Author: Brenda Sunoo

The Cherokees begin every meeting with a prayer. First, they bless the elders. Then they pray for their youth. And finally, they pray that everyone will work in harmony and for the benefit of the nation.

“It’s just natural for us to do that,” says Joe Byrd, principal chief of the Tahlequah, Oklahoma-based Cherokee Nation.

Byrd was elected to the sovereign nation’s highest position in 1995. Unlike the CEO in a private-sector company, he’s accountable not only to the nation’s 1,650 employees, but also to 182,000 registered tribal members—65,000 of whom reside in the 14-county jurisdictional service area, not a reservation. A former educator, Byrd believes the future and legacy of his nation depends on its tribal youth. Last year, for example, Byrd refused a salary increase. Instead, he requested the money be given to a scholarship fund for outstanding Cherokee students. “I want to leave a foundation for our youth,” he says. “If we put our investment in our children, in return, they’ll be more apt to come back and work for the tribe.” For the Cherokees, scholarships mean survival of their nation—not just philanthropy. And survival is something they know a lot about.

Nearly 159 years ago, approximately 17,000 Cherokee men, women and children were displaced from their Georgia homelands by European immigrants seeking gold. In what’s today referred to as the Trail of Tears, the Cherokees were rounded up and marched 1,200 miles to Indian Territory, now the state of Oklahoma. More than 4,000 died from exposure and disease along the way. But it was a spirit of resilience and perseverance that led the Cherokees to what they now describe as a new trail—the Trail of Opportunity.

Today, the Cherokees—first spotted by Spanish explorer Hernando DeSoto in 1540—belong to a thriving government and organizational enterprise. Their constitution was established on September 6, 1839. Over recent years, the nation’s growth has been overwhelming, according to Ervin Rock, director of HR. As more Americans claim Cherokee heritage—because of cultural pride and to seek benefits—the nation barely keeps pace. Adds Lela Ummerteskee, the nation’s registrar: “Last year (1995), we processed more than 27,000 applications. These are coming from everywhere—across the United States and overseas. I’ve been here 19 years, and we’ve never slowed down.”

Since 1987, the nation’s employee base has nearly doubled, says Rock. Under Chief Byrd’s leadership, HR has been given the green light to hire and fire, and to set up a more comprehensive human resources system. But developing HR for a tribal nation involves more than your standard corporate template. While most American companies are hard pressed to achieve more racial and ethnic diversity, the Cherokees are struggling to retain their own history, language, native traditions and values. Therein lies the unique mission of a growing sovereign nation: “to promote and sustain the self-reliance of its members.” At the same time, the nation as an organization must also embrace American business practices, ethics and standards of accountability—issues that Byrd emphasized during his electoral campaign. By giving Rock more authority, HR is better positioned to meet the critical needs of recruiting, training and empowering a growing Cherokee workforce to realize its long-term vision of tribal self-governance. It’s not without risks. “The balance is tilted toward the growing side. One of the things we’re going to lose is part of our identity,” says Rock, who is half Cherokee, part Scottish and Irish. “The people we need to interact with to grow aren’t Cherokee. We have to fit into their structure, not the other way around.”

For example, Cherokee Nation Industries (CNI)—a business subsidiary—obtains contracts to manufacture cables and fiber-optic accessories from major Fortune 500 corporations. The possibilities for strategic alliances abound. Nevertheless, Rock is committed to proving that HR is fluid and mature enough to bridge organizational necessity with the sacred prayers of his nation. As American companies increasingly search for spirituality and meaning in their jobs, HR will be called on to help reconcile human values and the bottom line. The Cherokee Nation’s journey is one thriving example.

What does sovereignty mean?
As a federally recognized Indian tribe, the Cherokee Nation has both the opportunity and the sovereign right to exercise and develop its tribal assets—66,000 acres of land, which includes 96 miles of the Arkansas Riverbed. During the past 20 years, the nation has posted dramatic and steady growth while increasing its asset base.The annual operating budget for the previous fiscal year was $130 million, most of which came from self-determination contracts for federal programs. Other sources of revenue include monies from its legally separated business enterprises and leases.

Charles Head, self-governance coordinator, explains three concepts that define the nation’s unique relationship to the U.S. government: “Direct services is when the U.S. government funds and runs various programs, such as a health clinic or hospital, with federal employees. Self-determination refers to federal contracting with agencies, such as the Bureau of Indian Affairs, Indian Health Services, the Department of Labor. Under a contract basis, the agency maintains the responsibility of oversight and tribal members carry out the actual workload. Self-governance, on the other hand, refers to the government-to-government relationship between the tribes and the Secretary of the Interior, for example, or Indian Health Services. The difference is in the level of responsibility assumed by tribal governments for its services. Self-determination, based on contracts, is step one. Self-governance, based on compacts, is step two.”

Although the nation isn’t bound by the same U.S. regulations as other business organizations (the ADA, FMLA, affirmative action, etc.) the nation still adopts such standard corporate and legal policies, according to Rock, a member of the nation’s executive committee—equivalent to a company’s board of directors. In fact, sovereignty doesn’t set the nation apart from mainstream America—as some might think. “It actually makes us more like everyone else,” says Head. By assuming more control over its human services, the nation will be freer to interface with Corporate America and apply the most appropriate HR practices to its own business environment. Interestingly, the HR learning curve began 20 years ago—more than a century after Cherokee statehood. Modern human resources practices, such as registration and recruitment, have enabled the nation to track its demographics more accurately.

HR evolves from payroll to registration and recruitment.
Alana Casteel is half Cherokee and half Chickasaw. She is one of 70 HR employees who can remember the department’s beginnings. A former participant in the Summer Youth program in 1977, she handled payroll for the 300 employees. When a fellow worker went on maternity leave, she remained as a temp. About the same time, another Cherokee was hired to set up a personnel department. Casteel was at the right place at the right time. Again, she stayed on—as a regular employee. “I saw our growth from the ground up,” she says. The first year, she and a federal consultant administered extensive job analysis questionnaires and conducted salary surveys. “We established a system of placing various jobs in a particular salary range. Before that, we didn’t have any system set up.”

The next step was to create a hiring process. Again, being a sovereign nation impacts how HR approaches recruitment and hiring. The nation continues to need employees with a variety of skills. It needs teachers, health practitioners, clerical staff, computer operators, doctors and lawyers. Non-Indians are welcome, but HR primarily practices Indian preference. (Executive-level positions are appointed by the Chief). For most positions, however, HR will conduct its searches within a 50-mile vicinity or search for higher-level professionals in the Tulsa area—perhaps even further to Dallas and Denver. About 90 percent of today’s employee base is of Cherokee background, says Ummerteskee. The proof of Indian blood, however, is a registration process supervised under the human resources department.

“We established our registration department in 1978 for membership purposes, which allows individuals to vote for Principal Chief, Deputy and Tribal Council members, as well as amendments to the constitution,” she says. But before an individual may become a member and vote, he or she must prove Indian blood. “We don’t have a blood quantum limit, though,” she explains. “A lot of other tribes have a quarter-degree requirement.” The Cherokees, she notes, also allow dual membership—a privilege most other tribes deny.

In order for an individual to receive a Certificate Degree of Indian Blood (CDIB), one must verify an ancestor’s name on the Dawes Commission Roll. The roll is a census recorded between the years of 1899 and 1906 of Natives who lived on Indian Territory for at least 10 years, among other requirements, she explains.

In 1984, the nation’s leadership reasserted its drive toward self-determination. It finally succeeded in contracting the CDIB function from the Bureau of Indian Affairs (BIA). Now, HR can process registration and membership applications simultaneously and more efficiently. “We are the only office issuing CDIBs for the Western Cherokees. We wanted the responsibility because the BIA wasn’t a good record keeper. A lot of people who shouldn’t be getting cards were [getting them]. And the BIA didn’t have the staff and resources to research everything back [to original documents],” says Ummerteskee.

Today, her staff visits 12 field sites once a month to help those who can’t come to the nation’s headquarters. But keeping up with the numbers increasingly is difficult.

HR, she says, faces the big challenge of refining the process of issuing CDIBs over the counter. But there are too many applicants and not enough staff. As an indication of her frustration, she mentions that Windows® 95 has been available for two years, yet her department is still operating with DOS. Ummerteskee would like more money allocated for staff and better computer equipment.

In addition, the software industry hasn’t created a program tailored to the needs of the nation’s registration functions. Existing programs, she says, don’t provide the necessary fields. “We’ve looked into that. It’s touch-and-go all the time. We’ve had to build our own computer database. We’re getting so big, the database is getting unstable.”

Her frustrations haven’t been ignored. “We’re pushing everything we can to upgrade our technology. What we need is upgrading and connectivity,” says Rock. The nation’s current database, he says, is incomplete. Much of the registration information still resides on file cards and in books, and searches are processed manually. Rock would like to purchase something off the shelf. But until a useful program is created, the nation must rely on its own staff to build its own database. “But that makes us too dependent on the person who develops it to stay here. It holds us hostage,” he says. Once the technology capabilities are stabilized, however, HR will be able to access more detailed demographic information. And with the addition of a newly hired CFO, Rock is more optimistic about identifying additional sources of funding. Meanwhile, human resources is addressing other issues as well: For example, why the nation must develop competent business managers and establish strict business and legal codes of ethics. Otherwise, tribal members won’t be able to exercise their cultural sovereignty in today’s business world.

Growth drives training and ethics guidelines.
The Cherokee Nation began its formal employee-training programs in 1992, according to Ben McCollum, a native of Tahlequah and former Army captain. In the early ’90s, the nation’s employee population had more than doubled from 400 to 900. Also, home health-care agencies in Oklahoma were deregulated. This change created the potential for additional job opportunities and services. HR needed to hire those who could provide the services and administrative support—all of which required training in such areas as customer service, bilingual proficiency and team-building. Also, mid-level managers and employees needed to be trained to make decisions—a necessary skill that often feels uncomfortable for some Cherokees. “Most Native Americans have a tendency to not [face] issues head on. They prefer to talk about something, leave it for a while and come back to it later—until it’s solved or goes away,” says Rock. “That won’t work well today. I want to pitch decision making as a virtue, not an option.”

Managers, he says, have attended special seminars equivalent to “Basic Management 101.” The curriculum emphasizes various employee behaviors and how to measure productivity and team-building. “We’re trying to get away from a top-down style of management and [move] more toward employee involvement.” One example of team-building is the administrative policy-planning committee. Its mandate is to establish a set of policies and work procedures for each major department of the government. Members of the team include representatives from accounting, health, law and justice, the inspector general’s office, HR, education and human services, the chief of staff’s office and community development. The committee meets once a week. “HR’s policies, articulated for each task, have been disseminated as a model for other divisions,” says Rock. In the health division, for example, there are five clinics. Employees need to follow the same procedures in order to provide consistent health services. Some training is conducted onsite. And very often, HR will hire outside vendors for specialized training in such areas as CPR and other emergency medical support procedures. “Some employees may have to pick up and take an individual to the grocery store or doctor. They need to know basic first aid because many of our customer population are elders.”

