Author: Dayton Fandray

For individuals to be successful, the organization needs to besuccessful,” says Jane Weizmann, senior consultant for Watson WyattWorldwide. “So at best-practice organizations, the assessment period getsthe least amount of energy. The biggest part of the energy is in the planningperiod.”

    Weizmann offers the following tips on channeling that energy constructively:

• Link the performance-management calendar to the organization’s businesscalendar. This way, performance planning is coordinated throughout the entire organization. “You tell your employees, ‘Here’s what we’ve got todeliver this year and here are the roles everyone’s going to play. We need toknow what development interests you have, and by the way, we have somedevelopment needs that you’ll have to grow with.’ “

  
  

• Conduct a mid-year review. With mid-year financial results in hand, you canrecast your plans to meet changing conditions. “By the end of the year,then, it’s in the bag. And as much energy goes into planning for the next periodas goes into evaluating the past.”

  
  

• Articulate a set of role-based competencies. First, let every employee knowthe five or six qualities that define success for every member of theorganization, regardless of job description. Then let every employee know howthose qualities translate into performance in specific jobs. “This tellsthe employee what they can expect of their leaders, as well as their coworkers.Expectations, then, are not disputable. They’re in the role. They’re well-documented.”

  
  

  Thus, whenreviews are conducted, employees and managers do not get bogged down indiscussions of whether or not a specific behavior is important. The focus isshifted to a discussion of how well the employee met expectations and how thoseexpectations might change in the coming year.

  
  

• Set developmental guidelines for your employees, based on their roles in the organization. Make sure that employees understand the kinds ofdevelopmental opportunities they will have to take advantage of if they want to grow intheir jobs and move on to positions of increasing responsibility.

  
  

• Don’t get bogged down in paperwork. “Paperwork has to facilitate theprocess. Anything you can do to assure the face-to-face discussion ofperformance between the individual and the manager is what counts. The papercan’t be the end result.”

  
  

• Focus on leadership. “One of the things that leaders do is setexpectations and coach. You want to line up your needs with the employee’sneeds. Do whatever needs to be done to get that to happen.”

  
  

Workforce, May 2001, p. 38— Subscribe Now!

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For the past two years, New York-based Merrill Lynch & Co., Inc., hasbeen making the transition from a traditional performance-appraisal system toone based on the principles of performance management.

    “The whole emphasis has shifted from one of justifying a rating to oneof improving performance,” says Linda Murphy, the company’s director ofglobal performance management. “We’re looking at how we can help theemployee improve his or her performance. And because of that, there’s much moreconcentration on the coaching, the feedback, and the conversations that occurbetween the manager and the employee. Coincidentally, one of the pieces is yourrating, perhaps, but the significance of the conversation really is how do wework together to improve performance?”

    The Merrill Lynch approach incorporates elements of 360-degree feedback.Employees have an opportunity to solicit feedback from their peers and theirclients, but the key to the system is still the relationship between employeesand their managers. At the beginning of the year, employees and managers settheir objectives. Mid-year and year-end reviews follow.

    At the mid-year review, the manager and employee sit down to assess theobjectives set at the beginning of the year. They look at the employee’sprogress with an eye toward making any changes necessary to ensure the ultimatesuccess of the plan. They also update whatever kind of personal development planthe employee may have in place. The year-end review integrates cross-levelfeedback, assesses the employee’s progress against business objectives, andidentifies the areas in which the employee needs to show improvement.

    These two specified reviews are just the minimum requirements. Throughout theyear, managers are encouraged to provide their employees with ongoing feedbackabout their performance.

    Murphy is particularly enthusiastic about the company’s recent move from afive-point performance-rating scale to one based on a simple three-point spread.This change, she believes, makes it more acceptable for an employee to be ratedan average performer. And this makes it easier for managers to distinguish thepeople who genuinely are top performers. It also makes theyear-end review less a ratings game and more a conversation about what theemployee has accomplished and how he or she has achieved those results.

    “The conversation with the employee doesn’t have to be, ‘Why aren’t I a5-minus instead of a 4-plus,’ or whatever,” Murphy says. “It allowsthe manager to say to the employee, ‘The middle category is an acceptable levelof performance. Most of us are in that category. Now, let’s talk about how,relative to your peers, we can move you up in the rankings.’ “

    For its managers, Merrill Lynch provides extensive training on how to conductreviews, with pointers on how to handle employees at each performance level, aswell as guidelines for how meaningful objectives can be formulated. The companyalso hosts an extensive HR Web site that allows managers to access modules thatdescribe every aspect of performance management.

    “Our expectation is that this is a critical element that will help us bemore competitive in the war for talent,” says Murphy. “People areexpecting us to be able to say, ‘This is what’s expected of you, this is howwe’re going to help you in your personal development, and this is how you’ll bejudged relative to compensation.’ Everything is telling us that there’s anexpectation among new employees that we’ll move in this direction. And it’s thesame thing for retaining employees.”

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Six months ago, it would have been difficult to find more than a handful ofAmericans who could tell you the brand name of the tires mounted on the familycar. Today, it would be equally difficult to find an American who couldn’t.Especially if that name happened to be Firestone.

    The lawyers, politicians, and federal regulators have yet to fix blame forthe Ford/Firestone tire debacle, but whoever ultimately bears theresponsibility, one thing is painfully clear: the once proud Firestone name hasbeen forever tarnished in the minds of American consumers. The company has takena public relations hit from which it may never recover.

    Compare this to the situation that Johnson & Johnson faced in 1982, whencyanide-laced Tylenol capsules were determined to be the cause of several deathsin the Chicago area.

Although the standard procedure in cases like this was torecall only the bottles in the contaminated lot, and although the source of thecontamination had yet to be determined, Johnson & Johnson vice chairmanDavid Collins decided to recall the entire product line. It was, he thought,simply the right thing to do.

    Johnson & Johnson ultimately was absolved of any blame. The company’sreputation was preserved.

