Author: Brenda Sunoo

Searching for the right moving company requires knowledge and persistence. Arm yourself with this checklist and keep your employee casualties to a minimum. Ask about:

Past Performance:
References
License
Gallup surveys, if available
Affiliation with the AMSA
Physical presence throughout markets in North America
Company turnover rates
Access to the warehouse

Personnel:
Dedicated service teams
In-house training and educational programs
After-business hours communication capabilities
Contingents
Awards or reprimands

Moving and Packing:
Minimum and maximum weight
Assessed value vs. replacement value
Projected time and distance based on transit guides
Number of times to be loaded/unloaded
Holiday deliveries
Contingencies for bad weather
Pet transportation
Handling of valuables and family heirlooms
Disassembly and reassembly of major appliances
What’s not covered
Clarification of words, such as “repair”
Insurance guidelines for damage
Openness to a dispute settlement program

Workforce, September 1998, Vol. 77, No. 9, p. 58.

Facing a challenge is one thing. Meeting it head-on is another. In 1997, New York City-based Donna Karan International experienced disappointing profits. As a young, fast-growing company, it had not always built its organization in the most profitable, efficient manner. Executives were forced to reevaluate the company’s core operating groups’ functions and relationships. Its new three-year strategic plan included a major downsizing driven by the reduction of the number of divisions from 13 to six. Donna Karan also streamlined the company’s senior management structure and made each of the six divisions fully integrated operating units.

Below, HR vice president Christina Nichols discusses how her department is helping employees impact efficiency, cost savings—and raise company morale.

What factors drove the recent downsizing and restructuring at Donna Karan International Inc.?
We’re a very young company that has experienced tremendous rapid growth. When you grow very quickly, you don’t always grow in the most profitable and efficient manner. So we made a difficult decision: to stop, evaluate what we’ve done and readjust where necessary.

Which employees were the most impacted and why?
It’s interesting. I’ve been with the company for almost six years and have been through a few other “downsizing” efforts. Typically there had been a target percentage to be cut in each division. This time around, however, the downsizing was driven by actual restructuring within divisions in an effort to impact efficiency and cost savings.

Another significant impact on the restructuring was our entrance into strategic alliances with other companies. This included the licensing of the company’s beauty business to The Estee Lauder Companies Inc., DKNYjeanswear and activewear products to Liz Claiborne and DKNY Kids to Espirit de Corp. The employees impacted were from all levels of our population.

What were the HR implications?
The restructuring process was draining to say the least! We were working with John Idol, our new CEO, trying to determine what the new structure would look like, trying to compile all the pertinent information for those employees who would be affected, coordinating outplacement services, and trying to coach management through the process. In the end, we managed to pull together as a team to make it happen successfully.

The aftermath of the restructuring process brings with it many new challenges. The employee population is dealing with the shock of losing co-workers, the stress of handling more responsibilities and the uncertainty of their own job security. Responding to these concerns is difficult.

Unfortunately, companies can’t offer anyone job security and yet, it’s one of the most important issues to employees. I believe that deep down people knew this restructuring had to happen in order for the company to prosper, but that doesn’t make it any easier to deal with the day-to-day issues. With the restructuring several months behind us, people are beginning to settle into their new roles and to re-emerge as strong teams.

What has HR learned in the process?
When we went through the restructuring process, we eliminated many jobs because of the decision to license various products. This was a fairly new direction for the company. Forming strategic partnerships with the licensees has been an insightful process. You need to become the expert on the licensee’s business so you can best educate the Donna Karan employees who will transition over [to working with them.] It’s difficult to ensure that employees who transition to the licensee maintain the same level of compensation and benefits. It’s a tough process because it doesn’t end once the employees move over to the licensee’s [work environment]. The role we play in this process already has evolved from working within the existing framework and facilitating the process to championing what’s best for the employees.

Have you developed new programs, incentives or work processes to ensure more teamwork and productivity?
A few months ago the company created several task forces to address our key business issues and to foster stronger teamwork between divisions. We currently have task forces for: human resources; strategic/business planning; creative planning; quality; and manufacturing/sourcing. The task forces have specific agendas and periodically present update reports. They’ve been successful in fostering teamwork.

The Strategic Planning task force has created the company’s first formal strategic business plan. Each division now is responsible for creating its own mission statement, goals and initiatives that will ensure support of and contribution to the company’s strategic plan.