Many of the elders, he says, don’t speak English. By speaking their own language—a syllabary codified by a Cherokee named Sequoyah in 1821—tribal members can obtain faster customer service. “A lot of positions are bilingual, so we have a large number of staff who speak Cherokee,” says Rock. HR also has helped to enforce clearer business ethics and guidelines so the tribal nation can prevent conflicts of interest and nepotism. For example, last June, Bob Powell was sworn in as inspector general for the Cherokee Nation. As a certified criminal investigations inspector in the state of Oklahoma, his primary duties will be to ensure the nation and its citizens have access to fair and objective reviews of their problems. In addition, the nation established a nepotism policy. According to Rock, no spouse, parent or child of an elected official may be employed by the nation. Nor can second-degree relatives (nephews, nieces) be supervised by a family member. Given the fact that the nation’s external customers are the same as its internal customers, the risk of nepotism could be higher than what most other organizations face. Chief Byrd, especially, is mindful of the need for such ethics policies. “As an elected official, he must respond to the wants and needs of an electorate. Some people might come to him and want a job because [they] voted for him,” explains Rock. “To the chief’s credit, one of the things he campaigned on was integrity.”

Under Byrd’s leadership, the nation recently instituted its first employee- appeals process. The Tribal Council passed the legislation which entitles employees to present their grievances before an impartial committee composed of three outside attorneys. “That way, we take controversy out before it gets to the top,” says Byrd. “We may even add some who aren’t attorneys to give balance.” Clearly, the nation is learning from its corporate counterparts to promote fairness and accountability. Rock praises the mandate. In fact, HR will oversee the appeals process for grievances and terminations, he says. But there also are long-term issues: the benefits of those who will eventually retire. Until recently, tribal employees weren’t allowed to save for their retirement. Then Congress signed pension simplification into law, and Native Americans rejoiced. HR at the Cherokee Nation could now recruit and retain tribal employees with financial incentives as well as cultural ones.

Tribes allowed to provide retirement benefits.
Last year, when Congress passed the Small Business Protection Act, most HR professionals celebrated because it meant pension regulations would, at last, be simplified. One item that didn’t receive much press attention was a provision that finally allowed tax-exempt organizations and Indian tribes to establish 401(k)s. “The minute legislation was passed, we jumped on it,” says Edna Shade, manager of compensation and benefits. HR staff members researched the law, called for bids, screened the main players and promoted the option to its employees.

“This is great news here,” says Chief Byrd. In less than two months, the nation’s human resources department enrolled more than 90 percent of those qualified to apply. “Our goal was to get 50 percent.” The nation will match—dollar for dollar—up to 5 percent, he says.

According to Shade, the Cherokees and other tribes have been trying to put such provisions in place for years. She also credits Sen. Ben Knight Horse Campbell (D-Colo.), a Northern Cheyenne, as a major advocate of the provision. Before the legislation passed, her employees were very demoralized because they didn’t have enough money for retirement. “With the option of employee contributions, now they can build a nest egg faster than what we could put in for them.” Because of the nation’s age and large pool of long-term employees, many of them will be retiring within the next few years. Therefore, ongoing education will include quarterly meetings and dispatching staff to the clinics and outlying areas—simply getting the word out. If it seems like a little too late, it isn’t. In the long run, younger employees will gain more incentive to stay. And that’s something Chief Byrd and Rock think about every day.

Growth and sovereignty walk hand in hand.
Most American companies expect turnover, attrition, layoffs and terminations. But somehow, there’s always a pool of employees to choose from. You might even say it’s an employer’s market. Less so with the Cherokee Nation and presumably, other tribes as well (there are more than 500 North American Indian tribes). Faced with growth-rather than extinction-the Cherokees’ HR recruitment and retention function is critical. Indeed, the nation is more than an employer. It’s a tribe whose history is recorded as far back as the 16th century. It’s also a government that struggles to represent those connected by the same tribal blood. Says Byrd: “We don’t want to become just another corporation that just brings in revenue. [As a sovereign nation], we have the best of both worlds. I look at it as having both the medicinal and spiritual arms of the Cherokee Nation. And we have these other entities that also play a vital role in the operations of the Cherokee Nation.”

For HR, the role is to amplify that uniqueness to ensure survival and growth —even if it means some short-term sacrifices. “We have to work on economic growth first—to provide jobs for our talented youth to come back,” says Rock. Today, this earnest desire is best expressed in the word Tahlequah, which means “where we meet.”

Workforce, February 1997, Vol. 76, No. 2, pp. 59-66.

Kelley Bacon, recruitment and training manager, Mesa County Government, Grand Junction, Colorado, says:
“Two years ago, the Mesa County Board of County Commissioners adopted a training and development policy that included tuition assistance. The county wants its employees to continue striving for the highest degree of expertise and professionalism.

“The tuition-assistance program has been utilized by employees at all levels. HR provided assistance for associate, bachelor’s and master’s degree programs. Most of our department directors now have master’s level degrees, and our professionals have bachelor’s degrees. The majority of degrees have been in business administration and accounting or human resources management—with a few in psychology. Seven individuals have received their master’s degree in public administration.

“Our tuition-reimbursement policy provides an 80 percent reimbursement for full-time employees with a $3,000 annual cap and a 60 percent reimbursement for part-time employees with a $2,500 annual cap. The individual must be enrolled in an accredited institution. Employees must have a minimum of one full year of employment with Mesa County and have acceptable ratings on current performance appraisals. Each course must be approved and substantiated by the department/division director or elected official with a statement explaining job relatedness and the benefit to Mesa County. The employee can apply by completing a tuition- assistance form and forwarding it to the training technician in personnel. The technician reviews the form to ensure that all documentation is attached and then turns the forms in on a monthly or as-needed basis to the training and development team for approval. This team is represented by employees in various areas and levels of the organization. Once tuition assessment has met all criteria, reimbursement is made. We don’t provide financial support for fees or books. Moreover, tuition is available on a first-come, first-served basis, subject to budget appropriations. I currently have budgeted $32,000 for requests.

“[Human resources] didn’t want this policy to be any kind of entitlement that would guarantee reimbursement for degrees. So we’ve really emphasized that this program will reimburse on a course-by-course basis for education that will be of benefit to Mesa County and its citizens. The program criteria are working very well. We still have some employees who believe that their non-work-related electives should be covered, but for the most part, everyone submits what he or she knows will comply.

We believe any type of training or employee development will help our workforce improve performance and productivity. Our commitment also shows the value we place on our employees. This goes a long way in improving employee morale. Expectations for employee performance are very high in local government. I believe that Mesa County meets those challenges because of our commitment [in HR] to training and education.”

Janice M. Stauffer, personnel administrator, MagiKitch’n Inc., Quakertown, Pennsylvania, says:
“The educational assistance program at MagiKitch’n covers expenses for tuition registration and the cost of books required for the course. However, the employee is required to pay for the course. If proof of the grade ‘C’ or better is presented to the personnel department upon completion of the course, reimbursement is made to the employee. Books are purchased with company funds and then are donated to the company library after the course is completed.

“All courses must be taken outside regular working hours, unless the employee is requested to take the course by the company and there is no convenient course available after normal working hours.”

Martin Bell, director, University of California, Irvine, Graduate School of Management, says:
“In recent years, I have noticed fewer students receiving tuition assistance. Traditionally, tuition reimbursement was a mainstay of many corporate benefits programs. However, since budgets have tightened, tuition reimbursement is now viewed with a more discerning eye. The relevance of the curriculum, spiraling cost of education and long-term commitment of the employee are real issues to consider. One result has been a downward trend in both the number of employees reimbursed and the amount of reimbursement. These issues are tangential to the larger question of whether tuition reimbursement is an appropriate benefit at all. The answer is an unequivocal yes.

“For a relatively small investment, the rewards cycled back to the organization in the form of a more motivated and better educated employee are incalculable. The employee who has exposure to innovations in his or her field should yield a savings to the bottom line. Moreover, a strategically educated employee is a value added to the organization. Many educational institutions have retooled their programs to meet the changing demands of the business culture and have kept cost increases in check. At our Graduate School of Management, the program has woven two strategic foci into the MBA curriculum—international business and information technology. This positions our students to be at the cutting edge of the business environment and relevant in the workplace, which will benefit the return on investment.

“The issue is not whether tuition-reimbursement programs should continue, but how. Specifics such as the tuition amount [to be reimbursed], the school’s billing cycle, invoice handling, when grade reports are produced and turnaround time for reimbursement all need to be clearly understood up front. This provides for minimal frustration for all parties at the time the funds are needed.”

Workforce, February 1997, Vol. 76, No. 2, pp. 85-86.

Suppose you received the preceding memo or one that’s similar. You’d have every right to tear out your hair. Your ideas were well-researched. They’d ensure your company’s competitive edge. But some of your colleagues and executives just don’t get it. Is the situation hopeless? Not really. They’re rightfully concerned about worker productivity at a time when everyone’s trying to do more with less. Admit it, even you have noticed more time-wasting activities. And it is getting harder to know what’s acceptable behavior and what’s not. Clearly, snoozing on the job is way out of line. But today, who’s to say why a meter maid takes longer to get from one stop to another? Or whether the sales rep has to chat about football for 30 minutes to get that stubborn client’s signature on the dotted line. Say one of your finance analysts checks stock quotes on the Playboy Web site. Would you trust he’d sign off before clicking onto the next site?

If you think the line between loafing and working is getting fuzzier, it is. Many HR executives are expressing similar frustration, apprehension and ambivalence in managing all forms of loafing in today’s changing workplace. (And, God forbid, we’re not even inferring HR is among these schlepping culprits.) On the one hand, management says employees need to take more responsibility for their jobs and their careers. On the other hand, employees expect employers to allow more flexibility in return for blind faith. Since the ink on the new social contract is still wet, it’s no wonder some workers are running amok. Or at least that’s what you and others perceive.

By facing an age-old phenomenon in a new set of circumstances, HR can readjust its managerial mindset, establish fair guidelines and untether itself from the fear of employees wasting more company time, resources and profit. In other words, you can squeeze more productivity out of your workers—but you also have to find new ways of measuring the work processes. Some activities are clearly an abuse of company policy. But some may appear to be loafing when, in fact, they’re not. HR managers need to learn how to tell the difference and unearth the causes of real loafing. Otherwise, your distrust and imagination may undermine the new work ethic you fought so hard to instill.

Is time-wasting an increasing phenomenon?
One cause can be situational. HR managers today are reexamining the ways they measure productivity. Loafing or time-wasting is beginning to take new forms. “It’s an interesting word. Loafing implies the deliberate time theft from the company,” says Nancy Probst, director of human resources at North Broward Medical Center in Pompano Beach, Florida. “I think loafing is happening, but I don’t know how deliberate it is or how much of it is a byproduct of poorly managed change. For most people, it’s not deliberate. The activities are symptoms of fear, depression and malaise.” Indeed, whether loafing activities are a result of downsizing, stress, boredom, flex-work options or extra time required to learn new technology and skills, HR managers are taking notice.