    And to this day, Collins’s response is cited as the textbook example of howdecisive action, grounded in sound ethical values, can avert a crisis, and evenbolster a company’s reputation over the long run.

    In the wake of the Ford/Firestone tire recall, a lot of managers arebeginning to wonder what they would do if faced with a crisis of similarproportions. And according to Tracy Carter Dougherty, director of ethics,communications, and training for the Lockheed Martin Corporation, it’s a goodthing they are.

    It’s bound to happen, she says. All it takes is one person using badjudgment, not even maliciously, but just using bad judgment. When you’redealing with as many different products and services and people as companies dotoday, it’s just a matter of time until something happens.

    When it happened to Johnson & Johnson, the company was, in a sense,prepared. David Collins looked to the company’s famous Credo, a shortstatement of values written by company founder Robert Wood Johnson in 1943. Asimple one-page document, the Credo begins, We believe our first responsibilityis to the doctors, nurses, and patients, to mothers and fathers, and all otherswho use our products and services, and continues, We are responsible to thecommunities in which we live and work and to the world community as well.

    The Credo says nothing specific about corporate policy in a case of producttampering, but it sets up a framework in which the responsible course of actionbecame obvious to Collins.

    Such guides to ethical behavior are now common in American business. TheRaytheon Company has an Ethics Quick Test that asks employees to consider thefollowing questions when faced with ethical dilemmas:

• Is the action legal?
• Is it right?
• Who will be affected?
• Does it fit Raytheon’s values?
• How will I feel afterwards?
• How would it look in the newspaper?
• Will it reflect poorly on the company?

    Texas Instruments (TI) has a similar test that covers much of the same groundbut ultimately exhorts the employee: If you know it’s wrong, don’t do it!

    Although TI’s ethics handbook dates back to 1961, widespread interest insetting company values down on paper and creating offices to administer them canbe traced in large part to the rash of defense industry scandals that surfacedin the mid-1980s. At the time, the emphasis was on compliance with governmentrules and regulations. This has evolved in recent years to a more fundamentalinterest in core values and ethical behavior. When TI sold its defense business,for example, it simply changed the emphasis of its ethics program.

    We felt that when we sold the defense business, the types of things that wewere concerned about changed, says TI ethics director Jack Swindle. We were moreinterested in establishing a values-based program with the rationale that youcan’t ever write down all the rules. Eventually you get so many rules thatthey’re almost meaningless. We start now by telling people what the values ofour company are and we work from that.

    Texas Instruments and Raytheon both back up their ethics codes with formaltraining programs and official channels through which employees can posequestions and voice their concerns.

    At Texas Instruments, the ethics course — Decision Making at the New TI –is voluntary. Swindle notes, however, that it is one of the company’s mostpopular courses, and he believes that eventually, most of TI’s employees willpass through it. The course generally brings together groups of 25 coworkers,and shows them ways in which the company’s values and principles can be usedas the basis for making day-to-day decisions.

    For Raytheon’s employees, the training is mandatory, an annual one-hourevent that uses case studies to sensitize employees to problems they may face inthe workplace. Like TI, Raytheon involves coworkers in these sessions, which aregenerally conducted in groups of 30 or so and use a variety of instructionaltools, including videos, board games, and discussions facilitated by theemployees’ managers.

    Open lines of communication are an essential ingredient of any successfulethics program, and both of these companies make it easy for their employees toask questions and report on observed violations of ethical standards. TI has ananonymous e-mail system, a post office box, and a direct telephone line toSwindle’s office.

Raytheon has a toll-free ethics line and full-time ethicsofficers in all of its major business units. Employees can also communicate withthe company’s office of business ethics and compliance through letters ande-mail.

    Is this all it takes to create an ethical business culture? No, says LindaKlebe Treviño, chair of the department ofmanagement and organization at Pennsylvania State University. You can have theseethics offices and officers and training programs and reporting systems, but ifthe CEO doesn’t seem to care, it’s all just a sham.

    Hence, it is not surprising to find that the companies that really do careabout ethics make a point of including senior management in all of their ethicsand compliance programs. Patricia Ellis, vice president, office of businessethics and compliance at Raytheon notes that ethics training is a requirementfor everyone employed at Raytheon and no one is excluded, not even the CEO. DanBurnham says we will have annual ethics training. His leadership team knowsthat, and they take the training themselves, Ellis says.

    But the management team’s involvement can’t stop at one hour of ethicstraining a year. If managers don’t walk the walk, as it were, employees willsimply assume that all of the high-minded words are little more than windowdressing, or something perhaps even worse.

    If employees perceive that these programs come from a CYA orientation, thatthey are in place simply to protect management, just in case they get caughtdoing something wrong, then the employees become very cynical, and that has allkinds of negative consequences, says Treviño.

    It is easy to write a credo and ask employees to take it to heart. But aneffective ethics program, one that includes training, confidential lines ofcommunication, and ethics officers who are truly empowered to investigate andresolve issues that are brought to their attention by employees, can consume asubstantial amount of company resources. As noted, Raytheon employs a full-timeethics officer in each of its major business units. And Ellis has 10 peopleworking directly under her, including five full-time investigators, a directorof ethics program development, and two people who are responsible for takingcalls on the company’s ethics hotline.

    Calculating the ROI on an investment of this nature may well be impossible,but Bruce N. Pfau, national practice leader for organization measurements atWatson Wyatt Worldwide, believes it is indeed money well spent. Employees whofeel that their companies conduct business with honesty and integrity showmarkedly higher levels of commitment — 68 percent — than those who rate theircompanies low on these values. The latter came in at a 12 percent commitmentlevel, according to Watson Wyatt’s surveys. High levels of employee commitmentare crucial to success in today’s economy.

Pfau effectively demonstrates thisrelationship by noting that companies whose employees rated them high on thehonesty and integrity scale had a total return to shareholders of 101 percentaveraged over three years. Companies rated low on the honesty and integrityscale averaged only 69 percent.

