Author: Gillian Flynn

Business initiatives often bear a striking (and unfortunate) resemblance to New Year’s resolutions — those vows of change we solemnly pledge and really do mean to uphold, but then somewhere along the way… well, you know. In January, we’re fired up, steadfast. In February, our commitment wavers a bit. In March, we make excuses. By April — forget it. Our resolutions become nagging memories of what might have been. Life sometimes has a way of getting in the way.

Business initiatives too often follow the same lines. When we set forth a plan, we’re champing at the bit to roll it out and get it going. But all that energy and excitement diffuses months down the road. We lose the snap of the earlier stages. We lose interest and lack time.

If this scenario hits home, you may be in for a pleasant surprise. You don’t have to get stuck in the morass of unfinished business. You don’t have to be bogged down in multiyear projects with minimal results.

We know one organization that won’t stand for it. Since 1993, Pacific Gas & Electric Co. (PG&E) has been solving problems and creating solutions at blistering speed. The San Francisco-based utility is setting the pace for change at a new level, not just for its industry, but for business as a whole. Basically, PG&E is moving at a rate most companies hope to hit decades from now.

The company’s blur of activity is due largely to its action-forum process, which bites off problems in three-month, easy-to-digest portions. The process allows anyone in the company, at any level, to suggest areas for change. As long as the issue in question can be dealt with in 90 days, it can be the focus of an action forum. You’d be surprised at how much gets done when you have momentum on your side. PG&E was. The company knew that picking off smaller issues — the “low-hanging fruit” of business — would keep some cash in its coffers. It just didn’t realize how much. In the past three years, PG&E has hosted almost 80 action forums — and has saved more than $270 million in cycle-time reduction, productivity and performance improvement, cost avoidance, revenue enhancements and actual cost reductions. Not bad for a company that had to enforce a massive 1993 downsizing to keep itself viable.

A new way of working revitalizes an old-fashioned utility.
It was in the spring of 1993 that PG&E, in response to industry changes such as deregulation, embarked on a downsizing that would eventually cost it 7,000 employees. Morale was low. Insecurity was high. The message from the top: Do more with less — and do it quickly.

But the company didn’t look like a mover and shaker. It was more like a sleeping giant, suddenly roused. The managerial ranks, which had been reduced by 3,000, sat stunned. Despite warnings of increasing competition and imminent change, most had remained assured that the status quo would get them through. Such, obviously, was not the case.

So there they were, reeling from staff reconfigurations and budget cuts of 10% to 30%, expected to grab the ball and run with it. One line manager, for instance, had been heading a group of 35 people. He inherited 1,300 employees from 10 parts of the organization. Where to begin? The top-level people knew these managers needed a special tool to carve out their niche in the new environment. The officers looked to HR for help in identifying this tool.

It just so happened HR had an idea, based on some benchmarking it had been doing against General Electric. That company was employing a problem-solving initiative called Work-Out. It was similar to the approach PG&E was looking for: a method of quick, no-nonsense brainstorming in which all the stakeholders worked together to create the best solution. Robert Haywood, PG&E’s senior vice president for customer energy services, attended the meeting at which HR first explained the proposal. “They outlined what the Work-Out was, and what impressed me was there was no emphasis on the negative [aspect] of a problem,” he says. “And it had a lot of roles and pieces, like a jigsaw puzzle.”

With senior management’s blessing, HR began to shape the idea into a model that would fit the company culture. That model became the action-forum process, a means of partnering PG&E decision makers with employee experts to forge business change. The structure is fairly simple. As a hypothetical scenario, say an employee wants to change the company appraisal process. He or she would suggest an action forum and, assuming the topic was neither too big in scope nor too narrow, the process would get under way.

It has three phases:

• Framework — six to eight weeks
• Action forum — two to three days
• Accountability manager — 90 days.

The framework phase is basically an intense planning period. First, the management team involved tightens the focus and clearly defines the issues to be worked on. They speak to all stakeholders involved — employees and customers — to ensure they have the data they need to proceed. Then the key players are identified. Who needs to be in on the forum? Obviously, the solution requires input from a number of viewpoints. In a case such as performance appraisals, participants might include employees who had recently completed the process, professionals from the legal department, leaders from industrial relations, along with folks from HR who created the appraisals. Whenever appropriate, a workgroup’s external clients or vendors are also invited to participate. A key element of the framework stage is to ensure the focus topic is believed by all concerned to be critical to PG&E’s business goals.

Several other important decisions are made in this stage. First, a cross-functional leadership team is identified. These people will be in charge of greenlighting a plan created by the action forum — or sending the team back to the drawing board. Secondly, a champion is identified — someone who feels passionately about the topic and who can rally the troops effectively. “In these preliminary sessions, you’re basically doing the casting for the action forum,” says Carol Gorski, director of organizational performance and planning, who acts as an internal HR consultant for many action forums. “I ask, ‘Are you the right people to lead this team? Are we missing anyone — industrial relations? Legal? Do we have all the expertise we need for this issue?'”

Framework is a period for team members to gather absolutely all the data they’ll need for the action forum. That way, when the rubber hits the road, the team is ready to roll — no last-minute, frantic fact-checking or confusion. Says Luther Dow, manager of GRID maintenance and construction and a veteran of 10 action forums: “The framework is about identifying the problem, getting the teams together, getting the background work that needs to be done so the information is available for the team,” he says. “You have to get the right people who know the business or you don’t get the right solution.”

For the actual two- to three-day action forum, participants usually head out to PG&E’s San Ramon Learning Center, 30 miles east of San Francisco. The offsite meeting place offers a more focused feel than just packing into a company conference room (see “PG&E’s Learning Center Provides Facilitation, Inspiration — and Recreation,”). Here, the participants address the problems identified in the framework phase. They may tackle the issue in one to five different teams depending on its dimensions. For instance, an appraisal-process action forum might have one group focusing specifically on providing feedback, another on management training, a third on the various types of appraisals available.

As many as 70 people can be involved in these mini think-tanks. They’re like no-holds-barred brainstorming sessions, at which team members work fast and furious to prioritize problems and then develop action plans to make improvements. They scribble ideas down on Post-it™ Notes, notecards and flip charts and slap them up on the wall so everyone can look them over. All improvement ideas have that 90-day implementation deadline hanging over them.

Throughout the action-forum session, the flame of urgency is fanned by trained facilitators — usually HR professionals like Gorski — who keep participants focused and moving toward the development of action plans. Teams are repeatedly reminded that they will be presenting their plans to the leadership team at the end of the session — which gives the day a sharper edge than a typical business meeting. “There’s drama, energy and excitement here,” says Haywood. “It’s very creative. You see your whole world in a different perspective. There’s a real joy in working with a team with one goal who all believe the company will benefit from their work. It’s very inspirational.”

The last few hours of the action forum are spent in a “report out” session, when employees present their action plans with set time frames. The leadership team members must work as a unit — despite belonging to disparate organizations within PG&E — to make pro or con decisions on the spot. “It’s culture breaking,” says Haywood of the pro-or-con mandate. “Before the action forum, you could say ‘no’ to an [idea] because you’re the boss. The position of power disappears for the employee. But with 60 people in the room, if you’re the manager saying no, there’s a certain risk. You’d better have a good reason.”

If the leadership team denies approval, it must explain its thought process. Although some plans are rejected, they often resurface with a few nips and tucks and are deemed acceptable. But the forum won’t close until a course has been set. Says Gorski of her role as facilitator: “I’m like a sergeant. If the leadership team says ‘maybe’ [to a plan], I say, what do you need to make this a yes or no? I tell them they must get back here by 3 o’clock with that decision, or they can e-mail it to me. I leave no loose ends.”

Once action plans have been greenlighted, the final phase — accountability manager — begins. At 30, 60 and 90 days, the action-forum teams meet with the leadership group to review the status of their action plans and make any necessary changes in strategy. This accountability phase was included in the process specifically to ensure that the teams own up to their commitment. Immediately upon their approval of action plans, leadership teams are locked into this series of highly visible meetings. At these meetings, they must support the plan by providing the necessary resources, or they must offer reasons why they have chosen to withdraw support. The visibility is a key factor in ensuring continued management commitment to the action plans.

The accountability phase is the biggest difference between PG&E’s action forums and the GE model, and Gorski believes it’s a crucial difference. “I’ve had people tell me [our version] is a little more rigorous and robust,” she says. “I think that’s what gives our process its teeth. It forces us to walk the talk.”

During this period, the importance of the team champion resurfaces, because that person is key in keeping the hype and excitement up. “The champion of each team is going to be the person who says, ‘I really believe this thing can be solved,'” says Dow. “He or she has the dedication and the willingness to keep the cause alive.” Dow knows of one team champion from an action forum held three years ago who still considers himself on call should anyone have questions or concerns about his action-forum topic.

At 90 days, if all has gone according to plan — and that’s almost always the case — the group meets for a final report and a celebration.

But while the process sounds fairly straightforward on paper, it wasn’t the easiest to pull off the paper into three-dimensional use. HR staffers had to deal with concerns from line management, continued staffing aftershocks and a union flare-up before their baby really got its feet.

A funny thing happened on the way to the forum.
In the summer of 1993, the officers of PG&E were ready to give action forums a whirl. The line managers of PG&E were a slightly different story. For one thing, they were a little wary of any program that centered on creating efficiencies, saving money or boosting productivity if those results might work them out of a job. After seeing thousands of their fellow workers dismissed in the previous months, their jitters were pretty understandable. Add to that HR’s image at that time as a creator of soft-serve, cute-but-not-crucial programs, and you had a buy-in dilemma.

To ease line managers’ worries — and skepticism — top officers made three things very clear:

• Action forums weren’t mandatory. No one had to attend education on them, nor use them
• Action forums would never be targeted to get rid of jobs. They were designed to help make the business better — to safeguard jobs
• Any cost savings resulting from an action forum would not affect that workgroup’s budget. If your department saves $1 million a year from a new process, your budget wouldn’t be cut by that amount.

In addition, a change team was formed, comprising PG&E officers and managers, corporate communications and HR. The change team worked to spread the word about action forums by positioning it as a serious business tool, not another flirtation with fad. Throughout this communication period, HR worked primarily behind the scenes so the program wouldn’t be written off by cynical employees.

In the beginning, PG&E brought in an outside consultant, Sunnyvale, California-based Implementation Partners, which had worked with GE on its program. Ord Elliott, president of the consulting group, further dispelled any aura of flavor-of-the-month programming. A former Marine Corps captain in the Vietnam war, Elliott had a take-no-prisoners approach that caught employees’ attention. As Haywood says: “This is a man who faced death daily. He’s not going to tolerate going through the motions. He’s extremely serious about what he does.” Haywood remembers that in one of the first introduction seminars for the action forums, Elliott marched up to him and said, “This is going nowhere. Your people are resisting. I’m sending everyone home and you won’t get a bill.” The approach worked at PG&E. It delivered a strong message to line management: This is not something you have to do. It is not mandatory. But if you’re going to do it, do it right.

Despite action-forum education and coverage of action forums in the company newspaper, most line managers were sold on the process through good, old-fashioned word of mouth. “We had our CEO and senior officers supporting and advocating forums,” says Gorski. “They were telling people, ‘This tool can get you through turmoil and change. It can help you keep your business thriving.’ It would take an unwise manager not to step up to the plate. But still it was very scary. I think HR’s role was to make it as easy and safe as possible.”