The Human Resources task force has been in the process of creating a corporate values statement. The preliminary work was done in the task force. Divisional meetings were conducted later to review feedback and to ensure people had a sense of ownership over the values. We haven’t formally rolled out the values statement yet, but it’s already starting to have an impact.

Which jobs have required additional training?
The immediate training needs associated with restructuring revolved around management. Before we actually went through the organizational changes, we conducted some brief sessions with the management teams to coach them on how to manage through the change. Frequently, the aftermath can be more difficult to manage than the actual restructure.

How has HR addressed morale?
We began face-to-face meetings with our CEO. That way, our employees can get to know him better and vice versa. We also began conducting regular update meetings with all our division heads.

Can you describe the corporate culture at Donna Karan International Inc.?
Its corporate culture is difficult to characterize. It’s demanding, rigorous and challenging. It’s also entrepreneurial, creative, rewarding, exciting and energetic. It’s an intense and committed environment. The people who work here put in 200 percent of themselves everyday! In a word, it’s passionate.

What has been one of your most recent innovations within Human Resources?
I would say it has been the creation of the team I work with in human resources. This is the most talented group of people I have ever had the fortune of working with ¼ and I’m a believer that you’re only as good as your team.

With all the changes in the company, from the arrival of our new CEO to the restructure, the goals and focus of the human resources department have radically shifted to remain aligned with the company’s direction. We’ve positioned ourselves as strategic business partners with the divisions in the company. We’ve evolved from putting out fires and creating policy to well-rounded business partners.

Workforce, July 1998, Vol. 77, No. 7, pp. 27-28.

Employee turnover isn’t only disruptive. It also can be expensive, a survey confirms. Forty-five percent of 206 medium to large U.S. companies report that turnover costs them more than $10,000 per employee who must be replaced, according to a survey conducted by New York City-based William M. Mercer Inc. One-fifth of the respondents peg such costs at more than $30,000.

Asked to identify the two groups with the highest turnover, 38 percent of the participating company executives identified technology workers and 35 percent identified administrative workers. Among employees with the lowest turnover rates are those in management (according to 49 percent of survey participants) and professional (32 percent) positions.

For employee groups with the highest turnover rates, dissatisfaction over compensation was identified (by 59 percent of responding executives) as the major reason for employees leaving. Other often-cited causes were unhappiness with “job fit,” the culture of the company or manager-employee relations.

Workforce, July 1998, Vol. 77, No. 7, p. 19.

Thursday, April 9

New York City—Author E.B. White once wrote: “New York is the concentrate of art and commerce and sport and religion and entertainment and finance, bringing to a single compact arena the gladiator, the evangelist, the promoter, the actor, the trader and the merchant.” He didn’t mention HR. But John F. Harvey fits the Manhattan profile. As vice president/relationship leader of human resources for Corporate Services at American Express Co., Harvey’s a little bit of each. He has to be. If you can’t sell HR as a business partner, why bother to board a train and ferry to work every day from Maplewood, New Jersey? “I love my job,” he says.

Corporate Services, Harvey explains, is the business-to-business division of the company that helps mid-sized and large companies—and government agencies—manage their travel and purchasing expenditures. He assumed his current position in January 1997 and is responsible for HR management, supporting 12,400 employees who represent Corporate Services clients domestically. The company underwent a reorganization last year, he says, that better aligns the business units by customer segments, rather than regions. His mission is to get the right people on the project teams to achieve his division’s business goals. Harvey reports to Bonnie Stedt, executive vice president/senior relationship leader—with a dotted line to Edward P. Gilligan, president of Corporate Services—and one of AMEX’ top 18 business executives.

When I arrive at his office on the 40th floor of the World Financial Center, he greets me with a friendly handshake. Harvey seats me facing the Manhattan skyline, and begins to quickly articulate the company’s recent reorganization. I joke with him to slow down, explain a few company expressions, such as “business utilities,” or “centers of excellence”—to little avail. He’s wired, and I’m thinking, “If only I knew shorthand.” Thank God, I wore comfortable shoes. By the end of my afternoon with Harvey, I’m awestruck at the sheer size of this organization. I wonder how anyone really functions in such a maze. “That was one of my concerns when I interviewed for this job. But I discovered that AMEX isn’t overly bureaucratic at all. We’re given a lot of room to make decisions,” he says.