    This is really a key driver of employee commitment, says Pfau. If a companyturns an obvious blind eye to an ethics problem, most employees are not going tobe loyal for long.

    Ethics and integrity do matter. And if the Ford/Firestone incident has taughtus anything, it’s that this is one lesson that business can ill afford toforget.

Image © Marc Tyler Nobleman

Workforce, December 2000, Volume 79, Number 12, pp.74-77 SubscribeNow!

When I was growing up back in the 1960s, no one had ever heard of a 24/7 economy.Offices pretty much ran 8 to 5. Retail outfits were a little more flexible, but even therare businesses that opened their doors seven days a week shuttered their windows bymidnight. The closest thing we had to large-scale 24/7 operations were the factories whereassembly lines ran round the clock to keep pace with America’s post-war prosperity.

My father worked at one of those factories. Second trick. And for his entire workinglife, he punched in three o’clock in the afternoon, coming home sometime aftermidnight. Yes, we saw each other on weekends and during the summer months, but it wasnever enough for us to make much of a connection. He knew that and I knew that. It neveroccurred to either of us to question the arrangement, however. In those days a man took ajob and he worked when he was told to.

Those were different times.

Like me, Bill Sirois is the son of Depression-era parents. As a senior vice presidentand the chief operating officer at Circadian Technologies, a consulting firm based inCambridge, Massachusetts, he has observed first hand a change in America’s attitudetoward work, and the effect it is having on American business.

“In my generation,” he says, “work came first, before God and family. Tohave a job was a big deal. For us, it was get educated to have a good job, work hard, dogood. But we have brought up our children differently. The kids today were brought uphaving just about everything. It’s getting increasing difficult to find people whowant to work shift work. Most people want to work the traditional hours and live thetraditional lifestyle.”

This is bad news for human resources professionals. We live increasingly in a 24-hour,seven-day-a-week world. Factories that teetered on the edge of extinction in the mid-1970sare humming again. And, more important, the globalization of the world’s economy,abetted by a revolution in computer technology, has made the notion of a 40-hour work weekincreasingly anachronistic. The week lasts a full 168 hours, and companies thataren’t prepared to stay open for each and every one of them do so only at their ownperil.

“It’s linked to the Internet,” says Richard Coleman, president of theColeman Consulting Group and author of The 24-Hour Business (AMACOM, 1995). “Behindthis fantasy of you sitting at your computer and clicking on something in the eveninghours and expecting it to show up at your door the next morning, there are more and morepeople having to work behind the point and click. While you’re sleeping, someone hasto get the order, pull the product, ship it, take your calls. There are more and more jobsin that sector.”

We have, then, two fundamental trends pulling our businesses in two differentdirections. And businesses have responded to the challenge in two related, if distinctlydifferent, ways.

The first response has been to add shifts to the traditional work week. The other hasbeen a sometimes subtle, sometimes heavy-handed, effort to wring longer hours out oftraditional day workers. In an economy where the unemployment rate has hung tenaciously atthe 4-percent level, both approaches have forced businesses to take uncommonly creativesteps to make sure that staffing levels are adequate to cover the 24/7 work week.

Evidence for the growing importance of shift work is largely anecdotal. The most recentdata from the Bureau of Labor Statistics (1997) indicates that 82.9 percent of full-timewage and salary workers have regular daytime schedules. In service-oriented occupations,however, the percentage of Americans doing shift work rises to 55.1 percent for thoseemployed in the protective services, 42 percent in the food services, and 27 percent foroperators, fabricators and laborers. By 1997, 16.8 percent of full-time American workerswere clocking in for shifts other than normal daytime hours.

If Americans in general are voicing a preference for spending more time with friendsand family, how are the managers of the nation’s call centers, warehouses, andfactories filling positions on the increasingly crucial evening and overnight shifts?

To some extent, they’re doing what employers have always done. They’re payinghourly premiums for work on the late shifts and they’re courting the people who mightnaturally see some advantage in burning the midnight oil: night owls, students, andspouses who need to spend their days at home to balance out child care responsibilitieswithin the family.

But as attractive as these candidates may be, they make up a small percentage of theAmerican labor pool. So companies are being forced to look beyond the traditionalcandidates for night and evening work, and the challenge has forced them to reconsidermany of their assumptions about the nature of shift work and the people they hire toperform it.

What is most significant, perhaps, is that progressive companies are no longerapproaching shift work as an all-or-nothing-at-all proposition. They are using creativescheduling techniques to make a stint in the off-hours seem preferable to the traditionaldaytime grind.

“If you go to the average person and start out saying, ‘How would like towork weekends? How would you like to work nights?’ generally, the response rate wouldbe very, very low,” says Richard Coleman. “What you’ve got to ask is,‘How would you like a schedule that gives you 20 weeks of vacation? And, by the way,you’re going to be covering some weekends.’ People will say, ‘That soundsinteresting.’”

According to Coleman, formulating the right schedule is the key to meeting businessneeds, while at the same enticing workers to cover hours that would normally send themscurrying for the door. The idea is so attractive, in fact, that even a number of mature,tradition-bound industries are giving it a try.

The railroad industry, for example, has been operating on an around-the-clock schedulefor well over a hundred years. And evolving labor agreements have created a complex web ofscheduling priorities that have proven resistant to change. Still, the complaint mostoften voiced by railway employees is that they have to live with the uncertainty of whenthey will be called out to work a train crew. Scheduling here, essentially, consists ofmatching a list of employees with a list of trains. Because trains can be delayed andemployees can opt out of the list for a variety of reasons, employees waiting to beassigned to crew seldom know exactly when the call will come. The problem is even worsefor employees assigned to so-called “extra boards,” because they are the peoplewho are called to fill in when vacancies open up on the primary lists, or “poolboards.”