At that time, HR resurfaced on the scene, reframing itself as an internal consultant. Action forums offered many openings for an HR presence: Each forum has one senior consultant who heads up all participating workgroups. In turn, each work team has its own facilitator.

HR professionals began developing capabilities to lead action forums so they could wean the company off the external consultant. The department initiated its own training for members on the proper facilitation of action forums — how to smooth conflicts, guide discussion and play devil’s advocate when necessary. “This is the toughest consulting anyone can do,” says Gorski. “But I like the challenge. I like the tougher teams; they’re the most fun. My goal is that everybody walks out and wants to be a facilitator. That’s when I know I’ve done a good job because I’ve made it look easy.”

Because many lower-level employees have never participated in group problem-solving, any work area going through the action-forum process for the first time receives some basic training on team-building.

In the early action forums, it became apparent how much employees were in need of empowerment. Many participants became extremely emotional at finally getting their ideas heard. Haywood says one of his most powerful experiences from action forums came early on. An employee, an exlineman, tapped into the pulse of his entire workgroup — and probably the entire PG&E workforce. Almost in tears, he talked about how long he’d been trying to get his idea through the thick layers of PG&E management, and how good it felt to be able to voice it and have it be responded to. “That was a very powerful moment for me,” says Haywood. “I got the sense of the incredible amount of knowledge [our employees] have. These people have a sense and feel for the real issues. They are more in touch. We need these people — without them, there’s nothing left.”

With each group’s success came more calls of interest, and pretty soon, top executives no longer had to promote the program themselves. “People started to do it and had such good experiences that they became the best ambassadors of the program,” says Haywood.

However, there was still a problem. PG&E has a bargaining unit that comprises 70% of the total population of company staff. Of the 150,000 customer contacts each day, 99% are handled by union employees. Obviously, it was imperative that PG&E had bargaining unit support if the action-forum process was going to have any impact. But the union wasn’t sold on action forums.

Fortunately, PG&E and its bargaining unit had a vehicle that allowed for employee participation, a section in the agreement called labor-management cooperation. The contract also provided for enablers that permit the union and management to meet before the next round of negotiations if necessary. So David Bergman, PG&E’s chief negotiator for industrial relations, sat down with the bargaining-unit representatives and, over the course of many months, hammered out an agreement that was suitable to both sides. “The biggest problem we had was convincing them we would really allow them to be a part of it,” says Bergman. “After that it was [convincing them] that they’d be appropriately represented to the point at which they could pick their own participants.”

In 1994, PG&E initiated the action-forum process with the bargaining units of the International Brotherhood of Electrical Workers (IBEW) by agreeing that the union would be an integral player in the process. The union itself — not just the collective bargaining members — would have the right to suggest topics and possible joint ventures. “I think it’s rare to get the union to agree to these kinds of programs,” says Bergman.

Through 1993 and 1994, the action-forum process raged, pouncing on issues as diverse as safety, women’s issues and plant efficiencies. Then it hit a block. In 1995, PG&E still believed it had a staffing glut, primarily within the union workforce, so it started the wheel turning on an 800-person downsizing. The layoff’s effect snowballed quickly. First, because the union is structured by seniority, the 800 people were bumped down to lower jobs, which displaced those several levels beneath them. Says Haywood. “One person effects five or six; so 800 [laid off] may affect 3,000. That’s pure turmoil.”

The turbulence was exacerbated by a series of unexpectedly violent storms in spring 1995. PG&E was being beaten up by the media for what the community deemed slow reaction in returning service. And during those 150,000 customer contacts every day, union members were explaining that possibly it was due to the downsizing.

However unpleasant, the storms did help put things into perspective for PG&E. Bergman remembers one union worker in particular: “Here was a guy who during February and March, in all these storms, was working seven days a week, 10 or 12 hours a day. Yet at the same time he had in his back pocket his layoff notice — for lack of work.” On April 5, 1995, PG&E did what few companies would have the guts to do: It pulled a chair up to the bargaining table and admitted it had been wrong. The company called off the downsizing, and committed to a new labor-management partnership.

PG&E even went so far as to invite the union to assist in determining the size of the company’s workforce. (Amazing as this may sound, it’s true. When I visited the industrial relations office, Bergman was wrapping up a meeting with union bargaining employees and management — the group had been debating the size of the workforce for 1996.)

Now, more than a year later, the union is still feeling the burn. But things are getting better. Action forums will be key in rebuilding the union-management relationship. For instance, the union could institute an action forum to decide some of the headcount issues — useful because they have the built-in 90-day accountability. The action forums, along with the labor-management process, will play a major role in keeping problems from festering. “It’s very unrealistic for us to say bygones will be bygones,” says Haywood. “We need to rebuild. Action forums can do that. Working together is the best way to help the cause.”

Despite struggles, the gains have been great.
When one of your initiatives saves more than $273 million in greater efficiencies and higher cost savings, your response isn’t usually, “Well, what else?” But if you did ask PG&E that question, you’d hear plenty of answers.

For one thing, the quick-footedness inspired by action forums has become ubiquitous throughout the company. Luther Dow and his department approach their general workdays like one continual action forum. They’ll call up one-day mini forums when necessary, but in general, they apply the principles to everything they do. He says this is typical throughout PG&E. After almost 80 action forums in three years, the ideals have become ingrained. “We have worked to integrate action forums into our business,” he says. “We have tried to train the directors and superintendents in those principles and how to use those on a day-to-day basis.”

PG&E is fast where it used to be slow, proactive where it used to be reactive and empowered where it used to be paternal. Action forums truly turned the culture upside down. Employees have been given power over their destinies, and they’re running with it. “You now have people who are either preoccupied with the future, or asking themselves ‘What can I do today? When I come in this morning, what can I do that makes a difference for the company?'” notes Haywood.

Gorski says PG&E is no longer trapped in analysis paralysis. “I hear it everywhere,” she says. “‘Yes, I have a full plate. Yes, I have a ton of issues to resolve, but this one is right here.’ It used to be we couldn’t come up with a business solution unless it was perfect. Now we ask ‘Will this get us 80% of what we need to get? Let’s do it!'”

That let’s-do-it attitude has knocked PG&E out of its downsizing slump. Action forums help employees take all their negative emotions — fear, confusion, frustration — and channel them into proactivity. They really can see the differences they’re making. Before, employees would have to wait months to hear if an idea of theirs was approved. It would sift down from layer to layer until all the energy and power was diluted. No more. “It’s a continual challenge to me to see a saddened employee and hear him or her demoralized by frustration at solving a problem,” says Haywood. “You don’t want people to feel they aren’t being recognized, that they aren’t being heard. We’re working on changing that…. If [employees] feel they can do something, the negative emotions shrink. There’s at least something positive to hang onto.”

Sure, every so often, an action forum has failed. Gorski says the gap has usually been in the follow-up. Maybe the topic was just too broad. Or key people have left the company. For the most part though, Gorski says the general employee attitude is, “I’ve wanted to solve this problem for seven years, and I have finally done it with action forums.”

Action forums also foster teamwork and cross-functional interaction. Gorski has seen groups of people who’ve never worked together quickly meld into a cohesive team during the three-day meetings. So dramatic have the results been that she has had many people approach her to initiate an action forum just so they can teach their workgroups about teamwork. She has to explain that team-building is the byproduct, not the focus.

But who can blame these hopefuls? Action forums encourage employees who’ve never made public presentations before to give speeches, employees who have never done cost-benefit analysis to pull out their calculators. Employees who worship rank must seek advice from those two or three levels below — and line workers who resent the top-level people must interact with them on a personal level. Only at an action forum would you see the top executives in the finance division going head to head with the folks that climb the poles. “People get charged up, and rank has no meaning,” says Haywood. “That was no small thing for us.”

Employees also benefit from seeing other areas of the company in a new light. Says Dow: “I think action forums have helped us bring across boundaries the people who can help solve the problems. The result is we see each others’ problems better. I think the action forums actually create a willingness to try to solve the problem.”

Why do action forums work? Dow says simplicity is a big part of their success — they’re easy to understand and easy to do. “The people who know the work are making the recommendations,” he says. “They’re getting immediate feedback, and they’re implementing their ideas. It’s their product. It’s not my product. They have ownership — it’s their solution, their implementation.”

Just as important to action forums’ success is that employees truly see them as useful. Gorski conducted a pulse survey a year ago, and the response was overwhelming — action forums get results. In addition, secondary research has shown that employees who participate in an action forum score higher on surveys in terms of employee commitment, team-building and understanding the company’s business.

And don’t think HR hasn’t reaped a few rewards of its own. Imagine the effect at your company if a department once thought extraneous at best leads a stampede of change resulting in millions and millions of dollars saved. The action-forum process became the funnel that HR needed to channel itself into a business partner. HR can now focus on its most powerful role — as an internal consulting partner to the company. “They come to us now to learn about the utility business, not just how to make meetings work or how to be a better supervisor,” says Gorski. “They don’t bash HR anymore at PG&E. I think we’re the best in the business.”

With its guidance of the action-forum process, being the best in the business is definitely one resolution HR at PG&E can keep.

Personnel Journal, June 1996, Vol. 75, No. 6, pp.100-108.

Let’s admit it: If any company has a right to be a little warm and fuzzy, it’s Hallmark Cards Inc. Consider its credentials. To begin with, its core mission, its very purpose for existence, is to promote affection, friendship and love-in the form of greeting cards, gift wraps and party favors (to name just a few products). Very warm. Then there’s the family issue: Hallmark started out as and continues to be a family-run business, from its 1910 founding under Joyce Hall as Hall Brothers Incorporated (in the hands of Joyce, Rollie and William) to its current chairmanship under Donald Hall, son of founder Joyce. Very fuzzy. And of course, we can’t dismiss the telling sign that the company is nestled in The Heart of America-Kansas City, Missouri, a town that was recently hailed as one of the best places in the United States to raise kids. Sounds like a cute little company, huh?

This cute little company also just happens to be the world’s largest greeting-card manufacturer-boasting annual sales of $3.8 billion, ranking it 31st on Forbes magazine’s listing of the largest privately held U.S. companies.

A delicious irony? Hardly. Any Hallmarker will tell you it’s the company’s cozy, homey qualities that provide the real muscle in pushing Hallmark on to the $4 billion mark. That’s because it’s the warm, friendly atmosphere that attracts the best people-and keeps them carefully snuggled deep in the folds of the company.

It’s a theory that holds water. For instance, Hallmark is loaded with literally thousands of Quarter Century Club members-people who have been with Hallmark for 25 years or more. Around Kansas City, the company enjoys a reputation as a peach of a Bermuda Triangle-folks enter its hallowed halls and never want to leave. A recent union flirtation failed because employees simply didn’t demonstrate enough interest in changing anything about the company. And why should they? Thanks to a generous profit-sharing program, employees now own one-third of the company.

Is it all becoming too much? Feel overwhelmed by visions of sugar-sweetened greatness? We really haven’t even started: Hallmark has scads of offerings that lure and hold the cream-of-the-crop employees. And when you have bragging rights on the best workforce in the industry, that $4 billion sales mark can be a pretty easy reach.

HR at Hallmark is a matter of individuality.
Dave Pylipow, director of employee relations and staffing, believes he knows just why Hallmarkers tend to be a satisfied bunch: “The most important thing is that Hallmark employees believe the company cares about them as people.”

