Author: Dawn Anfuso

Do you want to offer your employees better benefits, but don’t think you can afford it? Think again. Today, you really can’t afford not to take special care of your workers. If they don’t get the preventative health care they need, your company pays big when they get ill. If they don’t get time off for personal or family problems, their productivity suffers. And if they don’t gain satisfaction from their jobs, they leave—costing your company in turnover, recruitment and training.

This is a lesson the Calvert Group learned well. Not long ago, turnover at this Bethesda, Maryland-based mutual funds company was at 30%. Although this wasn’t exceedingly high for the industry, it didn’t sit well with Calvert executives. The turnover rate indicated that employees weren’t happy with the quality of their life at Calvert. And this was a company respected for its dedication to quality of life. Indeed, Calvert pioneered the concept of socially responsible investing as a way to ensure a better quality of life for all. The Calvert Social Investment Fund, for example, seeks to invest in companies that have good environmental practices, make safe products and treat their employees well. Conversely, it avoids investments in companies that pollute, make unsafe products or have poor labor relations.

“Our overall mission is to be a primary provider of asset management while at the same time improving the quality of life in society,” says Clifton “Stan” Sorrell, president and CEO of Calvert. “And for us, society means our employees, our shareholders and the community. Both our products and our people must be in sync.”

To bring these elements into alignment, the HR staff at Calvert began to look at its employees holistically and refocus the company’s benefits and HR policies accordingly. “There are a variety of different needs we all have as human beings,” says Evelyne Steward, vice president of human resources. “We all have survival needs, psychological needs, emotional needs and spiritual needs.”

Calvert thus structured its benefits and HR programs around these human needs. The company now addresses survival needs with compensation programs and health and wellness programs that cater to individual needs. It attempts to satisfy emotional needs by creating an environment of trust in which people are treated with respect and dignity. It provides growth and development initiatives to help employees fulfill psychological needs. And it provides opportunity to do meaningful work both within the office and in the community as a way for workers to achieve some spiritual satisfaction (see “Calvert Group Fulfills Workers’ Basic Needs,”).

Says Training Manager Bill Williams: “Although Calvert isn’t publicly traded, we strive to be the kind of organization that, if we were publicly traded, we would pass our socially responsible screens.”

The holistic approach has paid off for Calvert. Yes, its benefits package is immense, with some benefits carrying a hefty price tag. But the company also offers many benefits that cost it little or nothing, such as flextime and a dress-as-you-like policy. In return, Calvert gets increased loyalty, high production rates and low turnover—currently at approximately 5%—all of which translate into increased profitability. “If people have their needs taken care of, they can be more relaxed, and they can get more enjoyment out of their work,” Sorrell says. “And, more motivated people are going to be more productive people. More productive people are going to make the company a better organization and a more profitable organization.”

Still think you can’t afford to up the ante for your workers? Read on and see how Calvert does it. By the way, Calvert only employs approximately 150 employees, its human resources staff only numbers four and, as a privately owned small company, its revenues are a far cry from those of Fortune 500 firms.

Here’s what Calvert has to offer.
Calvert’s benefits plan isn’t static. It’s altered frequently to keep pace with the changing needs of its work force. Constant communications and occasional formal focus groups keep HR abreast of employee needs. Through these dialogues, Calvert has learned a key point: When it comes to benefits, one size doesn’t fit all. Although all workers have needs that fit into the four basic categories, these needs can vary dramatically. To an older worker nearing retirement, health care and retirement savings are the biggest concerns. For a young parent, child care and time off for emergencies top the list. And for a young, single worker, getting a college degree may be the most important need to fulfill.

That’s why Calvert offers flex-benefits under a package it calls Personal Choices. Benefits are grouped into one of three categories in the package: core benefits, optional benefits, and other benefits and services. The core benefits are such things as life insurance, sick leave, disability, holiday pay and a retirement savings plan. These are company-paid benefits that employees receive automatically upon date of hire.

Optional benefits include medical, dental and vision coverage, spending accounts for health and dependent care, additional life and disability coverages, and additional savings plans. Optional benefits have a cost for employees, but can be paid for with pre-tax payroll deductions and with ChoiceBucks—money Calvert gives employees each year for their benefits based on their age, years of employment and annual salary. The key for keeping costs down, says Steward, is letting employees choose what they need rather than spending money on things they don’t need.

Although the optional benefits, as the name implies, give employees flexibility as to how much medical or life insurance coverage they want and what type of policies suit their needs best (for example, there are five different health-care plans employees can choose from), it’s the benefits and services in the “other” category that give employees the greatest choices for tailor-making their plans.

Lumped under this category are such things as career planning, an EAP, transportation/parking benefits, tuition reimbursement, free weekly massages and a multitude of family-friendly services. Most of these are company paid. A look at the transportation/parking benefits will show how it isn’t a one-for-all proposition. For example, the company pays for employees’ parking. But because it encourages workers to use public transportation, it also covers the costs of bus and subway fares, even if these total more than the parking fees. And in addition, Calvert will reimburse employees who walk to work up to $120 per employment year for walking shoes, and will buy employees who bike to work a new bicycle with a maximum cost of $350, each year. “Even if someone asks for a new bicycle every year, it’s cheaper for us than $80 a month for parking,” says Steward.

Educational assistance and a physical-fitness reimbursement policy further illustrate the flexibility given to employees. Calvert will pay as much as $3,000 a year for classes employees take, be they for learning how to basket weave or for earning an advanced degree. “We want people to be committed to learning,” Steward says.

The same goes for physical fitness. Calvert reimburses workers up to $35 a month for health-club memberships, tennis courses or whatever. “One guy was a member of a rugby team, and would come in black and blue every Monday during rugby season,” says Judy Shober, an HR administrator. “I used to think, ‘this is a benefit? We’re helping this person get bruised.'” But, in accordance with the philosophy of matching benefits to lifestyle, the company doesn’t limit workers’ choices of sport, other than to stipulate that the activities must be organized.

Calvert’s mix of family-friendly policies is another example of its commitment to meeting its employees’ varying needs. It pays for up to 80% of the cost of adoption, up to $2,000 per adoption, or reimburses for out-of-pocket expenses beyond deductibles associated with alternative birthing arrangements, such as hiring a midwife. It offers a domestic partner health-care subsidy for homosexual employees who can’t receive the coverage in the regular health plans. And it offers flextime, job sharing and telecommuting for employees who have special needs.

It’s these types of benefits that have fostered Carmen Ieid’s loyalty to Calvert. Pregnant with twins four years ago, the sales and marketing administrator was instructed by her doctor not to commute for the month prior to her due date. So Calvert installed all the equipment she needed in her home so she could continue working for as long as she felt able to. After the birth, she needed more time off than she had anticipated to care for one of the newborn’s health problems. In total, she received eight paid weeks off (this included paternity leave since her husband doesn’t work at the company).

After returning to work, Ieid took advantage of the flextime benefit for quite a while, working four days a week and using Fridays to take the twins to doctor’s appointments and so forth. “That all meant so much to me,” says Ieid.

For Shober in HR, who has a disabled daughter, a flexible schedule is what enabled her to start her career with Calvert. And that was 13 years ago, long before flextime was part of the benefits vocabulary. “I’m living proof [of the effect on the company] the benefits here have,” Shober says. “Calvert worked around my schedule, and I’m still here all this time later.” Shober, with Steward, has been a key player in designing the benefits program.

Calvert cultivates careers and healthy communities.
Having loyal employees such as Ieid and Shober certainly has its advantages. But it also creates problems in a small company—especially one that strives to fulfill workers’ psychological needs by offering employees challenging careers. “Some people get to a point at which they feel there’s no-where else for them to go,” Steward says.

Indeed, survey information Calvert gathered a few years back indicated that other than leaving because of personal reasons, such as relocating or going back to school, the single biggest reason why people left was because they felt they’d reached their maximum potential at Calvert, and sought more opportunity.

Calvert has a strong promote-from-within policy and posts all open positions internally before recruiting from the outside. And to prepare people for filling these positions, Calvert offers support. It encourages workers to create their own personal development plans, and some managers actually require their employees to set career goals that they review with the employee periodically. Workers who seek it can receive career counseling from human resources. “We do a lot of one-on-one, helping employees focus on where they want to go and what they need to do to get there,” Shober says.

And workers have many resources available to them. Williams maintains a training center that’s stocked with books and videotapes on subjects ranging from successful investment strategies to how to write an effective, attention-getting resume. Workers can check these items out on their honor. The center also provides computers for computer-based training courses on such programs as Microsoft Word or Lotus 1-2-3.

Other resources available include assessment tools and informational interviews. Occasionally, the company also brings in career counselors who conduct training seminars on how to determine an employee’s best career route.

Despite all of this, Shober says it’s inevitable in a small company for people to outgrow it. “As people grow, their needs change,” she says. “We hope there’s something at Calvert they can grow into. But if they grow out of Calvert, that’s OK too, because we feel we’ve given them a good, strong background to take with them.”

A little bit of turnover is good anyway—it enables companies to bring in new blood. For Calvert, these new hires have to be more than warm bodies. Not only must they meet job requirements, they need to be people who “really want to make a difference and who can be committed to our quality of life mission and our social responsibility,” Shober says.

When screening applicants, Shober listens carefully to candidates’ responses and questions to determine whether they’re good fits. And although having done community service isn’t a prerequisite for working at Calvert, people who have been involved with their community tend to fit best with the Calvert culture.

After all, community involvement is a big part of Calvert’s culture. The company gives all employees a total of 12 days off a year for community service. This could be anything from helping out at a child’s school, to serving lunches at a homeless shelter. Williams, for example, tutors once a week at an English as a Second Language class at a local high school. Workers don’t need to get their projects approved, nor do they need to provide proof of what they do.

In addition, the company sponsors numerous community involvement activities throughout the year employees can volunteer for, many of which don’t even count against their 12 days. This year, for example, the company signed on with Food and Friends, a program that has workers delivering food to homebound HIV and AIDS patients every Friday.

Company-sponsored activities run the gamut. Calvert workers have put on dances for senior citizens, done home repairs for downtrodden people and planted trees in community areas. They’ve participated in the homeless walk, the AIDS walk and the Cystic Fibrosis sports challenge. They’ve given blood and given food.

Calvert even enlists employees’ families in its community projects. Several years ago it created a Kid’s Day in lieu of Take Your Daughters to Work day (it actually has two Kid’s Days a year now). While the mornings of Kid’s Days are spent at the office learning about what Mom and Dad do, Calvert takes the kids out in the afternoon, along with children from the local Head Start program, to do community work. One time the children made crafts and then gave them to senior citizens. Another time they picked fruits and vegetables from an orchard and donated them to a food kitchen. “The kids love it,” Steward says. “It’s fun, but it’s also good for the kids to be able to see what’s happening and get a feel for the community.”

Kids are actually a big part of Calvert’s community outreach. The company brings students in from a local school once a year for a Career Awareness day. The students spend the morning taking a tour and talking with Calvert people about the mutual funds business. “Stan [Sorrell] has spent many lunchtimes being quizzed by the students,” Shober says. (“How much money do you make?” is usually the kids’ first question.) After lunch, the students partner with a mentor who works in whatever part of the company they’re most interested in, be it the computer area, the advertising business or HR.

Calvert also sponsors numerous internship programs as part of its outreach activities. It works with a program called Training Inc., which puts displaced people trying to get back into the workplace through a 26-week program before placing them in internships. It also partners with a children’s hospital’s Employment Adolescent Readiness Center. One participant from this program has been with Calvert for three years as a temporary employee. A gunshot victim who must use a wheelchair, the young man came to Calvert just out of high school with little vision for his future. He took an interest in computers, got some training in the computer operations area of Calvert, and now has decided to go into the computer science field.

Calvert’s investment in its people yields high returns.
With these types of programs, Calvert has become an employer of choice. Shober says she has noticed a difference in the resumes she has received the last few years. “The resumes I used to get basically were, ‘I want a job,'” she says. “Now, they say, ‘I want to work for Calvert.'” And, judging by the low turnover rate, employees who already work for Calvert don’t want to leave.

Obviously, the company didn’t get here overnight. Creating a culture of caring takes time in assessments, program design and implementation. It also takes money. But with careful planning and with attention to employees’ needs, a company can get the maximum bang for its buck. For example, although Calvert doesn’t have any quantitative comparisons between costs of benefits and savings incurred, the company claims attention to workers’ survival and emotional needs has kept sick days down, health-care expenses low and stress levels to a minimum. And career and personal development strategies designed to address psychological and spiritual needs have strengthened morale and lowered turnover rates, reducing recruitment and training costs.

A recent survey from New York City-based Towers Perrin indicates initiatives designed to help employees balance their work and personal lives indeed provide a solid return on what are, in most cases, relatively modest investments. According to the survey, companies with a high commitment to work-life initiatives believe they’re better positioned to compete effectively in today’s market environment.

In addition, the survey reveals more and more companies are paying attention to programs designed to help keep employees mentally and physically “fit,” such as tuition reimbursement for nonbusiness-related courses and subsidized fitness centers. “Employers recognize that easing work-personal life conflicts offers significant gains for both them and employees,” says Pat Milligan, a Towers Perrin principal and HR strategy consultant. “The level of appreciation of these programs among employees is very high, as are the potential benefits for the employer.”

Says Sorrell: “Yes, we have a bottom line. But there’s another line that deals with attitude, commitment and loyalty.” It’s that line that too often gets ignored. But as Calvert has proven, there’s a definite link between it and the bottom dollar.

It also has shown that there’s a link between a company’s culture and the products it sells. As Williams says, Calvert strives to be a company that would pass its own stringent screens for its socially responsible investments. As such, it gains credibility. Comments Bob Dunn, president and CEO of Business for Social Responsibility—a three-year old Washington D.C.-based organization of companies established by Ben Cohan of Ben & Jerry’s Homemade Inc. and others—”It’s certainly gratifying that a company formed to assess the policies of other businesses is being recognized for its own practices.”

Still think you can afford to neglect workers’ cries for more? The cost of improving quality of life may in fact be much less than the cost of not.

Imagine trying to create a family-friendly work environment without knowing anything about your work force other than that you employ both men and women. Chances are, you’d write the company’s policies around this issue from your own perspective, with perhaps some input from trusted sources. And, chances are, because you don’t know the perspectives of your workers who may be parents, who may be gay or lesbian and in nontraditional families, or who may have responsibility for parents or disabled siblings, you’d end up making assumptions, perpetuating stereotypes and neglecting the needs of many of your workers.

Unfortunately, this is precisely what has been happening at the country’s newspapers. A homogenous group of reporters write the news about the communities in which they live mainly from their perspectives, with input from trusted sources. Although these reporters may know the demographics of the areas about which they write—such as the percentage of minorities who live there, the average family sizes and so forth—they may know little about the perspectives of people within these groups. The news, therefore, often perpetuates stereotypes, scratches only the surface of a story and inadvertently neglects the needs of, and stories of interest to, many readers.

How could this happen? Easy. The demographics of the nation’s newsrooms simply haven’t changed as rapidly or dramatically as have the country’s. Just look at the figures. Minorities now make up approximately 24% of the total U.S. population, according to the U.S. Bureau of the Census. Yet, according to a survey by the American Society of Newspaper Editors (ASNE), minority representation in the nation’s newsrooms is only 10.91%. In fact, the ASNE calculates that nearly 46% of the country’s daily papers don’t employ any minorities at all. The question of whether this failing in employee diversity stems from newspaper companies dropping the ball in the past on recruiting from a diverse set of sources, or from the fact that the job of reporter traditionally has attracted mainly Anglos, is under debate. What’s certain, however, is that things need to change.

And, fortunately, they are changing. The ASNE reports that although minority representation in the newsrooms is behind the population at large, it has nearly doubled in the last 10 years. This can be credited to efforts, mainly by the nation’s larger papers, to make a change—not just in numbers but also in how those numbers affect their products.

One company recognized as an industry leader in this area is The Seattle Times Co. Last year, for example, the National Association of Minority Media Executives awarded The Seattle Times Co.’s Publisher and CEO Frank A. Blethen its Distinguished Diversity Award for Lifetime Achievement. This award recognized the family-owned business’s efforts at embracing “pluralism,” defined, in part, by The Times Co. as “the existence and preservation of groups within a society distinctive in ethnic origin, cultural patterns, religion or the like.”