6:30 a.m.
Early commute from the ‘burbs.
An early wake-up. Says goodbye to his wife and four children; catches a train to the Hoboken ferry. Normally, he would read The New York Times. But this morning, he runs into a colleague on the train. “We got into a great discussion about the public sector.” Upon arriving by ferry at the World Financial Center—downtown at 200 Vesey Street, near the Hudson River, Harvey stops at Minters for a blueberry crumb muffin and coffee (with milk and one cube of sugar).

7:50 a.m.
Arrival at the office.
Checks e-mail. Approximately 20 messages have accumulated since 6:30 p.m. the previous day. “I try to check in every two hours,” he says. The drawings on the wall next to his desk show he’s a proud daddy. His daughter Corinne has drawn him with a white face, yellow eyes, pink nose and gray lips. His son, John, on the other hand, has painted Harvey as a blockhead with a yellow face, pink eyes and a green mouth. He laughs at the contrasting images.

We spend some time reviewing the day’s itinerary. On an average day, he says, he attends approximately five meetings. They include anything from big-picture planning to developmental projects. Meetings usually run between 30 minutes and one hour. He knows his objectives for every meeting, and hands a list of them to me before we’re off and running.

9:00 a.m.
Leadership and development.
Brisk walk across the building’s North Bridge toward the World Trade Center. We walk five minutes from AMEX headquarters to another building the company leases on Broadway. (He believes in going to his internal customers’ office.)

His objective: To review service delivery and drivers of employee satisfaction, and finalize HR commitments to supporting business initiatives.

Harvey and two other colleagues review what Corporate Services refers to as “The Stand.” This vision statement is based on an annual Employee Survey, which measures employee satisfaction in a number of key areas. Three key goals of “The Stand” include: Making people incredibly successful; inspiring intense customer loyalty; and continually transforming entire industries. These elements, he says, must be aligned with the “drivers for leadership and development”—what employees say they want most from an employer: “I feel I can grow and progress with my company,” “My job gives me a sense of personal accomplishment” and “Management treats employees with respect and dignity.

“In the course of one hour, they discuss: how “The Stand” leads to capabilities, which in turn lead to competencies and behaviors; team training effectiveness; and relooking at the current reward structures. After engaging his colleagues, Harvey calls for the action/follow-up plans while tapping his pen on a notepad. “Remember our theme is coaching and giving feedback. Team leaders often get too tied up with administrivia.”

11:00 a.m.
Competency models. Quick walk back to Harvey’s office. One colleague already is in the office. Another joins in via conference call.

His objective: To update progress on deployment of the Corporate Services leadership model and determine linkage with competency modeling group.

Harvey keys in on talent assessments for mid-level managers. He observes that 10 years ago, “A good leader was a good leader.” However, in today’s business world, HR is challenged to meet that pace with a more multi-skilled workforce. (To the manager of quality services in Phoenix): “Greg, where are we? Is there any issue we need to work through?” “Peg, (Wagner, vice president of competency modeling) jump in.” The three talk about “mapping up,” moving competencies “across the Blue Box (AMEX’ values statement). To shorten the cycle time, Harvey suggests designing a development model and implementing it at the same time in one unit. “Here’s the approach: Develop, deploy, develop, deploy, finalize—then go out and apply.”

11:45 a.m.
Mentoring a new director.
His objective: To orient an employee to a new role, review orientation plan, goals, expectations and “The Stand.”

Since winning the U.S. Government account in 1993, American Express services more than 1.3 million federal employees who use the Government Card for official travel. Jackie Bennett has recently been hired as new director/relationship leader supporting government services and the corporate purchasing card group. Via conference call, Harvey reviews the orientation plan—a customized plan he has designed for her. It includes “action steps,” “contacts to meet” (in some categories, as many as 13 individuals), their “job titles” and the “scheduled completed date.” They review one of the action steps: “Spend time with each government service and corporate purchasing card direct report individually to gain an understanding of their business, gain an understanding of key HR challenges and to initiate the development of an effective working relationship. Harvey simplifies her tasks by explaining the benefit of talking to specific individuals. “Talk to Courtney. She’s a good thought leader.”

He also reminds her: “You have to prioritize day to day. And I’m also worried about work/life balance. You set the pace for others. So take immediate steps to post a job for administrative support. Send me what I need to sign off quickly.”

“Sounds great!” Bennett’s voice rings through the speakerphone.

12:30 p.m.
Marketing new technology.
His objective: Review the latest multimedia presentation developed by two senior internal business consultants from Learning and Development, Alicia Mandel and Greg Davis.