This nod to individuality manifests itself in a variety of HR standards-beginning with HR policies, one of Pylipow’s main stomping grounds. He has a hand in writing them, updating them, and most often, interpreting them. That’s because they’re constructed to act more as guidelines than very strict rules. Let’s say an employee wants a leave of absence not covered by the FMLA. Or maybe a snow storm keeps half the workforce at home while the others manage to get in. Pylipow is more than happy to interpret the company guidelines on a case-by-case basis. “Doing that gives us a great deal of flexibility. It helps our employees and shows we care about them individually,” he explains.

Another strong demonstration of commitment to employees turns up, ironically enough, in Hallmark’s approach to job termination. Employees know the company doesn’t take their jobs lightly. For instance, anyone (at any level) employed at the company for at least two years can’t be terminated until Pylipow himself has reviewed the situation. Five years’ or more company experience guarantees that an employee’s division vice president, as well as the vice president of HR, Ralph Christenson, must sign off. Pylipow says this, in the very least, ensures all sides get a chance to talk.

Just as employees know their jobs won’t be snatched away due to a misunderstanding or a simple mistake, they also know jobs at Hallmark don’t disappear because of a slow year or a slipping product line: Amid the rubble of today’s corporate downsizings, Hallmark stands tall with a no-layoff history. Instead, Hallmarkers at any site that’s low on work have several options. First, they can take some time off without pay, with their benefits intact. Other employees can redeploy themselves to work units that need some extra hands: One group of Hallmarkers recently helped paint an operating plant while receiving their standard wages. Finally, employees can opt to do some community activities, also while pulling in their usual paychecks. Why pay folks big money to do things like touch-up painting and literacy tutoring? Pylipow says it all evens out-although there’s a temporary cost factor, the sense of goodwill and employee security make it worthwhile.

These general HR standards are backed up by a prevailing atmosphere at Hallmark-one that celebrates the relationship between employees and the company. “A lot of it stems from the style with which our managers manage,” says Pylipow. “Managers know that if employees talk to them, they’d better make time to listen. Division heads will walk through the factory and just talk to people. That sends an important message to the managers that you’d better be in touch with your people.”

Just as the company encourages sharing information, it also encourages sharing affection and recognition. You can, for instance, imagine the number of birthday cards that exchange hands in the place. But in addition, other tokens of appreciation abound. Whenever an employee or department goes above and beyond the call of duty, there’s sure to be some form of congrats, be it gift certificates or passes to a Kansas City Chiefs game.

Then of course, there’s the coup de gras of employee recognition: initiation into Hallmark’s Quarter Century Club upon reaching 25 years of service, marked by an office celebration to which an employee can invite all his or her company friends. Then, once a year, Hallmark throws a heck of a party for these folks at a nearby posh hotel. All employees who’ve spent 25 or more years with the company are invited-the 3,100- strong group now comprises almost one-fourth of Hallmark’s U.S. workforce. Many retirees fly in especially for the occasion. “It’s great,” says Pylipow. “It’s like a big family reunion.” Family. There’s that word again.

A family-run business backs family-supportive programs.
Every Christmas season, employees are invited to head up to Donald Hall’s office to meet the family. The whole Hall clan tends to show up, greeting employees and chatting as toddlers crawl around on the carpet and babies coo back and forth at each other. The whole thing looks like a-well, like a Hallmark card. Who wouldn’t expect the family-friendly atmosphere to trickle down through the ranks?

And it certainly does. As Andrea Zeorlin, work and family program representative, explains, “If you walk around here at Hallmark, you can always see family photos. Plus, our products are based on enhancing relationships. It just stands to reason that Hallmark would be supportive of a family-friendly environment.” Indeed: The company’s strong work and family services department does such a good job helping employees care for their own that in 1995, Hallmark celebrated its 10th year on Working Mother magazine’s “100 Best Companies for Working Mothers” list (making a perfect 10-for-10 record). Hallmark’s work-life programs also have played a big part in placing it twice in the top 10 in “The 100 Best Companies To Work for in America,” by Robert Levering and Milton Moskowitz (see “Robert Levering Tells Why Hallmark Is One of ‘The Best'”).

The work and family services area, established in 1990, has three main spheres of influence:

• Family care assistance
• Counseling and education
• Alternative work arrangements.

For the family-care assistance arena, the emphasis is on assistance. This is no hearts-and-flowers program by any means. The company has definite business motives behind assisting families. So what the program does, and does well, is help employees make care arrangements they feel good about so they can come to work (physically) and stay at work (mentally).

For instance, Family Care Choices is a service designed solely to assist Hallmarkers in locating care for their children, family members with disabilities and aging parents. Zeorlin says that elder care is one of the fastest growing concerns among employees. To access Family Care Choices’ free assistance, all an employee needs to do is pick up a phone. Run by Heart of America Family Services-a non-profit human services program-Family Care Choices assigns a family care specialist to everyone who calls, and that specialist remains the point person throughout the search. “We have some instances in which employees in our rural areas need care,” says Zeorlin. “I know the specialists have gone as far as running newspaper ads to find [caregivers].”

But a care service won’t cover all needs all the time. Maybe a school takes a snow day, and suddenly an employee’s 6-year-old has nowhere to go. Or maybe a child gets ill, and his usual daycare can’t take him. This is where Hallmark’s emergency back-up care and sick-child care step up to bat. The back-up care program, Moment’s Notice, is made possible through a partnership Hallmark struck up with a nearby day school. The school has agreed to keep spaces open for Hallmarkers’ kids-all employees need do is call and reserve a spot (the school operates on a first-come, first-serve basis). Hallmark subsidizes a portion of the cost-up to half for children 4 years and younger.

Zeorlin says the sick-child care is one of the most popular services among Hallmarkers. Perhaps it’s due to the fact that almost 4,000 employees (of the company’s 12,500 U.S. workers) have children 15 or younger. And most of these kids at some point are going to be ill, prohibiting them from their usual daycare or making parents reluctant to leave them at home on their own. Again, Hallmark solves the problem through a partnership arrangement-this time with the pediatric units of six area hospitals where children receive some TLC (as well as hot dogs and popsicles). The first day of care is free; every day after costs only $3 to $3.50 an hour.

Hallmark goes beyond child-care placement, however. As a member of the American Business Collaboration for Quality Dependent Care, the company has access to a resource van. A Hallmarker whose child is at a family day-care home may request that this van stop by. There, kids can sift through a veritable treasure trove of goodies, from science equipment and books, to toys and games. They can check out these items library style, for up to three months. Caregivers also are invited to grab a few things: strollers, cribs, cots as well as resource books.

As much as the company is willing to make employees’ lives easier, it continually sends a strong message: Hallmark helps those who help themselves. The company is willing to meet employees halfway, but they’re expected to do some of the work themselves. Hence, the company sponsors an abundant array of counseling and education programs. Many of these link back to family situations. One of Zeorlin’s favorites just started this past fall. Playfully tagged The Doctor Is In, this program recruited a child behavioral specialist to provide Hallmarkers with twice-weekly onsite consultations. Although the service is fairly new, already more than 60 parents have used it. During the 45-minute one-on-one session (partially subsidized by the company), parents may ask for guidance on any number of behavioral issues, from toilet training and temper tantrums to sibling rivalries and shyness. Zeorlin thinks it may be the only service of its kind in the country. “I’m really excited. People stop me in the halls and say, ‘It only took one visit and already it’s made such a difference in our household.’ Little things like that make you feel so good. You know, you’re not giving them a raise or anything, but you’re easing something in their family life so they may become more productive in the workplace.”

Hallmark’s twice-monthly brown bag Lunch and Learn seminars also tackle family topics: from elder-care issues to “Maternity Matters,” designed to answer questions about maternity disability or parental leaves. The Lunch and Learn sessions covering parenting issues have been extremely popular, but Zeorlin was getting two main complaints: They weren’t detailed enough because of time constraints, and many times the topics dealt with information both Mom and Dad should hear. So Zeorlin introduced quarterly Saturday parenting workshops, which are offered at no cost and open to Hallmarkers’ spouses. Recent topics have included “Parenting from the Heart”-on instilling positive values in children-and “The Role of Fathers.”

Hallmark continues to help employees on more directly personal levels. The Personal Assistance Program pays the cost for up to four sessions with a trained psychologist for problems such as marital difficulties, substance abuse or emotional and mental distress. Employees who have lost a loved one may enter a company counseling and support group, which offers an informal network. “They know each others’ phone numbers and can lean on each other if they’re having a bad day,” explains Zeorlin. “Then there’s somebody there who knows what they’re going through.”

The final piece of the department’s package is facilitating alternative work arrangements. Although the company is just now getting its feet wet in telecommuting waters, for more than 10 years it has offered to arrange part-time schedules for whomever deems them necessary. While part-timers are no new creature to the workforce, Hallmark maintains a strong commitment-not only in encouraging the arrangements, but also in keeping part-timers fully integrated in the workforce. Many women in the company, for instance, have chosen to go part-time-often in a job-sharing capacity-just until their children hit school age. Upon their return to full-time schedules, Zeorlin surveys these employees to ensure they feel they’ve maintained their career track, and most report positively.

Hallmark has proof of its word. Several of its unit directors are former part-timers. One director currently remains in a part-time capacity. Zeorlin herself works a 60% schedule. (In fact, she gained her current position largely because of her extensive personal experience in job-sharing situations in another Hallmark division-they realized she could be an important liaison between managers and employees who want to play with their schedules.) Finally, Donald Hall himself has offered evidence that non-traditional job arrangements are accepted: His secretary is part of a job-sharing duo. “If he can support and work with a job-sharing team, I think the rest of our managers can do the same,” says Zeorlin.

The lines of communication are open.
The Kansas City Star puts out the town’s most widely received newspaper. Hallmark Cards Inc. puts out the second. And Andy McMillen, internal communications and publications manager, will tell you this isn’t just a set of quickly Xeroxed tidbits typed up at the last minute. Noon News is a professionally designed, professionally printed newsletter replete with slick photos and graphics. “When we tell other people in the corporate world that we have a daily newsletter-it just blows them away,” he says. “Noon News has been around about as long as I have-40 years-and we crank it out every day. It’s not just a tradition. It’s an institution here.”

Noon News carries the standard newsletter updates, such as anniversaries, births, marriages and promotions. An issue may cover the outcome of the Toy, Clothing and Food Drive that Hallmark sponsored this past holiday season. It may contain several pages of want ads, acknowledgment of blood-drive donors and reminders of health-plan enrollments. It also contains “about as much business news as we can squeeze out of this place,” says McMillen, referring to product and financial information.

Supplementing this companywide communication is Directions, a 7-year-old newsletter targeting managers. Both the length and the schedule of Directions depend on the information flow in the company: It can be published as often and can cover as many pages as necessary. Reaching about 1,500 Hallmarkers, the newsletter is published for two reasons: First, it alerts them to information they need to know before it becomes public knowledge; second, it provides a tool for them to use in transferring that information to their work groups.

Directions tends to cover more in-depth company news than Noon News. Twice a year, it offers up the company’s financial performance progress. If Hallmark is about to make an acquisition or a divestiture or launch a new product line, that also will warrant an issue. “We’ll [cover] just about anything that will be more broadly known soon but that we’d like managers to know about.”

Finally, any info that doesn’t make it into Noon News or Directions can be disseminated through the dozen computer-monitor signboards sprinkled around the headquarters building. The bottom line: Hallmark has its bases covered when it comes to communication.