The Burlington Northern and Santa Fe Railway Company has been working with CircadianTechnologies to find ways to remedy this problem.

“We find that the number one priority for our employees is wanting to know whenthey’re going to be off, so they can plan activities with their families,” saysGeorge Smallwood, Burlington Northern’s assistant vice president of manpower trainingand operating practices.

The railroad is now reducing that uncertainty by giving its employees assigned restdays — days when they have what amounts to a “right” to take the phone off thehook. For workers on the extra boards, the new schedule generally entitles them to 4 daysoff after 11 on the job. The program has been successfully implemented on approximately 70extra boards and plans called for transferring the concept to the pool boards at the endof the summer. The key difference is that it will be based on a 7-day-on, 3-day-offschedule.

“We’re giving the employee a window of time they can put on theirrefrigerator at home and say to their spouse, ‘During this three-day period we can dowhat we want to do. The phone’s not going to ring,’” says Smallwood.

Circadian Technologies even convinced Burlington Northern that current scientificevidence indicates that short “power” naps can improve an employee’salertness by a factor of hours.

“For a hundred years,” says Smallwood, “if we caught you sleeping onduty on this railroad, we’d fire you. But we learned that short naps can have markedrestorative value to our crews. So now we have rules that allow, in certain circumstances– when motion is stopped and there’s no danger of any type of intervention –certain members of the train crew to take short, restorative naps. It’s part of ourculture now.”

Another change in thinking in recent years has concerned the length of the ideal workshift. We tend to think in terms of 8-hour shifts, but in a 24/7 environment where thework is not overly strenuous, a number of companies are experimenting with 12-hour shifts.

With more than 400 plants scattered across the country, International Paper,headquartered in Purchase, New York, has had experience with just about every shiftschedule imaginable. The one constant at its manufacturing plants, however, is thepressure to keep the paper-producing machinery running 24 hours a day, seven days a week.The challenge for company managers has been to devise a schedule that keeps the machinesrunning while at the same time giving employees a chance to strike an acceptable work/lifebalance. These seemingly contradictory demands led International Paper to launch a pilotprogram to measure the effect of rotating 12-hour shifts at its plant in DePere,Wisconsin.

“The real difficulty when it comes to 24/7 operations is whether you have fixedshifts or rotating shifts,” says Jeffrey Mayhew, business resources manager in thecompany’s industrial papers division. “Rotation gives everybody the opportunityto balance out. If you work on a permanent midnight shift, it can preclude a lot of thethings you would normally do during the daytime, whether it’s family or LittleLeague. With rotating shifts, everybody shares in the upsides and the downsides.”

The downside in the pilot project is the long hours and a schedule that rotates fromdaytime hours to nighttime hours and back again. The upside, however, is a wealth of freetime. Mayhew notes that the typical rotation at DePere follows a pattern of four days on,two off, three on, three off, three on, and four off. This means that employees work only190 days a year, giving them more time off than ever before, time they can use to balancethe demands of work and family life.

“Employees reported fewer problems with insomnia, fewer gastric problems, bettersleep habits, and better dietary habits,” says Mayhew. “We have much higheremployee satisfaction. It has worked out very well for us.”

If railroads and paper mills are emblems of the old economy, call center and servicedesks are emblems of the new. And it is in places like these that we find some of the mostinteresting approaches to life on the 24-hour clock.

As in the mature industries, managers here still report that smart scheduling is thekey to meeting quotas and keeping employees happy. These managers enjoy the advantage,however, of working more with individuals that with teams. Not only is it easier to createa schedule that meets the individual employee’s needs, it is possible to staggerindividual starting times over the course of a day. This reduces the disruptions thatcharacteristically occur during more traditional shift changes.

In the call centers, where safety concerns are less of an issue, we also see evidenceof other changes that are sweeping through the American workplace. At Sprint’s fourservice centers in Jacksonville, Phoenix, and Kansas City, agents typically handle between600 and 800 calls per shift. The work can be strenuous, so the long-distance carrierlaunched a campaign two years ago to lighten the atmosphere a bit. Now, employees canwatch television between calls, listen to their favorite CDs, do homework, or work attheir needlepoint. But, according to Mary Hogan, general manager of Sprint’s GlobalConnections Services, that’s just where the fun begins.

“We bring in popcorn machines. We’ve been known to play Trivial Pursuit andbingo. And on the all-nights, some of the centers will have pajama parties or Bring YourFavorite Stuffed Animal to Work nights. The focus is always on getting the work done, butonce they learn the job, it can be somewhat repetitive. That’s why we’ve donesome things to break the monotony.”

And if Mary herself dons a pair of chicken slippers and struts into the center doing a“chicken dance,” what harm is done? Last year, Sprint set a goal of reducingturnover by 25 percent and Global Connections Services met it.

Says Hogan, “We’ve really tried to take the stress out of the workenvironment so that people want to come to work.”

Even when people want to come to work, they eventually want to go home as well. Shiftworkers are lucky. The best employers provide education programs that teach them how toadapt to changing schedules; they create clean, well-lighted work areas; they supportall-night cafeterias and on-site fitness centers; and some are even furnishing nap rooms,complete with easy chairs and soothing white noise machines. But most importantly,perhaps, workers know that when their shifts end, they can pick up their coats and simplywalk away. Salaried employees are not so lucky. In a 24/7 global economy, it seems to themthat work is consuming an ever-expanding portion of their lives.

Whether or not this is in fact the case depends on how you read the numbers. The Bureauof Labor Statistics has found that the average workweek for managers and professionalsjumped from 41.2 hours in 1982 to 42 in 1999, an increase of only eight-tenths of anhours. On the other hand, 40 percent of the men employed as managers and professionals putin at least 49 hours per week. Perhaps more significantly, the Department of Labor reportsthat between 1969 and 1998, the number of married couples in which both spouses work morethan 40 hours per week jumped from 3.6 percent to 10.1 percent.