The Times Co.’s commitment to this philosophy shows up in a work force currently comprising 21% people of color and 33% women. The makeup in the newsroom is similar, with 21% of the reporters and editors being people of color and 44% of them being women—placing The Times in the nation’s top 20 large newspapers (with circulations greater than 100,000) in terms of minority representation.

But even more than that, such initiatives as diversity training, a companywide diversity newsletter and a diversity council have ingrained pluralism into the company culture. And specific newsroom activities, such as minority intern programs, the creation of a diversity reporter and coach, and a newsroom diversity council, ensure that not only the company, but also its products, represent the community which it serves.

Diversity is a business goal for The Seattle Times Co.
The Seattle Times Co.’s diversity efforts began at the top with Blethen. In a statement to The Times Co.’s work force back in 1992, Blethen said: “The Times recognizes that its work force and the communities and customers it serves are changing. Because of these changes, achieving and managing workplace diversity is fundamental to maintaining our three core values: Staying independent and privately owned; maximizing journalistic quality; and maximizing employee workplace satisfaction.”

A lofty commitment, but one backed up by specific objectives:

• To communicate the company’s workplace diversity commitment to all employees, with emphasis on why it’s important to The Times Co. and what it means to the company
• To establish departmental employment/development goals, timetables and action plans to ensure the work force, at all levels, reflects the diversity of the communities the paper serves
• To develop companywide assessment and evaluation systems to monitor progress throughout the organization toward attainment/retention of a diverse work force and a work environment that supports pluralism
• To implement a cycle and procedure for reviewing with department managers and interested employees results from the previous year
• To develop ongoing communications systems to create and reinforce a high level of employee awareness of the importance of diversity to The Times Co.

These objectives have manifested in a variety of ways, beginning with the distribution of Blethen’s statement of purpose and diversity definitions to employees companywide. These things have then been reinforced in diversity training programs. Ten times a year, for example, the company holds a two-day training session called Exploration into Diversity. The training is mandatory for managers and voluntary for all other employees. It’s the only training available to everybody in the company.

The company purposely doesn’t engineer the makeup of the training groups, so, although key issues will be covered, conversations are dictated by the diversity mix at each session. This includes not only representation of both genders and different ethnic groups but also a mix of manager/non-manager personnel, union and nonunion workers, people from various shifts and people of varying ages.

The training program begins by repeating the philosophy statement and going over definitions, such as diversity, multiculturalism and pluralism. “We make sure everybody has a common understanding of what the terms are,” says Diversity Manager Phyllis Mayo, who facilitates the training sessions with a consultant. Then, the training participants explore why they think The Seattle Times Co. is focusing on diversity issues. “A range of things come out, all of which are true to some degree,” Mayo says. These include statements such as: “Because it’s the right thing to do;” “Because it’s the law;” “Because of the changing demographics;” and “Because if people can work better together, there will be better productivity.”

Once the group has established reasons why diversity awareness is important, it identifies obstacles to creating a pluralistic environment. Workers talk about their past experiences, about stereotyping, about some people’s prejudices and about how some people just don’t care.

The workshop’s next step is to focus on what can be done to overcome those obstacles. What can individuals do? What should managers do? What needs to be done companywide? Then Mayo helps the participants learn skills for staying aware of stereotyping and for looking at situations individually. “One of the things we talk about is avoiding knee jerk reactions,” Mayo says. To help people remember this, Mayo distributes little business card sized pamphlets depicting a knee jerk within a red “not” circle. “These serve as visual reminders people can look at frequently.”

So far, about 400 people have graduated from the workshop, and there’s a waiting list for future sessions. “People go back into their work areas and say, ‘you know, it wasn’t bad, it was pretty good, you ought to check it out,'” Mayo says.

Supplemental projects ensure training takes hold.
In addition to the two-day workshop, the company offers two-hour follow-up sessions every two months. The agenda for these vary: sometimes they’re training sessions, sometimes they highlight speakers. For example, recently, a graduate of the Explorations in Diversity workshop solicited a survivor of the holocaust who the paper had written about to speak at a follow-up session.

To supplement the training, the company publishes a “Diversity Works” newsletter six times a year. The publication, edited by Mayo and another HR person, reinforces Blethen’s message and the diversity definitions. It also lists upcoming training dates, offers games and puzzles that focus on diversity issues, and reproduces a diversity calender created by Diversity Tool Box Inc., which includes such highlights as the beginning of the Islamic New Year on June 21 and the anniversary of the Americans with Disabilities Act on July 26.

It was through the newsletter that the company announced a survey it would be doing to evaluate where the company is in terms of diversity and how far it still needs to go. The survey is based on research by Bailey Jackson and Evangelina Holvino, who have identified three levels of evolution that organizations experience: monocultural, nondiscriminatory and multicultural. Within these levels, the researchers have identified stages they call the White Male Club, EEO Compliance, Affirmative Action, Redefining and Multicultural.

The survey, being taken by all employees anonymously, will be used as a baseline for planning. At press time, Mayo hadn’t yet received all responses, but she did have some conclusions based on those she had received. Responses evaluate work units, which, depending on work distribution, can be full departments or units within departments (larger departments have as many as 30 work units).

So far, only one of the company’s work units has reached the level of multiculturalism. But, there’s now only one unit identified as still in the White Male Club or single-standard stage. “The bulk of the units are somewhere in the Affirmative Action stage, but we’ve also got pockets in the EEO Compliance area and pockets in the Redefining stage,” Mayo says. “Even within the same work units, some practices would be at the White Male Club end, and some practices would be considered Redefining and Multicultural.”

The survey has sparked some controversy within the company. One employee, unhappy with the term White Male Club, called a local radio talk show and generated a heated conversation that, according to the “Diversity Works” newsletter, “lambasted this company for its bigoted stand on diversity.” Another employee responded by writing a letter to “Diversity Works” that states, in part, “I don’t believe for one minute that our (The Seattle Times Co.’s) stand on diversity is bigoted. I do believe discussion and open dialogue

on diversity leads to self-examination, deep thought and growth. It certainly has in my case.”

Which is exactly the point, says Mayo. “I was thrilled with both comments,” she adds. “The most valuable piece of the Stages of Diversity survey is to establish a common frame of reference from which we can start talking about what it’s like to work here.”

Indeed, though the company has taken responsibility for grooming the culture of diversity by training employees and raising their awareness, it expects everyone in the firm to carry it out. “Our diversity efforts definitely are two-pronged: top down as well as bottom up,” says Mayo. “For example, the Explorations in Diversity workshop is a top-down mandate designed to put strategy into place, educate people, expose people to the concept of diversity and get them thinking about it.” But individual initiative must keep the ball rolling.

That’s precisely why the company recently created the Diversity Council, a group of 13 volunteers from throughout the company whose role it is to enhance communications and keep the issue of diversity alive among the people at The Times Co. Although newly formed, the plan is for the council to help identify information to go into the “Diversity Works” newsletter and to create projects that get workers involved with diversity issues. For example, the council’s current—and first—project is putting together banners that the work force will decorate. “We’re asking employees to contribute anything to these banners that represents for them one of their best moments at The Times,” says Mayo, who’s the council’s only permanent member. Items for the banners may be written messages, photos, drawings or pretty much anything the employee comes up with. The only criteria is that the items aren’t disrespectful and don’t hurt anyone. The Times Co. will unveil the banners in August—at its 100th birthday celebration.

Diversity awareness has sparked grass-roots innovations.
Employee participation in moving the company toward a pluralistic environment doesn’t stop with special projects, however. The company has pushed the responsibility for diversity planning down throughout the work force by instituting a formal diversity planning process for departments. “Instead of being a process whereby the managers go off and make a plan the way affirmative action planning used to happen, we take it to the grass-roots and have people look at what it’s like to work here and what things we can improve,” Mayo says. “Our feeling is that grass-roots really works. It hooks into what people are most interested in and what they’re willing to do first.”

According to Jim Schafer, VP industrial relations, the plans may be specific to hiring objectives, or they may be as general as educational objectives. “It requires each major department to set out what it intends to accomplish in terms of furthering our transition from diversity to pluralism,” he says. “There’s a whole range of things that might be taken into consideration, but they’re specific to where the departments are.”

Some departments, for example, focus primarily on mentoring new and existing employees. Others create career-development strategies that include having people from different work areas come to regular meetings and talk about skills needed for their jobs, about the department’s direction, and about any open positions.

Many departments create their own newsletters, which they use to talk about diversity issues. Sometimes they highlight individual employees, let them talk about what it was like growing up in a Jamaican family or living in an ethnic neighborhood. “Whatever they’re willing to do first is a good step,” Mayo says. “We don’t evaluate whether one person or department is doing less than another person or department. Any first step is wonderful because then you just take another step.”

Some of those first steps include participating in the speakers’ bureau and talking to school kids about diversity. For others, whose jobs may not permit them to take time away, first steps may be engaging in pen-pal programs with children of ethnicities different than their own. “We added kids to our strategy because we realized that most people like kids, no matter what kinds of kids they are,” Mayo says. “So some people have gotten through their stereotypes by working with children rather than adults.”

Some employees have gone beyond what’s expected of them and started their own grass-roots initiatives. Mayo says much of what the company does started at a grass-roots level. For example, two early graduates of the Explorations in Diversity workshop created a Diversity of Thought library at the company’s headquarters. Struck by the idea of having an onsite library that contained materials focused on diversity, the two approached Mayo with it. Although Mayo believed it was a marvelous idea, she informed the workers that there wasn’t a budget to do it as a corporate initiative. So the workers went to the art department and made up some posters asking employees to donate books that reflect their interest. Today, the library contains approximately 300 books. Four or five employees volunteer as librarians, keeping a list of available books on E-mail and sending requested books by interoffice mail to employees at other locations.

Another group of employees expressed their belief that it’s important for people to be able to meditate for religious reasons. So, once a week, the company makes space available for just this purpose. “We have a practice that says we’ll give any group, as long as it isn’t hurtful to others, time and meeting space,” Mayo says. “They just need to make sure that whatever they’re doing isn’t interfering with their jobs.”

Other groups formed at The Times Co. include the GALA group, which stands for the Gay And Lesbian Association, and a child-care committee known as Family Connections: A Seattle Times Committee for the Enhancement of Family Life.

Diversity awareness has boosted The Times Co.’s employee retention and reputation.
Being able to form groups according to their interests has been an important employment factor to many people at The Times Co. “We have folks who seem very willing to give the organization an opportunity to change, to make mistakes, because they have a sense of acceptance, a sense of belonging,” Schafer says. Indeed, all of the diversity activities have contributed to turnover lower than the industry average. They’ve also earned The Seattle Times Co. a reputation as a great place to work.

But, these activities have also created unique challenges for the company. “It’s kind of a double-edged sword,” says Mayo. “When you raise people’s consciousness about diversity and you say that it’s one of your values, perfection is a tough status to achieve, and there’s always something that someone can point to as a deficiency.” Recently, for example, three minority reporters left the company for varying reasons. “The cry was, ‘look at all of these people of color leaving. There must be problems in the newsroom,'” Mayo says. “Some Caucasian reporters left also, but no one was counting and saying, ‘The whites are fleeing.'” She adds that this reaction is OK, because it means people are paying attention.

The Seattle Times Co. hopes to keep people paying attention by continuing to add people of color to its staff, as well as help improve the number of people of color in the industry as a whole. Part of the strategy for doing this is through a number of intern programs specifically for minority students. One such program provides juniors and seniors in high school the opportunity to produce their own newspaper, called the Urban Journal. “It’s specifically targeted for students of color because there are so few people of color in the newsrooms,” says Mayo. “We’ve been criticized for that, and some teachers won’t support it. But we’ve resisted opening it up to all students because white male students have lots of other avenues for getting into this industry, and do get in.”

However, The Times does have several other internship programs open to students of all ethnicities, including some that give journalism students repeated summer experiences. Many, though not all, of the students from all the internship programs stay on at The Times. Those who do, especially those from the minority programs, help maintain the newsroom’s diversity balance. But, as has been demonstrated throughout the organization, numbers alone aren’t enough. It’s by talking about diversity issues, making diversity a priority, and taking an active role in ensuring that pluralism takes place that positive results concerning diversity occur.

Attention to the human issue of diversity affects the company’s product.
Because the idea of diversity has permeated the company culture so profoundly, it has begun to affect the products that the company produces. To be exact, it affects the news.

In a statement carried in “Diversity Works,” Blethen confirms the relationship between the company’s diverseness and the product it sells: “The world is rapidly changing around us. Both our advertising customers and, more importantly, our readers, have become more diverse in ethnicity, lifestyle and family definition. If we expect to maintain our circulation readership and our position as the area’s leading information provider, our news and editorial content must reflect the diversity of our readers. That will happen only if our newsroom reflects that diversity.”

Adds Schafer: “This is a bit of a unique business in the sense that we’re providing information to a lot of subscribers in this community, and for that information to be fair, appropriate and objective, it should be reported by essentially the same kind of population that’s reading it.”

Certainly, having a newsroom composed of 21% people of color and 44% women is reflective of the readership, at least in terms of numbers. In fact, according to the latest U.S. Bureau of the Census numbers, tallied in 1990, people of color represent just more than 13% of the Puget Sound region’s population.

Though the newspaper feels it has gained positive results from its heightened newsroom diversity, this is more than just a numbers game. Several initiatives specific to the newsroom are aimed at guaranteeing those positive results are reflected in the newspaper. One such initiative is the creation of a Diversity Committee. Says Schafer, the focus of the committee, which was formed approximately seven years ago, is both on content and on education. Committee members—reporters, editors and photographers—meet bi-weekly to evaluate the paper’s content and educate the rest of the newsroom staff about diversity issues. For example, the committee will lead a discussion as to whether a topic was handled appropriately, with the proper sensitivity and without being offensive. “It’s primarily focused on the way in which information is gathered and communicated, rather than things like employment policies,” Schafer says.

Alex McCloud, managing editor of The Times, says the committee has provided a constant forum for discussing what it is the reporters, editors and photographers are contributing to the newspaper, and also how diversity is effecting the newsroom itself. “We’ve created an environment in which people are free to express their opinions, even when they aren’t shared by anybody else or only by a few others,” McCloud says. “And, by having the committee, the watchdog responsibility doesn’t fall to one or two people.”

The newsroom further checks itself by performing periodic content audits of photographs. Instituted in 1988, the content audit evaluates the representation of women and people of color in The Times’ photographs to see if the representation “reflects accurately their participation in the world around us,” McCloud says.

By doing the audits, The Times’ newsroom staff has significantly improved the content of its photos during the last seven years. “Early on, the representation of people of color in photographs was less than our population within the community,” Schafer says. “And the photos of people of color were disproportionately associated with negative stories—articles about financial conditions and crime, for example.” But today, McCloud says, women and ethnic minorities are just as likely to be portrayed in positive or neutral contexts as are white males. “It’s a change that’s been recognized in the community,” he says.

How can he be sure? Well, the editorial staff periodically ventures out into minority communities and solicits feedback about how the newspaper covers them. The company also brings people from these communities to its offices and asks them to critique the paper and discuss with the staff their opinions on how issues important to them have been portrayed through words and pictures.

Gloria Trinidad, a multicultural education specialist with the city of Seattle’s child-care and Head Start programs, reviewed something like 75 Times articles for a special outreach program designed to help teachers communicate diversity (see “The Times Puts Diversity Talks on Common Ground”). Discussions within her group helped the newspaper staff better understand how a news item can perpetuate stereotypes simply by not exploring deeply enough for the human elements. For example, the group commented that articles intended to be positive—such as ones about women who work their way off of welfare—could be richer and present a fairer view if they were more personal and focused on the situation’s human rather than its economic elements.

Reporters learn to recognize diversity angles to news stories.
These are things that Aly Colón knows well. As diversity reporter and coach for The Seattle Times, it’s his job to seek these angles out. When a murderous shooting occurred at a local Vietnamese nightclub, for example, Colon reported on a story behind the story. While news reporters simply reported the facts of the incident, Colón wrote an exposé on the clash of culture and crime—reporting on the challenges police had matching up statements because half of the nightclub patrons had the same last name; the difficulties involved with the language barriers; and the problems presented by the Vietnamese’s distrust of authority brought with them from their home country.

