Reference no: EM132221865

Questions: What are the problems with allowing individual store managers to use their own discretion in hiring and promoting employees?” What is a positive aspect of allowing store managers to use their own discretion in hiring and promoting employees? Do you agree with Walmart’s claim that the company cannot be held responsible for unconscious bias and the sexism rooted in society? Why or why not?

Case:

Betty Dukes was hired in May 1994 as a part-time cashier at a Walmart store in Pittsburg, California. Within a year she became a full-time employee, and two years later she was promoted to Customer Service Manager. Shortly thereafter, Ms. Dukes complained to the District Manager about discriminatory treatment from the head of her department and the store manager. After complaining, she was written up for a series of rules violations that were seldom enforced. In August 1999, she was demoted back to cashier, and her hours and wages were reduced. Despite this retaliation, Ms. Dukes aspired to a higher position, but each time the open position was filled without being posted, usually with a man. “Opportunities seemed to come and go, positions were filled,” she said, but managers would not provide any support or encouragement. “No one would talk to you.” Suing for Discrimination: On June 19, 2001, Betty Dukes joined with five other female workers to file a suit against Walmart for discriminating against them as women. These women charged not only that local Walmart stores had discriminated against them personally but that the whole company had discriminated against all female employees during the previous five-year period. Since women employees at Walmart comprised more than 65% of hourly workers in a workforce of over 1 million people, the potential members of a class-action suit on behalf of all alleged victims of sex discrimination totaled at least 700,000 and possibly as high as 1.6M women who had worked at the company for any length of time between 1996 and 2001. Although the six women who filed the suit cited instances of discriminatory acts against themselves personally, the evidence that Walmart as a company is guilty of sex discrimination is based, in large part, on a statistical analysis of personnel data. The suit alleged that female employees in Walmart stores were less likely than men to be promoted and that when they were promoted, women’s advancement came more slowly. Women’s pay also lagged behind that of men. According to Walmart executives, the company has a firm policy against discrimination, and there is little evidence that individual store managers are consciously biased. The suit filed by Betty Dukes and the five other women alleged that the cause of the statistical disparities was the company’s pay and promotion practices and the discretion that store managers had in decisions about pay and promotion. Both of these factors allowed store managers to exercise an unconscious bias. There is extensive psychological research on unconscious bias, which includes studies of stereotyping and in-group favoritism. Sex stereotyping occurs when managers evaluate female employees using traditional conceptions of the characteristics of women and the appropriate roles for them. According to one psychologist, “There are studies that show that the strongest predictor of whether an opening is filled by a man or a woman is whether the previous incumbent was a man or a woman.” In-group favoritism is a tendency of human beings to favor those who are considered like themselves in certain respects, such as gender. At Walmart, pay and promotion decisions were left largely to individual store managers’ discretion. This discretion on the local level was in sharp contrast to decisions on other matters, which were highly centralized at Walmart’s headquarters in Bentonville, Arkansas.

In many stores, promotion opportunities were not usually made known, and open positions were often filled with employees previously identified and groomed by store managers, whose decisions were based on vague criteria that were inconsistently applied. Many job categories and departments were identified as male or female lines of work. Women workers were typically assigned to departments such as kitchenware and children’s clothing, which were considered less important, and they were not rotated through different departments, in which they could gain valuable experience and recognition. Women who knew of vacancies said that they were not encouraged to apply, and many declined to submit an application in the belief that they stood little chance of being selected. It is alleged that men were promoted more often to positions in the same store whereas promotions involving a transfer elsewhere were offered disproportionately to women. Workers, such as Betty Duke, who complained about sex discrimination or other matters were often subjected to retaliation by store managers, which included demotions and loss of eligibility for promotions. Walmart’s Defense Walmart vigorously defended itself against the charge of discrimination and has objected, in particular, to the attempt to bring a lawsuit on behalf of all women employees. The company argued that if the six women were victims of discrimination, then the suit should seek to redress the wrongs incurred in these cases. Moreover, the circumstances in each of the six cases are different, and so the company should be allowed to defend its conduct given the particulars of each case. Walmart has further argued that as the largest private employer in the United States, with approximately 3,400 domestic stores, employing more than 1M people, in as many as 53 departments and 170 job classifications, it is necessary to allow store managers leeway to make decisions on a case-by-case basis in response to local situations. With so many decisions to be made, some mistakes may have occurred, but Walmart insists that these were local problems that do not necessarily indicate a problem with the company’s policies and procedures. In addition, Walmart argued in its defense that one cannot justly extrapolate from the wrongs in these six cases to the conduct of the whole company. It does not follow that because some women suffered discrimination, all women employed by the company from 1997 to 2001 were victims. This is especially true if, as the women argue in the suit, that the discrimination occurred because of the discretion allowed to local store managers. As one observer asked, “How can a court treat 4,000 store managers as acting identically for purposes of a class action when the plaintiff’s whole theory of the case is that those store managers are being granted too much autonomy?” Walmart has submitted evidence from its own studies that show that there are no statistically significant gender disparities in 92.8% of stores. These studies found that men were favored to a statistically significant degree in only 5.2% of stores, and that in the remaining 2.0% of cases, women were favored. Thus, Walmart concludes, “The evidence establishes that, if anything, any discrimination that may have occurred was not system-wide, and indeed was sporadic and varied widely.” Finally, Walmart contended that discrimination is, in large part, a problem in the larger society that the company cannot be reasonably expected to solve alone. For example, the assignment of women to certain departments, such as kitchenware and children’s clothing, may be due to their own preferences. A company spokesperson said about such cases, “Societal issues should not be confused with Walmart practices.” In addition, women may have less interest than men in assuming a managerial position. One Walmart study further found that from 1999 to 2002, women constituted 12% of applicants but were offered 17% of the open positions. The low ratio of women store managers may be due, then, not to company offers of the position but to women’s willingness to accept them. Furthermore, statistical disparities have many causes, some of which a company cannot easily identify and correct. Supreme Court justice Sandra Day O’Connor observed in another discrimination case, “It is completely unrealistic... to suppose that employers can eliminate, or discover and explain, the myriad of innocent causes that may lead to statistical imbalances in the composition of their workforces.”