Without a shift schedule to protect them, these professionals look increasingly totheir employers to create a work environment that not only inspires them to put in theunpaid overtime, but that also allows them to lead some semblance of a normal life.

“The name of the game today is productivity and output,” says JohnChallenger, CEO of Chicago-based outplacement firm Challenger, Gray & Christmas.“Good companies are struggling to make their environments ones that help theiremployees. They’re creating soft benefits programs that address the real needs thatpeople have, helping them balance their personal lives and working lives morecapably.”

This brings to mind the familiar litany of warm and fuzzy perks that we tend toassociate with the freewheeling high-tech firms of Silicon Valley and the PacificNorthwest — weekly massages, pets in the office, well-equipped game rooms, and so on.And, as Challenger notes, there’s nothing wrong with bringing amenities like theseinto the work environment — as long as they’re amenities that the employees willappreciate.

“If you put pinball machines in your offices and nobody plays pinball,” henotes, “it’s not going to do you much good. What is important is listening toyour people, and trying to design and create an environment that is responsive tothem.”

Assuming that employers are indeed listening to their employees, a recent surveyconducted by Hewitt Associates indicates that the most popular work/life benefits todayinclude childcare assistance (offered by a full 90 percent of employers); educationalassistance and personal and professional growth programs (75 percent); flexible schedulingarrangements such as flex time, job sharing, and telecommuting (57 percent); on-sitepersonal services such as banking services and dry cleaning (52 percent); and casual dresscodes (60 percent).

Ray Baumruk, employee research practice leader at Hewitt, believes that these thingsare indeed important. He has also found that employees need to feel truly engaged in whata business is doing, and a little fun isn’t a bad idea, either. But the best way toretain employees and make them feel that their sacrifices are worth the personal cost isto inspire them.

“In some of our ‘best employer’ research, where we’ve looked atseveral companies that on paper look exactly the same — they pay the same, they havesimilar practices, they offer the same amount of flexibility and so forth — yet some arejust more attractive places to be,” says Baumruk. “That’s where culture andgood people management make a difference…we see lower turnover rates from those kinds ofcompanies.”

My father never got flextime or dry-cleaning services, and the thought of him trundlingoff to work in a pair of Dockers and a polo shirt makes me feel a little light-headed. Butthe paychecks came in like clockwork and when any of us landed in the hospital, he neverhad to worry about paying the bills. On the other hand, he always regarded his son assomething of a stranger.

A lot can change in 30 years. And forward-thinking managers seem to be making it achange for the better.

Workforce, September 2000, Vol. 79, No. 9, pp. 35-42 — Subscribe now!

Love, like youth,” wrote Sammy Cahn and Jimmy Van Heusen, “is wasted on the young.”

Love. Youth. In today’s sizzling economy, a forward-looking, HR-minded songwriter could add another thing that’s wasted on the unwrinkled set: career opportunities.

A growing number of experts are warning that the future workforce won’t rely on the peripatetic hotshots of Generation X, but on the ever-expanding pool of older workers and retirees. Part of it is a matter of simple economics; with the unemployment rate hovering consistently around 4 percent, companies are already scrambling to keep up with the demand for qualified employees. And part of it is demographics.

The aging of the Baby Boom generation has already lifted the median age in this country from 28 in 1970, to 35 today, to a projected 40 by the year 2010. By 2006, the number of workers age 34 and younger will dip to 36 percent of the U.S. workforce.

Any company that hopes to keep pace with its competitors in the coming years will have to convince a wary work-force that careers can indeed be more fulfilling the second time around.

Fortunately for employers, the concept of retirement is changing as quickly as the composition of the workforce.

“Right now, depending on which age group you look at, we have about 12 to 16 percent of our retirees who are working after retirement,” says Scott A. Bass, Ph.D., a gerontologist and dean of the graduate school at the University of Maryland, Baltimore County. “As we look to the future, a recent survey by the American Association of Retired Persons showed that 80 percent of the baby boomers say that they expect to work after retirement. That’s dramatic.”

Roughly half of these retirees will be working because they have no choice, Bass says. Lacking adequate pensions or assets, they will linger in the work force as the “have nots” of an aging American population. The other half, however, will continue to work simply because they want to. Missing the social experience of interacting with peers and colleagues, and seeking personal fulfillment, they will stay active in the workforce.

They won’t necessarily want to shoulder the same responsibilities they had when they were younger, but they will want to stay professionally active just the same.

Those who want to tap into this pool of employees will not only have to remember that the reasons for seeking employment vary greatly according to individual need. They also will have to keep in mind that the terms “older worker” and “retirement” refer to stereotypes that no longer have any useful meaning. Depending on whom you ask, older workers today are variously considered to be anywhere from their 50s through their 80s.

And given the rash of mergers, consolidations and restructurings we’ve seen in recent years, a retiree could as easily be 55 as the 65 we traditionally peg as retirement age.

“One of the things about the older population is that it is extraordinarily diverse,” says Bass. “There will be people who want to work just like they did when they were younger. There are going to be those who say they’re leaving at age 50. There will be those who have retired and take what we call ‘bridge’ jobs — temporary, transitional jobs without benefits or security. There will be those who go into new careers and go through re-training. And there are going to be those who create new companies and new businesses that we hadn’t imagined. All those things are going to happen.”

Despite the tight labor market and the inexorable aging of the nation’s workforce, it is surprising to find that very few American companies are actively courting older workers.

In its most recent survey of the issues facing employers and older workers, the Society for Human Resource Management (SHRM) found that 65 percent of the companies surveyed do not actively recruit older workers to fill open positions, and only 45 percent actively attempt to retain older employees. A full 81 percent of the employers reported that they do not offer any provisions or benefits that are designed specifically with the older worker in mind.

A similar survey, conducted by AARP and FGI, Inc., corroborates these findings. This study found that only 40 percent of human resource managers interviewed have implemented any of the policies that they believe would be most effective in better utilizing older employees. The approach deemed most likely to appeal to older workers — benefits packages tailored to meet their specific needs — had been embraced by only 18 percent of the respondents.