Harvey reviews a presentation of a new tool to sell Corporate Services products. Patting themselves on the back, the group says it’s the best application of Lotus Notes™ ever applied in the company.

Davis is oozing with enthusiasm at the possibility of presenting the tools onsite or sending along the software to clients. “I’m so excited!” he says. What the group realizes is that they’ve created a product that can be used throughout the organization—and eventually outside the company. Harvey reiterates “The Stand”: “We have the capability to develop internally. Now, we can market the learning and development capability to transform entire industries.”

1:30 p.m.
His objective: To devour our sandwiches as quickly as possible.

We lunch in the company cafeteria and tour the corporate Fitness Center, where Harvey often spends his lunch hour. He walks up to the counter to check the computerized records of employee’s exercise activity. Big smile. He’s made it on the list of Top 100 calorie burners.

2:30 p.m.
Attends coaching session on team effectiveness.

4:00 p.m.
Reviews global service capabilities.

5:00 p.m.
It’s a wrap-up: Checks e-mail and phone messages.

6:40 p.m.
Boards ferry to Hoboken, New Jersey.

7:06 p.m.
Boards train from Hoboken to Maplewood.

7:35 p.m.
Enjoys dinner with the family. Helps three older kids ages 7, 10, and 13, with homework—nothing as tough as HR.

8:45 p.m.
Plays platform tennis with friends.

10:00 p.m.
Watches evening news.

10:30 p.m.
Lights out!

Workforce, June 1998, Vol. 77, No. 6, pp. 64-68.

In 1990, two Brown University buddies, Tom First and Tom Scott, launched Cambridge, Massachusetts-based Nantucket Nectars Inc. When the “juice guys” formed their free-spirited company, they wanted to create a work environment that was non-hierarchical, casual and without job titles. Below, HR director Kelley Merrill shares how Nantucket Nectars’ participatory management style yields team spirit and quality beverages.

How would you describe the core values of your organization?
Our core values are simple: to provide a quality product and quality service to our customers and to provide a quality work environment for our employees. Here at Nantucket Nectars, the value we place in our employees shows in our efforts to promote community participation, integrity, honesty and respect for the law. Value is one of six areas that make up our mission statement; Product, Service, Work Environment, Technology and Profitability are the others. It’s the mission statement that guides our team members and continues to make our business a success.

So whom does your company seem to attract?
Nantucket Nectars attracts many “entrepreneurial types,” if you will—people who are interested in and believe in the American Dream, in working hard and in being successful and prosperous. Most of the applicants are interested in working for a young growing company. Young and growing—to job seekers—means providing all of our employees with the opportunity to become the expert in their areas. Others hear about our unique style of management and look for an opportunity to do the same. Our unique style of participatory management, coupled with the value we place on our employees as well as on our community, attracts many candidates. In my five years in HR, I’ve yet to be at a loss for candidates.

How does participatory management work at your company?
Our founders, Tom First and Tom Scott, created this company out of a passion for creating a quality product that people enjoy and have made the company successful and fun along the way. We’re a team, and we share in this passion. That’s what makes participatory management work. You have to have people who are driven, and one way to drive people is to give them the opportunity to make decisions for themselves, use their judgment, and make mistakes and learn from them. Each of our employees has a vested interest in the success of our business, which stems from having free rein, creating their departments and seeing the difference they make. Tom and Tom have communicated along the way what their dreams are and the importance of setting individual goals as well as company goals and adhering to them. This constant communication has kept everyone involved and kept the same passion that started this business in 1990.

Is it difficult to ensure teamwork while pushing for growth?
Yes. One of the biggest challenges for HR is to keep this team atmosphere as our company grows. It gets more and more difficult to communicate our values and goals to those who work in the field. HR must find creative ways to keep all involved, keep people motivated and make sure we’re all enjoying ourselves along the way. We believe it’s important to have an even balance between work life and home life. We encourage people to try and get their work done in a normal eight-hour day, to stay physically active and to continue educating themselves in areas that are of interest to them. We encourage people to stay informed and to make suggestions. And we often seek out advice from a number of people when we’re thinking about making a significant change that we believe would affect everyone. The more information and advice we receive, the better. We also encourage employees to help improve the community by volunteering their time in a particular area of interest to them. We give all employees two paid volunteer days per year to help improve our communities. We try to keep families involved by sending out a monthly newsletter, and we always invite families and friends to company sponsored events. These are only a few examples of how HR reinforces the importance of working as a team, staying involved and living a well-balanced life.