In his year and a half in this job, Colón has focused his reporting on articles that, like this one, portray the intersection of where different people meet and how they react to that intersection—how it affects them, what it means to them, how they feel about it. “Everybody on the staff is tasked with trying to be more inclusive in their reporting in terms of diversity, but my job is to look at diversity in as diverse a way as possible,” he says. For another article, for example, he visited a new immigrants’ class for secondary school teachers at a local university and reported on what the teachers were learning about what being a new immigrant means to people, what kind of reactions the immigrants were getting from people and how immigrants are adjusting their cultures to fit with that of the United States.

For another article—which Colón titled “Speechless in Seattle”—the reporter, who is a native of Puerto Rico, walked around the traditional tourist sights of Seattle speaking only in Spanish. He then chronicled how people reacted to him and how they dealt with the difference. “What I’m trying to do is encourage a more diverse approach to the way that we look at the community around us,” Colón says.

He does this through his own stories, as well as through his role as diversity coach. This is a unique position. Colón says The Times doesn’t know of any other newspaper in the country that has a person on staff who is a combination diversity reporter and coach. The position came out of Diversity Committee discussions about the need for one person to be sort of the sounding board on diversity issues. But, says Colón, who got the position because of experience as both a writer and editor and because he’s lived in and traveled most of the world: “I’m not a PC police or a guru in the sense of what I say goes. And, there’s no requirement on my part to go after people, and no requirement that says they have to come to me. But I’m there as a resource for people who are trying to branch out into a variety of different areas, and who want to be able to turn to somebody who’s attuned to the different groups of people out there.”

In his role as coach, he advises reporters about diversity angles that stories within their beat can take, and provides them resources that may help them expand their perspectives. “People have a tendency to go where they’re familiar, and that includes turning to a regular bevy of sources,” Colón says.

Often writers and editors will seek Colón’s opinion on whether the depiction of a particular group of people is fair and accurate. Sometimes, these discussions happen after the fact, when readers contact the paper with concerns over a particular portrayal. “I’ll talk with the reporters and editors about how that came about, what the reasoning was behind that approach, and help everyone involved understand the different points of view,” Colón says.

Whether these discussions happen before or after an article is written, the point is to get people thinking and talking about these issues. Another device that helps keep the idea of diversity in the reporters’ and editors’ minds is a diversity checklist. The checklist includes such questions as: “Have I sought diverse sources for this story?”; and “Am I furthering stereotypes as I seek diversity?”

“It’s one of those tangible reminders to people, as they approach the work they do, to get outside their boxes and recognize there are diverse sources. To do our job well, we ought to think about these things in the same way we’ve always thought about who, what, when, where and why,” says Managing Editor McCloud.

The Diversity Checklist, like so many other innovations at The Times, was created by a group of workers. It has proven a useful tool, and even has been reproduced in a publication by the ASNE on how to conduct newspaper content audits.

Says McCloud: “The most important thing is to have people thinking and talking about diversity. That’s what our whole emphasis has been on: To have a diverse group of people who respect one another, who will listen to one another, and who will, in the end, produce a better product.”

According to Schafer, the product has changed dramatically during the last decade, due in part to the diversity efforts. The paper has an excellent reputation in the industry and among newspaper readers. And its circulation has been steadily increasing. As of March, it was at 234,000.

The Seattle Times Co.—proof positive that human issues affect the bottom line.

Customers of L.L. Bean know that they’re the boss. They can order hunting equipment 24-hours a day. They can request fishing poles to arrive, via Federal Express, within two days — at no extra charge. And they can return broken car racks after years of use.

Indeed, the Maine-based mail-order company has a reputation for superior customer service. It’s a reputation that dates back to 1912 when founder Leon Leonwood Bean made good on nearly an entire shipment of hunting shoes that came back to him unstitched.

It was this reputation that prompted Leon Gorman, grandson of Bean and current chairman of L.L. Bean, to apply for the Malcolm Baldrige National Quality Award in the service category in 1988, the first year out. He proclaimed that despite the outcome, Bean “will be under a great deal of pressure to renew and enhance our quality improvement efforts to make sure we live up to our reputation.” The organization came close to winning — it was one of two companies that qualified for a site visit — but no award was given that year in the service category.

Bean used feedback from the Baldrige committee to carry out Gorman’s desire to renew and enhance the company’s quality improvement efforts. It embarked on a total quality management process that would lead it first through changes in people management and later through process revisal. HR at the company not only has managed the TQM process, but the changes that have gone along with it. In fact, HR has become the Total Quality in Human Resources department. And although the company already has experienced increased profitability, improved return on sales and return on equity, it’s only halfway through the process.

Feedback helps Bean redefine total quality.
The Baldrige experience prompted Bean to take a hard look at its culture as it relates to quality. The award committee had been impressed with Bean’s customer-service levels, citing them as “world class.” However, it told the company that it wasn’t getting customer satisfaction in a productive way. It had been satisfying customers through a guarantee-based approach to quality. Indeed, “We really pioneered the no-questions-asked guarantee,” says Robert Peixotto, vice president, total quality and human resources.

The Baldrige committee told Bean that, rather than relying on its guarantee, it should be ensuring that things happen right the first time. For example, legend has it that a customer-service representative in Freeport once strapped a canoe on his car and drove it to a customer in New York who had ordered one for a hunting trip he was leaving on the next morning. Although this certainly was a demonstration of exemplary customer service, it also served as a sign that something was wrong. Had the canoe arrived in time in the first place, there would have been no need for heroics.

The other advice that the Baldrige committee gave to Bean was that the company needed to have more employee involvement. This came as a surprise. “We had for a long time prided ourselves on employee involvement, doing attitude surveys and climate studies,” says Peixotto. “We did quality circles back 10 years ago when they first came out.” Certainly, the employee who delivered the canoe 300 miles away was involved.

But Peixotto says Bean learned that these things constituted only token involvement. “We didn’t understand the whole concept, letting people really take responsibility for quality in their work,” he says. “We had been a fairly traditional hierarchical organization in which decision making occurred at a high level.”

To truly live up to its reputation as a high-quality service organization, then, Bean needed to embrace the concepts outlined by the Baldrige committee and put them into practice. Taking the committee’s two suggestions for improvement, the company developed a definition for the total quality process it would pursue: “Total quality involves managing an enterprise to maximize customer satisfaction in the most efficient and effective way possible by totally involving people in improving the way work is done.” In short, Bean’s upper management looked at total quality as the way you involve people and the way that you improve processes.

Because it’s a service organization, the company determined that, after training the work force on general TQ concepts, it must begin making changes by focusing on the employee involvement piece. “Quality for us doesn’t happen on a production line, but every time you call up one of our phone centers and talk to a customer representative,” says Peixotto. “That interaction is where quality really happens for Bean.”

The goal of HR during this process would be to change the infrastructure of the company to support that customer interaction. Bean had to ensure that the frontline, customer-contact employees were knowledgeable and empowered, and that they were well supported by management. In fact, because it would be the managers who would empower their employees, HR concentrated on changing their role in the organization first.

Managers use employee input on total quality to become coaches and developers.
Bean spent approximately 10 months familiarizing its then-3,000 workers with total quality and what it meant for Bean. All salaried individuals in the organization received three days of TQ training and all hourly workers received one day. “We started with the senior level and we rolled the training on down through the organization so that each level within the company was well versed and able to support total quality as the next level learned about it,” Peixotto says.

After everyone was trained, HR enlisted nearly 70 people within the organization to begin putting their knowledge into action. The department created seven quality action teams, comprising eight to 10 workers from across levels and functions in the organization. HR team leaders solicited the help of line managers and employee-relations specialists to identify people who not only would have an interest in serving on a team but also would easily be able to speak up around individuals from different organizational levels.

Once formed, the teams worked simultaneously on projects to bring about change. Although they each worked independently, the teams drew upon each other’s work. One of these teams set out to define a total quality manager for Bean. “We had never done this at Bean before,” says Peixotto. “We basically had taken our best doers and promoted them into management roles.” In these positions, they continued doing. To support the newly defined quality organization, however, the team determined that the role of manager had to change to one of a coach and developer.

Another cross-level, cross-functional quality action team incorporated this new definition into the management learning program it was developing. The ensuing program is set up so that once a month more than 150 of Bean’s highest level managers, including the president, sit down and discuss what being a manager in a total quality environment means. “It isn’t really training,” says Peixotto, “although we do some of that. It’s more of a facilitated discussion about what employees need from us as managers and how total quality is changing the management game.”

Some of the topics that have been addressed during these discussions are rewards and recognition, measuring employee involvement and team development. Occasionally, the company brings in guest speakers to talk on topics such as learning organizations.

Nick Sampson, manager of customer service and operations for the company’s retail store in Freeport, says that the sessions provide a consistent message, one that says “when you’re talking about creating measurable goals, this is how we do it at L.L. Bean, this is what we expect.”

To ensure consistency, another quality team created a feedback instrument for managers. The team first determined nine dimensions of a total quality climate, which are that it needs to be:

• Aspiring and focused
• Ethical and compassionate
• Customer focused and aligned
• Effective and efficient
• Challenging and empowering
• Open and innovating
• Objective
• Rewarding and developing
• Team oriented.

The group then incorporated these dimensions of quality into a Feedback For Improvement survey that would be used as a development tool for managers. For each dimension, the team listed statements for which employees answer to which degree they agree, disagree or are neutral to the statement. For example, under the “aspiring and focused” dimension is the statement, “I clearly know what’s expected of me and what the major priorities are.” Other statements: “I receive regular coaching and counseling that helps me improve my performance in my work unit,” and “My supervisor helps me anticipate and solve problems.”

Each statement is worth up to seven points, with strongly disagree scoring one point, and strongly agree scoring seven points. The scores are then averaged together.

The managers take these surveys and hold feedback forums with the people who filled them out. In a room together, the manager and his or her people (and sometimes a facilitator per the manager’s discretion), discuss the answers and determine issues that need to be addressed. “We sit down and work out plans and goals to improve the scores, maintain the scores or maybe even in some cases drop the scores if they’re too high and hindering other scores from becoming higher,” Sampson says.

The company asks managers to develop three action plans for improving their scores. For example, during a feedback forum in 1992 involving Sampson and his staff, one of the issues discussed was that workers don’t always understand initiatives or priorities. The action plan decided on by the group for Sampson was to clarify the customer-service department role and purpose and communicate better what and why an initiative has been taken. Says Sampson: “Just to focus on [the scores] brings us to the conscious state of saying, ‘let’s discuss how we do our work.’ “

Results of the feedback survey and forum are then folded into the managers’ performance plans. A quality action team actually revised the performance review system to account for this. In replace of the old system that listed a series of projects managers had to accomplish during the next year or specific numbers he or she had to reach, the new system reviews four different areas. One is operational responsibilities, which basically encompasses what the old reviews used to. The second element reviews how well the manager is performing his or her role. A manager’s supervisor assesses this in three ways. One is by looking at feedback survey scores. Actually, supervisors don’t look at specific scores but improvements in scores. “We’ve learned that there are certain functions within the company in which it’s easier to get higher scores,” Peixotto says. Therefore, the company rates managers based on their rate of improvement instead.

Supervisors also engage in a method called One-Over-One for evaluating the effectiveness of managers below them. Basically, what this means is that they annually talk with the managers’ subordinates about their career development, the climate in their area and what types of things they need from their manager that either they are or aren’t getting. “If you think of an employee as a customer of a manager’s management, we’re asking the customers of the managers how they’re doing,” Peixotto says.

Finally, managers’ reviewers run through a list of questions, such as, “Has the manager hired good people? Is the unit more capable than it was a year ago? Do people seem to know what they’re supposed to do?”

The third piece of a manager’s performance review evaluates their total quality behaviors or impact on climate. Their bosses pose the managers such questions as, “What are you doing as an individual to help support the company’s move toward a total quality workplace? Are you participating in improvement efforts? And, are you providing and receiving feedback well?”

The final part of the review system looks at the learning activities the manager has received in the last year and the developmental steps that need to be taken in the upcoming year. “That was a major change in the way we held people accountable for their work,” says Peixotto. “It wasn’t just hitting the numbers anymore. It was how you got there, the approach that you used and whether or not you participated in improvement.”

Because the company has a pay-for-performance system, managers’ salaries are affected by the results of their reviews. Also, the company bases promotional decisions on performance as defined in the total quality climate.

With the aid of Thomas Rand, president of Management Research Group, Bean used the FFI survey to compare the traits of effective managers within the total quality environment with those previously considered effective. Rand and Bean looked at the management practice and style of more than 100 managers (a manager in this case is defined as anyone who supervises three or more people).

Using Rand’s company’s Management Effectiveness Analysis, Bean discovered that effective managers in the quality climate shared similar traits. Most were clear about expectations and defined accountability. They were involving, participative and empowering with their staffs, although most still took on the role of boss and were identified as being in charge. Effective managers had high performance standards, were creative and resourceful, open to change, and strategic. They also were more persuasive than less efficient managers, serving as advocates. They were high on feedback and addressed conflict.

Peixotto says that the feedback generated from this and the FFI survey has proven to be powerful, allowing for conversation to occur that probably should have happened years ago. More than that, however, they have been successful at turning managers into the coaches and developers that they need to be for a quality environment. By changing their role, they have in turn created an empowered work force.

Employees embrace total quality and initiative.
Take the manufacturing division for example. Peixotto recently talked with a footwear manufacturing manager who, in the face of tremendous productivity pressures, had managed to spend a large amount of money on training. The manager told the HR professional that it was simple. He explained: One day he shut down one of the production lines and spent the morning teaching employees how a shoe is costed — something the workers had never been told. He explained to them what each of the various operations involved in making the shoes entails, and they learned about the costs of those operations and the materials that go into the costing of a shoe.

In the afternoon, he took the employees out onto the floor and asked them to show him ways the company could save money based on what they’d just learned in the morning. The employees found enough savings that day to pay for all the training conducted in that department all year.

The manufacturing department actually has deployed total quality the most effectively in the company, says Peixotto. A few years ago, it was losing money, and nobody wanted to work there. Recently, however, it won the Maine state quality award, called the Margaret J. Smith award. Also, the department’s costs of poor quality have gone down 47%, and its factory defects have been decreased by 10 times. Return on assets has improved 223%. “What’s really made the difference is employee involvement more than anything else,” Peixotto says.

In the total quality climate, employees who see a place for improvement can make the necessary change on the spot. Employees who work on manufacturing the camp moccasin, for example, made a simple adjustment on a glue machine that has resulted in tremendous savings. They observed the process of the shoes going together and noticed that when glue is squirted on the sole to affix it to the leather uppers before stitching, an excess amount spills over that must be wiped off in the final stages of production. By reducing the amount of glue that comes out, they’ve not only cut down on waste, but have eliminated a step in the production process.

“We’ve worked very hard at trying to create a climate where employees can take responsibility for quality and make improvements where they see them,” Peixotto says. For that reason, Bean consciously decided not to have a suggestion system. “That’s a prop,” he says.

Instead, the company consistently offers support and learning that enables employees to take initiative. Recently, for example, management asked the workers from Bean’s retail store in Freeport who stock shelves to trade jobs with the workers in the distribution center who pick the store orders. The employees are customers of each other.

From the job-swap experience, the workers simplified a process that no one had questioned before. Here’s how they formerly worked together: The stockers would place orders with the distribution center for items running low in the store. Pickers at the distribution center would gather those items on rolling carts, have them packed in boxes and loaded onto trucks. When the items arrived at the store, stockers had to unload them, unwrap them and put them on rolling carts to take them to the shelves. When the workers saw both sides of the process, they realized there really was no reason for packaging the items. Now, the pickers simply roll the carts holding items directly onto trucks so that stockers can roll them right off. Each customer more efficiently serves the other.

Employees such as these who take initiative are rewarded through recognition programs put in place to support the total quality efforts. The company allots each major line area a budget to be used specifically by managers to pay for recognition awards. The company gives out few cash awards, opting instead for symbolic awards, such as dinners out or Bean merchandise. Currently, the company is spending approximately half a million dollars a year for this program.