“For the most part, employers have not been taking many steps toward thinking about what their future workforce will look like,” says Deborah Russell, AARP’s senior program coordinator for economic security and work issues. “Knowing the demographics the way we do, the majority of the pool of workers available to choose from are going to be older workers.

And whether it’s because they want to or because they need to, the fact of the matter is that the boomers are completely redefining the whole idea of what retirement is all about.”

Perhaps because this pool of workers is so diverse, and expects so many different things from its retirement years, the companies that are actually reaching out to older workers are reaching out to the older workers they know the best — their own senior employees and recent retirees.

In the SHRM survey, 62 percent of the respondents reported that they are currently hiring retired employees as consultants or temporary workers. Twenty- nine percent provide opportunities for workers to transfer to jobs with reduced pay and responsibilities, and 19 percent have instituted a phased retirement program that enables workers to ease into retirement by reducing their work schedules.

In each case, these initiatives make a great deal of sense for both the employer and the older worker. The employer gets to take advantage of the seasoned employee’s institutional knowledge and specialized skills while reducing the considerable costs associated with hiring and training a new employee. The employees get an unprecedented opportunity to define retirement in a way that suits both their financial and emotional needs.

“What we want is to have a worker not feel like work is an all-or-nothing proposition, that they’re either going to work five days per week or they’re going into retirement,” says Bill Miner, retirement practice leader in the Chicago office of Watson Wyatt, an international human resources consulting firm.

“When they reach the point where they no longer want to work five days a week, it’s the option to retire in stages rather than fall off a cliff, to go from high-intensity work to no work at all.”

Indeed, a 1999 survey conducted by Watson Wyatt found that three out of four older workers indicated that they would rather reduce their work hours gradually than face the traditional all-or-nothing sort of retirement that is the norm today.

Phased retirement, part-time employment, and consulting arrangements all imply an unusual degree of flexibility on the part of employers, and flexibility is a term that comes up repeatedly in conversations about what employers will have to do to meet the needs of older workers. You can talk about elder care: A growing number of 55-year-old Americans have 85-year-old parents to look after. You can talk about child care: A lot of 60-year-old Americans are looking after their children’s children.

Name a traditional work/life benefit and chances are it will appeal to an older worker as much as it appeals to an employee who has been in the workforce just a handful of years. This, perhaps, explains why so few employers in the SHRM survey (11 percent) reported that they offer benefits tailored to the needs of older workers.

Representatives for IBM and 3M, in fact, told Workforce that these perennial leaders in innovative work/life initiatives simply offer a broad range of employee-friendly benefits. If they appeal to older workers, so much the better. A representative from a third industry leader noted, however, that even if a company did actively seek to recruit and retain older workers, it might well prefer to avoid publicizing the fact.

Singling out any group of employees for special treatment in today’s litigious environment is just asking for trouble, said the representative, who asked not to be named.

In the absence of specific initiatives, then, employers are simply advised to be flexible when forced to contemplate building a business on the shoulders of an aging workforce.

“You need flexibility,” says Barry Dym, Ph.D., president of WorkWise Research & Consulting. “Flexibility of work, of space, of time. It’s customizing work to fit different people’s needs. So if you think of that with older workers, you would want to think about having them work part-time; you would have them work from home. A lot of people want to be with their grandchildren and travel more. Yet they really want to work. They could put in a tremendous amount of time.”

Beyond making it easier for older workers to balance the demands of work and life, there is a growing sense that employers also need to make them feel good about themselves, to help them see that they are not dinosaurs lumbering around in a world increasingly dominated by quick-witted mammals.

To that end, 55 percent of the human resources executives in the AARP survey listed “Skill Training for Older Employees” as one of the top five approaches to more fully utilizing older employees. Forty-seven percent of the respondents in the SHRM survey indicated that their companies already provide training to upgrade the skills of older workers. Thirty-eight percent said that they plan to offer such programs in the next five years.

Ongoing education and retraining can help keep older workers engaged and productive, but it is equally important to show them that their years of experience — both on the job and in the community — count for something as well.

“There’s a wonderful thing that a lot of employers are doing,” says Kathleen Conroy, vice president of client relations at employeesavings.com, a provider of Web-based work/life programs. “They’re beginning to reach out to their retiree populations, bringing them back and creating mentoring relationships. They take a retired executive, for example, and match him up with one of the younger professionals, somebody who might be a rising star but who doesn’t have the same kind of executive experience and acumen and doesn’t know all of the boardroom politics.”

Mentoring relationships demonstrate to older workers that their experience is valued. Such relationships also foster continuity in an organization. For this process to work, however, managers must be especially sensitive to issues of intergenerational conflict. If older workers feel threatened by the new ideas advanced by their younger colleagues, or if the company’s rising stars sense that they’re being patronized, trouble is sure to follow.

“Senior leadership is best served if they reinforce a partnership model of leadership,” says Bob Turknett, president of Turknett Leadership Group in Atlanta. “Then, when you’re mixing up older and younger workers, it doesn’t become as big a deal. I would encourage leadership to create a culture and an atmosphere that promotes partnership, that says we’re all part of a team, that we have different roles and we have to organize this way to get things done more efficiently, but it doesn’t matter what age a person is. It’s more determined by who’s on the job and what needs to be done. Everyone is highly valued.”

Turknett also believes that the primary responsibility for making these relationships work must be borne by the younger employees. Generation X, in particular, is known for being brash and self-confident. But according to Turknett, a little respect and humility can go a long way toward bridging the gap between the generations. Successful organizations will be sure to instill these qualities in their younger employees even as the proportion of older workers inevitably grows.

