70,000 part-time and full-time workers (e.g., transitioning an employee from part-time to full-time).

Wal-Mart's latest staffing decision and accompanying public relations push may be seen as a response to efforts by employee and labor groups portraying the retailer as sacrificing employee compensation and development in favor of higher profit margins. Wal-Mart has also been the target of union organization efforts.

To date, Wal-Mart has resisted unionization efforts. However, employee-led and union-backed group OUR Walmart is quick to counter that as many as 63 percent of Wal-Mart's full-time employees make less than $25,000 per year. OUR Walmart plans a series of protests on Black Friday, the busy after-Thanksgiving sales day. Therefore, whether Wal-Mart remains union-free in the long-term is still an open question.

Wal-Mart's decision to promote such large numbers of employees signals management's complex decision-making regarding overall staffing, with an emphasis on employee development strategies. As an alternative, an employer may use on-the-spot cash rewards as a way to incentivize and motivate employees. The practice can build on existing employee engagement efforts and increase productivity without requiring an extensive commitment to increased employee compensation. In all cases, on-the-spot rewards should focus on individual goal achievement and on an employee's role within the greater organization.