But while Hallmark, by its very nature, feels a special niche in reaching out through the written word, the company knows that true face-to-face exchange also is important. One such communication program is Hallmark’s CEO Forums, which have been in existence in one form or another for a decade now. Approximately 10 times a year, President and CEO Irvine Hockaday meets with a group of workers for 90 minutes. To ensure pet employees don’t dominate the discussions, the attendees are chosen randomly by divisions. And to ensure employees feel free to say what’s on their minds, senior management is barred from the meetings. “The forums are purely for midmanagement and below so there’s no intimidation factor,” McMillen explains. “You can talk to Irv about anything, and you don’t have to worry about your VP sitting there taking notes. It’s a terrific opportunity for dialogue.”

The company tries to keep the forum groups near 50 participants, because with more than that, the sheer mass can make communication a little intimidating, while a smaller group wouldn’t allow enough people to take part at a time. “The main purpose is to achieve meaningful two-way communication between employees and the top management. We want employees to have the opportunity to hear directly from their leader what’s going on in the company, and we want him to hear directly what’s on their minds.”

On a similar note, if not a similar scale, are Hallmark’s Corporate Town Hall meetings. Initiated just last year, the plan is to host these gatherings quarterly, with three meetings in one day and 400 employees attending each. Again, the main attraction is Irv Hockaday. He is joined by other top management team members when necessary. Hockaday talks for 30 minutes on some company topic and then opens the floor to discussion for the next hour. The two Town Hall meetings held in 1995 both covered basic progress reports. The first, in July, gave an update on the doings of the new management team that started up in January. The second focused on 1995 product goals and initiatives.

These two-way communication efforts give a lot of employees an unusual opportunity to chat with the top figure in their company.

“If you combine the Corporate Town Hall meetings, which reach almost 5,000 people a year, with the CEO Forums, which [reach] another 500, then that’s better than 5,000 people a year who have a chance to sit in a room and engage in dialogue with the CEO,” says McMillen.

Is there any form of communication that Hallmark hasn’t completely saturated? Well, yes. McMillen concedes the company’s internal communications are lagging behind in joining the Electronic Age. For instance, currently, only a lucky minority in the building have access to e-mail. In fact, not all employees even have computers. Surprising? Probably not, when you stop and think about it. “We communicate on paper,” says McMillen. “That’s our business and we do it well, so it’s not surprising that a lot of our efforts go into a published or print medium. But we’re not ignoring electronic communication.”

Another challenge to getting information across to employees is the very corporate culture itself. Because Hallmark has always been under private ownership, there’s been a history of reluctance to reveal too much business and financial information, lest it fall into competitors’ hands. “When you have decades of that close-to-the-vest behavior, breaking that pattern is very difficult,” says McMillen. “But from a communications [standpoint], it’s important because Hallmark employees own a third of the company.” McMillen admits it’s a difficult dance between giving employees the information they’re entitled to without revealing too much to hungry adversaries. This restraint is compounded by Hall family members themselves: “The Hall family is a family of few words,” says McMillen. “They’re not Chatty Kathys-they’re terrific people who have a colossal impact in the community in which they do business, yet they aren’t quick to talk about or brag about their company, so there’s a bit of reticence that translates into the corporate culture.”

Still, McMillen says the company has come a long way in its communications efforts since the ’80s. He believes the progress is largely a combination of the two-way communication programs along with top management’s admission that they need to loosen their grip on the information flow. “Employees receive far more information today than they received 10 years ago,” says McMillen. “Far more.”

Hallmark builds a multi-layered diversity initiative.
Some department has, under one name or another, addressed issues such as affirmative action and equal opportunity for the past 20-plus years. However, it’s been only in the past four years that a department specifically concentrating on “corporate diversity” has existed. But the places it’s gone in those four years…

To begin with, this department has broadened the traditional boundaries of diversity. At Hallmark, diversity “includes, but is not limited to: ethnic origin, religion, gender, age, sexual orientation, disability, lifestyle, economic background, regional geography, employment status and thinking style.” To give these definitions more context, the Corporate Diversity Council (CDC), formed in November 1993 (and comprised of senior management from every division of the company), has articulated a “Business Rationale for Diversity,” explaining that diversity sustains Hallmark’s competitive advantage: the company’s financial success depends in part on its ability to provide products that meet the needs of a diverse and global consumer base.

But, Hallmark, not known for its passivity, didn’t want to just place these thoughts on a shelf for good looks. So the CDC identified nine short-term initiatives and programs that will receive attention from 1994 through 1997. Next, it defined an “Ideal Future State” for each. The CDC then conducted a gap analysis to see where Hallmark currently was in relation to the Ideal Future State. It then identified the necessary steps to close the gap and assigned accountability, completion dates and effectiveness measures.

There are nine initiatives:

1. Education and Training:
   Two courses specifically address diversity. The Managing Diversity Workshop is a required session for managers. Accepting Differences is required diversity-awareness training for employees. Managers have been trained to teach the course to their own divisions.
2. Communication:
   The company’s internal publications, Noon News and Directions, cover diversity issues. In addition, a Manager’s Communication Packet, which helps managers foster two-way communications, includes guides for facilitating discussion of diversity topics.
3. Executive Action:
   Top management must set an example for employees; walk the talk.
4. Employee Career Development and Planning:
   Managers are encouraged to talk with employees about performance, objectives and future goals. Hallmark also encourages mentoring relationships by division.
5. Management Style:
   Management must be able to work with a diverse group of people; programs are in development to support this goal.
6. HR Policies, Compensation and Benefits:
   Hallmark is conducting a pay equity audit, and a complete review of benefits and policies is in the works.
7. Commitment to the Business Rationale:
   Hallmark commits to supply the necessary resources to make diversity a top priority.
8. Developing Ongoing Assessment Tools:
   Hallmark is creating a process that reports monthly to the chairman of the CDC on progress in various diversity components.
9. Employee Involvement.
   Obviously, employee involvement is a big piece of a diversity program. It’s the employee involvement initiatives that Mary Towse, director of corporate diversity, will be setting her sights on in 1996. Let’s just say she’ll have a busy year. To begin with, there are the Division Task Forces, now mostly in start-up stages. These groups focus on diversity efforts within their own areas. “Diversity has to be owned by line management,” says Towse. “It can’t be viewed as an HR function or nothing will happen. This is a means of pushing it out.”

But also gaining steam is the Hallmark Multicultural Exchange (HME), which serves as a bridge-building and service organization. The group’s mission is to promote recognition of minority contributions in the workplace and community. It also sets out to provide opportunities for professional and personal development and social interaction among its 100-plus members. In 1995, the organization sponsored such events as a basketball-competition fundraiser for the Kansas City Parks and Recreation program and Mother’s and Father’s Day projects with area nursing homes. There were also plenty of development courses, such as internal resume preparation and interviewing skills. The big selling point of HME is it’s a grassroots employee organization, entirely self-run with the help of an operating committee and a chairperson who’s elected every year. “I think it’s one of the neatest organizations we have here in the company,” says Towse. “If you go to a meeting, you’ll see people in custodial uniforms sitting next to vice presidents. The idea is that if you bring people of difference together and they get to know each other, bridges are built.”

Also in the works for ’96 is the formation of networking groups for people who share common interests and concerns: women’s groups, ethnic minority groups, even white male groups. As long as the networks support Hallmark’s corporate values and objectives, Hallmark will support them (no militia groups need apply). “Our sense is that the best ideas come from grassroots,” says Towse. “We feel strongly that these kinds of [networks] need to happen, but everything I’ve read says they need to form on their own. I think the answer is to give corporate sponsorship to communicate the company is supportive of the process, and then I think they’ll form.”

Spreading the diversity message at all levels will likely deter a repeat of an ugly 1990 incident at Hallmark: Several minority Hallmarkers, mostly African-American men, were targets of anonymous hate mail delivered through the interoffice mail system. Hockaday issued a strong statement in Noon News immediately, promising a speedy dismissal for the culprit. Unfortunately, the sender was never found. “It’s the kind of thing you hate to think would happen anywhere, but when it happens under your nose, it’s absolutely horrifying,” says Towse.

Counseling was made available to those who had received the hate mail, and Hallmark rallied to action. “It’s almost like a case study of how a company responds to a crisis,” says Towse. “The company responded exactly the way it needed to, but something like that always leaves permanent scars.”

Yet the gains of diversity within Hallmark should help the healing. In the past few years, three women were promoted to corporate officer level; six women were promoted to senior management; two African Americans were promoted to senior management; and one African-American was promoted to vice president; the Board of Directors was expanded to include a woman from the creative community and a man of Hispanic heritage.

In addition, the company is addressing diversity among external groups it has dealings with. Its Ethnic Business Center creates products for African American and Jewish consumers. And its Minority and Women Supplier Development program is closing in on its 30th year. The program focuses on all suppliers to Hallmark-with the goal that 5% of total purchases be placed with minority suppliers.

Often, a team of Hallmarkers will work with the supplier to identify the challenging issues. If the supplier needs help developing a computer system, the team might get someone with an information technology background to help. The supplier program is personally championed by Donald Hall, who started the program himself 27 years ago. In addition, his son, David Hall, sits on the Corporate Diversity Council. In fact, it’s the continued upper-level support of her department’s efforts that Towse truly appreciates. “I don’t know that everyone in my position has that kind of support. It’s just unquestioned that the company is behind diversity.”

As far as continuing the complete cultural transformation required to support diversity 100%, Towse is proud of Hallmark’s current status. She believes that by continually building awareness, a mass of change agents eventually surface, who each go out and make a difference in their own sphere of influence. “A process of cultural change doesn’t come easy,” she says. “It’s like turning a very big ship. Hallmark historically has had a wonderful culture in so many ways, we feel we want to go at it with a laser, because there’s so many things we don’t want to change.”

Towse highlights a concern that seems a common theme at Hallmark: How to keep growing and getting better, without sacrificing all the qualities that make it such a great place to work. But as far as conundrums go, this isn’t such a bad one to have. How many companies can have so little to improve upon that they actually begin to worry about change negatively impacting the current culture?

“We’re just lucky here,” says Pylipow. “There’s a sense of respect in the way we do business, and it’s just a good place to work. Hallmark hopes to be a good example for other companies to follow in terms of really taking advantage of the relationship between the company and employees, and making it as mutually productive as possible. Then everybody wins.”

Sounds almost good enough to be on a greeting card doesn’t it?

These are dangerous times, no doubt, due to a variety of factors. For one thing, the nature of the workplace is changing—people are no longer guaranteed they can make a living on assembly-line skills. Jobs are vanishing. Employees are dislocated and unable to retrain. People are burnt out, frustrated and angry.

Couple that with greater access to weapons—40 states now make the carrying of concealed weapons legal—and you’ve got the makings of an ominous workplace situation. But employers have more control in the outcome than they may think.

Donald W. Savelson, partner in the labor department of the New York City-based law firm Proskauer Rose Goetz & Mendelsohn, takes a look at how employers can protect their employees—and themselves.

When the figures for workplace violence for 1995 are tabulated, what will we see?
The top officials in the Occupational Safety and Health Administration have indicated there are more violent incidents in the workplace than ever before.

It’s a topic that unfortunately is very real for a lot of our clients and a lot of employers in the country. Certainly, there’s not a day that goes by in which you don’t read about or see something on the news with respect to violent episodes in the workplace. It’s a very big problem. When we run seminars on workplace violence, we’ll get 500 different companies coming to them. It’s astounding.