How does participatory management benefit the company?
Participatory management motivates people to work hard because they’re required to be experts in their areas. If problems arise, they’re held accountable. When you give people that type of responsibility, it motivates them to try their best. Our success rides on the efforts of our team—the harder we work, the more successful we are.

And the employees?
The educational experience gained by our employees is immense. In my mind, there’s nothing more beneficial than hands-on learning. People learn from doing and from making mistakes. Participatory management allows that to happen. All employees are focused on their individual responsibilities while also being involved in other department and company happenings. Committees are created to complete various tasks that allow people to think “out of the box,” so to speak. It also gives them an opportunity to get out of their daily routines and do something different. This makes for happier employees. I’ve also found the more each individual knows about what others are doing and what other people’s responsibilities are, the more apt they are to lend a hand. It also gives them a more rounded understanding of the total operation.

How does this all translate to your customers?
Our customers make out because the combined effort of 100 people is much better than that of two people. We work as a team to ensure that our customers are receiving a quality product with quality service. It’s part of our mission statement. It’s our ultimate goal. When our customers call us, we have a team of customer-service people available to answer questions, comments and take care of any complaints. We get hundreds of people a week sending fan mail, and they’re all responded to within a three-week time frame. We let our customers know through our commercials, our fan-mail responses and through our daily customer-service calls that we care about them.

Have you seen a correlation between participatory management and profits?
I do see a correlation. Nantucket Nectars has doubled its sales for the last four years. We’re in Inc. 500’s Top Ten Fastest Growing Companies, and we’re expanding all over the world. This is a pretty good indication that what we’re doing works. We have great people who work well under this style of management.

How does it make HR’s work easier?
Well, for one thing we have a very low turnover rate here at Nantucket Nectars, which in my mind means we have satisfied employees. As we all know, hiring can be a very long, drawn-out process. So [low attrition] definitely makes HR’s work easier. Having satisfied employees also makes for a happy work environment with less stress, which is helpful as well. That’s not to say we don’t have stress, but satisfied employees are key to an organization’s success—again back to the philosophy that employees are the No. 1 asset.

Workforce, May 1998, Vol. 77, No. 5, pp. 25-26.

Did you hear about the guy who tried to beat a drug test by drinking bleach? Beth Lindamood has, as well as dozens more stories like it. She has heard so many, in fact, that she has created her Top-10 list of the dumbest things employees have done to try to beat a drug test.

Lindamood, an expert in workplace drug abuse and a senior market analyst for Great American Insurance Companies, based Cincinnati, says the list shows that people will go to incredible lengths to hide their drug abuse. So, HR beware. Attempts to disguise drug abuse generally fall into three categories: 1) flushing the body with various fluids, 2) substituting someone else’s or a dog’s urine sample or 3) buying products designed to mask drug use. And although she admits some methods may occasionally succeed, the vast majority simply provide comic relief. “One guy drank liquid soap because he thought it would ‘clean out his system,’” she says.

Though often amusing, attempts to disguise drug abuse can cause real headaches for human resources staff and employers’ testing labs. As products and methods designed to thwart drug tests have proliferated, testing labs have had to devise new means to detect them. “The best way for an employer to prevent the use of adulterants is through random drug testing.” Workplace drug abuse costs American businesses between $75 to $100 billion every year, she says.

Here’s Lindamood’s Top-10 list:

10. Drinking “Mary Jane’s SuperClean 13,” a vial of liquid dishwashing fluid that sells for $29.95

9. Drinking liquid soap

8. Drinking vinegar

7. Adding ammonia, blood, Drain-O, lemon juice, table salt, Visine and WD-40 to urine specimens

6. Drinking bleach

5. Injecting “clean urine” into the bladder

4. Making your own powdered urine and substituting it “when you’re clean”

3. Submitting a “fresh” 40-degree urine sample

2. Substituting canine urine for human urine

1. Sending someone else to collection site for you.

Workforce, May 1998, Vol. 77, No. 5, p. 16.

Generation Xers, those employees born roughly between 1965 and 1981, are often challenged by carrying out tasks independently. This positive attribute is what makes this generation the most entrepreneurial generation in history, according to Bruce Tulgan, founder of New Haven, Connecticut-based Rainmaker Inc., a think tank that researches the working lives of Generation Xers. So how should a manager calibrate the delegation of responsibility to a relatively young member of the corporate team? Here are six useful tips:

1) Stick to the principle that all work should be divided into clearly delineated tangible results, with each result assigned to an owner, and each owner assigned 100 percent responsibility.