In 1989, Bean instigated the Bean’s Best Awards. According to Peixotto, this is the company’s highest form of recognition. All regular or temporary employees, or teams of employees, hourly or salaried, are eligible for the award (last year, one out of every three employees in the company served on some sort of work team). Workers can nominate co-workers, bosses or subordinates. A cross-level, cross-functional group of employees determines winners based on the following criteria, which are tied to total quality:

• Provide exceptional customer service — internal or external
• Have innovative ideas
• Standout as role models
• Are experts at what they do
• Manage people exceptionally well.

Winners are honored at an awards ceremony in August with their families in attendance. “It’s a big deal,” Peixotto says. “It’s like the Academy Awards night.” Winners are treated to a lobster bake, have photos taken and even are congratulated via planes flying overhead. They receive glass pyramid awards and L.L. Bean merchandise, including a pair of Bean Boots with life-time resoling.

Last year, more than 650 nominations of individuals and teams were made. Of those, only two teams and six individuals received awards. “Employees hold this Bean’s Best Award in high regard,” Peixotto says. “They’re selective. They really cut through all the politics and ask, ‘who are standout role models here, who live the values of the organization?’ “

He adds that those people who are singled out as Bean’s Best place a high value on winning the award. For this reason, the award has served as a valuable tool in supporting the total quality climate.

One tool that Peixotto admits needs some work to align with the total quality environment is L.L. Bean’s compensation plan. Bean did install a pay-for-performance system as a consequence of changes in management performance. However, Peixotto says that the human resources staff is just beginning to address the team-based aspect of the business by looking at such systems as skill-based pay.

Human resources’ role in quality management expands.
The Total Quality in Human Resources department itself is changing to fulfill its function as a catalyst for total quality, a function spelled out in the department’s mission statement. Although the managing of total quality wasn’t originally assigned to the human resources staff (it started off as a special small function reporting to the president, then aligned with operations for a while and with strategic planning for a short time), human resources became a natural place for it to settle.

“We’re looked upon by the organization as being the owners of everything that supports total quality,” Peixotto says. “Total quality itself is owned by the employees, but all the support systems for it belong to the total quality in human resources department.”

The last three years the department has spent changing the infrastructure of the company to support total quality behaviors — instigating the role revision for managers, creating a climate for empowerment and setting up support systems, such as feedback forums and recognition programs. Now it’s moving into managing the change that will result from process improvement.

The company has slated four major process improvement initiatives for this year alone. “When you change these processes, the big name of the game is managing change because it’s going to create a tremendous amount of change in the organization,” Peixotto says. “One of the things we’re focusing on in the human resources department is increasing our effectiveness at helping people understand their processes and being able to cope with the level of change that we’re creating.”

To do this, human resources is re-engineering from being functionally organized to being more customer organized. It’s moving the strength of the department out of human resources offices and into customer areas by setting up service teams to support each area. The service teams represent the breadth of the expertise that the department brings together. They offer process improvement, health and safety, employee relations, training and so forth. But it’s all decentralized.

In addition, the department has created a resource center, which provides the expertise to support the service teams. “We’re just moving to that organization now,” Peixotto says. “We’re [not quite] where we need to be to support the massive changes that we’re unleashing on L.L. Bean.”

Nevertheless, the Total Quality in Human Resources department has made tremendous strides thus far. In a recent Feedback For Improvement survey, only 36 out of 3,000 Bean employees disagreed in any way with the statement, “I feel strongly committed to L.L. Bean and its goals.”

The fact that Bean began its TQ process with people issues is key. “Bean is about people and respect for people,” Peixotto says. “This is a way of respecting the talents within the organization. A lot of companies see people as the problem. We saw people as part of the solution.”

And those people have contributed greatly. When the company started its TQM process, it had been experiencing flat sales for a couple of years. Since that time, return on sales, which the company uses as the barometer of productivity, has increased 80%. Moreover, returns for quality are down 25%, lost-time injuries have decreased 40% and work-in-pro-gress cycle time has improved 332%, from more than three weeks to less than four days.

Perhaps the organization’s most significant accomplishment, however, is that through the people involvement in total quality processes, L.L. Bean hasn’t in any way tarnished its reputation for superior customer service. In fact, it has polished it by adding internal customers to the list of satisfied customers — job satisfaction, as measured by the Feedback For Improvement process, is up 12-1/2%. And from the outside, not much has changed. Customers still receive Bean’s no-questions-asked guarantee — if necessary. However, it’s less frequently necessary.

Pesonnel Journal, July 1994, Vol. 73, No. 7, pp. 72-83.

As the oldest resort in San Diego, the Hotel del Coronado has been innovative since opening on February 19, 1888. The Hotel Del, as locals call it, is one of the world’s largest wooden structures, sprawling over 33 beachfront acres. When it was built, the hotel was the largest structure outside New York City to be electrically lighted. In fact, Thomas Edison himself supervised the installation of his incandescent lamp invention. (He returned in 1904 to throw the switch on the hotel’s first electrically lighted Christmas tree.)

Throughout the years, the resort has been the locale of choice to honor other pioneers, such as Charles Lindbergh after his solo flight over the Atlantic. And because it’s only 16 miles north of Mexico, the Hotel Del has hosted several summits between American and Mexican presidential leaders.

In March of this year, during a ceremony at the John F. Kennedy Library in Boston, Personnel Journal had a chance to honor the hotel’s human resources department for an innovation of its own — the creation of the first Mexican-based HMO. In accepting the Optimas award, Jerry Ramsdale, senior vice president, director of human resources — who pioneered the project — proclaimed that innovation is a proud tradition at the hotel.

But it’s the hotel’s 1,300 employees, Ramsdale said, that gives him and other managers at the resort their greatest pride. “We feel we get tremendous loyalty from them, and in turn we owe them something,” Ramsdale says. Which is why, four years ago, when the hotel learned it was providing inadequate health care for some of its workers, Ramsdale began a crusade to correct it. The hotel had just switched from an indemnity health-care plan to a Blue Cross HMO for its nonunion workers, “to be able to offer a better plan with more extensive coverage that would cost the company less,” Ramsdale says.

The HMO seemed an ideal program for both the company and the employees. There was one problem, however. The hotel employs more than 200 immigrant Mexicans (former Mexican citizens who have become legal residents of the United States), many of whom choose to live south of the border. And although these workers hold green cards that allow them to work in the United States and give them unlimited border-crossing privileges, some of their family members, who are Mexican citizens, don’t have that option. With the indemnity plan, it was no problem. People could use any health facility they chose, north or south of the border. But with the HMO, employees and their families would have to use hospitals and doctors that belonged to the Blue Cross plan — all of which were in the United States.

Ramsdale promised the immigrant employees that he would do his best to remedy the problem. “We’ve always felt at The Del that we have an obligation to provide our employees with benefits that are as good as we can afford to provide them,” Ramsdale says. “We particularly dislike the idea of not being able to provide for one group of employees something that we’re able to provide for another group.”

Solving the problem proved more difficult than Ramsdale imagined. But he didn’t give up, and the resulting HMO that he established with a Mexican health-care service company not only solved the hotel’s problem, but has impacted businesses up and down the Mexican border.

The search for solutions led to many dead-ends.
The first thing Ramsdale did was ask his Mexican staff what the biggest insurance company is in Mexico. They told him of La Republica, a national insurance company based in Mexico City. Ramsdale contacted La Republica’s nearest office in Tijuana, the town that borders San Diego. The company sent a representative to the hotel to meet with him. The HR executive asked the company what it could provide to the hotel’s Mexican employees and their dependents. The representative informed Ramsdale that the company provides private insurance only. And the insurance that it provides didn’t meet the hotel’s standards. For one, the insurance company said it would have to approve each employee individually based on his or her health, and then repeat the process each year. So if an employee gets sick one year, the insurance company could choose not to renew his or her policy the next. Another problem with La Republica’s insurance coverage was that it would require large deductibles from the employees. And to make matters worse, the employees would have to pay their own bills when receiving any services, then wait for the insurance company to pay them back.

Certain that this wasn’t the route he wanted to take, Ramsdale then contacted the hotel’s insurance broker in California, who recommended that he contact an insurance company called El Groupo de Kennedy in Mexico City. “This fellow came in from there and basically explained to me what I had already heard from La Republica about how Mexican insurance works,” says Ramsdale. When the HR director suggested doing it differently, he says the man looked stunned. “The company just had no sense of anything that would be new and fresh,” he says.

Knowing by now that he would get nowhere with insurance companies, Ramsdale contacted the administrators at some of the major hospitals in Tijuana. They would agree only to set up a fee-for-service plan. “I’m a trustee for a union health plan and I learned a long time ago that [this type of system] allows for abuse,” says Ramsdale. “A company has no way of controlling the costs, it has no way of knowing if the fees being charged are feasible. A company simply can’t open itself up like that.”

Ramsdale explained the capitated system used in the United States to the administrators, and even asked if they would like to talk to some American-owned insurance companies to confirm that it works. As with the Mexican insurance companies, however, the hospitals simply weren’t interested in trying anything new. “It seemed that there was no solution to this problem,” Ramsdale says. “No one was interested in any sort of capitated approach because they had never done it before.”

And then Ramsdale saw an advertisement in a San Diego newspaper informing Americans living close to the border that less expensive health care was available at the new Hospital del Rio in Tijuana. The ad was put out by Servicios Medicos Internacionales (SMI), a Mexican-owned and operated health-service provider that had facilities within the Hospital del Rio. As a last hope, Ramsdale contacted SMI.

This was the right move. SMI already had started putting together an insurance policy arrangement that was close to what the Hotel del Coronado was looking for. However, the program was age-rated and health-rated and, according to Ramsdale, had all kinds of exclusions. Ramsdale explained the type of plan he wanted: That the company would pay SMI so much per employee per month regardless of health care received. Because the company already was interested in offering insurance to corporations, it was willing to try the arrangement that Ramsdale suggested. Says Tor Ewald, director of marketing for SMI: “We had been dealing mostly with individuals at that point, but through that service we had enough administrative systems in place to offer the HMO. In fact, things had already been put together to start accepting corporate clients, and when Jerry came along we were already open to that kind of business idea. The hotel was the first company willing to take that risk with us.”

Ramsdale gave SMI a list of the hotel’s Mexican employees and their dependents, and asked the company to come up with a figure for coverage. SMI came back with around $100 a month for individuals or family units. Because families average 4.5 kids in Mexico, this coverage was for an average family of 6.5 people. At $100, the cost was only approximately one-third of what the hotel was paying per family for the American-based Blue Cross HMO, which was approximately $400. SMI has raised their rates by $5 since that time, but, with the devaluation of the peso, Ramsdale doesn’t expect — nor would he pay for — another increase soon.

After agreeing on a price, SMI and Ramsdale negotiated coverage. SMI originally wanted to exclude AIDS, for example, but Ramsdale explained that was considered discrimination in the United States. Within a couple of months, the two parties came up with a workable plan and the program was put in place in 1991.

The new HMO saves the company, and employees, money.
Here’s how the SMI plan compares to the American-based Blue Cross plan. The hotel offers both plans to employees free of charge. For the American plan, Hotel Del charges employees $30 a month for one dependent and $60 a month for a full family. For the SMI plan, the hotel charges employees $14 for one dependent and $21 for a family. “Because it costs us less, we charge the employees a lesser proportion as well,” Ramsdale says.

In addition to the lower premium cost, the Mexican-based plan requires no copayment for most services performed, unlike the Blue Cross plan for which employees must pay $20 per office visit to both their gatekeeper doctors and to any specialists to whom they’re referred. Employees in the American plan also must pay a copayment for prescriptions, whereas prescription drugs are free in the SMI plan. In fact, most prescriptions are dispensed to patients right in the Mexican hospitals. Also, the Mexican plan includes dental care, which is taken care of in the same facilities as well.

Other coverage in the SMI plan includes prenatal care, psychological care, vision care and emergency care out of the area. If an employee gets into a car accident in San Diego, for example, and must go to a local hospital, he or she would be covered.

Within Mexico, employees enrolled in the SMI plan go to SMI’s facilities within the Hospital del Rio to see their primary-care doctors and their dentists, and for the pharmacy. If they need emergency service, they go to Hospital Ingles, also in Tijuana, which SMI owns. SMI also contracts with other facilities in Tijuana and in Mexicali, and will be opening a facility in Juarez, the Mexican town bordering El Paso, Texas, shortly — all of which employees and their family members enrolled in the plan have access to.

Maria Luisa Huizar, an employee of the housekeeping department who has been with Hotel Del for 18 years, likes being in the SMI plan for its hospitals’ convenience. She lives in Tijuana, so she’s able to make appointments for the mornings, evenings after work, or on her days off.

Although Irma de Anda lives on the U.S. side of the border, the engineering employee also likes the convenience that SMI offers her. The close proximity of Hospital del Rio to the border enables her to reach it quickly, without getting caught in the traffic of downtown Tijuana. As a single mother with a young daughter, however, her main reason for joining the plan is the price. “Medicine is much cheaper,” she says, “so even if I do have to put up with a line at the border [to get to the facilities], I don’t mind because I get compensated a great deal.”

De Anda, who has worked at the hotel for 16 years, says she’s been happy with the service she gets through SMI. “They have very good doctors and dentists, and they cover everything you might need. If they don’t have something you need, they’ll get it or they’ll send us where we can have that kind of service.”

Huizar agrees that the service she receives through the plan is as good as any. “I had an accident a couple of years ago, and everyone was very accommodating. They really helped me for a long time while I was in the hospital. I got a lot of support from everybody.”

Despite these employees’ good experiences, there were some problems with the program in the beginning, as can be expected with any new system. Some employees complained that it was difficult to access the hospital after certain hours, and that the hospital was understaffed. There were complaints about some of the doctors not being as friendly as the others, and about a receptionist who, as Ramsdale puts it, “was on a power trip, and was anxious to protect the doctors from what she felt were unreasonable requests, resulting in her being cold and distant with the employees.”

Some of the complaints came out of unrealistic expectations of the employees — such things as expecting the doctor to see four children on one visit when an appointment was made for only one child. But for all the legitimate problems, SMI made every effort to correct them. It added the Hospital Ingles, for example, to accommodate late-night emergencies, and trained or fired doctors and receptionists that gave bad service. “Although SMI had no competition — they were the only thing we could do, period — they never treated us as a captive audience,” says Ramsdale. “They always made every effort to try to do something about the problems.”

Ewald explains why. “For the first time, Mexican facilities were dealing with an American client that expected American standards of service. Having the Hotel del Coronado as a client, which wants its employees taken care of and is accustomed to American HMO customer service, requires SMI to react quickly to its requirements. That’s the only way SMI would be able to grow.”

In the American tradition, SMI now has customer-service departments, so if a member has a problem, they have someone to talk to. It also has a survey sheet it gives each person who comes for service. The patients are asked to mark Excelente (excellent), Muy Bueno (very good) or Malo (bad) for several different aspects of service. For example, the sheet asks if the patient’s appointment was kept, if the doctor treated the patient well and if the pharmacy provided satisfactory service. “Every sheet that doesn’t have an Excelente marked by every question goes to a customer-service person who calls the patient who filled it out and asks him or her why it wasn’t excelente and how it can be made better,” Ewald says.

The SMI plan started a trend that could be the wave of the future.
Although SMI was quick to ensure customer satisfaction when it was the sole provider of a Mexican HMO, it now has even more reason to do so. Since it has proven that the system works — and works well — other American individuals and organizations have contracted with Mexican hospitals in Tijuana and other border cities to provide HMOs. Hotel Del itself has signed on with two of the newer plans for its nonunion employees: Sistemas Medicos Nacionales (SMN) and Meca Internacional, S.A. De C.V. (Meca). “I added them primarily to give those employees who were complaining an option and some control over what they had,” says Ramsdale. The hotel also added the SMN plan for its union workers.

The hotel has approximately 110 employees enrolled in the three plans. Adding in their dependents, that’s somewhere around 500 people being serviced by these Mexican HMOs.