Respect. Flexibility. A chance to do something meaningful. Ultimately, it seems, older workers want the same things that all employees want. The companies that do the best job of attracting and retaining them will most likely be the companies that have already shown a strong commitment to innovative human-resources strategies. Whether it’s their first time around or their second, or even their third or fourth, employees are attracted to employers who appreciate them.

It’s a fundamental truth, perhaps, but one that employers ignore at their own peril.

As employees, we can’t help but love work/life programs. They make itpossible to see that an aging parent in another state is getting the love andcare that he needs. They enable us to be there when our children get home fromschool or make sure that they’re cared for when they’re sick. And sometimes,on those rare occasions when everything falls into place, they give us a littleextra time to get away from it all, to pause and prepare for the next round ofcrises and commitments.

As managers, however, we’re not so sure. We intuitively believe that thingslike flextime and telecommuting and on-site day-care centers make for happier,more productive employees. And given the difficulty of finding and retainingpersonnel in today’s tight labor market, we think that certainly must countfor something. Our colleagues seem to think so. In Hewitt Associates’ 1999survey of U.S. employers, a full 90 percent reported that they offer some kindof child-care assistance; 47 percent offer elder-care programs; 74 percent offerflexible scheduling arrangements (including flextime, job sharing,telecommuting, and compressed workweeks); and 52 percent offer on-siteconveniences such as banking services, travel services, and dry cleaners.

The trouble is, beyond a visceral sense that these initiatives and programs– loosely grouped under the umbrella “work/life benefits” — arepopular with the vast majority of our employees, most of us really don’t knowif they’re making a difference where it counts: on the bottom line.

And we’re not alone. Scan the literature. Talk to the experts. There’sample evidence that employees like these programs and that the nation’s mostadmired companies are embracing them, but when it comes to calculating thereturn on a company’s investment, the numbers simply can’t be found.

Why, then, are these programs so popular? Jon Van Cleve, a work/lifeconsultant for Hewitt Associates, believes that many of his clients offerwork/life programs because they don’t want to be left in the dust.

“We try to point to competition as a big factor,” says Van Cleve.”We bring in a lot of prevalence data and show what their competitors aredoing. Today, because work/life is really exploding, we try to present the casethat your competitor down the street has all these things — flexibility, peopleworking at home, reduced schedules, compressed workweeks, things like that –and you don’t. Therefore, your employees may be migrating to them because theyhave those opportunities.”

It’s a compelling argument, perhaps, but it does call to mind every mother’sfavorite question: “If all of your friends jumped off a cliff, would you doit, too?”

Marc Spaulding, president of Change Management Associates in Derry, NewHampshire, believes this question is every bit as valid in business as it is onthe playground. “No organization

can afford to change just because it might feel good to change. The changeshave to be driven by the competitive situation as well as the needs of thecustomer.”

Before you begin any work/life initiative, then, you should make sure thatyou have a problem in the first place. And if you find that a problem exists,measure its dimensions in terms that you can quantify — before you try to fixit. You must have adequate measures in place, warns Spaulding. Otherwise, you’llnever know if you actually fixed the problem, or if you were simply jumping offthe cliff with a self-satisfied grin on your face.

Its value lies in recruitment and retention

It isn’t as if the measures don’t exist. You can go right to youremployees and conduct surveys to determine job satisfaction, or you can measurethese things indirectly by looking at turnover, absenteeism, and levels ofcustomer satisfaction. Productivity can be measured in a number of ways. And inthe end, there are bottom-line measures like profitability and economic valueadded. The key to making this work is determining a set of useful baselinemeasurements.

Unfortunately, companies these days tend to implement first and then askquestions later.

“Clearly, starting with knowing what you want to accomplish and why thatis important for the business makes for a much more strategic approach,”says Arlene A. Johnson, a senior consultant for Boston-based WFD, a consultingfirm that specializes in work/life issues. “We always say that we want towork with our clients to create a business-based strategy. It’s like withmarketing or any business-based activity, you want to know what you’re tryingto accomplish and why you’re trying to do that. Some kind of diagnostic andstrategic focus always makes for greater effectiveness. Then you know what you’veachieved or you know if you haven’t achieved it.”

Looking at the Families and Work Institute’s 1998 Business Work-LifeSurvey, one gets the impression that it is a lot easier to institute a work/lifepolicy than it is to calculate any sort of return on the investment. Forty-ninepercent of the companies surveyed, for example, allow employees to take time offto care for ill children without using vacation days or losing pay. What is theROI associated with this policy?

“Very few companies have actually evaluated return on investments intheir family leave policies,” notes the report. In fact, whether you’relooking at flexible work-arrangement policies, child-care benefits, orelder-care assistance, the answer is always the same: “Very few companieshave actually evaluated return on investments in their [fill in the work/lifepolicy of your choice].”

This is not to say, however, that some companies aren’t trying. In 1995,DuPont conducted a companywide study that analyzed the effects of a 10-yeareffort to help employees balance work and family responsibilities. While thestudy did not attach numbers to changes in productivity or turnover, it did findthat employees who took advantage of DuPont’s work/life programs were “45percent more likely to strongly agree that they [would] ‘go the extra mile’to assure DuPont succeeds than those [who didn’t] use such services.”Eighty-nine percent of all respondents indicated that they would “workextra hours to help DuPont succeed.”

The survey findings prompted then-president John A. Krol to declare,”The results of the study clearly indicate that work/life programs are apowerful tool to motivate people and encourage commitment to achieve businessobjectives.”

A 1997 study conducted by Hoechst Celanese came up with similar results. AtHoechst, employees who were aware of the work/life programs and policies were”39 percent more likely to expect to stay with the company for the nextthree years” than other employees, and they were “20 percent morelikely to agree with the survey statement, ‘I am willing to go the extra mileto meet business needs.’”

Encouraging as these numbers are, however, they still fail to quantify theultimate impact of work/life programs on the bottom line. To get a more rigorousaccounting of this impact, one must turn — perhaps not surprisingly — to thebanking industry.