Are certain industries more inclined to experience violent incidents?
Yes. The Occupational Safety and Health Administration is in the process of setting guidelines, and maybe eventually a standard, for preventing and dealing with violence in the workplace. It has focused on two or three specific industries.

The highest incident seems to be in retail stores, particularly in the evening-hour operations. The health care field also has become one of the increasing areas of violence, particularly in [functions] that deal with emotionally disturbed patients. Generally, however, violent incidents cover a broad spectrum of industries.

Forty states now allow carrying of concealed weapons. How easy is it to get a permit?
It depends on the state. There’s legislation in the majority of states that allows individuals to carry concealed weapons. For most of them, we’re talking about handguns, not shotguns, not machine guns.

In terms of carrying concealed weapons, most states require a waiting period when you apply for a permit because they want to check whether you have a criminal record. The waiting period varies. I understand you can get it in three to five days in some states.

So an employee who wants to carry a concealed weapon can get a permit fairly easily? Or does it again depend on the state?
[It depends.] New York, like a lot of other states, passed a “legal activities” law. Employers have been more restrictive in how they structure the workplace environment. For example, some employers have policies on not hiring anyone who smokes. In New York state, the legal activities law [makes it legal] to smoke, not on the premises, but outside of work.

This law would also cover [owning] guns and belonging to a gun club. [Employers can’t make employment decisions based on gun ownership]. So that may give encouragement to individuals who want to own guns or weapons.

Can employers force employees to tell them if they’re carrying a concealed weapon?
The answer is emphatically: Yes. That is, of course, if an employer is going to allow employees to carry concealed weapons on the premises [in the first place]. It’s inviting disaster.

But if the employer is going to allow [the carrying of concealed weapons], it’s lawful to require the employee to first and foremost advise the employer that the employee is going to be carrying a concealed weapon while doing work duties.

Does this apply to weapons outside of handguns?
Weapons are more than simply handguns: They could be long knives, brass knuckles, box cutters—which are currently the weapons of choice for many, particularly young people. They’re easily hidden, easily purchased (you don’t need a permit), but they can do a lot of damage.

So an employer can legally ban weapons altogether—even for employees who’ve obtained a concealed-weapon permit?

There’s no constitutional right to carry a concealed weapon into a workplace. The mere fact a state would allow people to carry a concealed weapon doesn’t allow a person to carry it when he or she enters a workplace, which is not in the public domain. The workplace is controlled exclusively by the employer—the employer can insist the employee disclose the nature of the weapon and where he or she is going to carry it.

Assuming employers want to ban weapons in the workplace, what’s the best approach?
The large majority of employers absolutely ban weapons in the workplace, and they do it in a number of ways. The easiest way is to have a written policy that’s communicated to employees and is contained in an employee handbook or in a set of rules and regulations that govern conduct.

It’s very important to communicate that in writing—not just in an e-mail message—so that everyone can look at that continuously. Employees need to know what the expectations are. It wouldn’t be unusual for an employee in a state that allows the carrying of concealed weapons to bring that weapon and put it in a locker or carry it around because they feel they live in a bad area outside of work or they’ve been threatened outside of work. You want that workplace rule of conduct to be clearly communicated so workers know it’s prohibited and could lead to discipline, including termination.

Does a clear policy ensure the legality of terminating an employee who does bring a weapon to work?
Employers that clearly communicate that type of policy are in a much sounder legal footing in disciplining or terminating employees for bringing weapons into the workplace. Obviously, unionized employers with collective bargaining representatives may have some more difficulty in discipline or in terminations if they don’t communicate that kind of policy or rule to employees. But an employer would never have a problem warning an individual: “You are not to bring a weapon into the workplace.”

What about background checks for criminal records—is that advised?
An employer hiring for something like a delivery [position]—for which the employee will be going into people’s homes—doesn’t have to hire someone with a criminal record of violence.

But some states are very restrictive for employers on what kind of convictions you can even consider: how old the conviction is, whether it relates to the job. That’s not counting arrest records, because there are no states that I’m aware of that would even consider allowing an employer to use arrest records in employment decisions.

What if you’ve already hired an employee who begins to show violent tendencies?
Often you’re going to come across current employees who exhibit violent tendencies. You have to establish a program to monitor those individuals. When necessary, prevent them from going out into the workplace where they’ll deal with the public, and limit their interaction with fellow employees.

What if you have reason to believe an employee may be violent—how do you find out without committing invasion of privacy?
One of the things you may have to do is conduct an investigation to determine if an employee is exhibiting violent tendencies—whether he or she is stalking other employees, whether the person is sending messages across your e-mail or voicemail system, whether he or she is using the employer’s premises to engage in prohibited and unwelcome conduct toward other employees.

The best thing to do is to make sure there’s a clear policy enunciated to employees that the employer reserves the right to access his or her computer and e-mail and voicemail. You can do this by just having the policy flash on the computer screen when you turn it on in the morning.

Let’s say, despite necessary precautions, a violent incident occurs. What liability does an employer have toward employees who are hurt in workplace violence?
The exposure depends upon who was injured and what the circumstances were leading to the injury or assault by an employee who has a weapon. Under state law, liability is determined by whether an employer is negligent in the way it hires employees, and in the way it supervises and trains employees. Employers are required to carefully hire and screen employees as well as supervise them.

The problem is a Catch-22 for employers in the sense that employees have a lot more protections against discrimination in the workplace today in their hiring and continued employment—ADA and state equal opportunity laws may give them protections.

If you look at the normal profile of the violent employee today, it’s a white male in his forties who has had a troubled background, marital problems, medical problems—a lot of those qualities could lead to discrimination if you were to try to screen out those individuals. But employers still are required to make sure that employees who exhibit violent conduct are carefully monitored and channeled into employee assistance programs.

Doesn’t the workers’ compensation law keep many employers from being sued?
Every state normally has a restriction under the workers’ compensation laws that prohibit employees from suing their employers directly. If an employee is injured on the job, the exclusive remedy is workers’ compensation. Now the question arises, what happens if an employee is injured by a co-worker? In most cases workers’ compensation is the exclusive remedy.

In what cases would the remedy be different?
There are two ways employees get around this restriction on suing their employers if there’s violence in the workplace. The first way is they sue a third party, claiming it was the third party that was negligent, like an independently contracted security force. That contractor in a number of states is then allowed to sue the employer, claiming that if the contractor is negligent and found liable, then the injured can collect from the employer, who also was negligent—perhaps the employer didn’t advise the third party of an employee’s violent tendencies or provide adequate precautions or screening measures.

In addition, some states allow employees to sue employers directly if there’s gross negligence: The employer knew of violent tendencies in an employee and didn’t take adequate steps to protect the workforce. Say a supervisor knows an employee is carrying a concealed weapon, and doesn’t tell anyone about this. The employee continues to bring the weapon into the workplace, and sooner or later becomes angry and uses the weapon. That employer may have been guilty of gross negligence.

What if the injured party is not an employee?
The employer would also have liability to customers and the public at large if the employee has violent tendencies and the company should have known but didn’t do a careful screening. [This would also be the case] if the employer is told about violent tendencies and doesn’t reasonably supervise that employee. This is the same kind of liability as when the employer sends an employee out into the workplace and says: “You’re free to do whatever you want to the public at large.”

What can employers do to protect their employees, their customers and themselves?
First, establish a good violence-prevention program. Adapt a proactive strategy by establishing a plan that makes security and violence prevention an essential function of everyone’s job in the workplace. Develop a written policy describing the organization’s philosophy and approach to workplace violence. Make sure if an individual exhibits signs of violence that lower level management doesn’t cover it up, but reports it—because it’s important to document these.

Discuss security considerations with employees in the workplace and decide what the program should look like. You certainly want to implement a security-risk assessment program. Identify those locations where you may need additional security. What areas present the most security risk for employees?

Finally, create a climate that’s characterized by communication, sensitivity and respect toward employees. You’ll often find there are certain institutional events that give rise to workplace violence: reductions-in-force, individual terminations, disciplinary actions, major changes that will cause upheavals. Make sure that your supervisory force treats individuals with respect and dignity when they’re carrying out any of these actions.

Ninety-six percent of large employers have incorporated employee involvement (EI) to some extent. Yet, companies from Cambridge, Massachusetts-based Polaroid Corp. and Holland, Michigan-based Donnelly Corp. have seen the National Labor Relations Board (NLRB) attack their EI committees for violation of Section 8(a)(2) of the National Labor Relations Act. The statute makes it an unfair labor practice for an employer to”dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it.”

The problem occurs because the NLRB has applied the broadest definition to what constitutes a labor organization. Even two employees count as an illegal, employer-dominated labor group if they discuss workplace problems with management in an effort to resolve the issue—the rationale being that all such discussion should be prohibited in a nonunion setting. The TEAM Act may clean up the problem, removing such restrictions on team-based employee involvement.

Jeff McGuiness, president of the Washington, D.C.-based Labor Policy Association—an organization of HR officers of 230 U.S. employers who are interested in federal employment policy issues—offers some insight into the TEAM Act.

What was the original intention of Section 8(a)(2) of the NLRA?
Going back to the 1930s, a tactic commonly used by companies to keep unions out was to form a company union. Companies would recognize an employee group as a union, and bargain with that phony union. So when Congress passed the Wagner Act in 1935, it wrote in a very broad prohibition against employers working with groups of employees. Basically it just forbade employers from working with employees if the employees are discussing terms and conditions of employment. That worked well—in approximately seven or eight years the use of company unions pretty well had vanished.

So how did the regulation come to have a different effect on companies?
In the 1980s, companies began to use quality circles and other various forms of work organizations to get employees much more involved in the work process and work redesign. A question emerged [at that time] as to whether that was a violation of the labor law, because in many of these instances, employee teams would be formed that included employers on the teams—they’d address issues dealing with product development, how to redesign the workplace, and very often health and safety issues.

And that’s illegal under the regulation?
A strict reading of the law at that time would say, yes, because these employee teams were coming up with recommendations that involve the terms and conditions of the workers’ employment, and companies were responding favorably to those recommendations. Now this was pretty much an academic debate. There were law review articles written, primarily by law professors, talking about this problem.

So, when was it that the discussion went mainstream?
No one really paid attention to it until the early 1990s when the first charges started to be filed with the NLRB against EI teams. And again, you have to remember that at all times I’m talking about nonunion settings. In a unionized setting, as long as the union says it’s OK, there are no problems with labor-management teams.

Was it inevitable that sooner or later a company would run astray of the NLRA?
By the ’90s, these teams were definitely the trend in American industry. Sooner or later, there was bound to be a charge filed, and that’s what has happened. In 1991, the NLRB, recognizing there was this new form of work organization out there, said it’s time it takes a look at it to provide advice to employers. It used a case with a company called Electromation Inc. in Elkhart, Indiana. It used that case to lay out a series of rules, and in December 1992, it issued it’s decision in Electromation. It was a very confused decision; it provided no guidance and pretty much said employee involvement in a nonunion setting is illegal.

What happened then?
The case was then taken up to the seventh circuit court of appeals and affirmed by the seventh circuit. And since then, there have been some other major cases that have come down involving a Polaroid company, Donnelly Corp. and [Missouri-based] EFCO Corp. It had become a real issue. I know within our own membership, companies started cutting back on their EI programs. One typical thing that went quickly was the plantwide safety and health committees, because those are clearly in violation of the law. When you have a group of employees from each section of the plant involved in a plantwide health and safety committee, they’re talking about terms and conditions of employment, and that’s illegal. So a lot of companies disbanded those right away.