Having all three plans creates more competition and thus even better service. For example, when SMN came on-board, it included a provision to pay up to $2,000 of the cost of giving birth in a U.S. hospital — a benefit important to some Mexican employees because if a child is born in the United States, he or she automatically is a U.S. citizen. To keep people from transferring to this plan solely for this reason, SMI added a $3,000 U.S.-birth benefit.

The multiple plans also provide employees greater flexibility. The Meca plan, for example, offers a luxurious hospital on the beach in Tijuana that serves healthy foods with alfalfa-based liquids, is decorated with tropical fish-filled aquariums, and provides doctors with vibrating pagers so as to avoid paging people over the loud speakers. The SMN plan allows access to the greatest number of hospitals, including the largest and most well-respected hospitals in Tijuana. Ironically, a few of these hospitals were the same ones that Ramsdale approached in his initial quest to set up an HMO in Mexico. “It just had to be done once,” Ramsdale says. “Once the other hospitals saw that this plan was working and that SMI was making money, they were willing to try it when the next person approached them to set up an HMO.”

SMI indeed has profited from the arrangement. Ewald says since the Hotel Del has been with SMI, the company has been able to purchase the Hospital Ingles, open facilities in Mexicali, hire more people, buy more computers and grow quickly to facilitate new clientele.

That new clientele is employees of more than 100 businesses in the San Diego area. “A lot of companies in San Diego employ Mexican immigrants who live in Mexico and cross the border every day,” Ewald says. “The health plans that are available in the United States don’t address the concerns of these people. Their families are in Tijuana or elsewhere in Mexico; oftentimes they speak only a little English, and the health care is too expensive.”

These are all reasons why the National Steel and Shipbuilding Co. (NASSCO) joined both SMI and Meca. Like the Hotel del Coronado, NASSCO converted from indemnity health-insurance plans to HMOs for its 4,000 employees back in 1993. The new plans offered coverage only at U.S. facilities. “We knew we had employees who were commuting from south of the border, so we wanted to make sure we provided for them and their families,” says Steve Gould, manager of employee benefits. Because the company requires all workers to have a U.S. address, however, Gould isn’t sure exactly how many employees actually live in Mexico. He estimates it’s between 200 and 300, although other people tell him it’s probably more. “We have approximately 1,500 people in the shipyard with Hispanic surnames,” Gould says. “Some live in Mexico and commute daily, and some live in the San Diego area.”

Regardless of how many, Gould says that the company “wanted to find something reasonable in Tijuana that not only would allow those families to go to medical providers in Mexico, but also save us a little money.” Gould had heard about the SMI plan set up with the Hotel del Coronado, and contacted the resort to find out about getting the service at NASSCO. At the time, the Meca plan was just getting off the ground, and representatives from it contacted NASSCO directly after hearing the company was interested in a Mexican HMO.

Currently, approximately 170 employees are enrolled in the two Mexican HMOs: about 90 in the Meca plan and 80 in SMI. That number is growing. When NASSCO first began offering the plans only 60 employees joined them. Some of the growth can be attributed to hiring the company has been doing, but Gould says most of the growth comes from word of mouth. “People wanted to see the plans get started and see what other employees thought about them before they made a commitment to getting their medical care in Mexico,” Gould says. He believes that there even are some employees who, now that they know they can get medical care in Mexico, have decided to move back there. Because they earn U.S. wages, they can afford more housing in Mexico than they can on the north side of the border.

Part of the appeal of the Mexican plans for the Mexican immigrants is the opportunity to receive care administered via their own culture. For example, Ewald says that in Mexico it’s customary for patients to spend a lot of time with their doctors. So at SMI’s facilities, doctors spend at least 20 minutes with their patients. “The patient is in the doctor’s office, the computer is in the doctor’s office, and the doctor is in the doctor’s office,” Ewald says. “That is what our clientele is accustomed to. So SMI has been able to mix the Mexican culture with American management.”

Sometimes the Mexican culture clashes with what’s standard in the United States. Ramsdale relates how one of Hotel del Coronado’s employees in the hospital was dying but the doctor wouldn’t tell the employee this because the family didn’t want him to know. “I got irritated with that because I thought the employee had the right to know,” says Ramsdale. “But over there, it’s whatever the family wants.”

For the most part, however, it’s the little things that make a big difference to the Mexican workers. “They like the fact that the hospitals are close to relatives so they can come visit, and that the doctors all speak Spanish,” Ramsdale says.

Martha Zendejas, a hostess in Hotel Del’s Crown Room restaurant who speaks fluent English, says it best: “If I’m dying, they can tell me ‘you’re dying’ in Spanish and I’ll understand that.”

Although Zendejas lives in the United States, she says she has never been in a hospital here because she feels more comfortable going to Mexican hospitals. Because of this, she’s currently facing a dilemma. Pregnant with her first child, she must decide whether to give birth in the United States, thus granting her child American citizenship, or use her doctor in Mexico, whom she says she loves. “I would have to change doctors, but I wish I could keep my doctor because she’s very nice and the hospital [Hospital Guadalajara under the SMN plan] is great,” Zendejas says.

Zendejas has had a difficult time with her pregnancy, and has greatly appreciated not only what she considers excellent care, but the ease with which she’s able to get it. Ramsdale, who because he’s at the executive level has a choice between an HMO or an indemnity plan, is an HMO member for the same reasons. “I’m perfectly happy to be referred to a qualified doctor, and if I don’t like that doctor, I can choose another one,” he says. “And I really like the system of no paper work. I go in, plunk down $20, and whatever is broke is fixed.”

Ramsdale believes that HMOs are the wave of the future throughout America, or at least should be. Ewald thinks that wave will splash across the border as well. Mexico’s current system of socialized medicine, Ewald says, is “bankrupt, isn’t providing quality service and is full of corruption. The people of Mexico would rather have a program more like American health care.”

Already the Mexican-based HMOs have spread to American companies in other towns along the border, including several in Texas. And some Mexican organizations are buying into the system as well. Mostly they are Maquilladoras: large companies that have twin factories on either side of the border that enable shipment of parts back and forth without paying duties. SMI recently also developed a domestic program for Mexican employers that may catch on as well. And in just the four years since SMI and the Hotel Del partnered to create the HMO, SMI has become the largest privately held health-care institution in Mexico.

It’s amazing how much impact one innovation can have. Surely Edison, as he ignited the glow of Hotel Del’s electric bulbs, could only speculate as to the enormity of his invention. Someday, Ramsdale will know the full effect of his.

Personnel Journal, May 1995, Vol. 74, No. 5, pp. 38-49.

A Census Bureau report sponsored by the Education Department and released in February reveals that employers believe schools and colleges aren’t preparing students for the workplace. Santa Clara, California-based Intel Corp. is one employer that’s doing something about it. Through its corporate K-12 program, the company is forging partnerships with elementary schools, such as the one with Kyrene de la Mirada in Chandler, Arizona.

But the company’s involvement with education doesn’t stop with high school graduation. Hilda Roy, new college graduate and new technical graduate sourcing manager for Intel in Arizona, says that the firm believes it can influence kindergarten through life-long education.

Right now, Intel’s focus is on junior colleges. According to Roy, Intel and other technology-based companies recruit about 70% of their manufacturing and technical people from two-year degree or certificate programs. Yet more and more, these companies are finding that students in these programs aren’t sufficiently trained. For example, according to F. Pat Foy, Southwest region manager for extended education at Intel, many past workers recruited from a two-year, associate degree electronics program — the most popular program — have had to be retrained in such areas as chemistry and physics once hired. “That shows us how little communication has been happening between the industries, high schools and community colleges,” says Roy.

To increase that communication, Intel has developed a curriculum suited to the technical field and is partnering with community and technical colleges to implement it. Already it has been installed at six New Mexico community and technical colleges, and work is under way in Arizona to do the same. The curriculum includes broad-based learning in chemistry, physics, math and electronics with a good emphasis on communications skills, particularly team building. And although it does focus at the end on semiconductor manufacturing technology, approximately 80% of it prepares people for the technology field across the board.

“Our strategy and our intent isn’t to install an Intel curriculum in the public sector,” Foy says. “We want to see the community and junior college and technical colleges make good on what their charter is, which is to prepare students for jobs that are available. So we’re trying to do our part to help the colleges prepare people for technologies in general.”

In addition to developing the curriculum, Intel has devoted approximately $3 million this year to enhance learning and facilities at community colleges in New Mexico and Arizona — where Intel already has large manufacturing plants and is in the process of building more that will increase current productivity six times. Part of that money is spent on benchmarking for community college faculty. “We’re taking their lead instructors and bringing them to Intel for the summer, and paying their salaries for the summer, to influence their curriculum.” says Roy. “Once they leave Intel, they go back to the classroom and teach the classes based on the experiences they had. It gives them more practical approaches to their teaching.”

Similarly, Intel is developing a work-study program for students. In addition, it’s creating scholarships, contributing money to community colleges for facilities enhancements and donating computer equipment. It’s also partnering with Los Alamos National Labs in New Mexico, to create process teaching labs in Arizona and New Mexico at which community college students can get hands-on experience.

Roy hopes that Intel’s role in the educational process can become a model for other companies and industries. Already some companies, including General Mills, Honeywell and Philips Semiconductor, have partnered in various degrees with Intel.

These businesses are on the right track. Indeed, during a speech at the San Bernardino Valley College in February, President Clinton stated that, “Not everybody has to go to a four-year college, but everybody needs to get out of high school and have access to at least two years of further education. One way to do that is to abolish the artificial distinction between learning and work by bringing the workplace into the school, the education into the workplace, and doing it everywhere in America.”

Personnel Journal, April 1995, Vol. 74, No. 4, pp. 128-138.

The Coca-Cola Co. sees itself not as a global organization, but as a multi-local enterprise. That’s because its global strategy is to allow its businesses in more than 200 countries to act according to local needs, local laws and local cultures.

For this reason, the Atlanta-based soft-drink giant’s philosophy toward staffing is to employ as many nationals in its international businesses as possible. “We strive to have a limited number of international people [in the field] because generally local people are better equipped to do business at their home locations,” explains Jeff Peeters, currently director of HR for corporate finance and human resources in Atlanta, previously HR director for Coca-Cola’s Northwest European division.

However, there’s still a need for expatriates in the system for two main reasons. One is to fill a need for a specific set of skills that may not exist at a particular location. For example, when Coca-Cola started up operations in an Eastern European country, it had to bring in an expatriate from Chicago—who is of Polish decent—to fill the position of finance manager.

The second reason that the company will relocate workers to foreign locales is for the employee’s own development. “Before you take on serious senior managerial responsibility in the company, you should have had an international exposure,” Peeters says.

Coca-Cola associates do that by being part of the company’s global service program, a system that focuses on the development of a core group of workers for international mobility (see, “The Philosophy Behind Coca-Cola’s International Service Program,” this page). Currently, approximately 500 high-level professionals and managers are part of the program. Says Michael J. Semrau, assistant vice president and director for international HR: “The cost of the program is significant, so we tend to focus on people who have knowledge of their particular field plus knowledge of the company, and who can do two things in an international location. One is add value by the expertise that they bring to each assignment and two is enhance their contribution to the company by having that international experience.”

Of the 500 people in the program, approximately 200 move each year. The typical duration of an international as-signment is three to five years, although that can vary based on need.

The workers in this program are supported by an international service program group that manages their compensation. The specialists in this group have responsibility for one of five international groups. They work with local division HR people or regional HR people to coordinate the transfer of the international service people and to ensure that the appropriate compensation elements are in place and provided on a timely basis.

“We try to set up our compensation programs so that we can transfer talent around the world without having significant compensation barriers for international service employees,” says Carl Presley, director of compensation. The company has done this by giving the international service workers a U.S.-based compensation package. In other words, they’re paid according to U.S. benchmarks rather than changing salaries for each move they make.

The workers pay hypothetical income taxes based on a calculation of what they’d pay if they were working in the United States. The company, then, pays their foreign taxes, taking any tax credits that the employee may get. “Many of the elements are the same so that there isn’t preferential treatment for going into one part of the world for international service vs. another,” Presley says.

The international workers’ compensation packages also include such compensation-related benefits as housing allowances, cost-of-living differentials and education costs. If an expat is in a particularly difficult area, he or she might receive an environmental allowance that recognizes the difficulties of that location. And expats in the program may receive home leave, which allows them to return home if they choose to for a certain period of time to renew their ties with their homeland.

To further ensure equity within the international ranks, the company also has a worldwide job evaluation system. The program evaluates the same positions in different parts of the world on the same internal value.

In western Australia, where rural landscapes stretch farther than the eye can see, employees of The Coca-Cola Co. travel more than 2,000 miles a week to deliver their company’s products. Coca-Cola salespeople in Venice, Italy, don’t have as far to go, but must transport bottles and cans by gondola through winding canals. And in Morocco, it’s donkeys that carry Coca-Cola salespeople and their products to customer destinations.

The obvious difference between these scenarios is the mode of transportation used by the employees. But the differences go deeper than that. Just as the distribution of product in each country varies, almost all elements of employment vary as well. In one country, po-tential workers may willingly respond to questions regarding their families, while in another these inquiries are taboo. Some cultures value high base pay, while others are motivated by bonus plans. Even holidays vary from place to place.

So how does Coca-Cola, which operates in not just these three countries but in more than 195 worldwide, manage its human resources issues? Through a decentralized system that’s tied together by a shared vision and central support.

Coca-Cola is a multi-local company.
Although Coca-Cola’s headquarters is in Atlanta, Georgia, USA, the soft-drink giant is more than simply a U.S.based company with some operations overseas. It’s truly a global enterprise. Nearly 80% of the company’s operating income comes from its businesses outside the United States. These businesses range from wholly owned subsidiaries and bottling companies to independent bottling and distribution centers that license its products—mainly soft drinks. The company also manufactures and markets juice and juice-drink products.

The businesses that produce, market and distribute these products span the globe. Coca-Cola manages them through 25 operating divisions making up six regional groups: North America, the European Union, the Pacific region, the Northeast Europe/Middle East (NEME) group, Africa and Latin America (see chart). Each of these groups has a president, accountable for the businesses in his or her area. In other words, each region, although a part of the bigger system, is its own entity. As Michael J. Semrau, assistant vice president and director of international human resources, says: “The Coca-Cola Company just happens to be headquartered in Atlanta. It could just as feasibly be headquartered in any of the other locations [where we do business] and it probably wouldn’t make a difference.”

The regions and businesses are linked together by a shared mindset to think globally and act locally, a philosophy that Vladimir Pucik, director of international programs at the center for advanced human resources studies at Cornell University, says defines a global enterprise. “If you look at a global company from a business perspective, the emphasis is a combination global integration and local responsiveness,” Pucik says. Drawing a parallel to human resources, Pucik says that its role is to get all the different functional capabilities—such as selection criteria, training processes and performance assessments—to reinforce the way people can think globally and act locally.

That’s exactly what HR at Coca-Cola strives to do. “Coca-Cola always has been known as a multi-local company,” says Semrau. It’s like a family: Each business, as each family member, has its own unique qualities and can stand on its own, but benefits from being connected to the group. And just like a family, the businesses have a certain bond. “The common thread running through Coca-Cola is its willingness to allow the locations to be different, to conduct the business in ways that are appropriate for the market in which they’re operating,” says Jeff Peeters, who’s currently director of HR for corporate finance and human resources in Atlanta, but previously served as HR director for the Northwest European division in Brussels, Belgium. “When we sell the same products in Central Africa as in France, the way we sell those products is radically different: the level of sophistication is different, the support systems are different, distribution is different. Coca-Cola has found a way of balancing all of these differences with selling the same products. We don’t impose any dominant culture—we really allow the local people to implement that.” Semrau agrees. “Our culture isn’t codified,” he says. “In fact, a previous president used to say that to do that you might miss something. The culture really is one of diversity.”

Because of this culture, the role of the global human resources professionals is to maintain the link between businesses and the corporation. The structure of the HR function supports this role and enables businesses to act locally while thinking globally. Each of the 25 operating divisions has a director of human resources, as does each of the six groups. They’re supported by HR in Atlanta, but work fairly autonomously.