2) With new employees who haven’t yet earned much responsibility, assign 100 percent ownership for tangible results that are smaller in scope. Let them use these smaller results as proving ground to earn ownership of larger results.

3) Attach a concrete deadline to every tangible result, regardless of scope.

4) Spell out any parameters, guidelines or specifications at the time results and deadlines are assigned.

5) With larger results, require result owners to make and submit a plan of action, including intermediate goals and deadlines, as well as the concrete actions necessary to achieve each intermediate goal.

6) Encourage result owners to monitor change and be prepared to adjust goals and fine-tune their plans.

Workforce, March 1998, Vol. 77, No. 3, p. 23.

Finding the right vendor doesn’t have to be a nightmare. Follow these tips and you’ll stay firmly in control.

Assess your situation before shopping around:

• Develop a strong, tiered relocation policy for your employees.
• Break down the different areas of relocation so you can itemize costs.
• Estimate time and costs of HR’s current relocation role.
• Project what time would be saved if relocation were outsourced.

Be in control of your search:

• Benchmark as many firms as you possibly can.
• Ask for references from other HR clients and relocated employees.
• Check with the Washington, D.C.-based Employee Relocation Council and the Alexandria, Virginia-based Society for Human Resource Management for referrals and experiences.
• Visit each prospective vendor’s office.

Be a prepared, articulate client:

• Clearly state the employee’s goal and situation—professionally and personally. Define your expectations.
• Meet the person who will handle your account. Ask about caseload.
• Evaluate the firm’s flexibility to match your needs, budget and culture.
• Determine the vendor’s long-term commitment to stay in the relocation industry.
• Leverage free services.

Forge the partnership:

• Set up a mechanism for employee feedback, such as a customer survey.
• Ask for some follow-up measures.

Workforce, March 1998, Vol. 77, No. 3, p. 72.

Workforce talked with Donald E. Walsh, personnel director for the City of Phoenix, about managing a fast-growing public entity.

Q: How did you get into the HR field?
A: I didn’t start out in the human resources profession. After I graduated from the University of Rhode Island in industrial management, I first worked for Boeing in Seattle. Then I was drafted into the army and worked as a clinical psychology specialist doing testing of soldiers and their dependents. That got me closer to the human resources area. After the service, my first job in HR was with the City of East Providence, Rhode Island, which had a population of 45,000 people and 450 employees. I was there for three years. Then I was hired by the City of Phoenix, where I worked as a classification analyst and supervisor of employment services division. After two years of that, I went to the City of Kettering, Ohio, as its first personnel director. I then returned to Phoenix as its first assistant personnel director. I served in that position for 27 years before becoming the director in 1997.

Q: What do you like about working for the City of Phoenix?
A: What I like about working for city government [in general] is that your job is around you all the time. When you drive home, you see your work in action, such as a policeman or a water line [being repaired]. Our product is service, and so the emphasis in recent years isn’t only about how many miles of streets you repair; it’s on customer services. We’ve given more care to that over the last several years than ever before.

Q: What do you think is the greatest misperception of Phoenix?
A: Outside of the state, people think Phoenix is a cow town-that is, we’re a bunch of cowboys with horses. They’re amazed to discover it’s a modern, very progressive city. And yet, we run our city government with a small-city [sensibility]. Our residents have access to their elected officials on a daily basis.

Q: What’s the most challenging aspect of running a city like Phoenix?
A: Our HR department serves 24 separate departments. And they all have demands on them to be competitive. For example, our public works department is competing against the private sector to be the contractor for trash and solid-refuse pick up. European firms are coming into the city and improving water and sewage departments with their new technology. So the city has to reengineer to be competitive.

Q: Which HR issues have been the key issues within the last few years?
A: One is our being able to adapt to changing federal legislation, such as the FMLA [Family and Medical Leave Act], ADA [Americans With Disabilities Act] and FLSA [Fair Labor Standards Act]. There are different practices in the public sector that are harder to translate into practice than in the private sector.

Q: What are the most important HR lessons you’ve learned over the years?
A: That each employee who works for the city has a lot of personal needs as well as what [the city] needs from them on the job. To me, the biggest issue is child care. Dual-income parents have such an emotional and financial struggle to provide good day care and education-as well as bringing home two incomes.