When was the TEAM Act introduced?
In 1993, Congressman Steve Gundersen (R-WI) and Senator Nancy Kassebaum (R-KS) introduced the TEAM Act—the Teamwork for Employees And Managers Act. The Act would exempt EI structures from Section 8(a)(2), allowing them to “address matters of mutual interest (including issues of quality, productivity and efficiency)” as long as they don’t “have, claim or seek authority” in collective bargaining agreements. It was given no consideration in 1993, but when the Republicans took control of Congress [in 1995], the issue started moving. It was introduced in January, went through hearings, went through mark up and was approved by the House of Representatives in late September.

Will it pass?
I think it will pass. At some point it will pass. I have no doubt whatsoever, because the current policy is, I think, indefensible. Why shouldn’t employees be allowed to work with management to improve the workplace and their work lives? Now the Secretary of Labor said he will encourage the president to veto the bill, but whether he’ll follow that advice is hard to say. Secretary Reich has also been a big supporter of employee involvement, up until the time the legislature started moving and then he suddenly became an opponent. (In a letter to Rep. William Goodling dated June 21, 1995, Reich explained his course of action: “The current version [of the TEAM Act] states plainly that employee involvement programs could discuss ‘issues involving terms and conditions of employment’—in short, the core of what is now reserved to legitimate unions.”)

If it’s passed, will the act solve the problem?
Yes. It will clear the way so the kinds of things you read about all the time, the teaming efforts going on in American industry, will have no legal cloud over them. That’s why there’s so much interest among our members in getting that legislation enacted. They’re very nervous now about embarking on broad, new programs, with the threat that the Board could come in at some point and order all these teams disbanded. That’s what they’ve done at the Donnelly Corp. and at Polaroid. EFCO had an advanced structure of workplace teams, and the Board ordered that all the ones that dealt with terms and conditions be eliminated.

Did these companies that were targeted do something differently with their employee involvement programs?
No. They’re the ones who just unfortunately happened to be at the wrong place at the wrong time and got the charge. It’s like everyone driving down the highway at 60 miles an hour. They were just the ones who got pulled over.

When do you think we’ll see a vote?
In 1996. You’ll probably see a vote in the Senate sometime before the summer.

What advice do you have for companies in the meantime?
A lot of companies have modified their teams so that issues involving terms and conditions of employment, such as scheduling, health and safety, workplace design, bonuses, overtime and all that—they just don’t get into those issues. The problem is, you can’t really have effective employee involvement if you can’t be free to discuss anything you want. So I guess my only advice is to write your Senator at this point and say, “Pass the bill—it’s an important issue for our company.”

Remember in the old cowboy movies when the man in white would put a hand on the railroad tracks and know the train was coming soon? That’s the feeling you get at Siemens Rolm Communications Inc. The place just hums with energy and the promise that something big is about to hit. You can see the enthusiasm in the employees, who bustle quickly through the company’s headquarters in Santa Clara, California, swapping ideas and strategies. You can see the interest in the HR department, where professionals from different team units drop into each others’ offices to thrash out plans. And you can see the excitement in Bonnie C. Hathcock, vice president of human resources, as she recounts the history of the company — a history that begins humbly in a prune shed, where four Rice University engineers founded Rolm in 1969.

What’s all the excitement? After several years of restructuring and reengineering (the HR function included), Siemens Rolm is poised to take on its third and final phase — regeneration. But this is no ordinary rightsizing rehash. This is a one-in-a-million tale of success. After an era of turbulence, Siemens Rolm has accomplished what few other companies can claim with their reengineering efforts. It has returned the company to financial stability, for one thing, but it also has emerged with a confident, satisfied work force — a rarity in today’s cadre of burnt-out, bitter survivors. “The people of this organization really have made major changes in the past few years, and I’m just so proud of them,” says Hathcock. “What pleases me so much is that they want this new workplace. They’ve really embraced it.”

The road from restructuring to regeneration was not the smoothest, as Hathcock will tell you. But because HR played a leadership role in every aspect — from downsizing and creating the new employee contract, to forging the game plan for a new learning organization — the road has brought the company to the place it is now, abuzz with opportunity and potential.

Siemens Rolm engineers a humanistic rightsizing.

The little company that was founded in an old Silicon Valley prune shed reached its financial peak in 1984. At this point its successful military-specifications computer operations prompted Armonk, New York-based IBM to purchase the company. But because of a variety of government regulations introduced during the following few years, IBM had to drop this big money-making operation, and profitability soon began to dip. By 1988, Rolm was losing an average of a million dollars a day. A million dollars down the tubes each day is a fairly serious tab to pick up. But that’s what Munich-based Siemens AG, a $60 billion, 150-year-old electronics company, did — snapping up first R&D and manufacturing in 1989, and then purchasing the telecommunications company whole in 1992.

The newly minted Siemens Rolm obviously had a few top-priority crises to deal with. At the head of the list was getting the operation out of the red. But also to contend with was how to meld a hodge- podge of cultures into one enterprise: There was Siemens and its telecommunications entities throughout the United States, which Hathcock describes as “very business-oriented.” Then there was the old Rolm culture, which was “egalitarian… constructively confrontational.” Finally, there was the old IBM culture, which, when it took over Rolm, introduced an extremely paternalistic environment — one which created what Alan DeMuro, director of HR strategy, remembers as “the most amazing culture clash you’ve ever seen.”

So in 1992, in response to the dual needs of boosting the company’s marketshare while forging one company spirit, the Rolm 1 initiative, the company’s re-engineering program, was born — and immediately hit its first obstacle. The company simply had too many people on payroll. But when Siemens bought Rolm the organization made an agreement with IBM to do its best to continue IBM’s full-employment practice, which basically meant that employees, more or less, were guaranteed lifetime positions.

It was an uphill battle for the organization. IBM could redeploy surplus employees to other business units, but Siemens Rolm, with approximately 6,000 employees, simply didn’t have a massive enough structure to follow suit. Instead, HR found itself offering severance packages, relocating employees cross-country and demoting surplus employees one or two levels. “We absolutely gave it a 150% valiant effort to [keep full employment], until finally it got to the point at which our employees said, ‘This is no longer a humane practice. Now you’re insulting us,'” says Hathcock.

At this point Hathcock, along with the CEO, CFO and several other Siemens Rolm officers, got together to craft a new plan of attack. They decided to end full employment — and to do so with full preparation of the employees. Hathcock remembers that the group carefully created the message they would give their co-workers. “We were anticipating that people would react negatively, but they didn’t,” says Hathcock. “They knew [the decision to end full employment] wasn’t something we’d come to arbitrarily, so the masses accepted it, and frankly, most of them said, ‘It’s about time.'”

After the announcement, the company entered a period Hathcock describes as “swimming against the tide.” The organization simply didn’t want to have a layoff — in Rolm’s entire history, it never had downsized, and it didn’t want to start now. So for the five or six months following the announcement, the company tried a number of tactics. In one plant, where volume had dipped, the company instituted a four-day workweek to avoid closing it. Partnering with California through a state program, Siemens Rolm ensured employees even received a little compensation for the fifth day. Early retirement packages and voluntary severance packages were also in the offering.

Unfortunately, at the end of the quarter the company hit an uncloseable gap, and was forced to lay off 5% of its work force — approximately 280 people. HR was determined, however, to make this a humanistic rightsizing. The average period of benefits coverage for laid-off employees at most companies is 12 weeks; Siemens Rolm gave six months. Instead of the standard severance — one week per year of service — the company provided two weeks, with a minimum of 10 weeks’ pay.

Siemens Rolm also wanted to safeguard its employees’ psychological well-being. It offered meetings with trained outplacement counselors, training on interviewing and resume writing, and access to a job bank starting the day after they were laid off.

Most importantly, perhaps, the employees weren’t ostracized. For their final two weeks, the company allowed them to keep their security badges and come and go as they always did — rather than under guard watch as in many companies. “We said, ‘We trusted you yesterday. We trust you today. We trust you tomorrow. Have your going-away parties,'” says Hathcock. And party they did, a fact the company supported. Hathcock, for instance, merrily shares the story of a group of laid-off employees who rented a gold Mercedes limo and arrived on their final day to pick up their paychecks blaring, “Take This Job and Shove It.” “I thought that was a spirited response,” she says.

The bottom line of all this is that because the company readily tried other approaches before a layoff, kept the employees informed, and treated those laid off with dignity and care, the survivors were really on board when the company was ready for its rebuilding phase. And that made all the difference, because the rebuilding phase was no easy-assembly job.

Reengineering the company to get back on track.
Siemens Rolm knew that companies of the future would have to look and act differently. They’d have to be more responsive, quicker moving and smarter. So the company embarked on a change effort with four specific foci:

• Create a new employee contract
• Raise the bar on performance
• Transform the culture
• Initiate competency-centered pay, with a revamped awards program.

The new employee contract delivered a message that, back in 1992, wasn’t yet so common: Employees were going to have to take more responsibility for their careers. “Their skills were going to be their security,” says Hathcock. “We told them, ‘You have a better chance of staying with this company you say you love if you’re constantly updating your skills.'” But the company also offered something in return: meaningful work and plenty of horizontal-movement opportunities. Even today, Siemens Rolm continues to emphasize the notion that although there are fewer rungs on the ladder, taking on a wide variety of positions will increase marketability. “We’ve been trying to crack that message,” says Hathcock. “I’m not going to say that [everyone has gotten it]. But I do believe most are cognizant — at least 70% as evidenced by our own survey — that they’re responsible for their own employability.”

The company then moved on to raising the bar on performance to world-class standards. A sticky area here was the performance-appraisal system. It had fallen into complacency: The standards weren’t rigorous enough, and managers tended to automatically rate employees in the top two performance categories. Yet obviously, world-class operations in which employees are such high-performers don’t lose millions of dollars a year.

In response, the company committed to putting a little more elbow grease behind its performance appraisals. A team of HR managers worked with other senior executives to create a “world-class” performance appraisal. This means that for an employee to be rated as performing satisfactorily, the employee must be performing on a much higher level than under the old system. “It’s like gold, silver and bronze Olympic medals,” explains DeMuro. “An employee who receives the lowest acceptable rating is still an excellent performer.”

For example, under the old system, a customer engineer would be considered satisfactory if he or she visited a client’s site and corrected an equipment problem adequately or installed new equipment correctly. Today that person is expected to understand just what the customers’ telecommunications goals are and how the company can help them achieve those goals. “Either you function at a world-class level or you’re managed out of our business,” explains Hathcock. HR tracks the system quarterly to see whether managers are building in tougher performance standards. The CEO personally reviews the appraisals of all the top performers.

Next came the cultural transformation, emphasizing “speed, guts and dramatic moves.” This new attitude was enforced over a three-day meeting in Siemens Rolm’s management institute, with more than 600 managers attending. Of the many buzzwords we have today to describe the newer, streamlined, fast-moving company, you rarely hear the word “guts,” but Hathcock believes it identifies the true nature of their new workplace. “We reward people if they make decisions that are gutsy and take some risks. We wanted to just move and take some bold action. That’s what we were trying to get at with our whole world-class initiative.” Managers in turn spread the good word to their workers in a slightly different version. The company acknowledged the average-Joe employees wouldn’t have a lot of pull as far as resources or money went. Yet they could still assist by focusing their time on solutions, taking personal responsibility and speeding up.