Peeters refers to the global human resources practitioners as “custodians for international equity,” who make decisions for such issues as benefits, compensation and training based on corporate philosophies. He says that while he was in Brussels, he accomplished this by staying in touch with the policy-making unit in Atlanta by telephone and written correspondence, and tried to visit the head office at least once a year to keep abreast of what was going on and to adhere to general policies as much as possible.

Essentially, corporate HR functions by providing the philosophy around human issues while allowing local businesses to apply those philosophies as they see fit for their region. For example, rather than having a standard salary policy for all of its businesses, Coca-Cola has a salary philosophy, which is for its total compensation packages for its businesses to be competitive with the best companies in their markets. “We focus on the end product—the means to get there might be different in one part of the world vs. another,” Semrau says.

Differences in laws and cultures play into that. For example, Peeters says that the openness that people in the United States have about salaries doesn’t exist in Europe. “In Europe we don’t discuss salaries. That’s something between you and your employer, and you will never breach that level of trust. They would find it insulting to have to disclose their salary, and they would find it insulting if you disclose their salaries because they consider that to be something very personal.” On the other hand, you can talk about their family backgrounds, their ages, and so on without a problem. In fact, they get offended if you aren’t interested in their family backgrounds. In the United States, such inquiries would be in violation of the law. “So certain policies that are perfectly legitimate in the United States, if they aren’t applied with the right level of judgment will offend people in other countries,” Peeters says.

This can happen with particular programs as well. Peeters says that while he was working in Brussels, he learned about a sales course that was developed at corporate headquarters. The principle of the course, which was to assess where your customer is emotionally before making a sales pitch, made a lot of sense and was universal. But Peeters knew that the teaching approach wouldn’t fly in the countries for which he was responsible. “We had to work on the course to not just adopt it but to take the principles and translate them into something that was culturally effective and acceptable,” Peeters says. For instance, an example that the American version of the training used showed a financial planner selling insurance. Peeters says that, in Europe, people wouldn’t go to a specialized consultant, they would go to a banker. Therefore, a salesperson in the European countries wouldn’t understand the example.

Also, the corporate training course included video presentations that, in line with equal opportunity, portrayed people of different nationalities and gender in all types of positions. Peeters says that in certain countries these portrayals can be offensive. A female representing management, for example, would be out of line in an Arabic environment. “The main goal is to take the valuable piece of the Coca-Cola system and optimize its effectiveness in the local markets.”

Working toward this goal works well for the soft-drink firm. “Through this decentralization and empowerment, associates can react quickly to market needs,” says Semrau. “Also, no one central entity can be as responsive as 25, 50 or 100 local, hands-on entities.”

Central support enables international HR to act locally while thinking globally.
Although they’re fairly independent, human resources professionals around the world receive support from a core HR staff in Atlanta. One of the support systems available is an HR orientation, held twice a year in Atlanta for international staffers and once for those working at headquarters. The two-week orientation is for people who have recently joined Coca-Cola as HR representatives or for longer-term associates who can benefit. Its purpose is to give an overview of the company’s HR perspective. “We try to blend a business overview with a human resources overview,” Peeters says. “So we talk about the business, we talk about how the business translates in HR policies and what the practices are that follow from those policies.”

Participants of the program leave with a much broader view of what the company is doing, not only in HR but in finance, marketing and other aspects of the business. They also learn about HR philosophies, as well as programs and policies already created that can be adopted. “Tools have been developed by people throughout the world and we want to be sure that others don’t have to start from the beginning,” Semrau says. For example, the company has designed a performance-development system, an industrial-relations negotiation model and regional expatriate programs that HR practitioners throughout the world can adapt. “We want to make sure that anyone coming into HR knows what exists,” he says.

Probably the greatest benefit that the orientation participants receive, however, is the framework for an HR network within the massive Coca-Cola system. “We try to involve as many people as possible so that participants get exposure to the specialists in the various areas of the company—people whom they can call when they’re confronted with issues in the field,” says Peeters.

The company involves the specialists in various ways. Some of the key figures in functions such as training, compensation or benefits will make presentations to the group, relating what their functions’ policies and practices are. Some help the newcomers in workshops. There are also numerous social events scheduled during the orientation periods that give participants a chance to get to know the specialists on a more personal basis. “Establishing that network is one of the most valuable things in that orientation course,” says Peeters.

In addition to the orientation, Peeters says that the company is planning to roll out a more advanced development program for HR professionals early next year. It will be targeted specifically at those who aren’t quite at a director level but who have shown the potential of getting there. Its goal will be to build skills, rather than to establish a knowledge base as the orientation strives to do. “We have noticed that HR as a profession evolves quickly,” Peeters says.

Also, the marketplace changes, theories change, and Coca-Cola revises policies and practices and tools to cope with these changes, accordingly. For example, a thrust within the company right now is for managers to become better coaches. “We can’t automatically assume that HR knows how to teach these skills,” Peeters says. So the development program will offer courses on these types of skills on an as needed basis.

Another support tool for human resources practitioners in the Coca-Cola system is the HR development committee. The company started using the development-committee model nearly 10 years ago within the finance division. Today, almost every functional area of the company has one. The role of the committees is to identify talent within their particular functions and then take the steps necessary to make sure that that talent achieves its potential. They also look at openings within their accountability to ensure that they’re moving people who have the right skills into the right positions. “The goal is to make sure that we have the right competencies in the organization to help us meet our business objectives on an ongoing basis,” Semrau says.

Nancy Shemaria, director of staffing, facilitates the HR development committee. (In other functional divisions, HR doesn’t chair the committees. Functional heads do, with support from HR.) Other members of HR’s committee are: Semrau, because of his vast knowledge of the international fields people and what the international needs are; Beverly Freeman, who was the vice president of human resources for Coca-Cola USA and has knowledge about the needs in that territory; the executive assistant to Michael W. Walters, vice president of human resources; and Michelle Beale, the vice president of HR for the Foods division. The criteria to be a member is a focus on and a commitment to development, and a knowledge of the people in the field.

Shemaria states that the purpose of the HR development committee is to ensure that the function continues to grow a ready supply of talent for human resources on an international basis by making strategic placements. “We’re really not in the business of just filling positions,” she says. “We’re in the business of making sure that they’re strategically based placements and that by putting someone in a particular position we’re also developing that person so that he or she can go on to other assignments and continue to grow in the company.”

The committee examines all open positions in human resources during every meeting and evaluates possible candidates. The main focus of the committee is on placing key talent—mid-management to senior-level positions— but because HR is a relatively small function, the placements can run the gamut.

Another task of the development committees is identifying key technical or professional skills for their functions’ positions. The HR development committee identified key experiences or job knowledges in 10 areas that people in HR need. They are: facilitation skills, an understanding of global business and HR trends, organization design, HR functional knowledge, employee relations, industrial relations, learning and development, performance development, selection and staffing and total compensation.

In addition to these, the company has core foundation skills that Coca-Cola personnel need. They are a combination of capabilities and skills that the company uses to evaluate any associate in the organization. For example, foundation skills for managerial people include coaching skills, leadership capabilities and ability to think creatively. “They’re quite generic, almost attitudinal,” Peeters says.

Adds Shemaria: “What you end up with is a comprehensive set of both the general business skills and the function-specific skills. And by putting them together, we get a complete picture of what somebody needs to be able to do the job.”

Along with developing key competencies, the HR development committee conducts talent assessments. It slices the organization either horizontally or vertically to look at a portion of the function. It then determines what skills are required of the positions in that group, evaluates the skills and talents of the people in those positions, and implements strategies to close any gaps.

For example, the committee will encourage and provide the tools to managers in that function to do development planning for their associates. “We play an influencing leadership role for which we may develop some assessment tools, develop the technical competencies and skills, and get those distributed throughout human resources as tools for all managers in human resources to use,” Shemaria says. “But the role of the development committee isn’t to watch over what the managers do. They still need to be managing, coaching and gathering feedback, separate from the development committee.”

Essentially what the HR development committee does is reinforce HR’s mission within its own ranks. That mission, says Semrau, is to “Work with all of the associates in the system to enable them to develop their full potential to exceed the expectations of customers, consumers and shareholders.”

Quite straightforward, but nonetheless lofty considering the expansiveness of Coca-Cola’s human resources. However, with staff in Australia and Morocco sharing the same mindset and receiving the same support as those in Italy and the United States, it’s a goal that’s certainly.

When an employee is attacked or killed on the job, it’s emotionally devastating. It also can be expensive. Not only does such an incident cause lost work time and lowered productivity, but depending on an employer’s actions before the violent act, it can result in multimillion-dollar legal settlements as well.

In 1990, for example, a California court ordered Equitable Life Assurance Society to pay $5 million to the families of two employees shot and killed in its offices by an employee’s husband. And in 1992, a jury awarded $5.5 million to the family of a woman stabbed to death at her job at Iron-horse Winery by a temporary worker.

These cases, and others like them, reinforce the fact that employers must take steps in preventing violence from erupting in their workplaces. The verdicts of the suits are based on a few legal theories: respondeat superior, negligent hiring and retention, and a duty to warn.

According to Philip Hyde, partner with the law firm Holzmann, Wise & Shepard in Palo Alto, California, respondeat superior is one of the foundations of employment law that holds principals (employers) liable for the actions of their agents (employees). In other words, if the employer knows-or should know-of information indicating that a person is a risk for committing violence, the employer is responsible for any violent acts that person commits.

Negligent hiring and retention is related to this principal. Says Hyde, because an employer has a duty dictated by the Occupational Safety and Health Act (OSHA) to maintain the health, safety and welfare of the workplace, if an employer knows, or should have known, of certain characteristics of an individual and hires the person or retains him or her in employment anyway, the employer is responsible for any harm the person causes.

In Holway vs. Snelling, for example, the case regarding a female winery worker who was stabbed to death by a temporary worker, the court concluded that the temporary firm that referred the employee failed to conduct a background check on the worker. If it had, it would have found that the man previously had been convicted and imprisoned for murder. Because this information was available, the company was liable for the man’s actions.

An employer also can be liable if it has information regarding a possible violent act and fails to warn the potential victim. For example, if a worker makes a threat against his or her supervisor to a human resources person-such as, “If I get another bad review I may just have to blow her away”-the HR person must let the supervisor know about the threat. “Not that the supervisor should change the review,” Hyde says. “But she would be prepared to deal with the problem and possibly intervene to avoid the situation.”

Also, if a company has information that leads it to believe violence may occur, it must take action. The 1990 case Tepel vs. Equitable Life Assurance Society, for example, concluded that the company was responsible for the death of two people and injuries of nine others because it had been told about threats the killer had made against his wife who was employed at the insurance company, but hadn’t beefed up security.

Employers can protect themselves against these types of legal suits by employing prevention strategies that include pre-screening and intervention. They must be cautious in doing so, however, because these actions carry their own liabilities.

Background checks and psychological testing, for example, must be job focused or run the risk of privacy invasion. “There is no hard-and-fast rule of where you draw the line between what’s relevant to the workplace vs. what’s personal and private conduct,” Hyde says. “The general framework I recommend is to keep inquiries focused on whether the information obtained will predict success in the job.”

Testing employees for violent tendencies also has implications based on the Americans with Disabilities Act (ADA). If a mental disorder that may cause violent behavior is discovered in an otherwise qualified person, the company may need to make accommodations for that person to perform the job he or she is seeking. However, Mary Russell, partner in the Labor and Employment Law Practice Group at the San Diego-based firm of Luce, Forward, Hamilton & Scripps, says that not all mental or emotional problems qualify under the ADA, and it’s difficult to accommodate someone with a propensity for violence. It’s even more difficult when the person acquires the ADA-protected condition during the course of employment, she says.

Hyde agrees. “Even if you do find out that a person who has made a threat is mentally disabled, if it looks like the person is going to carry out the threat, there’s no reasonable accommodation that can be made,” he says.

The bottom line is to balance the rights of potential perpetrators with those of potential victims, and to examine the consequences of investigating vs. taking your chances. “Sometimes you’re forced to make decisions knowing that there’s possible liability involved,” Russell says. “You want to do it in the safest way you can. You face greatest liability for failure to investigate.”

Nestled in the mountains approximately 60 miles east of Raleigh, North Carolina, Deborah Hollis’ office would seem to be a safe haven from violent crime. But, just as an increasing number of American workers have discovered, violence is something that can’t be escaped.

As the vice president of human resources for Rocky Mount, North Carolina-based Hardee’s Food Systems Inc.-which operates 1,100 company-owned Hardee’s and Roy Rogers restaurants east of the Rockies and employs 35,000 people-dealing with violence is part of Hollis’ job. All too often, she has been put in the position of reacting to bloodshed within the company’s restaurants as robbery attempts have led to murder, or the aggression from the streets has been brought inside.These days, however, more of Hollis’ time is spent in proactive measures against workplace violence. In taking a stand against this growing epidemic, the company created a comprehensive violence-prevention program in 1990. The program is run by a full-service loss-prevention department that reports directly to Hollis. It includes extensive training, a 24-hour reporting hotline and an intervention policy, and aims at reducing violent crimes within the restaurants. It also addresses threats, harassment and domestic violence targeted toward any member of the company’s work force. And although it’s impossible to tell how many threats, harassments or other such incidents the program has deflected, evidence shows that the program led to a 48% decrease in robberies in 1993.

The program isn’t cheap. Francis D’Addario, director of loss prevention, estimates that the company spends nearly $3 million a year on prevention and security. But, he believes it’s a small price to pay. Just look at the figures. According to the National Institute for Occupational Safety and Health (NIOSH), an average of 15 people are murdered on the job each week, which averages to nearly 800 murders a year. And, restaurants are high on the workplace-homicide risk list.

Even more workers are physically attacked, threatened or harassed. In fact, these incidents, although less brutal than murder, are much more prevalent and nearly as detrimental to a business and its workers. Between July 1992 and July 1993, for example, 2.2 million full-time workers were physically attacked on the job, 6.3 million were threatened with violence, and 16.1 million were harassed, according to a study by Northwestern National Life Insurance Co.(NWNL). And these incidents cost companies more than $4 billion in lost work and legal expenses in 1992, according to the Monroe, North Carolina-based National Safe Workplace Institute. The research company calculates that the average cost to employers of a single episode of workplace violence can amount to $250,000 in lost work time and legal expenses.

Despite the numbers, a poll taken by the Society of Human Resource Management (SHRM) of HR professionals, released in December 1993, revealed that only 28% of companies have a formal plan aimed at preventing violence or dealing with its aftermath, and only 22% have plans to introduce such a strategy. Why the lack of action? S. Anthony Baron, chairman and CEO of San Diego-based Scripps Center for Quality Management Inc., and author of Violence in the Workplace: A Preventative and Management Guide for Businesses, cites three reasons: a lack of knowledge of what to do, cost, and a belief system that “it won’t happen here.”

The truth is, it can happen anywhere. And although the retail and service industries remain the bloodiest worksites (because many transactions involve cash and these businesses are easily accessible by the public), other industries are vulnerable. The contributors to workplace violence cited by workers interviewed for the NWNL study present themselves everywhere. They are: alcohol and drug abuse, layoffs and firings, job stress and job-related conflicts, violence on TV and in the movies, accessibility of guns, and poverty.

In addition, workplaces everywhere have become battlegrounds for domestic violence. Ac cording to the U.S. Justice Department, boyfriends and husbands, current and former, commit more than 13,000 acts of violence against women in the workplace every year.

Clearly, it’s impossible to completely prevent violence from happening in our workplaces without eliminating it from society, but there are steps companies can take-and indeed must take-to defuse potentially violent situations and keep their workers as safe as possible. Increased security is one measure. But security personnel shouldn’t hold the burden alone. Violence is a human issue that HR can and should play a leading role in preventing. Hollis says that Hardee’s created its program under HR’s jurisdiction because company officials believe it’s important that it have a strong focus on the human element. “Whatever strategies the company comes up with have to meet our internal standards of how we want employees treated,” she says.

Part of HR’s role in preventing workplace violence is creating an environment less conducive to volatility, an environment in which workers are empowered, have support systems such as EAPs in place and are treated fairly. But more than that, HR departments can be proactive by putting together violence-prevention strategies that at the minimum include extensive pre-screening to keep potentially violent people out of the workplace, training managers on how to recognize and handle violent behaviors, and developing action plans that include processes for reporting threats.

