Goodbye, Greeters: Can Walmart Calm Its Latest Controversy?

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Henry C. Boyd from the University of Maryland, Jeffrey Stoltman from Wayne State University and Lex Frieden from the University of Texas Health Science Center discuss Walmart's controversial changes to its greeter position.

Walmart has enjoyed a reputation as an inclusive employer for people with disabilities – but that reputation took a hit with a recent change in its job profile for so-called “people greeters” at its stores. The altered position has had the effect of excluding people with disabilities and elderly people, mainly because it involves more physical labor.

The controversy dates back to a May 2016 company memo, when the greeter’s job profile was changed to “customer host.” It required them to go beyond greeting customers to scanning receipts and checking shopping cart contents, assisting with returns and helping keep entrances clean and safe. The retailer has been using that revised job description in pilots since 2015 to hire and fire greeters. The issue has provoked outrage in many quarters in recent days after a Facebook post two weeks ago by the mother of one of the affected employees gained notice.

According to an NPR report last week, to qualify for these new host positions, “workers must be able to lift 25 pounds, clean up spills, collect carts and stand for long periods of time, among other things — tasks that can be impossible for people with disabilities.”

Walmart CEO Greg Foran last week sought to defuse the crisis by offering to extend a 60-day notice period for greeters who happen to be people with disabilities, and to try and find other roles for them at the company’s stores. He also drew attention in a letter to store managers that Walmart has for three years scored 100% in the Disability Equality Index for being an employer of choice for people with disabilities.

Notwithstanding those claims, Walmart now faces much more than an expanding public relations problem: A former greeter in Utah has filed a lawsuit, and many other greeters with disabilities who lost their jobs have filed complaints against the company with the Equal Employment Opportunity Commission (EEOC).

‘Massive Misstep’

Walmart’s action was a “massive misstep,” said Wharton marketing professor Americus Reed. Even if the economic imperatives compelled it to control costs by eliminating the greeter position, the company failed in how it handled the fallout. “The three keys to crisis management are one, validate concerns; two, show action; and three, control the narrative.” He gave Foran a “D-” for validating concerns; and an “F” for showing action. As for controlling the narrative, “it remains to be seen whether or not the story gets legs and folks start reacting in the social media world,” he said.

Those tenets form the “standard playbook” of crisis management, Reed noted. “Smart companies execute on those three steps — and even smarter companies have put some thought into a plan of contingencies for unseen events or crises that could hit the brand, conditional on the event likelihood related to their particular industries,” he added. “I would be more proactive and get out there and tell the world about what we are going to do specifically, step by step, to make sure these valuable folks maintain their deserved opportunities.”

“A competitor could step in and say ‘Unlike Walmart, we actually care about opportunities for all employees regardless of whether they are handi-capable or not.’” –Americus Reed

Walmart has “clearly bungled in terms of the communication and transition,” said Jeffrey Stoltman, director of entrepreneurship and innovative programs and a professor of marketing at Wayne State University’s Mike Ilitch School of Business. “They just had no sensitivity and no awareness as to how it would affect the actual individuals who had been in these positions — sometimes for close to two decades — who were identified at a local level by the people who shop and frequent Walmart.”

The company seems to have rushed with its plan to discard the greeter role with little thought about how it would impact its brand at the community and corporate levels as one that stands by certain cultural values and corporate social responsibility, Stoltman added.

Little Business Sense?

According to Henry (Hank) Boyd, clinical professor in the marketing department at the Smith School of Business at the University of Maryland, Walmart may have acted under the heat of the competitive pressures it faces from Amazon. For its latest full year ending January 31, 2019, Walmart posted $514 billion in revenue and $22 billion in net profits. For 2018, Amazon posted $232 billion in revenue and $10 billion in net profits. Both had roughly the same net profit margin of a little over 4%, but Boyd noted that Walmart also has the overhead of physical store locations.

Lex Frieden, professor of biomedical informatics and physical medicine and rehabilitation at the University of Texas Health Science Center, agreed that the move “makes no sense from a business standpoint.” In fact, the company is probably hurting more from the negative reaction than any financial benefits it might gain by rewriting the greeter’s role, he said. (Stoltman, Boyd and Frieden discussed the Walmart controversy on the Knowledge@Wharton show on Sirius XM. Listen to the complete podcast at the top of this page.)

Stoltman also didn’t see the move making sense from a cost standpoint, even as Foran refers in his note to retailing industry competition. “Somebody in the HR department and somebody in the PR and communications department needed to get together way before they started rolling this thing out and think about the implications,” he said. Elderly greeters who cannot meet the new job specifications for customer hosts are also affected, he pointed out.

“If [Walmart CEO Greg Foran] had put out a real apology — ‘We blew this, we botched it entirely and we’re going to take corrective steps immediately’ — then that would have been fine.”–Henry Boyd

Tiger by the Tail

Stoltman noted that while Walmart has implemented the changeover to customer hosts for close to three years now, it was social media that helped spark the current controversy. “The volcano erupted first on social media and then the local and national news outlets picked it up,” he said. “Now they have a tiger by the tail. They simply can’t walk it back.”