Finally, to support this new workplace, in which employees are responsible for their own career growth, in which world-class performance is a must, in which dramatic moves are a necessity, Siemens Rolm reengineered its pay system. It began by carving out one-fourth of its merit budget pool for discretionary pay to reward employees who had significantly advanced their skills during a performance period — by taking a class or earning a certification or assuming a new assignment. The company also wanted to leave room for big payouts, so it committed funds (more than $1 million a year) specifically for rewarding employees for demonstrating world-class performance. An employee could receive a reward for going the extra five miles for a customer, for designing a new product that has big market appeal, for achieving cycle time reduction. Awards can start around $250 and go as high as $25,000.

HR releases the winds of change on itself.
This new culture needed a new HR to support it. Bonnie Hathcock catches herself laughing when she remembers the grueling challenge HR submitted itself to: Reengineering the entire function while supporting the larger companywide effort. “It certainly wasn’t in our spare time,” she says. To keep up with the restructured company, HR would have to make some changes.

First, Hathcock began carving out a new purpose for the department, which includes approximately 60 people in HR across the country and 80 people in the education division, for which she also has responsibility. Coming from a sales and marketing background, she admits she’s always been customer-focused. She has a habit of continually asking herself how she can help her customer succeed.

But this, as we know, wasn’t always a common theme in HR. Hathcock says it took a while to drill in the new message of HR as a business partner. “But now, two-and-a-half years later, everyone knows why we get up in the morning, why we come to work, why we’re funded. We’re here to help the company execute its business strategies.” HR’s goal boiled down to this phrase: Align the HR organization with business strategy. For every company goal, there is a people strategy necessary to support it.

To thrive with this new HR mindset, professionals in the department needed to grab hold of a new set of competencies. First, to truly be seen as viable business partners, Hathcock knew they couldn’t just sit in their offices and do their core jobs. “My view of HR is that we should be bold, we should be provocative, we should be in people’s faces. We should be leaders. I don’t believe in an HR organization that’s a shrinking violet…. We need to help make the decisions that affect people as opposed to sitting back and waiting for… them to come to [us].” So the HR professionals boned up in three areas:

1. Business mastery:Hathcock urges her department members to go to seminars, learn everything they can learn and make sure to infuse those ideas into the organization.
2. Change and process mastery:HR professionals must continually lead the company through ever-increasing levels of change. They must be on the front end, coaching people.
3. Personal credibility:HR people must understand the company’s finances; be able to read a balance sheet; know their business. To this end, Hathcock instituted HR University, held three times a year, at which an outside expert conducts a “class” on a particular subject. Last November, Charles O’Reilly, of Stanford University School of Business, discussed the powerful effect of a well-defined culture on business results.

After setting a new direction and defining new competencies, HR still wasn’t done. It turned its structure inside out. This past October, it threw the opening blow in a fight against administrivia by starting up a shared services center. Now, instead of HR professionals across the nation getting sucked into extraneous work all day, administrative transactions are gathered under a single umbrella. Employees may dial one phone number and reach HR experts specifically deployed to answer their questions. “These guys are the front line image of HR. They have to do their jobs really well,” says Hathcock.

And they do. Walk through the service center, and you can hear any of the 10 employees answering inquiries on employment, benefits, administration, relocation or international services. The center has a number of safeguards in place that keep it singing with efficiency. To ensure that employees can always reach a live person, for instance, a minimum of three people must be available at any given time. To ensure consistency, employees log in the subject of the call as well as the answer provided. “We’ve had a great response from employees,” says Kim Waide, manager of the service center. “It’s like one-stop shopping for HR information.”

HR gives itself a new look.
Although the service center was a big step in allowing HR to focus on adding value, the department had a ways to go. Its old silo system, in which HR was parceled out into specific disciplines, such as benefits and pay, was slowing it down. “We had so much structure, and so much definition, and everyone got along beautifully, and everything worked,” remembers DeMuro. “But we weren’t really engaging in the type of high-impact activities we could.” So in the summer of 1994, a group of top HR people sat down with a blank page. They reviewed the business strategy and discussed what HR should do in the way of impacting that strategy. The group concluded it would be most effective if HR reorganized around the company’s business strategy, rather than silos of skills or preferences. This was no quick-fix. By the time autumn came around, it was clear this wasn’t going to be just a little reorganization. It was going to be an entire rethinking of how HR should look — namely, as a team-based function.

Restructuring into teams may look simple on paper, but this was hardly the case. Not everyone in HR, for instance, believed it was such a good idea. “It’s tough for people who are fairly senior in their careers. [There was] a passive resistance,” remembers DeMuro. “On one level, they’d agree, but they didn’t really invest. We needed to get rid of the silos, and this upset some folks — [you] have your own department and your own people and you’re in charge, and if that has meaning and status and identity for you, and you’ve invested a [lot of] time getting there, and suddenly someone comes along and says, ‘This isn’t the way…'”

Finally, however, most HR people warmed up to the idea, and the department was restructured into four different areas (in addition to the Service Center):

• The strategy and design area: charged with “creating the future” — devising the programs and initiatives that respond to employee imperatives
• The consulting services group: acts as a consultant to the business, deciding how to deploy human assets to meet HR strategies
• The HR program integration area: ensures that all the expertise of area managers is cloned across the company
• Education: supports the business by training employees on the competencies they need.

To assist the HR areas in meeting their goals, there are four main team groups that can be called upon:

Strategy team: This team is the main driver and consists of more senior or strategically minded HR professionals in the organization. It’s a standing team that convenes periodically to develop HR strategy in support of Siemens Rolm business strategy. Membership on the team is relatively permanent.

Core team: This team consists of the centers of expertise or knowledge of best HR practices. For instance, on the core team of benefits are the two or three people who know most about benefits.

Design team: A design team is launched whenever HR wants to initiate something — to establish a program, set up a communication effort — whatever. “Anything significant enough to form a group of people to pursue an objective, but otherwise we don’t try to define them,” explains DeMuro. For instance, when the company wanted to introduce flexible benefits, HR formed a design team responsible for communication.

Process team: These teams are initiated after a program or policy is in place to continuously monitor for quality.

Team membership changes, but in a nutshell, the teams work like this: An HR strategy team in charge of looking over the rewards program, for example, will create a plan for revising the executive compensation program. The core team would be made up specifically of experts in executive compensation, upon which the strategy team could draw for information in creating its new plan. The strategy team would then pick the people to best serve on the design team, give them a deadline, and let them have at it. The design team would dissolve as soon as it met its goals. After that, the process team would handle quality control and continuous improvement of the new executive compensation plan.

How are all these newly (less than a year) restructured teams doing? “We’re still struggling,” admits DeMuro. “It runs the gamut. Some people are trying to get back into department mode. Others have internalized the new structure, and they’re running with it. They’re perfectly comfortable with it.”

Strategy teams map the future of HR.
The strategy and design teams’ battle cry was to “create the future,” but any well-planned attack has some specific goals and guidelines. So HR came up with HR Impact Areas — areas in which HR’s hand can have the greatest benefit on business in the future — and ordered teams around each of them:

• Values, Beliefs and HR Communications: “As an HR organization, we wanted to have an impact on defining the culture,” says DeMuro
• Resources: in charge of strategic staffing, deployment and diversity
• Practices: handles HR programs, benefits, services and policies
• Rewards: designs the compensation policy and executive pay programs
• HR Technology Team: “We want to be able to impact employees and managers at the desktop,” says DeMuro, who leads the HR strategy teams
• Organization Effectiveness: handles training, team effectiveness, performance appraisals, and competencies.

As you can imagine, two of the busiest teams currently are the Resources and the Organization Effectiveness groups, because they’re both so closely related to people — their selection, development and performance. The Resources team, for instance, is trying to breathe new life into its recruiting strategies now that Siemens Rolm is emerging from its hiring hibernation. Managers have forgotten the finesse of hiring, and the company has about zilch when it comes to recruiting brochures and the like. To rectify the situation, the company is working on a videotape to show to prospective candidates. It’s also gearing up to hit the Internet for recruiting, using a self-selection process in which candidates must successfully answer a series of questions in order to submit their resumes. Also in the works is retraining via teleconferencing for managers across the country. Half a dozen or so managers will spend the day on a refresher course covering interviewing do’s and don’ts, how to deal with troublesome situations and how to ask the right questions.

Down the road, the Resources team hopes to get back in touch with some key college campuses. “I want us to get out of totally relying on experienced [people] and get back into the campuses to get some new ideas, update us on what’s going on in schools,” says Doug Spottswood, manager of HR operations and head of the Resources team. “It may motivate the rest of us.”

Another of Spottswood’s goals for the upcoming year is to re-recruit the company’s current employees, who may be a bit frayed from the downsizing. “Sometimes you forget why you’re here, but we’re a heck of a company, so let’s remind them — let’s take the time.”

The Resources team works closely with the Organization Effectiveness team, which helps provide a skills inventory of what kind of competencies the company will need for its different job families in the future. There are basically two kinds of competencies Siemens Rolm employees will need to have to function at the necessary world-class performance levels: enabling competencies and domain competencies. The enabling are more behavioral; they describe the characteristics of a person you’d want in the organization. The domain competencies are more job-specific; they deal with the skills and knowledge necessary to do the job.

William Maybeck, director of education and head of the Organization Effectiveness team, says competencies aren’t just important in hiring the right people, but also in keeping current employees aligned with the business. For instance, under the Organization Effectiveness umbrella is a competency development team assigned to each business unit. That team’s sole mission is to understand the strategic direction of that business unit and from there define the competencies that unit must have to meet its objectives five years down the line.

The consultants work with the managers to plan how they can get the competencies they’ll need. That may result in outside recruitment, but very often it’s a matter of employee development. If that’s the case, the consultants will spell out a development track for each worker for the next few months or a year, and it will be reviewed annually. The competency consultant reconvenes with the head of his or her assigned business unit quarterly for a progress update.

Maybeck says that not only do the competency consultants assist the business in staying on track, they also continually flame the spirit of the learning organization, encouraging continual education and development.

What’s the overall result of all these changes? To begin with, HR is more than pleased. “We’re starting to see what happens when you put intelligent, committed people in a room and allow them to self-direct around a specific purpose,” says Hathcock. “You leverage all that talent. We want HR to be a real team-based organization so we can model for the rest of the company.”

The company also is more than pleased: After a six-year slump, it hit a break-even operating point in 1995, and expects to be back in the black soon. Last, but certainly not least, the employees are happy. The last worker survey revealed that 89% of employees believe their organization is as good or better than other companies; 81% said they were proud to work for Siemens Rolm. For a company that’s gone through such a magnitude of change, those are impressive numbers. But, Hathcock is quick to add that Siemens Rolm went through all those changes for good reason. “Our restructuring and reengineering were done to revitalize the company for growth. That’s where we are now. We’re poised for the next phase: regeneration.”

Can you hear those train tracks start to rumble?

Personnel Journal, February 1996, Vol. 75, No. 2, pp. 58-69.

Why institute an English-only policy? There are a number of reasons. Maybe your company deals with an English-speaking customer base and must have employees who communicate effectively. Maybe in the past, separate languages have segregated the work force.Whatever your reason, English-only workplaces can be tricky propositions. If poorly handled, they’re vulnerable to discrimination claims by employees who feel banning their language is a disparagement of their race or nationality.

