He built Wal-mart from the ground up on the solid bedrock of making every penny count and accounting for every penny—exactly the way he lived his personal life.
Sam Walton hated unions and the damage he believed they caused to a business. He had to walk a fine line between paying his associates a fair wage and implement working conditions that would act as a deterrent to union influence.
Like almost every retailer, Walton knew that the cost of labor could make the difference between profit and loss, and the control of labor costs was the simplest part of the equation in operating a profitable retail business. Like every other expense, Sam kept it as low as possible while still paying a reasonable wage.
Early on he also realized that to keep well-trained, customer-friendly and highly productive associates he would have to do more. Instead of increasing salaries to the next level—which would then continue to escalate annually—he instituted a profit-sharing program where he matched associate contributions. This program gave the associates the very real opportunity to make a large sum of money if they stayed with Wal-mart and worked productively.
This was done in order to retain productive associates and improve the company’s bottom line.
It was also a key part of his strategy to stop the infiltration of unions into his company.
The Wal-mart headquarters and store management works on a full-time basis to seek out any sign of associates at any given store who may be pre-disposed to voting in a union. Monitoring associate grievances, complaints and analyzing answers given upon direct questioning or through a written questionnaire is an ongoing process. The goal is to identify potential associates, stores and departments within the store that may be sympathetic to voting for a union.
As the largest retailer with the most associates, Wal-mart is a union target. Yet, only a handful of stores have ever conducted a union election and only one has voted in a union.
The meat department managers in one store voted 7 to 3 to unionize their store’s meat department.
Wal-mart struck 14 days later like the hammer of God. The company announced that meat cutting operations would cease immediately and Wal-mart would begin selling pre-packaged fresh meat. What a message that sent!
Wal-mart has closed stores to prevent unionization and various lawsuits have been in the courts for many years.
Sam’s vision for his company did not include the intrusion of unions and even after his death the fight goes on.