Leave it to the number crunchers to figure it out

In 1997, First Tennessee Bank of Memphis earned Business Week’s top rankingin the magazine’s list of American companies rated for work and familystrategies. Appearing on such lists, in and of itself, can have a powerfuleffect on recruiting efforts. But while it may be difficult to calculate adollar value for the effect on recruiting, when you start to talk about thepeople you didn’t have to hire, it’s possible to come up with somemeaningful numbers.

First Tennessee’s loan operations division, for example, estimated that itwas able to save $3.6 million in salary and benefits annually because it wasable to hold staffing steady at 90 employees over the course of five years.Without the increased productivity that is attributed to the bank’s work/lifeinitiatives, a staff of 212 might have been required to handle the growingvolume of work.

Fleet Financial Group has also attempted to quantify the effects of work/lifepolicies on profitability. In 1996, it launched a pilot project to explore theeffect of work/life innovations at two business units — a business banking unitin Framingham, Massachusetts, and a portfolio management unit in Providence,Rhode Island. The project, conducted in partnership with the Radcliffe PublicPolicy Institute, is one of the rare instances in which policies have beentailored to address specific work/life issues, and these policies have beensystematically evaluated for their effectiveness.

“The nature of the changes we’re talking about were more complex thanimplementing a single program,” says Radcliffe researcher Francoise Carre.”A lot of work/life programs entail implementing just one benefit. Theactivities in this project entailed a pretty thorough examination on the part ofthe staff in the site as well as the team of researchers that was working withthem. It was a fairly thorough examination of the work processes, what wasworking and what was not working.”

The Radcliffe researchers implemented a number of changes in the two businessunits, including policies that allowed interested employees to take advantage oftelecommuting and flextime. At the Framingham unit, the changes resulted inmeasurable work/life improvements with no adverse effect on productivity. At thesame time, average quarterly turnover for the experimental group fell to 4.5percent, compared to 6.9 percent for the rest of the unit. At Providence, theresults of the program as they pertained to productivity were inconclusive, butaverage quarterly turnover in the experimental group fell to 3.9 percent,compared to 6.6 percent for the rest of the unit.

The researchers ultimately concluded that “quantitative and qualitativemeasures at each site show a positive relationship between improvement inbusiness outcomes and improvement in quality-of-life outcomes.”Furthermore, the changes appear to have had a lasting effect.

“We went back a year later and administered the same instruments againand held focus groups,” says Carre. “And the results were sustained.They didn’t go back to where they were before in terms of production orsatisfaction or sleeplessness [a common complaint among employees before theprogram began].”

You will note, however, that despite the scientific rigor of the Radcliffeproject, there are no dollar signs.

Mindy Fried is the director and co-principal investigator at The NationalWork/Life Measurement Project, a sweeping piece of research currently beingconducted by the Boston College Center for Work and Family. She is notsurprised, really, that so few of the people who talk about work/lifeinitiatives are willing — or able — to quantify the ROI.

“Measuring productivity,” she says, “while everybody wishesthey could do it in a clean and easy way, is one of the most complex things todo. Let’s start with the fact that most of the work that we do today isknowledge-based work. It’s very subjective. And even the kind of work thatpeople deem easy to measure — manufacturing or phone-based work — even there,people have more ability to gauge or control their output than people mightattribute to them. There’s a value judgment in measuring productivity that Ithink we need to be aware of.”

Fried notes that the cost of turnover is nominally quantifiable — the figuremost often cited is a cost equaling 150 percent of the departing employee’sincome — but even here accurate measurement is problematic. Most companies,Fried and her colleagues have found, don’t collect data on why people leave.It’s easier, perhaps, to focus on the reasons employees select to stay, butthat requires the will to allocate resources for surveys and focus groups. Ingeneral, companies lack that will. Without the data, notes Fried, it is almostimpossible to draw meaningful conclusions about the effectiveness of theirwork/life initiatives.

The results of Fried’s research are scheduled to be published in June. Forthe moment she ventures no conclusions, other than to say, “The least we’llbe able to say is that flexible work schedules, for example, don’t have anynegative impact on productivity or intention to stay. And I’m hoping, when welook at the final results, that we’ll be able to say they have a positiveimpact.”

So what can you do?

That so few companies have actually calculated their ROI on work/lifeinitiatives is, ultimately, somewhat surprising. It may indeed be difficult tocome up with precise numbers, and causal relationships can be difficult toestablish beyond a reasonable doubt. But unless you’re hoping to publish yourfindings in a peer-reviewed journal, a simple and methodical approach will giveyou most of the information you need. Management consultant Marc Spauldingoffers the following guidelines:

• Determine, first of all, if you have a problem or issue to resolve.
• If you do have a problem, work with your employees to determine whether or not a work/life initiative is called for.
• Before beginning the initiative, find an appropriate way to measure the successful resolution of the problem or issue. Whether it’s absenteeism, turnover, productivity, profitability, or job satisfaction, you should already have an instrument in place that measures it.
• Determine the cost of the initiative. An on-site day-care center is easily quantifiable. Telecommuting is less so, but if you supply any equipment for the home office, you have a number to work with. Flextime? If it’s not costing you anything, own up to it.
• Keep an eye out for those pesky hidden costs, such as increased insurance premiums.
• Set a time frame and at the appropriate time, return to the problem. What do your measurements tell you? Is productivity up? Is absenteeism down?
• All things being equal (admittedly a risky assumption in a dynamic economy), you should now be able to calculate what it cost you to achieve the observed changes. You have a rough measure of the return on your investment.

As the experts are quick to acknowledge, measuring the cost of something asintangible as flextime or the value of a happy employee is a rough science atbest. Yet in our hearts, we know that work/life programs make a lot of sense. Ifwe just use our heads, we may be able to prove that our hearts know what they’retalking about.

Workforce, May 2000, Vol. 79, No. 5, pp. 64-71— Subscribenow!