HR in organizations such as Hardee’s, the U.S. Postal Service and Kraft General Foods are going one step further by leading or serving on prevention task forces with people from their companies’ EAP, security, legal and other staffs. Together, they take such measures as investigating threats and intervening in potentially explosive situations.

Employee-committed violence can be minimized with proper pre-screening.
According to the NWNL study, 30% of workplace attacks are committed by co-workers, bosses or former employees. What’s more, 43% of threats of violence against workers come from this group, along with 88% of harassment. It’s acts of workplace violence committed by this group of people that human resources can have the most significant effect in preventing.

The first step in this strategy should be pre-screening both internal and external applicants. Conducting interviews that focus on uncovering character, competency and chemistry, says Scripps Center’s Baron, is the first step. Jack Jones, vice president of research and development at London House in Rosemont, Illinois, agrees. He recommends developing job-related questions that probe to get people to reveal how they have reacted in the past, or may react in the future, to certain situations.

J.L. “Larry” VanderHaar, vice president of of HR at the Courier-Journal and Louisville Times Co. in Louisville, Kentucky, says screening temperamental people out during the interview process is key to his company’s strategy. He asks questions such as, “What frustrates you?” and “Who was your worst supervisor and why?” Says VanderHaar: “If they come in and badmouth their last employer because they changed their benefits plan or something like that, there’s no sense bringing them in here because we’re going to make changes like any other employer as time goes on.”

The newspaper company began paying closer attention to interview responses after September 15, 1989-the day an armed employee on long-term disability from a company leasing space in its building shot to death seven people and wounded 12 others before killing himself on the premises. “None of our employees were injured, but it impacted us because it was in our building,” VanderHaar says. He can still picture the human carnage, which he says keeps him aware of the consequences of a slack prevention strategy.

Warren Lawson, director of training & development operations at Northfield, Illinois-based Kraft General Foods Co., has the same awareness. Earlier this year, a male employee shot and killed a female co-worker at one of the company’s plants. The victim recently had broken off a relationship with her killer.

Ironically, the company already was aware of the potential violence that can happen in the workplace and was preparing to roll out a companywide violence-prevention program when the murder occurred. As part of this program, which it has since implemented, the company tries to avoid hiring workers who have violent tendencies through a three-pronged pre-screening process, which comprises behavior-based interviewing, thorough reference checks and attitude tests.

For the first step, Kraft asks candidates questions that probe into their behavior patterns. The questions focus on discovering how a candidate will likely react to situations that may occur at work, and are job-specific. For example, if someone’s interviewing for a position that requires working on a team, the questions address team activity. If they’re managerial candidates, they’ll be probed as to how they would handle specific relations with employees. “We’re getting them to talk about what they’d actually do on the job rather than asking them what college they went to or what their favorite course was,” Lawson says. “That doesn’t tell us very much.”

Along with behavior-based interviewing, Kraft conducts thorough reference checks. Lawson has found that the company can obtain a greater amount of background information by contracting with an outside firm.

Other organizations have learned this as well. The U.S. Postal Service, for example, which has developed a six-part strategy for prevention that’s being enlisted nationally (see “The Postal Service Delivers a Violence-prevention Program”), uses an outside firm with access to national data bases to check such applicant records as criminal, driving and credit histories. “Because we have a unique population in that we’re across the entire country and we have mobile people, it’s been difficult for personnel to do thorough checks on the local level,” says Ann Wright, national manager for safety and health, who has been coordinating the prevention program. Use of the outside firm has freed up the Postal Service’s personnel workers to do more qualitative screening, such as contacting former employers and personal references.

Wright says that the postal service has explored behavioral tests to incorporate into its screening process, but hasn’t been able to identify one that does an effective job of screening and also has been validated as a predictor of violent acts.

In fact, many companies stay away from behavioral or psychological tests for fear that their validity will be tested legally. Their use is indeed tricky, says Mary Russell, a partner in the Labor and Employment Law Practice Group at San Diego-based Luce, Forward, Hamilton & Scripps. Probing questions about behavior can be an invasion of privacy, and seeking out mental problems can be a violation of the Americans with Disabilities Act (ADA). For this reason, she recommends companies avoid them.

However, London House’s Jones, who has conducted research on these types of tests, says that as long as tests are designed to assess workplace violence specifically and are grounded in psychology, they can be not only valid and legal, but effective in identifying tendencies for everything from vandalism to physical abuse. “What you’re primarily interested in is identifying what percent of applicants could have some violent workplace disposition,” says Jones.

To specifically address workplace violence, he says, these types of tests need to seek answers to job-related behaviors and attitudes. For example, questions may ask candidates to agree or disagree with the way a problem is solved, or ask to what degree of anger a proposed problem would cause them.

Jones’ research on these types of psychological tests has included having workers who take them also complete biographical questionnaires in which they admit to past violent activities. He has found a high degree of correlation between the test scores and the admissions. “It’s a myth that tests can’t predict violent behavior,” he says.

He believes that these types of tests, coupled with structured interviews and reference checking, benefit companies in several ways. “Not only do they help deter negligent hiring claims by showing that you’re responsible in keeping out the more severe offenders, but they also seem to be related to customer-service behavior,” he says.

That’s something that Kraft has discovered. As the third prong of its pre-screening process, the company conducts behavioral tests that uncover how candidates react to certain situations. The process, while weeding out potentially violent people, also has netted a better- quality work force. At the company’s four new facilities, which used the process from the outset, the turnover rate has been less than 2%. “We’ve got a better caliber of employees in these facilities, and that’s because the selection process was good to begin with,” says Lawson. “Had we had this process before, we probably would have screened out some employees that we hired in the past.”

Augment pre-screening with training about violence, its predictors and preventions.
Along with extensive pre-screening, Kraft is training its work force on violence issues as part of its prevention program. The video-training program from Des Moines, Iowa-based Excellence in Training Corp. explains what workplace violence is, identifies its causes and signs, and offers tips on how to prevent it and what to do when it occurs.

Kraft plans to train all of its approximately 75,000 North American workers in 168 facilities. It’s starting with the management group, who will in turn train their employees. Lawson says the program is being well received. “Our plant managers are asking us where they can get more information,” he says.

At San Joaquin Health Care Inc. in French Camp, California, training on how to recognize and handle potential, violent incidents also has been successful. The company held a three-hour seminar for approximately 60 managers in July presented by Littler, Mendelson, Fastiff, Tichy & Mathiason, a San Francisco-based law firm that has approximately 20 lawyers on staff who work full time on workplace violence cases. Only a few days after the seminar, a manager was presented with a potentially violent incident. An employee approached her because another employee’s husband had threatened to harm his wife and anyone around her. The manager had learned in the training how to advise the threatened employee about getting a restraining order, and bringing human resources into the process. “She was thrilled that she had had the training so that she could try to prevent anything from happening,” says Judy Courtney, director of HR for the hospital. She adds that the training sent a clear message that this issue should be taken seriously.

That’s a message that the Postal Service wants to get out. Training is one way it’s doing so. Approximately 5,000 managers in California, for example, recently received training on how to report threats as well as how to recognize early signs of violence and how to intervene. In addition, postal managers and supervisors nationally are going through a series of training programs that addresses such climate-improvement measures as employee empowerment, labor relations and conflict resolution.

How to handle conflict is part of the training Hardee’s managers get as well. The fast-food company does extensive video training for managers on everything from store security systems to dealing with stalking situations. Workers receive training on cash handling and such preventative measures as keeping the back door of restaurants locked. And, the company communicates safety information constantly to its work force through a monthly newsletter produced by human resources, a training newsletter and a semi-annual internal publication called The Stop Watch. Occasionally, it even sends out special bulletins to stores in particular areas if a crime analysis indicates a particular risk.

Hardee’s program goes beyond just job safety training. All of Hardee’s workers receive personal safety training. They’re taught travel tips (such as not going directly to their hotel room if there’s someone following them); road safety (such as driving in spite of flat tires if a suspicious person approaches); and general safety tips (such as not going to ATM machines alone at night). “Most of the violence that’s occurring in the United States occurs off the job, and if a company is going to address the potential for keeping its employees and their loved ones safe, it would be remiss to only prepare workers for what might happen in the workplace,” says D’Addario.

Adds Hollis: “If there are unsafe practices at work or at home, it costs the company in lost time, in workers’ compensation and in health-care benefits.”

Wilmington, Delaware-based EI DuPont De Nemours & Co. shares this philosophy. It began a personal-protection program in 1986 that has won the company several awards. The program also has been copyrighted and purchased by other businesses. “DuPont is focused on safety,” says Jane McManus, human resources manager for DuPont’s nylon business. “So when we had a changing dynamic in the workplace-an increasing number of women going into nontraditional jobs, interfacing in different types of business and traveling more-coupled with a growing awareness of violence against women and violence in general, the company put in place a personal safety program.”

Its most intensive training module is an eight-hour rape prevention workshop for women. The seminar was created by human resources development and is facilitated by female workers who volunteer. The training focuses on understanding rape and its aftermath, providing prevention measures and outlining support systems for rape survivors.

Other modules include a managers’ workshop that’s designed to help managers understand how to support workers who have been through a crime such as rape. The workshop also gives managers some strategies for preventing rape; a Right to Dignity program that talks about physical and psychological battering; and a Matter of Respect seminar focusing on sexual harassment. All of the programs are facilitated by DuPont volunteers, who are trained to conduct them in a five-day workshop. “People volunteer generally because they understand the topic and have the energy to try to bring about change,” says McManus.

Task forces focused on violence prevention put energy into action.
DuPont’s training program raises its workers’ awareness and knowledge of violence and how to react to it. To facilitate reaction, DuPont also recently created a Corporate Threat Management Team that is developing an action plan for handling threats, harassment and physical attacks. The team consists of someone from security, external affairs, human resources and the company’s employee assistance program.

Scripps’ Baron says that forming a crisis team such as DuPont’s Corporate Threat Management Team is key to a prevention strategy. These teams should comprise senior, onsite managers; HR personnel; legal counsel; security representatives; people to handle communications both internally and externally; a psychologist, EAP representative or violence specialist; and a union representative if the company has a unionized work force. The duties of these teams may vary, but at a minimum should include performing crisis-vulnerability assessments, establishing written policies and procedures, such as guidelines for reporting abuse, and developing action plans if crises do occur.

San Joaquin Hospital created a safety task force after a female employee was attacked from behind in the parking lot. “We decided we needed to really look at the incident, as well as some increasing activity that was occurring, such as vandalism and emergency room violence going on around the country,” says Lynn Cook, director of nursing, who chairs the task force. Also, medical facilities in California must abide by new Cal/OSHA guidelines that require them to develop plans for reducing violent behavior on their pre-mises.

Cook enlisted the personnel director, hospital director, a risk manager, a security person, an education coordinator and managers from various departments to serve on the task force. One of the first tasks the team undertook was conducting an employee survey of safety concerns. The survey revealed that workers’ fears stemmed most from the distance of the parking lot from their work sites, hospital accessibility (there are 35 entrances into the hospital) and emergency room chaos.

The team then began meeting monthly to address these concerns. It did a security survey, looking at lighting systems, security measures and building access. The members all stayed after dark one night to walk the parking lot, noting bushes growing too high, light locations and employee parking spots.

Since the task force has been in place, several new safety measures have been implemented. Security guard schedules have been adjusted to meet identified needs. An ID badge system with electronic readers has been installed. And the company is in the process of creating a “lock-down” system to limit access into the buildings. In addition, the team has added a reporting procedure to the employee handbook that defines what constitutes violence and outlines workers’ responsibility for contacting the proper people.

Creating a reporting system was also a key achievement of Kraft’s task force, assembled to design the company’s prevention program. Kraft enlisted an outside consultant to lead its team, which also consisted of corporate security personnel, safety and risk management people, human resources staff, an EAP representative and workers from operations.

The team developed guidelines for workers to report either actual violent incidents or suspected trouble. The guidelines stipulate that supervisors should be employees’ first contact. If the incident requires further action or investigation, the chain of involvement is human resources, the legal department and then security. “The key is that it’s better to take some action than no action,” says Lawson. “We’d rather err on the side of prevention than be sorry for it later.”

Some companies are finding hotlines to be the answer for threat reporting. Hardee’s, for example, has a 24-hour crisis-reporting center run by the loss prevention staff. And the Postal Service has two toll-free numbers that ring at the headquarters any time day or night. One, run by the U.S. Postal Inspection Service (the law enforcement arm of the Postal Service), takes all reports of any overt threats or any kind of illegal activity. The other one takes reports of almost anything. Sometimes, says Wright, the reports regard climate issues or conflicts with supervisors or co-workers. Sometimes, people just call with personal problems. “If a caller contacts us and needs some sort of counseling, then counseling is available on that phone line,” says Wright. “And that’s in addition to our EAP services.”

The agency’s inspection service pursues all threats reported to either line, as well as threats reported at local levels. And it does take action if threats prove authentic. In Southglenn, Colorado, for example, a postal worker made a threat against his supervisor during a session with his personal counselor. Obligated by a duty to warn, the counselor informed both the police and the postmaster about the situation. The postal service removed the threat maker from his job until he was cleared by a psychiatric fitness-for-duty test.

The action, although proper for the situation, had its implications. At the time the employee was released, his union filed a grievance. Nine months later, when the postal service cleared him to return to work, co-workers again filed a grievance, some of them walking off the job. The problem, says Wright, is that the Postal Service probably didn’t do a good job of communicating to the work force that the agency no longer deemed the worker a danger. Currently, the employee isn’t working but is being paid, and the Postal Service is continuing with its training, climate improvement and labor relations initiatives.

In addition, some regions of the Postal Service have created crisis intervention teams to address threats and other potentially violent behaviors on a local level. The pilot project began in California, where each district created its own team comprising human resources managers, EAP coordinators, medical practitioners, line managers, safety and health personnel, injury compensation people, labor relations representatives and outside resources. “The teams provide an organized way of addressing potentially dangerous situations so that we can have control and respond appropriately,” says Jim Merrill, an HR executive with the Pacific region of the Postal Service.

Action the teams take can include gathering information about the threatening workers, offering counseling if appropriate or even terminating if necessary. For example, there was an incident in Antioch, California, in which an ex-employee wrote his supervisor a threatening letter and sent Prodigy messages to the post office stating, “I have post-traumatic stress disorder, I haven’t been properly treated, I’m enraged and I wake up at night thinking that I want to kill the postmaster.”

The threat assessment team for that region took over the case, investigating and taking action. The team discovered that the ex-employee had an attorney to deal with some employment issues. It talked to the attorney. It sent the doctor on the team to discuss the situation with the man’s therapist, who confirmed the man was under treatment. The team got a permanent restraining order against the ex-employee, installed some security guards in the office temporarily and moved the postmaster to a different location until the situation was stabilized.

Currently, the postmaster’s back in the office, the restraining order is holding and the ex-employee’s therapist knows that if the man acts up, the agency needs to be contacted. “You don’t have control of that person because he’s outside your work force,” Merrill says. “But through these efforts we were able to put him on notice, determine that he wasn’t dangerous, that he was just blowing off steam, and defuse the situation. Had we not been organized, we don’t know where it would have gone.”

Having a team in place provides organization. It creates opportunity for input from several areas of expertise and divvies up responsibility. And Merrill believes that it’s important for human resources to lead the team. “HR managers have most of the information about employees, and have experience dealing with employee problems and medical situations,” he says. “They’re the natural choice in an organization to take the lead.”

But they shouldn’t have full responsibility. “They tell me that having a threat assessment team reduces their stress because in the past they ended up doing it all themselves.”

At Hardee’s, the human resources personnel work closely with the loss prevention team in following up threat and harassment reports. “Our loss prevention staff in the field have a dotted line relationship to our field HR staff,” Hollis says. “Their skills are different, so they match up and blend very well.”

The HR and loss prevention staffs work as a threat assessment team collecting written and verbal statements from victims and witnesses and doing background checks on both perpetrator and victim. “We want to make sure that the incident occurred as described and that the integrity of the person making the allegation is reasonable,” says D’Addario.