According to a recent Personnel Journal survey, 63 percent of HR executives who responded say they see or hear reports that employees are spending more time surfing the Net or engaging in some other diversionary activity. The same percentage also has spoken to employees about loafing on the job. And yet, 71 percent admit they haven’t taken any measures to further identify and curb the problem. The cost of ignoring this phenomenon can be enormous. For example, if 1,000 employees in a large company wasted 1 1/2 hours per day, it would cost an employer 1,500 hours per day or $30,000 at $20 an hour.

Given those projections, HR has a few choices: Unleash a witch hunt and threaten an immediate crackdown or step back and benchmark those who are grappling with these issues—from all sides of the broad spectrum. For example, the city of Denver and Oklahoma City survived the embarrassment of local TV exposés of their loafers and followed through by warning and disciplining their public employees—including a few supervisors in the Denver case. Irvine, California-based Western Digital Corp. and Houston-based Compaq Computer Corp. allow Internet access to thousands of their employees and, therefore, established effective use-and-abuse policies. And the most liberal of them all—Chicago-based Playboy Enterprises Inc.—hasn’t established restrictive Internet policies at all because management doesn’t believe it’s necessary. In fact, Hef’s employees—including HR—are encouraged to cuddle up to the company’s bunny-eared Web sites in order to know their products. So, how would you draw the line—on earth and in cyberspace?

It’s not an easy question to answer. A big part of the solution depends on the reasons underlying the loafing. Very often, the reason is situational. Take North Broward Medical Center—a four-hospital, integrated health system. Its 1,000 employees are still reeling from the shock of a radical restructuring over the last two years. The changes included four RIFs (reductions in force) totaling approximately 240 employees, the departure of a dynamic CEO and the farewell of an interim leader whose initiative toward decentralization was reversed by the successor. “Morale went down,” says Probst. HR personnel, she adds, were actively involved in managing the first RIF. They briefed managers. They sent employee bulletins around the clock. By the second set of layoffs, however, some of those same HR professionals were let go themselves. Now, HR participates minimally, except in preparing severance packages and notifying those who are reduced from the force. Is Probst bitter? Somewhat. But her candor only underscores her concern. “The impact on both our managers and employees has been tremendous,” she says. “We’ve done a very poor job of managing change.”

Hospital employees are fearful of their jobs, yet they’re trying to give the impression they’re working as hard as usual. But Probst knows they’re not. In some cases, they can’t even bluff. “The old perception says ‘If I work off my rear end, they’re certainly not going to target me during the next RIF.’ But today, that’s not true [and they know it].” She recalls one manager who was known as one of the company’s biggest go-getters. She was innovative, active in the local community and marketed her program extensively among her outside clients. Her colleagues never would’ve expected she’d be fazed by the changes. After the series of RIFs, the manager confessed to Probst: “I don’t know what’s wrong with me. I spent the last three weeks sitting in my office, looking at the walls. I can’t work. I can’t think. I feel numb, like I’m paralyzed.”

In cases such as these, HR must be aware that some forms of time-wasting are related to the in-security employees feel about their future. Probst often thinks about what she learned at a seminar led by author and management consultant Michael Hammer. “Change creates bad feelings. Bad feelings end up creating bad behavior.” HR professionals need to be more empathetic leaders, rather than cold-hearted managers, she says. EAPs are certainly there to help.

Phillip Morgan, CEO of Houston-based EPC International, is equally concerned: “The problem we have in our corporation is that stress isn’t recognized as the driver of so many behaviors. One of our biggest concerns is that [managers] don’t know what identifying stress would look like. And the amount of change that people are going through is creating conditions that could lead to loafing.”

False entitlements can lead to loafing.
Some employees, however, don’t deserve a tear of sympathy. Unlike the manager at North Broward Medical Center, some loafers believe they have a right to steal time. HR managers would be foolish not to pay them equal attention. The more human resources professionals can understand the causes of various behaviors, the easier it will be to motivate and retrain wayward employees, and correct the work situation.

Jon Weinstein, CEO and president of APEX Plastic Industries Inc. in Hauppauge, New York, describes the false-entitlement attitude as one in which the employee has no sense of accountability: “There’s a mindset that simply believes that work is how the worker defines the labor, its importance, its time and value—and that these judgments aren’t to be made by management.” Strutting their false sense of confidence—or is it denial?—people with this mindset believe:

• “They won’t fire me —it costs them hundreds of dollars to advertise for replacements.
• “They can’t lose me —it’ll cost them thousands to train someone else, and they’ll lose productivity.
• “They can’t remove me—I know too much.
• “They won’t mess with me—I’ll sue ’em for sexual harassment, age discrimination or some other civil-rights violations and breach of contract.”

In this scenario, these cocky time-wasters could be the ones taking longer lunches, spreading negativity among co-workers or slowing down the workflow—just out of spite.

But wait a second before you scream, “Terminate!” There’s a difference between those who deserve to be disciplined or fired and those who feel entitlements for other reasons, such as lack of respect. “I started loafing when I knew I was going to quit my job,” admits one marketing representative. “My company’s [managers] didn’t really care about us as individuals. So I thought, ‘If they don’t care about me, I don’t care about them.’ But before, I never loafed —not a second.”

So chances are, there are more than one of these entitlement-types lurking around in your corporate den. Besides the obvious appreciation that managers should bestow on their employees, Weinstein advises looking at the company’s culture first. “I think the answer in dealing with these shirkers is to develop team activist leaders in your organization,” he says. “Supervise the employees consistently with interest, so that your interest in their work is not merely to get involved when they louse up.”

Out-of-sight employees force the issue of trust.
Perhaps you’ve recently granted telecommuting privileges to some employees. Certainly as managers demand more productivity—and measure performance by results—employees are in turn demanding more flexible work options. By the year 2000, the number of at-home workers is expected to reach at least 11 million, according to IDC/LINK, a New York City-based market research firm in the electronics services industry. Out of sight, but not out of mind, these employees still manage to tickle the imagination of their superiors: “I wonder if he’s really working? Why isn’t she answering the phone? I bet he’s taking a nap.” One employee was shocked when his supervisor appeared on the doorstep, and he greeted the supervisor in his pajamas. The supervisor said he just wanted to “check in,” but he sat on the couch until the employee completed his assignment. You don’t have to be that uptight, but the example certainly illustrates the unsettling nature of managing those whom you can’t see hour by hour. Indeed, in the same Personnel Journal survey, we asked: “Do you think telecommuters loaf more than those who work onsite?” Fifty-four percent said no; 46 percent said yes.

Most telecommuters and home-office workers, however, will tell you that working offsite has its perks (you can read on the patio; you can take breaks whenever you want). But your days are longer and your output is greater—simply because telecommuters usually are self-starters and independent to begin with. Just the thought of their managers and peers suspecting them of loafing is enough to trigger their unnecessary guilt. Remember, if an employee didn’t already have a keener work ethic and higher level of accountability to begin with, chances are you, as managers, wouldn’t have granted him or her the privilege of working offsite. Some companies, therefore, allow periodic telecommuting, but still require their employees to be in the office at least three days a week. Other recommended practices include establishing home-office requirements (such as designating a specific space for work); holding regular meetings, communicating by phone, e-mail and fax; and providing your telecommuters with the necessary support and tools to do their jobs.

A related HR concern, however, is the telecommuter’s office-bound co-workers —those who are jealous and feel a sense of inequality. When one employee returned to work to check the mail and attend a staff meeting, his co-workers made snide remarks such as, “Oh, I see you decided to come to work today.” Or when Brian C. Kennedy, regional sales manager for Schlumberger Smart Cards & Systems leaves the office where he leases space in Irvine, California, others tease him. “There’s a perception we have the [good] life because we get on airplanes and go out to lunch a lot. They don’t realize I miss my kids and don’t see my wife for a few days at a time.” So if managers are sensing flex-envy and are beginning to allow more employees to institute varied work options, it’s important that all employees understand why. Certainly, all jobs aren’t equal, and different jobs are more conducive to flexible arrangements. But all employees —whether in or out of the office—should ultimately be measured by their output. The key is to promote one corporate vision. By empowering each employee in his or her own function to see himself or herself as part of one vision, one team—it shouldn’t matter where each member works day to day.

Be reasonable. New technology takes time to learn.
More than any other recent phenomenon, the Internet probably has piqued your concerns about loafing. At no time does the issue of time-wasting become so blurry as when you see your employees—and HR colleagues—exploring the Internet. “It’s the watercooler of the ’90s,” says Michael Welles, president of Chicago-based EdWel & Co., a performance and training consulting firm. From a loafer’s point of view, the Internet is even better because one can actually appear busy—and really be futzing around. Whether it’s sending an e-mail to your golf buddy, searching for Bali on the World Wide Web, or subscribing to a professional newsgroup, your wired employees are just that—wired. “[The Web] is exciting. It leads you down this path—link to link. The seductiveness of it is fascinating. And before you know it, time has gone by,” says Pam Burdi, director of human resources for Western Digital Corp. (noting she surfs after hours). HR, she says, shouldn’t panic that its employees are going to lift off into cyberspace and never return to earth. Try to imagine the initial excitement that followed the invention of the telephone. If the early naysayers had it their way, we would’ve never gotten online or been able to check our savings account from our cellular phones. So expect the momentum to continue.

According to New York City-based Find/SVP Inc., approximately 9.5 million Americans signed on as Internet users in 1995. And for the current year, Internet users are expected to grow to 13.5 million by year-end. Corporations account for 46 percent of the total user population. Among all users, 85 percent use e-mail and 76 percent access the Web, Find/SVP analysts report. “Anytime there’s something new, you need to try it out to see what the boundaries are, says Burdi.” Because the Internet is relatively new, HR managers need to allow the additional time to experiment and develop their skills in this new medium. But reservations are understandable.

When Western Digital Corp. decided to provide Internet access to employees, HR weighed the pros and cons. As a global company with 10,000 employees worldwide, Western Digital knew its internal communication and customer service would benefit from the Internet. “We worked with IS [information services] to develop guidelines on access and use,” says Burdi. After benchmarking other companies, Western Digital’s HR was able to establish the company’s own needs and goals. To ensure that employees adopt the Internet as a business tool, HR rolled out a set of policies and procedures that outlined terms and definitions; applicable documents; employee responsibility; IS responsibility; and terms regarding access, security and record maintenance. Employees also received an employee-management agreement that must be signed by both parties. “Once there’s agreement about what the Internet is for, then we trust people to use it appropriately. But there are ways to monitor employees, and we’ve advised them of that through e-mail.” For example, in addition to employers establishing fair use-and-abuse policies, several software companies have created filtering devices to either block inappropriate sites or monitor where employees are surfing —and for how long.

Search for the yin and yang in policies.
Balancing trust with the need for clear guidelines requires finesse and faith. And yes, it’s hard when you know your employees are bombarded by temptation. One of the more benign Web sites is called Sara’s Network Time Wasters. By entering “time wasters” in the search fields of Yahoo or Alta Vista (two popular Web search engines), users can land on the site and select several diversionary activities, such as Cool Site of the Day; and The Keirsey Temperament Sorter.