Here, Christine Cesare, partner, and Lisa Lerner, associate, with employment law and litigation firm New York City-based Emmet, Marvin and Martin LLP, explain the difference between a legal English-only workplace and a liable one.

Since language isn’t protected ground under human rights legislation, how is it that so many employers are finding themselves vulnerable to discrimination suits?
LL: Some employees base their [complaints by arguing that] their language is linked to their national origin. That’s when the employer runs into a potential problem under Title VII. The Equal Employment Opportunity Commission has had interpretive guidelines [since 1980] that pretty much define what constitutes national-origin discrimination. The EEOC has mentioned that English-only rules may violate Title VII.

So in what case would English-only rules represent discriminatory action?
LL: The EEOC looks at two different things. First, the EEOC has said that if you have a per se rule that states employees must speak only English in the workplace, at all times, it’s going to closely scrutinize the rule, and will [likely] construe that as discrimination. But if an employer has a rule that English must be spoken at certain times, but on break or lunch periods employees may speak any language they want, and if that rule is justified by a compelling business necessity, then it may withstand scrutiny. The interesting thing here is that in this type of discrimination, unlike other types of discrimination, you actually have an employer admitting the discriminatory conduct. It’s admitting it has an English-only rule, and it’s relying on its policy in the litigation.

What kind of business necessity would justify an English-only rule?
CC: It depends on the nature of the business. You usually see it in cases of promoting safety, order and discipline. Also, and I don’t know if this has risen to a legitimate justification, but there’s a concern that people speaking different languages can create disharmony in the workplace. Sometimes employers articulate that as a reason why they’d like the English-only rule, because it tends to eliminate some divisiveness. But I don’t know if that has risen to a business justification.

Has anyone successfully used something like workplace disharmony as a business justification?
LL: The first circuit court of appeals to consider the issue—the ninth circuit—upheld the EEOC interpretive guidelines and essentially used them to find an employer’s practice discriminatory. But the next time the ninth circuit considered the issue, it rejected the EEOC guidelines. They found that an employer may have legitimate reasons for essentially having an English-only rule under circumstances that aren’t designed to promote workplace safety. In that case, Garcia vs. Spun Steak Co., the employer had instituted an English-only policy because certain employees were using the Spanish language allegedly to harass other co-workers.

How did the court explain its decision?
LL: The court found that the employer could have an English-only policy. It held that Title VII doesn’t protect employees’ right to express their cultural heritage on the job and that bilingual employees aren’t denied a privilege of their employment when [English-only is enforced]. The court held that you have to look at an employee’s claim under the hostile work-environment analysis of Title VII. In the [Garcia] case, the employees hadn’t proven that the English-only work rule constituted a hostile work environment.

What does that mean to employers?
LL: It means an employer has leeway to have an English-only policy; and that English-only policy is going to be evaluated on a case-by-case basis.

CC: Employers can feel hopeful because these recent cases tend to look favorably at the employer’s reasons and take them into account—as opposed to the first ninth circuit case that adopted virtually wholesale the EEOC guidelines, which are pretty limiting and restrictive.

What advice would you give employers who are considering instituting this kind of policy? What kinds of questions should they ask themselves before they do this?
LL: It depends on what kind of business you’re in. Some of the cases coming down deal with hospitals and whether nurses and doctors have to speak English. That gets into an area in which there are safety concerns—you want to be careful that a doctor is effectively communicating to a patient. So one thing is the nature of the business and what type of contact [your employees] have with other people, how imperative it is that [they] can communicate in English.

So a justification could be that the work simply required English fluency?
CC: It could happen in a hospital or certainly in sales work, depending on whom your customers are. An employer whose customers are English-speaking is going to have a problem if all the sales people speak a different language.

LL: By the same token, as technology increases, as people work [more] on computers and communicate by E-mail, the language part of the job becomes less imperative. In terms of communicating in the workplace, it becomes less imperative that you speak only English.

What about choosing not to promote someone because of an accent?
CC: Employers can’t use accent as a reason not to promote somebody unless it’s a true impediment—unless there’s a demonstrated problem, such as the people working for that person can’t understand him or her. If the accent is that pronounced and it’s a legitimate problem, that’s a reason why an employer may not be able to promote somebody. But you can’t use that as a subterfuge to discriminate against someone based on national origin.

LL: The issue of accent discrimination also was addressed by the EEOC in its interpretive guidelines. The EEOC has said it will carefully investigate charges involving disparate treatment and adverse impact on the basis of national origin. But the issue of accent ties into an employee’s ability to communicate, so what you have are employers claiming that employees were unable to communicate effectively in the workplace, and that hinders their ability to perform their jobs properly.

Do you see any general legal trends for English-only workplaces?
LL: The Supreme Court refused to reconsider the Garcia decision, and in the aftermath of the Court’s refusal to hear the case, a lot was written on what this is going to mean for employers. The interpretation that people are giving is that employers may be able to get away with more in terms of English-only policies, and employees may be less likely to rely upon the EEOC’s interpretive guidelines.

So where does the EEOC fit in?
LL: While the courts are demonstrating a willingness to favor the employer, the EEOC is strictly adhering to its guidelines. When employees have a claim of discrimination, the first thing they’ll do is file a charge of discrimination with the EEOC. So employers still have reason to be concerned about an English-only policy.

CC: You always have to be concerned about the EEOC. It can start an investigation on its own, file charges and fine the plaintiff—and they determine and assess the claims [not on a case-by-case basis] but by looking strictly at their guidelines.

Any legislation pending on the topic?
LL: There are several bills pending in Congress right now. They don’t deal directly with the workplace, but they do deal with English-only measures. One of the reasons this issue has been brought to the forefront is because there are two bills pending attempting to make English the official language of the U.S. government. There was also a bill proposed in July that goes the other way and encourages multilingualism; it discourages English-only measures. So although these don’t deal directly with the workplace, they certainly affect the way the public is going to view workplace regulations. The two bills introduced to declare English the official language have been pending for several months. The odds they’ll pass each stage of the legislative process are slim.

Some states also now recognize English as their official language. What does that mean exactly?
LL: What these states have essentially said is that they recognize English as the official language. It’s a response to the influx of immigrants. According to the 1990 Census—and the numbers are growing—there are more than 31.8 million people in the U.S. who speak languages other than English. There’s a trend to preserve the English language that’s been fueled by the rise of non-English-speaking and multilingual people in the United States.

It’s fairly easy to look at such cost-free benefits as flextime and casual dress days and say, “Yes, with a few minor workplace adjustments, this will benefit everyone.” It’s a little trickier when you have to start deciding on which benefits should stay and which ones should go. Most successful companies will tell you to really look at the return on investment:

• Is the program truly boosting the bottom line in some plausible way?
• Is it truly helping employees balance their lives?

One particular conundrum facing companies is child care—which, depending on the company, may do both of the above—or neither. “I think child care is a bit peculiar,” says Levering. “It affects a fairly small percentage of most work forces. And it’s not like some other benefits where you’re really trying to help employees balance their time. You’re trying to help them take care of some personal things through the company.”

Some companies, such as Memphis-based First Tennessee Bank, opt for a sick child-care center over regular child care. Through a survey, the company ascertained that in Shelby county alone—the bank’s headquarters—it was losing about 1,500 days of productivity within a given year. Last year the bank formed a partnership with several other companies to open a center. “Our break-even goal was to get at least 100 days of productivity back, and within the first nine months of its first year, we’ve done that,” says Pat Brown, vice president and manager of family matters.

Why not offer onsite child care as well if the bank could afford it? “We asked our employees what issue was impacting their productivity, and they said it was their kids being sick,” says Brown. “They also wanted onsite child care, but we couldn’t justify that. With the sick-child care center, we show an immediate return on productivity, and we’re starting to track to see if we also retain those employees longer.”

While many companies are unsure of the return on investment of owning or supporting their own child-care centers, the idea remains popular. In a 1994 Towers Perrin survey of more than 100 large employers on work-life practices, 13% owned or supported their own child-care services, and another 13% were planning to do so. But with serious expenses for a fairly small portion of most companies’ work forces, is offering child-care centers really the way to go?

Consider this: According to the Bureau of National Affairs, absenteeism related to child-care problems costs U.S. businesses approximately $3 billion annually. A company-owned child-care center provides daily care for children, but so does any reliable outside child-care center. The problem arises most often when a child is sick, and a center won’t take him or her in. That’s the most common reason for a child-care problem that will cause a lost workday. That’s also the reason Knoxville-based East Tennessee Children’s Hospital chose to offer sick-child care over regular care. Says Paul Bates, vice president of human resources: “The interesting thing for any organization that’s looking into an onsite child-care center is that only a very, very small portion of your employees use it due to space constraints. Is it really a benefit to the organization to help 100 employees when you have 1,000?” Instead, the hospital allows its 900 employees to plan for dependent care through spending accounts funded through voluntary contributions from their paychecks—up to $2,000. It also connects employees with the University of Tennessee’s child-care resource and referral service. “That way we’re doing something. We’re helping out but not carrying all that responsibility,” says Bates.

Companies with a large number of employees with young children may find, however, that an onsite child-care center would be the greatest thing for the company. It really depends on the need. Bob McDowell, national director of HR for New York City-based Coopers & Lybrand, has experimented with several child-care situations for the company’s 16,000 employees. For instance, for a while the company flirted with weekend child care to assist more demanding business areas, such as tax practices that are very busy from January through April. Employees seemed to have few weekday child-care problems—the trouble occurred when they had to drop in the office on Saturdays or Sundays. “There seemed to be a lot of interest in weekend child-care arrangements, so we tried to do it. It didn’t work. People are too scattered geographically and often work at client offices, so setting it up at a central location where the office was didn’t make any sense.” The company instead chose to go the referral route—a practice that has been a success. For instance, one senior consultant was closing a key half-million dollar job. At the last minute, she lost her nanny and was faced with staying home for a few days and jeopardizing the deal. Instead, she was able to call Coopers & Lybrand’s family resource service, interview four candidates in the evening, and didn’t miss a day of work. The whole set-up cost the company less than $150. “Now does that contribute positively to the profitability of the organization?” asks McDowell. “You bet it does.”

Today’s top women candidates are taking closer looks at potential employers to ensure they have a supportive culture. Don’t just assume your company is female friendly—make sure it is. Mary Mattis, vice president of research and advisory services for Catalyst, a New York City-based organization “working with business to effect change for women,” offers this advice:

Conduct internal research.
Look at your company. Don’t assume the face of your company is a smiley face. See if women plateau at a certain level or whether they tend to be over-represented in some areas and under-represented in others. See if you have women in international assignments.

Gather data.
Get the facts. Look at promotion rates and how long women tend to stay at one level. Look at relative turnover between women and men. If companies don’t have those kinds of numbers, they need to start working on them and keeping that data systematically.

Talk to women.
Listen to women. Start an advisory or focus group of women that you meet with on a regular basis. This gives you a better sense for how women are feeling and how they’re faring.

Revisit female-focused programs.
There are a lot of companies out there with excellent work-family programs. But they shouldn’t assume that the programs will meet the needs of all women. Companies may assume that work-family is a woman’s issue, and that if they’ve dealt with that, they’ve dealt with women’s issues. But there’s a whole other side—for instance, what’s happening in the company with women’s career mobility?

Have a plan.
Companies need to have target goals not just for recruiting women, but for moving them up as well. Until companies start treating this just like any other business issue, for which they state the result they want, measure whether they got it and reward the people who got it for them, they’re not going to change organizational behavior.