If the incident indeed is real, which D’Addario says is the case 90% of the time, the team takes action. First they check the public record for other acts of violence committed by the perpetrators. If some is found, action is escalated.

Action may vary. In most cases, immediate steps include informing law enforcement of the situation and moving the potential victim temporarily to another location out of harm. The company also will advise the victim on such things as getting restraining orders, working with police and cataloging evidence, such as gifts, phone calls and letters from stalkers. If phone harassment or threats have been made, the company will serve as liaison with the phone company. And if employees need the company to go to court for them, it will. “One of our missions is to enforce a zero-tolerance policy for threats or harassment at Hardee’s,” says D’Addario.

The Courier-Journal and Louisville Times Co. has zero tolerance as well. Shortly after the murderous rampage occurred at the company site, for example, an employee came to work with a water gun shaped like an assault weapon. He was immediately fired. “His intent was to be funny,” says VanderHaar. “We didn’t take it that way.”

In another instance, an employee frustrated about a particular work assignment threatened the company that it “hadn’t seen anything yet,” in reference to the previous deadly incident. Her termination withstood an arbitration with her union. “We’re just not going to tolerate that,” says VanderHaar. “This isn’t a kindergarten. People need to have a minimum amount of respect for one another.”

Joseph Kinney, executive director of the National Safe Workplace Institute, agrees that zero tolerance is necessary, but warns that immediate termination isn’t always the answer. He suggests finding out a perpetrator’s side of the story, weighing it and making a decision to suspend without pay or terminate. “There may be mitigating factors,” says Kinney. “And if somebody’s creating a hostile environment, you need to know because other people are likely to be affected and it’s going to be a situation that’s going to come back to haunt you legally.”

He stresses, however, that some sort of discipline be applied. One of the reasons for increased crime in our workplaces, he says, is a failure to equate crime with punishment. “The boundaries of allowable behavior have changed,” Kinney says. “We’ve allowed people to get away with too much. Companies need to go back and redefine those boundaries. If somebody’s abusive toward somebody else, they need to be disciplined.”

D’Addario believes this extends to people outside the workplace as well. Hardee’s offers rewards for the capture of people who harm any of its workers, be it on the job or elsewhere. “We will do anything that’s legal to bring that person to justice,” he says. “We want everyone to know that Hardee’s and Roy Rogers will not abide by somebody injuring a customer or employee, and we will move to take whatever measures are necessary. We want people to realize that ours won’t be a place where they can act out aggressively and get away with it.”

Even this can’t stop the violence, however. On August 9th, as this article was being written, a female employee was shot and killed at a Hardee’s restaurant in Georgia during a robbery. Investigators believe that the killers were let in through the back door by an employee-an employee who has been trained to avoid potential violent situations.

“Tragedies happen even if you have the best of training,” says Hollis. “We do everything within our power [to prevent them], but there’s a human element involved, which isn’t predictable.”

The recent Hardee’s murder is a painful reminder of this and a warning signal that even more must be done.

With the days of the paternalistic corporation long gone, and downsizings now a common occurence, guaranteed employment is hard to come by. But, for approximately 4,000 unionized employees at Stamford, Connecticut-based Xerox Corp., job stability is a reality. On June 7, the workers at the company’s Webster, New York, facility ratified a union contract guaranteeing them jobs for the next seven years. This came to pass during a major restructuring, which includes projected layoffs of more than 10,000 people.

The job guarantees are in exchange for concessions made by the union membership to allow for measures that would help increase profit and productivity while reducing expenses and process redundancies in the manufacturing function. These measures include no wage increases for the next seven years except for quarterly cost-of-living adjustments to keep pace with inflation. In addition, the employees would have to allow Xerox to bring in temporary workers, outsource low-value-added jobs and exercise greater flexibility in promotional and transfer activities within the unionized ranks.

The contract was negotiated one year early to help support the organization’s restructuring plans and remove any barriers. The fact that both sides were willing to open negotiations early, and make compromises, reflects the strength of the company’s union/management partnership Xerox has been painstakingly cultivating during the past decade with the Amalgamated Clothing and Textile Workers Union (ACTWU), which represents the manufacturing, supplies and distribution workers at the Webster facility.

Since 1983, the two parties have been working together as business partners to bring about change in the manufacturing function that will help Xerox in its goal of being “The Document Company.” This partnership includes sharing all financial information, participating together in training sessions and serving as equal members on work teams. Through the partners’ combined efforts, the U.S. manufacturing function in Webster has enlisted greater employee involvement, installed increased flexibility and has transformed into focus factories that employ the use of work teams.

An old partnership rekindles out of a need for survival.
The foundation for today’s partnership between the union and its members and company management was established back in the 1940s when Xerox was the Haloid Co. The Wilson family, who was the prime stockholder in Haloid, believed in cooperation between employees and management. This philosophy continued through-out the ’50s and ’60s as Xerox established itself as the copy-machine maker. The company was making lots of money, so negotiations throughout this period were fairly uneventful as Xerox shared its profitability with workers through lucrative wages and benefits. And, “It was relatively easy to pass the additional costs on to customers who didn’t have many alternatives in the marketplace,” says Joe Laymon, director of corporate industrial relations for Xerox.

According to Laymon, the amiable relationship between the union members and management broke down in 1973 when the membership rejected a proposed contract and struck the company for two weeks. Both sides saw how detrimental this could be for the company — and in turn the workers — and agreed to work harder at avoiding such action in the future.

As the company moved into the 1980s, however, it became evident that simply avoiding conflict between the two parties wasn’t enough. The organization needed to establish a genuine partnership. It was vital for success; indeed, even for survival.

Facing stiff competition from Japanese companies that had entered the industry during the 1970s, Xerox’s market share had shrunk from 80% to less than half. Profits ceased to increase at the rate they had previously, revenue became flat, and expenses soared. “The foreign competition was selling products at a price that it cost us to make them,” Laymon says. “And the products were of outstanding quality. For the first time, the American consumer had a choice, and their choices were based on quality, price and delivery. In all three of those areas, we tended not to be the best provider.”

David Kearns, who was the CEO of Xerox at the time, and Paul Allaire, current CEO, who was then company president, determined that to take back its market share, Xerox would have to reduce the costs of doing business, become more efficient and produce better quality products. Employee involvement within manufacturing, they believed, would be one essential tool for meeting those objectives. Because the workers in this area were members of the ACTWU, union support would be essential for success.

Complete cooperation between the company, ACTWU officials and union workers wouldn’t happen overnight, however. Although the 1980 ACTWU contract contained a clause that the union would “explore the concept of employee involvement,” the document didn’t make any concessions for enabling the company to increase operating flexibility and productivity, and reduce labor costs. In fact, it stipulated that employee-involvement initiatives couldn’t affect wages, jobs and work rules. What’s more, managers wanted employee involvement to happen during employees’ off hours. And, workers weren’t sure that their input wouldn’t cost them their jobs.

Teamwork spreads across the company with union support.
It wasn’t until after the next labor/management negotiations, in 1983, when a real strategic partnership began to materialize. By this time, the employee-involvement concept had been in the air for three years at Webster. Workers already had received some problem-solving and team-work training — jointly paid for by the company and the union.

Then the company launched its Leadership Through Quality program, a TQM process. Through it, all employees, including the unionized workers at Webster, received more extensive training in such disciplines as problem solving and effective team skills.

Initially, the union wasn’t involved in putting together the program, says Gary Bonadonna, manager of the Rochester regional joint board of the ACTWU and international vice president of the main union, because it was a top-down initiative. However, the company included union officials’ input before the program rolled down to the union’s membership. They ensured that the program fully incorporated employee involvement.

This same year, the ACTWU contract was renegotiated. During discussions, union officials made a suggestion. “If you’re serious about getting the members’ support for resolving problems and reducing costs,” Laymon remembers them saying, “then take away their biggest fear, which is the loss of employment.” The union representatives said that the membership had to be assured that any ideas that they offered wouldn’t be used against them.

Xerox agreed, giving the workers three-year job guarantees. In exchange, the union members accepted a freeze in pay for the first year of the contract, a cut in benefits coverage from a 100% company-sponsored plan to an 80/20 plan, and a no-fault absenteeism provision, which would allow termination for four absences in any 12-month period. In addition, Laymon negotiated for the ability to hire a buffer, or temporary, work force and the opportunity to outsource any work that can’t be performed competitively inside. “At the time, plants were closing across the country,” says Bonadonna. “People were worried that Xerox was going to be forced to do the same things.”

Even with training and a contract to support employee involvement, however, the initiative didn’t take hold right away. “For approximately one year after the contract, employee involvement was stagnant [within the union membership],” Bonadonna says. “People were upset, they felt that the only reason they had to give concessions was because the company hadn’t managed right.” As a result, he says that workers remained uninvolved as a way to strike back at the company.

It’s ironic, then, that it was the manufacturing function at Webster that really gave employee involvement its impetus. Because costs of manufacturing remained high, Xerox management announced that the company could save $3 million by moving production of the wire harness — the configuration of strands of wires that delivers the current throughout the copier — to its plant just outside of Mexico City.

According to the contract, says Laymon, the company has to give the union membership within any area for which outsourcing is a possibility the opportunity to make it competitive. “A small study team, made up of company and union employees, will be appointed to work for three to seven weeks to reduce the cost of doing business in an operation to competitive norms,” says Laymon. “If they fail, the company reserves the right to outsource the work.”

The company commits to providing the teams with all financial, engineering and legal support that’s needed. There are very few areas that the teams can’t explore, wages and benefits being two of them. The teams work fairly autonomously and are allowed to work uninterrupted toward the objective of meeting the external benchmark.

For the wire-harness operation, a team of eight people, led by a management member and a union employee and made up of both members of management and union workers, did an analysis of where the manufacturing costs were higher in Webster and why. Ron Slahetka, vice president of Webster manufacturing operations, said that the team found ways to reduce overtime, redesign factory layouts to cut down on overhead costs and production redundancies, and implement more self management.

For example, the team learned that the wire-harness operation was being charged for one-sixth of its building’s electric bill, although it was using only a 50th of the electricity. It also was being charged fully for the overhead of the building’s lobby — including fees for security guards — because it was located closest to it. Other findings for savings included using cheaper material, purchasing new, more efficient equipment and employing different training techniques. The team’s changes resulted in $2.9 million in savings, and preserved more than 180 jobs. “I didn’t think they could do it at first,” Bonadonna says. “I was told by managers that there was no way. But they did it.”

Company and union partners redesign Xerox’s factories for improved productivity.
After this initial success, employee involvement in Webster caught on. But despite the improvements being made, the company realized in 1990 that it no longer could operate the manufacturing operations as it had in the past. “Many had grown to be large, unmanageable operations,” says Laymon.

The industrial-relations director took union representatives on benchmarking trips to focus factories in California, Texas and Europe. A focus factory replaces the assembly line with self-managed cells that produce narrow lines of products. The cells contain their own finance, engineering, HR and quality staffs, and reduce the number of management personnel, pushing decision-making down to empowered employees. “These factories were smaller, self-contained, quick-to-respond entities that were more manageable, had higher productivity, better team cohesiveness and higher quality of work than non-focus- factory operations,” says Laymon. The cost of their operations also was lower.

The company set up a focus team made up of both Xerox and union officials to design and implement focus factories for Xerox. Laymon assigned an industrial-relations representative to the team, Slahetka represented operations, and Bonadonna and one other person represented the union.

The team began work on the project in late 1990, two years before the next contract negotiations. “We struck an understanding that because this was such a major deal and it would help in determining how much work would be assigned to Webster and how much work would stay in Webster, we wouldn’t wait until 1992,” Laymon says.

Because the company planned to implement the new factories under the existing contract, the union membership had to permit changes in work rules. Says Laymon, the company needed, “the ability to move people without regard to seniority, for the purpose of staffing a product line with the most qualified individuals to get the product out as quickly as possible and with as little cost and as high a quality as possible.”

For example, Slahetka explains that the focus factories brought together two previously separate plants — one that built new machines and one that remanufactured the same machines. With the new factory, the machines would be built and remanufactured on the same assembly line, “using one set of toolings and one set of people who had skill and experience on that particular product.” The union had to allow for job reclassifications for this to occur and had to protect the pay of workers who changed jobs.

The focus team created six focus factories by early 1991, used for consumer-replacement units, low-volume machines, mid-volume machines, high-volume machines, components and color machines. Slahetka says giving labor and management equal voice in the design of the focus factories had advantages. “You get the workers’ views and you also get the managers’ views in terms of the bigger picture,” he says. “And when you get both views, you get more data and can come up with more effective solutions. Also, if everyone’s involved, it’s easier to implement.”

Adds Bonadonna: “It wouldn’t have happened without [both parties]. You need labor and management working together to make these things happen.”

According to Laymon, the focus factories as designed by the company and the union have decreased product-development costs 30%, improved quality by 100 times and increased return on investments from 8% to 14%. Also, the amount of money spent on training and retraining has decreased. “The teams tend to be more cohesive than they were before,” Laymon says.

Most of the teams within the focus factories work autonomously or semiautonomously. Where once there was one supervisor for every 20 employees, for example, there now are four semiautonomous groups of employees who share one coach or facilitator. Other groups have no supervisors at all. The teams have within them group leaders who they elect themselves for various lengths of terms. The company provides training on company time for both the leaders and the team members. Many of the teams do their own scheduling, overtime balancing, ordering of parts and the assigning of employees to daily, weekly or long-term tasks.

To reach the level of a totally autonomous work group, a team must pass certain objective gates. These include:

• Do the members know how to work as a team?
• Do they know how to lead?
• Do they know how to participate?
• Can they deliver a product within a cost specification, and have they demonstrated this within a specific period of time?

The average team takes two to three years to get to this point. “The reason it takes this much time is because we’re looking at those objective measures,” says Laymon. “Can this team continue to deliver a product to a customer over a period of time that meets the customer’s quality and price specifications? Once we see that, and the team has made an appeal for autonomy, we make the decision to pull supervisors and overseers and all the other inspectors and checks and balances and let the team work autonomously.”

Union officials and management personnel embrace teamwork together.
During the implementation of the focus factories, Laymon was working on another project — smoother negotiations between the ACTWU and Xerox. Although relations between the two parties were strong, as witnessed by the successes of the partnership thus far, contract negotiations remained arduous. Talks often lasted up to four months, including weekends. Each side brought in as many as 40 representatives and 200 demands.

Laymon did an assessment of the negotiation process, looking at who usually was at the table for both sides, what skills were needed at the table and whether the people at the table had the right skills. “When we looked at the objective of the activity, we quickly concluded that we had too many people at the table and not enough of the proper skills,” Laymon says.

When the two sides came to the table in 1992, there were only seven members on management’s negotiating team and 14 on the union’s. The two sides set some reasonable working expectations to start every morning at 8:00 and to conclude at 5:00. They agreed not to work weekends. “We agreed to use discipline to get the job done within working hours,” says Laymon. “We also agreed that, unlike in the past, we wouldn’t inundate the system with frivolous issues. We would go to the table as a company only with those things that we needed to change to run the business more effectively. The union agreed that they would come to the table only with those things that their membership needed, and not a wishlist of wants.”

As a result of the preparation, the union’s needs only numbered 12 and management only had seven requests for change. Talks concluded after five weeks, with just one three-hour Saturday meeting.

The new negotiation process stuck. The contract ratified in June took just three weeks to deliberate. Preparation for its negotiation included the formation of a task team, comprising Laymon, Bonadonna and other management and union representatives, to look into bringing costs down and new business into the Webster plant.

The negotiation process is reflective of the partnership that Xerox and the ACTWU have worked so hard to cultivate. “This relationship has been successful because we don’t view each other as adversaries or enemies,” Laymon says. “We view the competition as a common foe, and we know that that foe will continue to beat us if we don’t act as a common friend or a team. This requires tremendous cooperation, dedication and a common vision that only when the customer is satisfied, we prosper.”

He admits that the relationship is growing still, as the two parties struggle through the restructuring. But Ron Slahetka sums up the motivation to keep it alive: “We’re working together to become the best manufacturer of copiers and duplicators in the world.”

Personnel Journal, August 1994, Vol. 73, No. 8, pp. 46-53.