Wal-Mart’s controversial new head of human resources may struggle to sell the
company’s self-image as a benevolent employer.
So say some analysts on the news that Susan Chambers has been promoted to
executive vice president of Wal-Mart’s people division. She replaces
Lawrence
Jackson, who after 17 months in the position was tapped to run
the retailer’s
global procurement division. Chambers gained notoriety
several months ago with
the public airing of a memo she wrote about
limiting benefit costs, including
the prospect of making Wal-Mart
cashiers do some "cart gathering" to attract a
healthier workforce.
That memo was a reflection of Chambers’ background as a logical-minded
technology professional, and indicates she wasn’t concerned about how
it might
appear to the public, says Kevin Berchelmann, president of
Triangle Performance,
a consulting firm focused on human resource
issues. To Berchelmann, the memo
signals that Chambers may find the
public relations aspect of her new job
difficult.
"I think it bodes ominously," he says.
Wal-Mart spokesman Dan Fogleman disputes the suggestion that Chambers will
stumble in the spotlight. "Ms. Chambers is very articulate and very savvy when
it comes to the positions that need to be taken in the public venue," he says.
"She's a great communicator."
Wal-Mart announced the executive changes Wednesday, April 6. The Bentonville,
Arkansas-based company says that Chambers will be responsible for human
resources functions and the company’s office of diversity. She will
report to
chief executive Lee Scott. Among other leadership moves,
Wal-Mart says that
Linda Dillman, previously executive vice president
and chief information
officer, will become executive vice president of
risk management and benefits
administration.
The company cast the changes as part of a corporate policy of rotating
executives.
"These leaders are people of great capacity, and today's changes reflect a
long history at Wal-Mart of what Sam Walton used to call
‘cross-pollinization,’
" Scott said in a statement. "They are good
examples of Wal-Mart’s commitment to
developing a strong bench, with
talent ready to step up and lead this company
into the future."
Wal-Mart has been dogged in recent years by employment-related litigation and
criticism, including the claim that the company offers a skimpy
benefits
package. Chambers’ memo last fall bolstered some of those
attacks, admitting
that "our critics are correct in some of their
observations."
Scott says Chambers has been instrumental in the retailer’s ongoing efforts
to meet the needs of employees with the company’s benefits plan.
"Much of what we’ve done in improving our benefits program, as well as the
actions we’ve taken for Wal-Mart to be more proactive on the health
care issue
in the United States, has happened under her leadership,"
Lee says in a
statement.
But Wal-Mart Watch, a group critical of the company, labeled Chambers’
promotion "bad news for Wal-Mart employees."
Among her biggest challenges is facing pressure to change the company’s
low-cost approach to compensation, says Jim Walker, a consultant on
human
resources strategy.
"They’ve been managing people by their own rules for a long time," Walker
says. "The public’s asking them to change."
Chambers came to Wal-Mart in 1999 and took a benefits management post in
2002. Much of her professional career, though, has been in information
technology roles. At Wal-Mart, she served as a vice president of
applications
development. She also was director of applications
development at Hallmark
Cards.
Jackson is known as both a hard-driving business manager and a skilled
schmoozer. Prior to taking the HR reins at Wal-Mart in 2004, he’d been
president
and COO at retailer Dollar General.
Procurement is critical to Wal-Mart, and the fact that Jackson is moving to
lead that division is a sign that the company believes he succeeded in
HR, says
Jeff Cohn, managing partner at New York-based consulting firm
Bench Strength
Advisors. Jackson is likely seen as a rising star within
Wal-Mart, Cohn
says.
"The grooming is on track," he says.
Jackson’s experience as a seasoned business leader helped him make the
transition into the HR leadership role at Wal-Mart, says Berchelmann at
Triangle
Performance. Chambers lacks that sort of business background,
nor does she have
much experience in the field of human resources, he
says.
"She doesn’t bring either one to the table," Berchelmann says. "I think it’s
going to be a challenge for her."
Wal-Mart's Fogleman, though, characterizes Chambers' background as broad. And
he says that under her leadership in the benefits field, the company has seen
greater levels of participation in its open enrollment process. In the company's
most recent open enrollment period, last fall, about 70,000 employees who'd
previously waived health coverage signed up for a company plan, Fogleman says.
Wal-Mart has more than 1.3 million U.S. employees, and more than 1.7 million
employees worldwide.
--Ed
Frauenheim