As HR managers grapple with these gray matters, one could establish guidelines all over the map. Western Digital’s realistic approach is probably the most acceptable prototype. Another positive example is Compaq Computer Corp. “We came at it from communicating expectations,” says Ron Eller, vice president of corporate compensation and benefits. Approximately two years ago, the global company began providing Internet access to its 17,000 employees in 100 countries. HR’s view of the privilege is just that. “Sometimes employees forget that computers and the software are the company’s [property]. They feel, ‘It’s my computer.’ They forget it isn’t,” adds Nora Hahn, a Compaq spokeswoman. When some of its employees were discovered downloading sexually explicit images on their computers, Compaq had no qualms about terminating these employees. “Once that became public, that sort of usage became virtually zero in the company,” Eller says, noting that the company has the ability to know who’s doing what and where they’re doing it through special software.

To appreciate Western Digital’s and Compaq’s faith and finesse, consider two other extremes. One is the executive who worries that access to the Internet will fling the company into a sexual harassment lawsuit—thereby not even considering the tool as a benefit. The other extreme (and one might argue it’s not) is Playboy Enterprises Inc., which hasn’t instituted any Internet policy thus far. “We’re one of the biggest sites on the Information Highway,” says Denise Bindleglass, vice president of HR. “We want our employees to be aware of what we’re doing on the Net and be excited about what things we’re putting up. So we want them exposed to it.” Playboy’s Web site garners more than four million hits per day on the homepage, according to Anne Steinfeldt, a member of Playboy’s New Media department. Even with such a liberal policy, Playboy’s MIS department still retains the capability to track its employees’ overall use of the Internet. “We still have our share of guidelines and policies. We’re not so informal that it’s seat-of-the-pants management. But since [the Internet] is still new enough, we’re going to take a little longer to see how things play out,” says Bindleglass.

Discipline the abusers, but ride the frontier with confidence.
Being flexible doesn’t mean HR managers should go easy on the abusers. In the case of several public-sector employees, the pressure to discipline was even greater. It’s one thing to discover and discipline abusers out of the limelight. When it hits the TV and newspapers, the exposure is shocking enough to rattle the nuts out of a Baby Ruth®. A few such revelations are:

• A Cincinnati Recreation Commission employee claimed other city employees were playing golf and fishing on city time (The Cincinnati Post, March 15, 1996).

• Minneapolis transit police were found playing strip poker with a computer-generated female player who shed or restored clothes depending on who won the hand (USA Today, December 12, 1995).

• Ten workers and six supervisors—in the wastewater management division of Denver Public Works—were notified they would be disciplined for loafing on the job and being caught on videotape by KUSA Channel 9 (Rocky Mountain News, May 1994).

• Nineteen Oklahoma City employees were to be disciplined after an internal investigation also backed up a TV videotape of work crews loafing on the job (The Daily Oklahoman, December 7, 1994).

In spite of the public embarrassment, Rama Mallett largely is unshaken. As director of HR for Denver Public Works, she is quick to differentiate between truth and fact. “One of the big problems is perception. The percentage who loaf on the job is minimal. We have many more employees who go out of their way to do extra work,” she says. In the city’s Public Works Department, there are 1,000 employees—many of whom are assigned street maintenance, solid waste management, fleet maintenance, traffic engineering and parking management. Very often, their work is exposed to public view. Even then, some loaf. “Some of our field supervisors said their employees could loaf by taking too long to drive from one place to another, taking breaks along the routes or stopping to talk to a friend,” she explains, noting that none of these behaviors is acceptable.

When the local TV station videotaped the field crews, it aired the story to pump up its ratings, says Kendall Hogue, director of administration and human resources in the wastewater management division. “There was an ongoing perception, and our [employees] were easy prey. You can follow any given employee and catch him or her doing something that could look questionable on TV,” he says. In some cases, the employees were loafing. In other cases, what appeared to be loafing was not. After the broadcast, HR met with the TV station’s upper management and viewed the tape, but the TV station refused to give them an unedited version. That being the case, HR got it’s own edited copy and subsequently disciplined six employees and four supervisors—from letters of reprimand to one-week suspensions without pay. “Since then, we’ve made some changes to better monitor our employees in the field,” says Hogue.

So regardless of where your employees might be wasting time—on land or in cyberspace—HR managers everywhere share the same concern. How do you justify increases in productivity in a changing workplace—especially when your employees are being told that job security is a thing of the past? Discipline is appropriate for extreme abusers. But for the majority who may periodically overreact to a company downsizing, a change in work style, stress or the temptation of new technology, they need your understanding, fair judgment and strong leadership.

At Denver Public Works, HR created a schedule that established where its drivers should be at different times. It also set up teams—with two sweeping crews starting at opposite ends of the city and eventually meeting somewhere in the middle. After the City of Oklahoma failed to prove and discipline some earlier charges of loafing, HR has become more cautious in its investigations of unauthorized breaks and other time-wasting activities. The City was challenged by the local union, AFSCME (American Federation of State, County & Municipal Employees) Local 2406, which won an appeal over one set of charges and currently is in arbitration for another. “Now HR [staff members] help the departments investigate a situation so it’s done accurately, and we provide guidelines of what we do,” says Enrique Alva, personnel director for the city of Oklahoma City. “We’re more involved.”

As these examples and others illustrate, by winning over your workers to a shared company vision and by offering them skills training, incentives and rewards, you can minimize time-wasting. But don’t forget to establish guidelines. Once you provide your employees with fair HR rules, you won’t have further misgivings about Driving M. Harder.

Patricia A. Bubb, assistant vice president and compensation manager at Chubb & Son Inc. in Warren, New Jersey, says:
The term standardized merit increases is a contradiction in terms. True merit increases are nonstandard because they reflect factors that vary from person to person. These include:

• Achievement of business and personal growth goals
• The reality of salaries in the outside market for people with comparable skills and experience
• The current level of pay based on the salary range or band assignment relative to skills and experience
• Eligibility of variable pay as an ingredient in total cash compensation.

In a pay-for-performance environment, we expect true differentiation based on these types of factors. Managing a performance-based salary program requires a strong commitment to goal-setting and measurement. Many companies now also are rewarding demonstrated growth in competency in their base salary programs.

This commitment to recognition of more individualized roles rather than standardized jobs is leading to design changes in many salary programs. Specifically, broadbanding is one way some companies are responding to this shift. This change from traditional ranges containing midpoints and quartiles moves us farther away from formula-driven merit grids. Instead of relating exact increase amounts to a position in range and performance category, today’s programs tend to be more focused on paying each person correctly.

Jeannine Schlie, human resources manager at Maryland Cable in Lanham, Maryland, says:
A few years ago, HR learned that many employees in our company felt merit increases were given arbitrarily. The relationship to individual performance wasn’t clear. We then decided not only to standardize the system but also to communicate the changes to all levels in the organization.

We began by adopting a strong pay-for-performance principle, tying the merit increase percentages directly to the overall rating the employees receive on their annual performance reviews. An overall satisfactory rating received a merit increase roughly equal to that of the inflation rate for the previous year. Rating above (or below) satisfactory resulted in higher (or lower) merit increases. The scale was communicated to each individual along with an illustration of how their rating was determined.

The overall rating is determined by using individually weighted objectives. These objectives are prepared for the coming year and are revisited with a formal six-month review as well as the final year-end review. This allows the supervisors and employees to determine the primary functions—which are specific to that person’s position—rank them in terms of importance and list which measurements will be used. This helps the individual identify which functions are most important. Then a high rating in that category will more greatly influence his or her merit increase than a high rating in a less important objective.

Standardizing the merit increase process and not the individual objectives has allowed our company to clearly illustrate how the merit increases are determined and how each individual can influence his or her overall rating.

Evelyn Khinoo, human resources manager at Catalytica Inc. in Mountain View, California, says:
The base salary merit increase budget under our current program is approximately 4 percent, which is fairly typical of many companies. The merit increase is based on individual performance, since individual contributions and rewards are still very important in our company.

The workforce is made up mostly of scientists and engineers who are constantly striving to achieve greatness. Their ambitions help the company, in the long run, reach its goals. So some rewards for individual performance are important. With a 4 percent overall merit budget, it’s difficult to reward the highest performers an 8 percent to 10 percent increase because it would mean that the not-as-high performer (although still very good) would possibly receive only a 2 percent increase to keep within the 4 percent budget. Sure, we could give the 2 percent to a good performer, but so far our company hasn’t been able to bring itself to do so. So how do you reward your high performers without taking away a lot from the good performers? We’ve done this in the form of cash awards based on team accomplishments and the potential impact certain levels of employees are expected to make on the bottom line of the company’s success. This is the second part of the compensation bonus awards.

Cash bonus awards are based on team goal accomplishments, and higher bonus amounts are awarded to higher levels (more direct impact to bottom-line results).

The strategy behind the two parts is to enable the company to meet its business goals and be successful. The leveling process within the merit increase segment and the cash bonus segment have more closely met employee needs (high-base merit increases for lower levels) and created incentives to accomplish tough goals (especially for higher level positions). Standardized merit increases can work if there are other forms of awards.

Salary increases in the past have been considered an entitlement (always receiving a substantial merit increase such as 6 percent). One of the major pros of the cash-bonus system based on goal accomplishment is that the entitlement syndrome could be eliminated or certainly diminished. A standardized merit plan can work if there is an additional form of incentive, such as a cash bonus.

In establishing merit increase programs or any other cash bonus incentives, companies should keep in mind the type of workforce they have, what the competition in their industry is doing, what the company philosophy is—and have a strong plan in place to set company goals and ensure all business units or departments of the organization are clear about the goals. Goal-setting has become one of the most important elements for our company in its quest to be successful.

Martha Jo Chalmers, regional trainer for the California Department of Social Services in San Bruno, California, says:
The State of California employs more than 195,000 people throughout the state. All hiring and promotions are based on merit practices established by the state legislature and monitored by the state Personnel Board in Sacramento. My agency, Social Services, employs 4,052 full and part-time staff.

I believe merit increases based on performance are fine, but they don’t go far enough for government employees. There should be a salary increase awarded every two to three years to employees who perform well at the top of their salary range.

I’ve watched employees struggle with a capped salary year after year. Because they receive no monetary reward for doing a good job, they look for work elsewhere—creating a talent drain within the public departments of highly trained, competent staff.

The cost of replacing those excellent employees exceeds the amount of money that would be spent to increase their salaries and keep them motivated and in their current positions.

In addition, there should be a way for supervisors and line staff to be eligible for decent year-end bonuses based on performance criteria established by legislation and funded out of the general fund.

Fiona C. Cribb, senior human resources coordinator at Arthur Andersen in North Sydney, Australia, says:
Panel interviews historically are associated with the rigid recruiting processes of large bureaucracies. This unfortunate association, coupled with the concern that panel interviews may intimidate some candidates, has tarnished the reputation of what can be an effective and time-efficient approach to candidate selection.

Panels are most effective when comprised of three to four stakeholders— preferably the recruit’s prospective line manager, a key customer, an HR representative and a prospective peer. Ideally, all panelists should be coached in behavioral interviewing techniques.

Prior to the interview, panelists should jointly agree with the mix of competencies—knowledge, skills and attitudes—required to fulfill the job role and the desired degree of proficiency expected in each area. They should prepare interview questions targeted to these competencies.