Stoltman also faulted the company for what he termed as its “weasel language” to extricate itself from its PR mess. “They didn’t say they’re going to find these people jobs; they said they’re going to make every effort to find these people jobs, and without that commitment, there’s another problem around the corner.”

Boyd found Foran’s handling of the situation unacceptable. “If he had put out a real apology — ‘We blew this, we botched it entirely and we’re going to take corrective steps immediately’ — then that would have been fine,” he said. “But he’s trying to walk this fine line, and I don’t think that’s going to pass muster.”

“When Walmart made this specific decision, absurd as it is, it lost the opportunity to stay on the signal, which is that it is inclusive,” said Stoltman.

Walmart seems to have lost touch with the philosophy of its founder Sam Walton, Boyd suggested. He recalled that Walton in the 1980s created the role of greeters because he recognized the importance of having “that human touch.” The greeter at Walmart stores brings “a sense of community,” especially in the rural heartlands of America, he pointed out. “Over the years, folks that have been disabled and older folks have moved into that position. And it’s been a great source of income for them and also a sense of pride.”

“Somebody in the H.R. department and somebody in the PR and communications department needed to get together way before they started rolling this thing out and think about the implications.”–Jeffrey Stoltman

A Larger Problem

The roots of the issue go much deeper than one company’s actions, and have to do with a wider discrimination against people with disabilities, according to Frieden. “Walmart is not the source of the problem here; the source of the problem is attitudes about people with disabilities in the workplace,” he said.

Frieden noted that when the Americans with Disabilities Act (ADA) was passed in 1990, about 80% of people with disabilities were unemployed. Citing government data, he pointed out that today, while the overall unemployment rate in 2018 was 3.7%, for people with disabilities it is 8%. “Walmart’s not doing anything to help resolve this problem,” he said. “We can’t say that they are discriminating in the legal sense of the word, but we can say that they’re using pretty bad judgment when it comes to their social responsibility.”

According to Frieden, it is “disconcerting that you can have these kinds of employment decisions made without giving any consideration to the full range of issues involved.” He noted that the people with disabilities working for Walmart “were proud of the company; they spoke on behalf of the company and they were ambassadors for it.

“It’s not simply because those of us with disabilities have an impairment that prevents us from doing one thing or another — we can do many more things than those we cannot do,” said Frieden. “People with disabilities are equally as well educated as those without. They are trained equally, if not better, in some fields than others. Why then are we not seeing improvements in the employment rate of people with disabilities? I have to believe that there are some attitudes still out there, and it really frustrates me when I hear about these issues like Walmart has — but it also makes me concerned about the larger scope of the problem.”

Longer-term Fallout

Boyd said the Walmart controversy may result in legislative changes to enhance protections for people with disabilities. “The ADA is a wonderful step forward, but we need to strengthen it,” he added. “We’ve got to put in place mechanisms that ensure that we can take care of folks who are saying, ‘Hey, I want this shot, I want this opportunity, I don’t want to just sit around the house, I want to be contributing to society, I want to have a job, and that sense of dignity and pride that goes with it.’”

“Walmart is not the source of the problem here; the source of the problem is attitudes about people with disabilities in the workplace.”–Lex Frieden

Frieden noted that the ADA is not an employment law, but a nondiscrimination law. “It may be time that we need to consider affirmative action when it comes to people with disabilities,” he said. Stoltman noted that senior citizens — roughly 74 million people over the age of 65 — also need those protections. Foran’s memo makes no mention of accommodations for those individuals, he pointed out.

The EEOC is taking the approach that “a reasonable accommodation” that Walmart could make is “to enable a greeter to call upon another fellow staffer who is able to do that aspect of the job that they’re not able to do at a given time,” said Frieden. For example, if a customer needs some help getting their groceries to the car, the greeter would call another staff member in the store to come and assist that person. “Those are the questions that the EEOC will have for Walmart,” he added.

According to Reed, the Walmart controversy serves as a wakeup call for companies to take more affirmative action in employing people with disabilities. “This class of people is protected under the law, so there are significant implications to the Walmart brand,” he said. Walmart’s rivals could use the controversy to claim a higher plane. “A competitor could step in and say ‘Unlike Walmart, we actually care about opportunities for all employees regardless of whether they are handi-capable or not.’”

Could the controversy hurt the Walmart brand in the long run, or will public memory run short? According to Reed, the news cycle is working in Walmart’s favor. “People are out there with their own problems, and there is very little oxygen for these stories. However, it all depends if consumers decide to become vigilantes and try to elevate this story [further on] the national news level.” He added that after being exhausted by news on political and other developments, “there is just so little left for these kinds of stories to bubble up and remain in the conscious awareness of the nation.”

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