How Walmart overhauled its pay architecture strategy to support rapid growth

In our latest webinar, Charlie Franklin hosted Walmart’s VP of Enterprise Compensation Zack Vinton to explore how Walmart overhauled its pay architecture strategy to support rapid growth. 

Zack shared the challenges and innovations that followed this expansion with his extensive experience working at Walmart. 

He highlighted the role of artificial intelligence (AI) and machine learning in enhancing human resources and delivering compensation innovations, ensuring that Walmart remains competitive in the talent market.

Zack and Charlie also addressed the pressure of wages during high inflation and how Walmart balances frontline wage challenges by providing real and tangible career growth opportunities.

‍

Transforming Walmart’s compensation approach

When Zack joined Walmart two and a half years ago, he quickly realized the company's vast scope beyond just retail stores.

This rapid expansion revealed the need to overhaul Walmart's job and pay architecture to maintain consistency and fairness.

Zack found Walmart's compensation system to be a patchwork of different approaches, with underdeveloped job families and career structures. And this made it challenging to establish fair pay practices. 

Zack's team started by emphasizing the importance of aligning job architecture with compensation. "We use data and analytics to inform our decisions, but at the end of the day, we have to make a business decision based on what we know about human behavior and business objectives," he explained. 

‍

Collaborative efforts in redefining job architecture

Zack and Charlie emphasized the importance of a strategic approach in addressing compensation issues, often uncovering deeper underlying problems. 

Zack noted that ill-defined jobs can hinder efforts to attract and retain the right talent. In Walmart's case, the company's evolution from a retailer to a diverse business required a comprehensive redefinition of job roles and responsibilities. 

This task, while falling under the purview of compensation, necessitated extensive collaboration across various HR functions.

Zack highlighted the critical partnerships with different HR professionals who have essential knowledge about day-to-day job functions. "The breadth of knowledge for defining jobs sits within the organization" - Zack explained. 

By doing this, the job architecture project was grounded in practical insights from those directly involved with the roles.

Effective communication and change management were also vital to the project's success. Zack stressed that without robust change management, even the best-laid plans could struggle in the final stages. 

Zack mentioned the importance of integrating the talent strategy into the job architecture framework. He advocated for the creation of detailed career profiles and ladders to provide more context and utility for employees and managers. 

‍

The connection between effective governance and long-term success

Zack emphasized the critical role of a well-structured governance system in Walmart's job architecture redesign. 

This involved engaging various stakeholders, including multiple CTOs, legal teams, and talent leaders, with frequent presentations to the People Leadership Team and sub-governance groups. 

"Don’t anticipate they’ll remember things you’ve said and agreed upon", Zack advised, highlighting the need for continuous engagement and reinforcement.

Zack's team developed custom guides for managers to facilitate clear communication about changes, addressing specific scenarios to help managers “own” conversations about pay adjustments, bonus targets, and stock options. 

The approach minimized confusion and ensured employees understood the changes, contributing to the project's success. 

Simplifying the job and pay structure made it easier to understand and administer, promoting long-term adherence. 

‍

The role of data in redesigning comp strategies

Zack underscored the crucial role of real-time data in Walmart's compensation project, emphasizing its importance in making compensation decisions that significantly impact the business. 

"We needed to have the best information available to us at that point in time" - Zack explained, highlighting the necessity of using reliable data to make structural decisions that wouldn't require frequent revisits.

Beyond the project, real-time data was essential for managing Walmart's vast frontline workforce across the U.S. Traditional market surveys were often insufficient due to the dynamic nature of local labor markets.

Instead, Walmart utilized methods like web scraping to gather real-time data from job postings, ensuring competitive pay rates. 

Zack highlighted the growing importance of predictive analytics, suggesting that hiring economists to forecast market trends could help identify competitive pay hotspots and ensure resources were allocated effectively.

‍

Simplifying complex structures for the change longevity

To ensure the longevity and consistency of the new job architecture, Zack emphasized the need for simplification. 

He noted that keeping tight control over job additions and maintaining clarity in decision-making processes prevented the system from becoming overly complex and unmanageable. 

"Simplicity and understanding will promote longevity" - Zack said. 

Reflecting on the evolving role of compensation experts, Zack, a self-proclaimed "data monkey," envisioned a future where AI could handle preliminary analyses, allowing professionals to focus more on strategic actions and business acumen. 

This shift could make it easier for individuals without deep technical expertise to succeed in compensation roles, emphasizing storytelling and strategic influence over technical data manipulation.

‍

‍Watch the full webinar and discover the insights Charlie and Zack discussed in full length.

‍Subscribe to our Peer Group newsletter to discover more insightful conversations.