One panelist should be appointed facilitator. The facilitator’s responsibilities will include introducing panel members to candidates; explaining the interview structure; facilitating clear communication during the interview; keeping the interview on track; and ensuring all competencies are satisfactorily probed and that no one panel member dominates the discussion.

Questions that are asked early should help relax the candidate and establish the flow of conversation (questions about recent work experience or educational background are strongly recommended). Then, panelists should move through their preagreed questions, retaining sufficient flexibility to follow any leads into other areas relevant to the position.

Following each interview, panelists should evaluate candidates twice across each competency—first independently, then as a group. This ensures no one individual view dominates the eventual decision. Panel interviews aren’t universally appropriate, but their advantages make them worthy of serious consideration.

Caroline-Anne Tylko, human resources manager at The Westin Hotel, Ottawa in Ontario, says:
Some managers believe everyone who will be collaborating with the incumbent should be included. But a 12-member panel not only can intimidate candidates, but also can hinder the evaluation/decision-making process—rendering it more difficult and becoming too time-consuming. Panels can be kept to a minimum by steering individuals who absolutely want to have input to submit questions to panel members ahead of time.

Panelists also should be trained. Proper training helps the panel commit to the process, develop targeted and legal questions, define potential responses, collect and evaluate relevant data, and make good hiring decisions. Training also ensures the most important factor in the process is highlighted—the candidate.

Trained panelists can ensure a candidate’s self esteem remains intact by simply paying attention to panel behavior. Curtailing behavior such as staring out the window, whispering, passing notes, doodling or brushing away imaginary lint during the interview, can make a candidate feel more valued, confident and comfortable.

Finally, the chairperson doesn’t have to be an HR representative, but a good facilitator. The chair is responsible not only for greeting the candidate and introducing the panel and interview format, but also for facilitating the entire process. It’s the chairperson’s responsibility to make sure office politics and personal agendas don’t interfere with the best candidate being hired.

James J. Carabetta, director of human resources at Fosdick Corp. in Wallingford, Connecticut, says:
The most effective way to manage FMLA leaves is to not mismanage them. This means HR must comply with notification and posting requirements. For good measure, add the FMLA’s poster text to your handbook or employee manual.

That being addressed, immediately assess all of your employees—exempt and nonexempt—for the effect on the operation during their absence whether for a week, a month or an undetermined length of time. Short leaves should pose no problems. Most employees qualify for some vacation or personal time. A company would be hard pressed to claim a hardship for an employee who requests a leave of a few weeks when that same employee had been suitably covered while on vacation. For longer leaves, the company’s strongest tool is people development. During the assessment of employees, determine who replaces whom during absences. Each employee should be given a goal at his or her first performance review: Help develop your own replacement.

If the company subscribes to a performance management system, part of the expectations should be to help develop a subordinate. If, during the assessment, any position poses a reason for panic, begin training immediately. Understand that not all qualified leaves will be prefaced with a notice. In a larger company, ask department managers to come up with their own action plans for leave replacement and to identify problem areas or positions that would be difficult to cover. Update these plans each time someone is hired or terminated in either key or problem positions.

One of the biggest challenges is scheduling. Just as leaves may come up without notice, requests or needs for leaves may overlap with other leaves, causing short-staffing. Ask for documentation of the need for leave prior to granting it. If scheduling is a problem and the leave request doesn’t appear critical, ask the employee whether the leave can be postponed. If not, perhaps intermittent leave would be acceptable. Whatever is agreed upon, make sure it’s clearly spelled out in the FMLA notification forms.

Compare your state’s leave laws with the federal regulations. The employee will be deemed covered under the regulations that provide the most benefit. If there’s a discrepancy in benefit level between federal and state, state in your notification under which regulations the leave is granted, or explain that the state and federal leaves will run concurrently.

Inspect the practices that are affected by leaves, especially the ones dealing with length of service and periodic reviews. Then obtain legal advice on the administration of such programs. For example, as absurd as it may seem, depending on how your program is worded, an employee who hasn’t been to work in 12 weeks under a qualified leave may qualify for a perfect attendance award.

Lastly, keep accurate records on all leaves. It would be impossible to determine when the employee’s entitlement ends, if there were no record of when it began. Also, there’s a limit to the entitlement. The number and length of an employee’s leaves are significant when the total time approaches 12 weeks. Demand in your notification forms that the employee contact the company periodically with an update and the continued intent to return. And document each contact. Track expenses incurred for each leave in time, training, accommodation or replacement labor. This procedure will become valuable in forecasting the financial impact on a monthly, quarterly or annual basis—once enough historical data is collected.

Finally, HR also should keep all FMLA records apart from the employee’s personnel records, lest it appear that the employee was subject to employment action in which exercising the right for leave was a consideration.

Karen Togno, supervisor, compensation, benefits and payroll at Tekelec, in Calabasas, California, says:
My company is a supplier of advanced diagnostic systems and network switching equipment for the telecommunications marketplace. We have 320 employees across the United States, most of whom are in Calabasas and Morrisville, North Carolina. The remaining employees are in small sales offices in seven other states. Only two of our offices—California and North Carolina—must comply with the FMLA (other offices are too small).

In 1994, we purchased a book from the California Chamber of Commerce, “Family Leave Laws: A Guide for California Employers,” that provides sample letters and forms to use in the administration of the plan. We made up individual packages using these sample forms and letters and give a package to each employee who requests a leave and qualifies under the FMLA. There’s even a sample form for documenting the time taken for this leave. We looked at other resources but found this book to be the best information at the best price (about $29) and the most user-friendly.

After doing this research we wrote a formal policy for this Act. Our policy states that any accrued vacation/personal/sick days be substituted until exhausted for any part of the unpaid family and medical leave provided under this policy. We also state that additional vacation/personal/sick time won’t continue to accrue during this leave. All other provisions of the FMLA are included in our policy.

We also made one person in our department responsible for managing FMLA requests. That person became the expert. So when one of our employees requests a leave or inquires about one, our expert can easily answer his or her questions with confidence rather than having to call someone else to find out what to do. Therefore, our employees trust the expert and know our company is following the law and providing them with accurate information.

For us to become experts took research. As a result, we have no problems managing the FMLA. When you know what you’re doing, it becomes very easy.

Tara Jenson, HR director at TEAM Technologies in Waterloo, Iowa, says:
In my experience as HR director for several companies, I’ve seen employee discipline take many forms. As professionals looked for a way to make employees more responsible for their own behavior and successes, traditional discipline began to give way to more innovative approaches.

Positive discipline, or discipline without punishment, has been around for a while. But companies have just recently started embracing it. Instead of warning employees about the consequences of their actions, we remind employees of the standards and ask for their agreement to solve the problem. This isn’t just a difference in semantics. It has to be a difference in attitude and behavior.

For example, “John” was a new machine operator in a factory in which I was the HR director. He overslept and frequently was late to work. He also would leave a couple of minutes early to take care of personal matters. After his first month, his tardiness became a pattern.

During the first and second steps of discipline, we gave him a verbal and a written reminder. These steps began to engage the employee in understanding why it’s important for workers to arrive on time and what happens when one fails to do so.

But the last and most powerful tool in the plan is known as Decision Day. When John failed to change his behavior, he was given a paid day off to reflect upon his employment and to decide if he was willing to solve the problem immediately and permanently, and return with a commitment to perform up to standard. We felt it was very important this step be a paid day off—to illustrate the company’s support. He was instructed to return the next day—either ready to change his behavior and stay with us or quit. John took his leave seriously and has since been promoted several times. Now, he’s a foreman.

At another company I worked for, we developed a positive process that included paid time off. However, we switched it to an unpaid day because of complaints from the general workforce. We called this step a Decisional Leave. Employees were asked to come back with their written plan for changing the behavior.

We asked the employees to focus on what the job meant to them and to their lives, what would happen if they didn’t have the job, and what they were personally willing to commit to doing in order to keep the job. The signed statement became a contract with the company. Invariably, the person either lived up to the agreement or quit.

We also adopted the same practice with my present employer. Again, we started out with a three-day paid leave. But once our team environment took over the counseling role, the teams insisted on the leave being unpaid. However, they kept the practice of the person writing out a commitment letter. Then the team would review the letter and decide whether or not to reinstate the employee. Because most problems still involve attendance, people seem to feel paying people to stay home isn’t acceptable.

Dave Green, personnel manager at Platte River Power Authority in Fort Collins, Colorado, says:
Several years ago, one of our managers attended a seminar and came back with the concept of positive discipline. The idea was to send a misbehaving employee home with pay to think about his or her transgressions, write an essay on how the problem would be corrected in the future, and then come back to work as a productive, enthusiastic, wonderful employee. We tried it a couple of times. Did we get productive, enthusiastic, wonderful employees? No. We got the same employees back whom we sent home. The only difference was that they were carrying poorly written, scribbled promises to behave in the future. It was reminiscent of the school teacher who made us write a hundred times on the blackboard, “I won’t chew gum in class.”

Feedback from other employees told us it was viewed as an extra day of paid vacation. So we’ve gone back to unpaid time off for discipline. It seems to get their attention, and that’s the whole point.

Joan Farrell, HR director, Label Sector at Lawson Mardon Packaging in Fayetteville, New York, says:
The message sent when inappropriate behavior first occurs sets the stage. In applying discipline, human resources must ask, “What is our intent?” If we want to fire the person, then punitive discipline is the quickest route. The message is, “You are wrong; you have failed; therefore, you must be punished.” If indifference to standards is the issue, this doesn’t remove the indifference. It also places the responsibility for correction on management, reinforcing a parent-child relationship: “I’m in charge, and I will punish you so you will learn.”

If we want to correct the behavior and make the person accountable, then positive discipline is the answer. It says, “You are accountable for your actions. We want you as an employee, but you haven’t lived up to our agreement, and we need to know what you will do to improve the situation.”

My first experience with positive discipline was with a company replacing a striking workforce during a period of low unemployment. The new employees were good workers, but they often had attendance problems. We quickly learned that if we used the three-strikes -and-you’re-out approach, we simply replaced one problem employee with another. So we developed a system incorporating a verbal discussion, a second documented discussion and a decisional leave.

The decisional leave is a timeout for the employee to reflect on specific questions: How important is the job to him or her? What would happen to him or her if the job was lost? What was he or she willing to do in order to keep the job? We asked the person to come back with a written response, including specific commitments (buying an alarm clock, developing alternate car-pool arrangements, switching shifts to accommodate childcare needs). At the end of the leave, the commitment letter was reviewed by the supervisor, the department manager and the HR manager before the employee’s reinstatement. The employee came back with the burden for change clearly on his or her own shoulders, and either lived up to the commitment or voluntarily resigned. Rarely would an employee who moved through this process be terminated for failure to honor the commitment.

Michael J. Jedel, a labor and employment arbitrator in Atlanta, Georgia, says:
Companies with unions need to consider labor officials’ reservations about positive discipline. Their opposition has been based on the concern that it doesn’t allow employees to know where they stand in the eyes of supervisors. Moreover, it fails to make clear what steps follow repeated infractions—particularly in the critical stage of the decision-making leave. The errant individual also may not understand that discharge can be the next step.