Q: What have you learned in terms of measuring bottom-line results of your initiatives?
A: We’ve measured our success in a variety of ways. For example, we use employee surveys, focus groups and measure enrollment in the programs to determine their effectiveness. We ask our employees to agree or disagree with statements, such as: “Overall, the City of Phoenix is a good place to work”; “I would recommend city employment to my friends who are interested”; “The city’s employee benefits are as good or better than most employers in the area”; and “The job I do is important.”

Workforce, February 1998, Vol. 77, No. 2, p. 74.

Transforming the federal government is like training an elephant to win the Kentucky Derby. At least, that’s what most critics would say. One seldom thinks of government as lean, quick and daring — much less competitive. Just consider the fact that the federal government is the largest employer in this country with more than two million civilian employees. Yet one of the most understated successes in recent years is President Bill Clinton’s 1993 initiative to reinvent government-otherwise known as the National Performance Review (NPR). The mandate he and NPR leader Vice President Al Gore set was to create a government that “worked better and cost less.” The challenge, however, was to do it. Enter the U.S. Office of Personnel Management (OPM) — the federal government’s human resources department. “People heard this [vision] for many years, but it never happened,” says James B. King, former OPM director who served between 1993 and 1997. (King left OPM in September 1997 to assume a senior position at Trinity College in Hartford, Connecticut.) “The government just continued to get bigger and bigger.”

Now, five years after Clinton signed Executive Order 12862 (calling for reinvention), the federal workforce is the smallest it has been in 30 years, and the nation’s deficit has been cut by 60 percent. And yes, the OPM is gleaming with confidence and accepting praise for its efforts. “The work is certainly not done,” says Warren Suss, a government technology consultant and president of Warren Suss Associates in Jenkintown, Pennsylvania. “But there has been a shift in attitude, and the federal government has been able to continue delivering cost-effective services during a major time of cutbacks. And they’re not over yet.”

To honor OPM’s achievements, Workforce awarded the 1998 Workforce Magazine Optimas Award in the Managing Change category because of its leadership during the federal government’s reinvention-as outlined in the NPR (visit www.npr.gov). Under the guidance of King and current Director Janice R. Lachance, the OPM has established a humane model for downsizing government and provided successful outplacement that has guided other agencies, pioneered privatization with the federal government’s first Employee Stock Ownership Plan (ESOP) and reduced its own tangled bureaucracy. In short, the OPM has “walked the talk” and looks like a government of the future. It’s smaller, more market-driven and focused on results.

HR takes care of its civil servants.

In the past, individuals who applied for federal jobs expected lifetime job security. They also were motivated by a desire to serve the public. So when Clinton announced that the era of big government was over, King knew two things: that government downsizing must be humane and that outplacement was going to be critical. A native of Ludlow, Massachusetts, King grew up in a mill town where his relatives worked in the textile mills. He’d seen layoffs before and didn’t want to see himself with a cigar in his mouth, handing out pink slips. “People feel abandoned and left on their own,” he says.

In setting guidelines for other agencies — and for itself — the OPM thus established that involuntary separations should be an agency’s last resort for cutting costs and reducing or restructuring personnel. Moreover, when evaluating options, agencies should focus on the objectives for the change because the objectives would determine which options are most likely to yield the best results. For example, job sharing is a viable option when the goal is to reduce costs and personnel. But job redesign is a better option when the goal is to restructure the workforce. OPM thus recommended nearly 30 options to layoffs for federal agencies. Among them: optional retirements, furloughs, job sharing, freeze promotions, retention of grade/pays, training, voluntary reassignment and retraining.

These flexible options were helpful because the Federal Workforce Restructuring Act of 1994 required the elimination of 272,900 full-time equivalents (FTEs) by the end of fiscal year 1999. (A full-time equivalent equals one 40-hour-per-week job.) At the end of fiscal year 1996, there already were 263,500 fewer FTEs in the executive branch than there had been in fiscal year 1993. Moreover, between January 1993 and January 1997, the federal executive branch nonpostal workforce had reduced its workforce by 14 percent. Most reductions have come primarily through buyouts, early retirement, outplacement and other voluntary attrition, according to King.

In response to Clinton’s commitment to provide displaced federal employees with job assistance, OPM also set up a one-stop shop for career transition called the Metro Area Reemployment Center in Washington, D.C. Opened in May 1996, it represents a consortium and is a partnership between the OPM, other agencies, trade union representatives and the governments of Virginia, Maryland and District of Columbia. It offers displaced federal workers career assessment and counseling, job-search assistance, skills retraining, and a career resources and computer lab. Employees also can access the center’s Web site through the Internet.

