Back when I worked for Walmart from 2003-2007, Walmart often liked to be really petty about overtime. I remember on multiple occasions that the management would discipline (“coach” in Walmart parlance at that time) employees for any amount of overtime, no matter how small of an amount it was. Even back then, I thought that was penny-wise and pound-foolish. In other words, sure, they were saving a few cents on overtime, but then spending far more than that on the discipline over that overtime.
I recently dug up an old Facebook discussion with a friend where I actually did the math about how ridiculous it was to discipline employees over trivial amounts of overtime. It started when my friend mentioned about taking vacation time, and how Walmart can't steal some extra hours because they were off the rest of the week. I agreed with it, and discussed how much their overtime-elimination practices, where they would have you take off the overtime later in the week, annoyed me. Then my friend said, “They actually started coaching for having overtime. Even if it was just .03. They're more lenient in the pharmacy, though.” I then added that 0.03 hours was one minute and 47 seconds.
After they agreed about how ridiculous it was, I did the math and laid it all out about exactly how penny-wise and pound-foolish it was to discipline employees over trivial amounts of overtime, as they were prone to doing:
This is where it becomes penny-wise and pound-foolish. (WARNING: Math ahead.) So let me be generous for a moment and say that the going rate at Walmart is $8.00 per hour (plus round numbers help). So at time and a half for overtime, a person makes $12.00 per hour. There are 3600 seconds in an hour. So a person making an overtime rate of $12.00 per hour is making $0.003333 per second (basically a third of a cent per second). Multiply by 107 seconds (00:01:47), and a person would have earned $0.3567 (35 and two-thirds cents) in overtime pay.
So to put someone through a coaching process takes at least 20 minutes in the back room. At $8.00/hour, a 20-minute coaching costs Walmart $2.67 in hourly pay. This doesn't count any losses in store productivity due to an hourly employee and two managers' being in the back room having a “coaching” session. So Walmart is willing to spend $2.67 to discipline an employee for earning $0.35 in overtime pay.
That, by the way, is 7.62 times more than the cost of the overtime in the first place. Doesn't seem worth the money to discipline someone over that little money, especially for a company as concerned about its bottom line as Walmart is. BUt then again, this is Walmart that we're talking about…
It still blows me away that the company would do that, especially when the numbers bear out that it's cheaper to just pay a trivial amount of overtime than it is to discipline someone over it. Regardless, I'm glad that I no longer work there, and now work a much better job now.