These problems can be real, but they can be addressed if supervisors have been trained properly in the mechanics of administering such a system, and if the notification to the employees (and to the union) is communicated effectively.

Another reason for potential union resistance is that positive discipline may be seen as limiting or eliminating the union representative’s role in negotiating a modification of the disciplinary action, as one might historically have done under a more conventional progressive discipline system.

However, because arbitrators have routinely recognized the right of employers to unilaterally adopt and implement positive systems as part of their customary management right, union opposition needn’t discourage the practice, but HR should take these concerns under consideration.

In terms of arbitrators, many are unfamiliar with positive discipline. But in my own informal surveys, I don’t think my colleagues would generally have conceptual problems in upholding such a system, as long as the basic requisites of just cause are satisfied. Those who’ve arbitrated such cases seem to have accepted and praised this positive approach.

Al Christenson, personnel and MIS manager of Solid State Stamping Inc., in Temecula, California, says:
An employee’s right to review his or her personnel file greatly depends on respective state laws. In California, for example, an employee has the right to review the file once a year, although exceptions are made under certain conditions. The employer may require the viewing take place during an employee’s free time. It normally isn’t permitted on demand, but must be at a time mutually convenient to both parties. Employees may review nearly everything in their files, with the exception of items such as letters of reference or documents from criminal investigations. Furthermore, employees are allowed to have a copy of any document they’ve signed, subject to reasonable costs of copying.

But employers shouldn’t feel threatened by an employee’s request to review his or her file. Of course, this is assuming the employer has been honest and objective in documenting performance. Employees have legitimate concerns about the accuracy of their files and should periodically review their contents. Employers should be ready and willing to discuss any item in an employee’s file and back up written comments with specific examples of behavior. An employee’s request to review his or her file should alert employers to the vital nature of documentation. Employee files should reflect the realities of the relationship: Notes should indicate extra effort and excellent performance in specific areas, as well as document discussions that indicate a need to alter one’s behavior or performance. To have only positive notes or negative notes would, in my opinion, raise a number of questions about the supervisor. Rarely, if ever, are employees all good or all bad. If that were the case, we would never hire the bad ones and wouldn’t need to worry about the good ones. Who, then, would need HR?

Thomas M. Terry, human resources manager at Zephyr Manufacturing Co. in Inglewood, California, says:
It’s important to view the issue of personnel records from a human resources manager and an employee’s position. As HR manager, I must strive to be fair and impartial in any situation. First of all, personnel files should be kept strictly confidential. In our company, the only individuals who are allowed to view employee personnel files are the employee, president, vice presidents and myself. Occasionally, a supervisor is allowed to see a person’s file as long as there’s a reasonable justification. Everything that affects an employee is entered or filed in his or her personnel record. That’s why it’s a touchy issue for the person accessing those files. Our company allows an employee to view his or her file as long as the request to view it is convenient for the company and the employee.

As an employee and manager, I would always want to have the option of knowing what’s in my personnel file. In some states, a third party may also review information from an employee’s file—if the employee isn’t available and has authorized his or her desire in writing. It’s always important to review state and federal labor laws before making any decisions so violations aren’t committed by either the employee or the employer.

As human resources professionals, we have an obligation to serve our company’s employees as well as our company. I strive to treat each employee with respect and grant the option of viewing one’s records. If push comes to shove, and there’s a legal battle, the employee will see records anyway. Keep in mind, there may be some items neither the company nor the employee would want revealed in public.

Mary Ann Schleyer wasn’t surprised at her male employee’s request. The Californian was spoiled by sunshine and the Pacific Coast Highway, where he could ride his motorcycle with a T-shirt flapping against a tanned torso. But when faced with the option of giving up his job or moving to Chicago, he opted for the latter—on one condition: Would the company pay the moving expenses for four of his Harley-Davidsons?

“Typically, we wouldn’t move all those bikes,” says Schleyer, manager of relocation services for Sears, Roebuck and Co. in Tucker, Georgia. “But as a concession for him not having any furniture, we shipped his motorcycles. That was important to him.”

Now multiply this one employee’s request by 500, and you can well imagine the responsibilities HR relocation managers face during a group move. “God only knows what they sneak onto the moving vans that we don’t know about,” she says. And household goods are just the tip of the iceberg.

Although far less common than individual moves, group relocations are on the rise, according to Chris Colley, executive vice president of the Washington, D.C.-based Employee Relocation Council. “We seem to be getting more inquiries,” says Colley. “HR managers need to talk to their peers in other industries who have managed group moves, so they can anticipate the issues that will arise.” Clearly, in an era of downsizing, a drive for lower costs and efficiencies, and access to improved technology, HR managers may face a group move at least once in their career. If your prayers are answered, will you be prepared?

Anticipate the jitters of first-time transferees.
While most individual moves are prompted by a new job opportunity or a promotion, group relocations usually involve a lateral move. They uproot employees whose positions don’t historically transfer and who therefore have deep roots and family ties in their communities. Most are likely to be first-time transferees.Without much choice, they’re told their job is moving—with or without them.

The reasons for group relos can vary, according to Jan Dickinson, of Dickinson Consulting Group in Portland, Oregon: contraction or expansion; facility expense reduction to control rental fees or the tax burden; proximity to manufacturing operations, suppliers or the marketplace; improving employee commuting and quality of life; mergers or acquisitions. How companies respond to corporate needs also vary. Some companies may want to realign several regional offices into one location. Another may want to centralize one function or division under one roof. Yet others may want to establish a function in a separate state from corporate headquarters, or even move an entire organization from one site to another. Regardless of the reason or solution, HR professionals must be involved in relocation planning from the very beginning, preferably once a decision to move has been made. To facilitate a smooth transition, survivor, Bloomington, Indiana-based State Farm Mutual Automobile Insurance Co., recommends: plan a group relocation far in advance, develop enhanced group benefits and introduce employees to local service providers at the point of destination. Others, such as the American Psychological Association in Washington, D.C., learned that any group move will spell disaster if employees aren’t involved in each phase of a move—especially if you’re faced with reluctant candidates who increasingly worry about their quality of life and their familial obligations to aging parents, young children and teens. So keep in mind the human factor: You’re not just moving boxes and Harleys. You’re moving people—emotions, warts and all.

Be an early-bird planner. About six years ago, State Farm Mutual Automobile Insurance Co. made a decision to expand its services to California. The company already had three regional offices in Southern California. It wanted to open a fourth by 1994. “A decision to open another regional office typically is made five years earlier,” says Larry Ingrum, staff assistant for relocation services. Land purchasing considerations forced some early planning. The decision also prompted the need to place experienced personnel onsite by opening day.

But in the midst of such plans, the political climate in California changed unfavorably for insurance companies. Many companies threatened to pack up their bags and leave the state as a result of its Proposition 103, which mandated reforms in the insurance industry, such as rollbacks for customers. State Farm, however, reassessed its situation and shifted gears. Instead of bearing higher costs by opening up a fourth regional office, it announced in 1994 that it would realign the three regional offices in Costa Mesa, Westlake Village and Santa Rosa by moving them to Bakersfield, California. The grand opening was scheduled for late 1995. In addition, State Farm announced it would streamline its life/health function and move that division to Bakersfield as well. About 800 employees were affected. “For a majority of them, it was a first-time move,” says Ingrum.

When the company was planning to open a fourth office, the move was presented as optional and voluntary. With the realignment, the scenario changed. “Our employees were faced with the [issue] of their jobs moving,” says Ingrum. They had to make a decision to lose their jobs or relocate to this 100-square-mile city—located on the southern end of the San Joaquin Valley. About 40 HR personnel also were included in the transfer.

Most companies about to face a similar situation normally would hire a third-party relocation company. State Farm didn’t have to outsource. It utilized its own in-house relocation group. Ingrum says the company created the service group in 1987. “We felt we’d provide better employee services by having our own relocation operation.” The division, he adds, is part of the human resources department, under benefits and services. During the realignment process, Ingrum served on a corporate team with members from various departments. The team worked through all the issues of the relocation. HR, he explains, began to work in conjunction with other departments to move management into Bakersfield before the grand opening. In addition, the relocation services group administered and counseled employees on the relocation benefits. Ingrum was one of four relocation coordinators who reported to the relocation group and lived in Bakersfield for several months to prepare for the transfers.

After the decision to realign its California offices, State Farm also set up a Start Team whose mission was to staff the office, build relationships in the community, and set policies and procedures for the new operations. Ellen D’Andrea, senior HR specialist, not only was pivotal on the Start Team, the New Jersey native was a first-time transferee herself.

D’Andrea says she was undaunted by the challenge and opportunity of working on a project of that scale. “I didn’t know anything about it at the time. It was scary. But I knew I had the ability to learn as long as somebody was good enough to teach me,” she says. That individual was Ingrum, who arrived in Bakersfield on temporary assignment one month after D’Andrea.

Together, they and others on the Start Team had their own individual missions. D’Andrea was in charge of the Welcome Center and the relocation process in Bakersfield; another individual was in charge of the selection process of employees from other regions. Two others were in charge of recruiting local new-hires. Ingrum oversaw the team and served as the point of contact for anyone who had questions about benefits for the group move.

Enhance group benefits as an incentive to prospective transferees.
Getting employees to move from prime areas, such as Costa Mesa, Westlake Village and Santa Rosa, required State Farm to develop a fresh approach to the benefits package. Without one, State Farm wouldn’t be successful in persuading its employees to relocate. Ingrum says the company created a few new enhanced benefits. For example, because the employees wouldn’t be moving for a promotion or better salary like individual transferees, State Farm provided a lateral move bonus—a flat fee of $1,000. Homeowners and renters were both given appropriate allowances. Renters were given up to $500 for the first month’s rent and a reimbursement of the security deposit—also up to $500. Homeowners, on the other hand, also were protected by State Farm. “We enhanced our California loss-on-sale policy,” says Ingrum. If the buyout was less than what the employee paid for the home, the company covered a portion of that loss. Normally, with individual moves, the cap is $20,000. With the group moves, State Farm covered a portion of losses beyond $20,000 because of the weak returns on home sales in California.

What the Start Team didn’t expect, however, was that 73% of those wanting homes in Bakersfield wanted to build their dream house. That created a lot of builder-related issues. If the homes weren’t completed, HR assisted in finding temporary living arrangements and expected productivity to dip until the employees’ families were settled comfortably.

Even before building a new home, consider the trauma first-time transferees face when they have to put their home up for sale. Someone who may have had a home with a leaky basement may have lived with it for years. It doesn’t bother them. “But it’s a necessity to get the home in the right condition [before sale] and remediate any problems,” Sears’ Schleyer says. HR has the delicate responsibility of educating its new transferees along the way. “People who have never moved don’t understand what the big deal is.”