In terms of downsizing its own resources, the OPM has led by example. From fiscal year 1993 to fiscal year 1997, the OPM’s salaries and expenses budget has been reduced from $118.4 million to $87.3 million — a 33 percent decrease in constant dollars. It’s total onboard workforce has been reduced by more than 48 percent, while during the same period, the entire federal workforce declined by approximately 11 percent, and the Department of Defense downsized by 16 percent. According to Lachance, OPM succeeded in placing 96 percent of its own employees into other jobs after theirs were eliminated.

The OPM pioneers privatization.
One key strategy in the OPM’s dramatic downsizing was the unprecedented privatization of more than 700 employees of its investigations unit, which conducted personnel investigations for the OPM. After nearly two years of planning, the employees formed the federal government’s first Employee Stock Ownership Plan (ESOP). Under the ESOP, the employees formed their own company, called U.S. Investigations Services Inc. (USIS Inc.) It was a baby of innovation and tenacity. Soon after King had become OPM director in 1993, he learned the investigations program had been losing money for more than 10 years and was more than $35 million in debt. To lessen the financial hemorrhaging, attrition alone wouldn’t do the job. Rather than just eliminate the positions and hand out pink slips, King considered and fought for the ESOP as long as it met three goals: It must do what was best for America’s taxpayers; it must provide a seamless transition and continued high-quality service for the federal agencies that would be its customers; and it must be created in partnership with the employees and their unions and serve their best interests.

Some of the investigators resisted. Many employees made their objections known to the media and to Congress, even testifying against the proposal at Congressional hearings. Ultimately, the OPM commissioned a feasibility study by ESOP Advisors Inc. of Reston, Virginia. In June 1995, the agency contracted with Marine Midland Bank of New York to act as trustee in establishing the ESOP. Marine Midland representatives then worked with American Capital Strategies Inc. and the Washington law firm Arnold & Porter to design the ESOP and ensure that it protected employees’ interests. Now, besides only serving the OPM, the new business would be able to serve other federal agencies and private sector customers as well.

“We knew this was the best thing to do for the public and federal employees involved,” says Lachance. Last October, USIS Inc. cut the price of its investigation services by 18 percent, saving the agencies that contract with OPM more than $1 million annually. Lachance says that in the first year of operation, USIS Inc. created $14.7 million in value to taxpayers that will be repeated over each year of its five-year exclusive contract with OPM. That’s equivalent to saving taxpayers $73.5 million.

Reinvention also means cutting the red tape.
In response to the NPR mandate to reform federal hiring procedures, the OPM has made the process quicker and easier. In the past, job candidates could hardly figure out whom to call, which test to take and which form to fill out. And the response time took months. Now, the OPM has delegated agencies with their own hiring authority, has closed 11 local job information centers and has reduced the size of others to cut costs. Through automation and computer technology, it has become easier for people to find out about and apply for federal jobs. For example, the OPM created USAJOBS, a Web site for federal, state and private sector job opportunities (http://www. usajobs.opm.gov). Technology has clearly improved the delivery of services, says Suss. “One of the movements we’ve seen is the virtual government, whereby the government cuts across agency boundaries and sets up work teams to address particular issues,” he says. That way, team members can communicate without being in the same office or department.

In addition, the OPM also eliminated the outdated, confusing 10,000-page Federal Manual and the monstrous Standard Form 171 job application form. Much of what had been centralized in the manual was delegated to local agencies to make decisions on a more appropriate level.

As the federal government continues to make strides in managing change, Lachance says the OPM will undergo constant self-evaluation. But first, it must operate less as a command-and-control HR agency and more as a consultative body. That means guiding all federal agencies to reinvent themselves as successfully as the OPM is transforming itself. Says Craig Conlin, deputy director of the management systems division in the Office of Human Resources and Education at NASA: “OPM has been a great help during our downsizing. It’s been very flexible in interpreting laws and rules for us. Before, we were issued new rules to follow. Now, NASA is more of a partner with OPM.” Since 1992, NASA has been reduced from 24,000 full-time permanent employees to 19,000-with no involuntary separations, he says. With such cheerleaders, one thing is clear: The big elephant is headed toward the finish line.

Workforce, February 1998, Vol. 77, No. 2, pp. 60-64.