HR must also help employees decide whether they want to rent, purchase or build a new home. Owning one’s home or land always has been part of the American culture. However, as perceptions of the traditional home change, so will the lifestyle and needs of the relocatee. To assist employees in evaluating their options, HR should have them prepare a list of pros and cons for each option, says Beverly D. Roman, publisher of “Relocation… 2000.” “They need to know the existing real estate market, the available interest rates and the types of rental units in the area,” she says. People choose rentals for several reasons: They desire the flexibility that renting affords; they may have lost money on a recent home sale and choose not to repeat the mistake; they’re encouraged by employers to rent because it’s less hassle to move them; or they simply don’t want the responsibility of owning a home. Those desiring homes, on the other hand, usually choose that option for two main reasons: They prefer larger and more private living quarters or they want or need the tax advantages of home ownership, says Roman. In either case, HR relocation managers need to provide the information and resources so employees can make the right decisions.

Make community relations user-friendly.
HR also should cultivate ties with the local business and service agencies far in advance. Not just to assist the incoming transfers, but to help establish local businesses’ mutual interest in the move. For example, many transferees will arrive as couples and families who will interact with local businesses, service agencies, schools, churches and civic groups. These employees will become new residents and patrons of their new community. Then again, others in a small town may not welcome the additional burden of more children in their overcrowded classrooms and apartments. Therefore, the local media also should be approached by HR to inform the community about the merits of a company’s grand opening or expansion. For example, if a company is opening up a new facility, the community might be more likely to welcome the arrival if locals were to be recruited for some jobs. By ensuring an early buy-in, the adjustment for employee and community will be that much smoother. That’s why State Farm’s relocation was well-received by the city of Bakersfield. “We had meetings with builders, realtors and lenders to explain our benefits package, so they’d know what they’d be encountering with our transferees. At the same time, we explained our expectations in working with them—that they’d be fair and [professional] with our employees,” says D’Andrea. “[That being established] people in Bakersfield was excited.”

As HR laid the foundation between State Farm and the community, the next step was to alleviate the fears of prospective transferees. State Farm, therefore, set up a Welcome Center. Headed by D’Andrea, the center became a place to bring one’s questions, meet the various financial lenders, school representatives and other community service providers. The company provided a three-day visit to Bakersfield, which included food and accommodations. On the first day, the employees were given a presentation about relocation benefits, what they needed for a loan, how to begin the appraisal process for their current homes and what kind of administrative services for moving household goods would be available. Employees were then divided up into two groups—those that wanted to tour the residential areas in order to buy a home or those that wanted to go on a rental tour. On the second day, about 35 community representatives or organizations participated in an information fair. Here, the employees were able to seek answers to their specific questions about the Bakersfield community.

Had the employees lived out of state, the insurance company could also have used the Internet to introduce employees to the place of destination. The Greater Bakersfield Chamber of Commerce, for example, created a Web site (http:// www. bbol.org/) that presents its city’s mission and vision statements; calendar of Chamber events; an historical overview, demographics, weather information and employment statistics—with a list of the top employers of the community. Moreover, users can click to the Bakersfield Californian to read some of the newspaper articles online. By giving their employees several opportunities to learn about Bakersfield, the State Farm relocation went smoother than most because the employees’ anxieties were mitigated. “They know their lives are in an upheaval, and they’re hungry for information. Don’t leave employees on hold,” says Ingrum.

Involve your employees in the relocation process.
Imagine being told your entire organization is going to be moved. Not to another city, necessarily. Just to another spot within the same metropolitan area. That’s what happened to the 400-plus staff of the American Psychological Association (APA) in Washington, D.C. In January 1992, the APA relocated from three locations in the greater D.C. area to a newly constructed headquarters near downtown. Aside from the cost benefits of selling its property, the APA’s move brought everyone under one roof. “Even though we weren’t far apart, we could never have the staff together in one space. It also took awhile to get back and forth between buildings and there was duplication of office services,” says HR Director Judy Maggard.

Once the decision to move was made, Skip Calvert and another colleague spent an entire two years planning the relocation. “We talked to many other groups that had relocated, learning from their experiences,” says Calvert, director of operations and office services.

He and other APA managers also correctly anticipated the emotional trauma associated with the move. Being a psychological organization seemed to work to its advantage: The people factor remained in the forefront of executive decisions. For example, the staff became involved from the time the move was decided. In the summer of 1990, it reviewed current and future space needs. Department heads made lists of their staff members and of current files, workrooms and equipment. They verified and updated current information, and then projected their space needs in the new building. The interior design firm asked department heads which departments they interacted with the most. The APA Monitor, for example, had to be on the same floor as the executive offices because the newspaper staff frequently spoke to the top-level managers.

Another example of employee involvement was the Coordinated Committee for Administration and Management, or CCAM. This group developed the new policies and procedures and recommended them to the executive staff. It was composed of representatives from each of the eight directorates, including the director of human resources, says Calvert. “CCAM’s premise was that we needed input to the decision-making process from all segments of the organization,” he says.

APA maintained communication with its employees in a variety of ways: focus groups, a newsletter, a moving team and through counseling with the EAP. The focus groups in each division discussed their needs within workstation configurations. For example, they tested five lines of chairs and chose one manufacturer. “We never reached consensus, but active participation went a long way toward achieving acceptance of the final decision,” says Calvert. Because face-to-face communication wasn’t always possible, the APA published a newsletter to minimize rumors and quell anxieties. With more than 400 employees in three locations, little issues magnified instantly. The newsletter was created about 10 months before the move and was published every six weeks—and in the last few months every three weeks. Staff from all levels contributed articles to address all kinds of worries: whether the move would impact salaries; when computers would be shut down; and if the new location was safe.

Then six months before the relocation, the APA recognized the need to create the Move Committee to handle the logistics: creating file spaces, packing and marking boxes, and implementing CCAM decisions. In addition, a cross-departmental group composed of seven people from each building was formed to develop team spirit. “The committee brought together people who never had worked previously as a team,” says Calvert.

Anticipating employee anxieties, the APA enlisted the support of its EAP provider. The EAP executive director attended all of the Move Commitee’s meetings and functioned as a resource on stress. She also helped HR develop a staff questionnaire eliciting employee concerns about the move. The survey identified these issues: commuting time and costs, security, postal services, shopping and restaurants. When necessary, the EAP representative also met privately with the employees to discuss their concerns as well. The counselor also was on call immediately following the relocation. That went a long way toward achieving a smooth transition, says Calvert.

Planning and executing the move was successful overall. But the APA didn’t drop its relocation responsibilities after the move. “The biggest adjustment,” says Maggard, “was nothing official. It was the unofficial aspect. We were now all in one building together. We didn’t have the barriers we had before in communicating.” The APA staff now had immediate access to each other. And yet, when employees moved into their offices, they didn’t interact with those on other floors. HR had to encourage the staff to visit each other’s floors and hold “open houses” so individuals would begin to feel comfortable with the new working environment. “Now we have a lot of all-employee activities and brown-bag get-togethers. People are mixing more freely and getting to know each other,” says Maggard. Did being psychologists help the relocation? The APA thinks so. “We did a good job. In today’s economy, there’s mistrust, and people overreact. The main thing is to involve your staff as much as you can,” she says. By involving employees, HR managers can better understand their concerns and minimize problems.

Put yourself in the employees’ shoes.
When Chicago-based Sears, Roebuck and Co. centralized its merchandise replenishment function five years ago, the company relocated approximately 100 employees from Los Angeles, Dallas, Philadelphia and Atlanta to its headquarters in Illinois. It wasn’t easy because the “windy city” was different from the climate, culture and lifestyle of the other cities. Sears’ HR, therefore, had to anticipate how these disparities would influence employees’ transfer decisions.

“You have a more emotional transferee in these situations,” says Schleyer. One employee, she recalls, decided not to move from Dallas. The employee owned a farm and raised horses. “We don’t move livestock,” she says. He also was helping raise his grandchildren so that was another reason for declining the transfer.

There’s also the issue of cost of living and the disparity between employees’ home equities. Those from Los Angeles were able to buy better homes than those from Atlanta because of Los Angeles’ higher property values. “If you’re living in a $70,000 home, and you’re sitting next to someone living in a $250,000 home and both earn the same amount of money, it’s human nature [to be envious].” Few from Atlanta, she says, ended up making the move. “Once you live in Atlanta, you don’t want to leave. To go to Chicago with its intense winters—that’s a lot to adjust to, as well as the cost of living.”

But Schleyer doesn’t measure the success of a relocation by numbers only. She expects a small percentage of employees to bid farewell to their jobs because of family ties, lifestyle choices, cost of living and other personal reasons. What she uses as her gauge is something more qualitative—how those who actually move learn to adjust and become productive again in their new environment. She believes it begins with understanding: “I truly believe you need to experience a move to empathize. If you can walk in their [transferees’] shoes, you can better relate and assist them because you know where they’re at—because you’ve been there,” she says.

Centuries ago, discoveries were made by explorers the likes of Vasco da Gama and Ponce de Leon. These adventurers sailed the high seas and roamed the earth’s continents. Today, discoveries can occur in research laboratories, such as those of Amgen Inc., a global biotechnology firm based in Thousand Oaks, California.

Last fall, one of Amgen’s scientists, FuKuen Lin, received the 1995 Discoverers Award from Pharmaceutical Research and Manufacturers of America. PhRMA presents the award each year to scientists whose research and development of pharmaceuticals has improved the quality of life. Lin, a native of Taiwan, was the leader of the Amgen team that discovered and developed EPOGEN®—a drug that stimulates and regulates the production of red blood cells. Over the last six years, it has been used for the treatment of anemia associated with chronic renal failure among 320,000 kidney dialysis patients in the United States. Its approval by the FDA made it the first Amgen drug to reach the American market in 1989—eight years after the company was founded on the cusp of the biotechnology revolution.

Since its inception, Amgen has grown from a few hundred employees at its Thousand Oaks headquarters, to a company employing 3,900 people spanning the globe. Amgen discovers, develops, manufactures and markets human therapeutics based on advanced cellular and molecular biology. It’s annual revenue currently is $1.4 billion. This means that HR at the company not only faces the challenge of rapid growth, but also a growth that’s on a global scale.

Create a global mindset—one that transcends boundaries.
Just as Amgen’s Lin discovered a valuable therapeutic drug that will help people worldwide, Ed Garnett, the company’s vice president of human resources, discovered what it really means to become a global company. “It’s an organization with a mindset of the world without boundaries,” says Garnett.

Garnett has been with the company since 1986 and has served in several positions, from purchasing manager to director of sales and marketing. He has watched the company grow internationally. Soon after the company was founded, it opened an office in Boulder, Colorado. “It wasn’t global, but it was the first step moving out of one site,” he explains. The company selected the Boulder site because of its proximity to the University of Colorado, where scientists were conducting compatible biotechnology research. As the company got closer to launching its first product, Epogen, Amgen executives decided to establish a global presence. Amgen opened a facility in Cambridge, England; began clinical development in Australia and Canada; and also set up European headquarters in Lucerne, Switzerland.

As a science-driven organization, Amgen goes wherever the desired research is conducted. In the pharmaceutical and biotechnology industries, Garnett explains, you have to pursue clinical studies in the countries with the research and market potential. “Then the regulatory agencies will acknowledge your legitimacy,” he says. Amgen plans to penetrate Latin America and more countries in Asia and the Middle East because of these reasons. But the foundation for setting up shop overseas must be laid correctly.

Years ago, when Amgen first began its distribution abroad, it typically would send an American manager to scout a location. The individual would collect data and make an analysis based on a map. These days, the company relies on the expertise and knowledge of locals in the host country. When Amgen wanted to build a facility in the Netherlands, for example, it was advised by locals to build it closer to the main airport in Amsterdam—instead of locating it too close to the German border. “When you talk to people, you begin to understand the cultural [and political] issues there. So we decided to build it somewhere other than the original planned site,” says Garnett.

Another factor that determines where Amgen sets up shop is where it can form the best academic and medical collaborations. For example, Amgen has formed collaborations with Massachusetts Institute of Technology and the University of Toronto because of its parallel research in biotechnology. Amgen also has joint ventures with Johnson & Johnson to promote Epogen, and with Japan’s Kirin Brewery to distribute Amgen products in China.

As the company expanded internationally, Garnett says he started attending more professional HR conferences and reading more literature about globalization. Over the years, he’s learned that a global mindset transcends operating like a traditional multinational company. “If you’re a multinational, you’ll have an expatriate program. If you’re global, you’ll only provide one-way tickets,” he says.

Indeed, traditional multinational companies normally send Americans over-seas for two- to three-year stints. HR usually monitors and assists in the cycle: recruitment, training, relocation, compensation, acculturation and repatriation. But according to Cynthia Barnum, president and founder of Fairfield, Connecticut-based Global Management Development Services, “A global company is ready and able to do business anytime, anywhere, with anybody. You can’t just have Americans talking about what’s a global company. If you have a unicultural management group, you’re not even asking the right questions.”

Enhance your staffing with foreign nationals and host-country locals.
Amgen’s HR strategy reflects the multicultural management philosophy required for true globalization. Nowhere is that more clear than in its staffing strategy. The company expects to double its population within the next five years. To gain a competitive edge, the company’s recruitment strategy will continue to include hiring the top international scientists, medical information and marketing representatives, and global managers who are either natives from or who are familiar with Amgen’s worldwide locations. “As our foreign national population increases, we’re getting more global answers and different perspectives in the decisions we’re making,” says Garnett. Approximately 15% of Amgen’s employees in Thousand Oaks are foreign nationals, he says. With the exception of one worker in Asia, an American expatriate temporarily setting up operations, all of Amgen’s remaining foreign-based managers and executives—located in nine European countries—are locals or foreign nationals. “We’ll hire locals for management. But we send expats to help with the integration of processes and special projects,” says Garnett, who’s responsible for staffing and recruiting, staff relations, compensation, benefits, organizational development and training. “The expat in China is working hard at developing a successor—in a year or two he’ll be coming back.” Amgen, Garnett explains, has a very limited expat program—only six placements throughout the world. “Most employees are locals. We’ve been very successful in having local nationals run and operate our facilities.”

Ask Michael Bentley. As Amgen’s first director of HR in Europe (he’s based in Lucerne, Switzerland), the native of Great Britain is responsible for approximately 330 employees in 12 of the 15 European Community nations. Assisting him are 70 HR staff members, including 30 temps. His global department provides the full range of HR Services, such as recruitment, training and development, compensation and communication.

The largest category of employees, he says, are scientific representatives who visit hospitals and clinics—explaining the merits of Amgen therapeutics to physicians, pharmacists and biochemists. The next largest group of employees is white-collar professionals who monitor clinical trials. Almost without exception, all of the employees are local nationals, he says. There are currently only three Americans in Europe. One of them manages a project for a new distribution system. Another works in marketing; and the third provides financial liaison with Amgen’s American financial reporting and accounting executives.

Most European employees have been recruited from unsolicited applications. “We get a lot of people writing in. Amgen’s [public image] is very strong.” HR also works with local search consultants and [uses] advertisements, says Bentley.

What type of people does Amgen look for? Individuals who are global-minded. “[Global companies] need people who’ve experienced many different business environments,” he says. This requirement, he adds, goes beyond speaking the language and growing up in the country. “Someone who’s aware of different cultures can execute our objectives in any of the countries we operate in,” he says.

One example is Homa Yeganagi, a native of Iran who’s the global manager of International Professional Services—an educational and information services arm for 50 marketing and medical information managers located in Europe, Australia, Canada, Japan and China. Yeganagi, an Amgen employee since 1987, was recently promoted to her current position and is based in Thousand Oaks. She previously worked in clinical development for five and a half years and also served as one of Amgen’s project managers. Both she and Bentley contribute to Amgen’s success in an industry driven by genome economics and expanding global markets. These global managers are the keys to Amgen’s future—the types of leaders that HR must increasingly recruit and promote worldwide. “What’s needed are more interchanges of people across different countries and continents so they accumulate a wider variety of work experience,” says Bentley.

According to Barnum, people who are adept at global management often want to stay overseas anyway. Says she: “The global-minded want to keep roaming.” The problem is that their employers often don’t share the same vision. The traditional multinational company sends their expats abroad with the expectation they’ll return in a few years. Of course, part of the reason is financial. U.S. expats still are taxed while living abroad, so their assignments are costly in the long run. Also, moving people creates more HR problems in terms of compensation and benefits.

Says Bentley: “Each country has different requirements and different issues. [We have to consider] which benefits are the most attractive; and what perks can we offer?”

When recruiting new employees, Amgen offers a competitive European compensation package. “They want to be paid like Europeans, not Californians. Every country is different, and each has its own compensation practice,” he says. The challenge is to make sure Amgen keeps abreast of the going rates and offers a tax-effective package. For example, in the United Kingdom, the salaries are competitive for the UK market. But they’re not as attractive if compared with other European countries’ gross salaries. “So HR has to do a good selling job and talk about the quality of life, rather than the actual economics,” says Bentley. “The emphasis on any move should not be primarily on the financial side, but on the career and personal development opportunities [the transfer] offers.”

Provide your global staff with leadership training.
With its staffing strategy in place, Amgen’s HR plans to beef up the company’s executive development program. Garnett says it’s still in the early stages of evolution, but eventually the curriculum will include more information about different countries’ cultures and business practices. In addition, much of the training will encompass leadership skills, such as communication, performance appraisals and decision making.

Amgen recently held a meeting in California with 182 of its senior managers from all over the world. “It was the most remarkable meeting as far as communications go,” says Garnett. The purpose was to talk about this year’s challenges: How Amgen will grow into a multiproduct company and manage a work force of 8,000 within the next five years. “The real challenges aren’t only HR issues. These are senior management issues on how to conduct your day-to-day activities. If there’s any overriding theme, it’s change.”

The executive development program is one piece of the company’s continuous training. Another piece is teambuilding, especially for across-border teams. Very often, Amgen will launch a new marketing endeavor, a distribution project or a new financial accounting system. These operational teams may include medical directors, product managers and marketing managers. Depending on the project, the teams may meet one time or on a monthly basis. “Our teams cross countries, and in the case of product development, they may cross continents,” says Bentley.

HR trains the team leaders to manage team dynamics. Within the last few years, it has focused on communications skills. “[The training program is] very effective because it brings together different nationalities and different functions. That, in itself, adds value to the whole program—regardless of the content,” Bentley explains. Most training is conducted in English, although some courses have offered translations.

But when the 50 medical information and marketing managers have questions about the products or the competition, they require scientific research and educational material. That bridge of information is provided by Yeganagi in Thousand Oaks. When Yeganagi started working for Amgen in 1987, she was hired as a research assistant. Her earlier studies of neurophysiology in Australia already had led her toward the path of scientific discovery and global living. Even as a child in Iran, she would listen to Casey Kasem and Dick Clark over the radio. “I love the English language. I’ve studied it since I was 6, and I was very much at home with those [radio] programs.”

Language was never a problem. It was the details of American culture that baffled her. In Iran, for example, a party host would never expect his or her guests to bring a bottle of wine or a gift. In Australia and the United States, social customs are more reciprocal and informal. That informality, she says, translates into Amgen’s corporate culture. One of her most surprising discoveries was her colleagues’ openness and friendliness. “People get to know each other. There’s a sense of family,” she says.

And as manager of International Professional Services, Yeganagi is mindful of keeping Amgen’s global family informed and connected to its American-based siblings. For example, whenever the overseas medical information and marketing managers need product information, Yeganagi works with internal experts and outside consultants. Together, they create the booklets, slide shows or video material to explain Amgen’s products to a specific market. Sometimes the overseas requests require more research to answer questions or claims leveled by competitors and medical experts. “Our job is to do searches and find out what’s going on in the industry and [also] make sure that what I hear is important to them is communicated overseas. I’m basically their link,” she says.

On one occasion, an overseas representative analyzed the local European market and suggested a booklet that would explain how NEUPOGEN® works on neutrophil functions in different settings—with AIDS, chemotherapy and osteomyelitis. Neupogen is the company’s second key product that received FDA approval in 1991 and is the main product sold in Europe. Creating a new paradigm in cancer care, it helps reduce the incidence of infection in patients who receive chemotherapy. When used in conjunction with chemotherapy, Neupogen selectively stimulates the bone marrow to produce neutrophils—accelerating the return of a patient’s primary antibacterial defense system. In the future, other patients who may benefit from its use are patients with severe chronic neutropenia, AIDS, pneumonia and other infectious diseases. Yeganagi helped create a colorful and informative booklet in English that was distributed to physicians, pharmacists and others in the European medical community. “One of the major areas of our work is [creating] different products to support education.”

Although Yeganagi’s position is part of the marketing department, she benefits from Amgen’s HR department as well. Because she communicates with nearly 50 global employees all over the world, she has attended several training seminars: effective listening techniques; how to manage conflicts; performance appraisals; and cultural diversity.

Asked whether her background has given her an edge as a global manager, she replies: “I’ve been told it does. Differences don’t bother me. I can handle them in a way that doesn’t disempower people…. That’s really the bottom line of knowing how to work internationally,” she says.

Yeganagi has learned that another key to working internationally is being able to translate the company’s values and still respect the various cultures. Since its inception, Amgen has had a commitment to excellence in science. Says Gordon Binder, CEO: “We believe that to foster commitment, all staff members, regardless of position or departmental affiliation, should be as informed as possible about Amgen’s operations, including our fundamental technology.”

When Binder talks about technology, he’s not referring to computers. He’s referring to the advancements in cellular and molecular biology—the sciences that will provide lifesaving therapeutics and products to enhance our quality of life. That’s why the company’s values of openness, diversity, risk taking and scientific collaboration have led to its growing success abroad. But Binder would be the first to agree that Amgen still has a long way to go. Translating a company mission into a vision takes years.

In fact, global consultant Barnum says the biggest challenge for growing companies such as Amgen is to retain its global talent. What’s to keep managers like Bentley and Yeganagi or its other global employees from jumping ship?

“I think HR should drive the globalization efforts. If you don’t have top management who’ve lived in each other’s countries, you won’t know how to reward, recognize and make things happen,” says Barnum. “Just because something’s done one way in Thousand Oaks, doesn’t mean that’s how it’s done in France. Nationalism can be a glass ceiling.”