Author: Jennifer Hutchins

From the Pony Express to airmail, the United States Postal Service (USPS) hasfueled American innovation for centuries. Today, the second-largest civilianemployer in the country is using Web-based technology to surmount a surge in HRdemands.

Madolyn Wiley used to spend a good chunk of her workdays searching throughprinted manuals and handbooks. Now the HR specialist for USPS’s Arkansasdistrict simply logs on to an HR intranet for the tools she needs to processbenefits and compensation. As part of the team that built USPS’s PersonnelDesktop, Wiley has helped the federal agency make strides in computer-based HRsystems. “It’s the way to go,” says Wiley, who has seen a lot ofchanges during the two decades she has been with USPS. “Every one of our HRpeople around the country has access to the system. We get the forms andinformation we need immediately.”

It was not always so easy. Two and a half years ago, Wiley and three of hercolleagues were recruited from another project to embark on an ambitiousmission: to streamline benefits and compensation processing for 1,500 HRprofessionals who deal with more than 800,000 employees. The four team memberscame from different parts of the country to Washington, D.C., where they wereasked to create a Web-based system that would offer step-by-step benefits andcompensation processing. Under the guidance of John Mahoney, HRIS manager, DonnaPeak, formerly USPS compensation manager and now CFO, and Dixie Wiles, HRISinformation systems coordinator, the team joined forces with five Webprogrammers.

“People were out there with large workloads trying to administerbenefits by searching drawers full of files,” explains Wiles. “Theywere going through manuals, looking for correct and current forms, and trying tofind current compensation information that could be in a notebook somewhere ortacked up on a wall. There were pieces of information scattered all over theplace…The challenges were distributing and accessing timely information, alongwith standardized, consistent, and accurate benefits- processing procedures byeach office.”

As if that weren’t enough, HR support was shrinking. “In 1992 we had a40 percent cut in support staff, but not in workload,” says Wiles. “Wehad a buyout situation where we lost a lot of veteran staff members. It was amajor knowledge drain that really hurt us. And it will continue; in the next oneto five years, 20 to 25 percent more of that staff will be eligible forretirement.”

The project team was not daunted. They began to map out a system that wouldincorporate a huge number of federally regulated procedures into a navigablesite. They decided to put the site on the USPS HR intranet, which had alreadybeen active for two years. “Our benefits processing is complex,rules-intensive, and forms-driven,” explains Wiles. “Because we areregulated under the Office of Personnel Management, there is little flexibilityto streamline the processes. We had a Web team for HR and had already done somework on workflows, so it seemed like the next logical step to build our owndesktop system.”

Four months later, the team proudly introduced the Personnel Desktop at anational USPS compensation conference. They kicked off the event with seminarsattended by more than 200 field people who would spread the word among the HRworkforce. “People were absolutely speechless,” says Wiles. “Whatit did for them was amazing. They had information, forms, manuals, and links toother Web sites in an organized, easy-to-use system at their fingertips. Theycould bring in new employees and sit them at the computer to easily learn toprocess benefits.”

The system features 52 Standard Operating Procedures (SOPs), complete withonline forms, documents, memos, letters, and links to other agency sites. Withinminutes, the system guides users through actions that previously could takehours. It not only makes HR tasks faster, but also cuts down on errors andpaperwork, while improving work-flow processes. It instantly became the second-most-used site on the USPS intranet. The system combats the agency’s declinein HR support. “It created a high-level knowledge-based system that willprovide a way to train our new HR professionals on benefits processing,”explains Wiles.

Calculators for compensation packages were also a big hit with fieldpersonnel. “We have 41 different payment schedules,” says Wiles.”The people in the field loved the fact that they had historical payschedules online. They use the site to go back to the old pay schedule when theyneed to adjust employees’ pay. Believe it or not, they used to have to callheadquarters compensation to seek that information.” HR staff members nowuse the calculators to determine things such as promotions within the same ordifferent pay scales and changes to lower levels. They also use the benefit-costcalculator to determine different scenarios for life insurance, health benefits,and flexible spending accounts to see how those packages would affect apaycheck.

Yvonne Maguire, vice president of employee resource management, was a majorchampion of the project. “Early on I saw the long-range value of thePersonnel Desktop,” she says. “I knew that this was another greatbusiness initiative that would benefit HR and, in turn, benefit the PostalService.”

Back in Little Rock, Wiley is thrilled to see her colleagues reaping thebenefits of the site she helped to create. The first thing she notices when shegets to the office these days is her co-workers logging onto the intranet. They’renot hurling their manuals into the trash yet, but more and more tools of thetrade are on the computer. “At first I didn’t know what to expect when westarted the project,” says Wiley. “I knew that a lot of things hadchanged over the years and we needed some help. Each one of us had things weused locally that we knew would be good for the whole country. Getting it to thewhole country was a different story.”

Bruce Lederman, HR analyst for NY Metro area and also part of the team thatdeveloped the site, says the hard work paid off. “It wasn’t fun everyminute,” he admits. “We argued a lot about how to do it. But we knewwhere we were going with it.” He says the advantages of using technologyfor standardization are clear. It used to take months, even years, for a manualto be reprinted with updates. “At a moment’s notice, you can go in fromthe headquarters level and change the way a procedure is written.”

That type of enthusiasm reverberates around the country. It is now a snap tokeep up, says Richard Domis, HR specialist for USPS Western New York district.”One of the best things about the system is the updating,” heexplains. “I’m able to view and adapt them rather than using a hard-copyreference that might not have been reprinted with updates. You used to get intoa cut-and-paste situation with your handbooks.”

Lederman, who joined the Postal Service as a letter carrier 30 years ago,says the HR intranet is among many major strides in technology he’s seen overthe years. “Everything used to be manual,” he says. “We wouldwalk around with index cards trying to keep track of things. Just to seeautomation and computerization is incredible, almost mind-boggling. The workrequires less and less people and less cost.”

The Postal Service has a long history of sharing its advances in such areasas transportation and automation. Now it is spreading the word about its HRtechnology. When Wiles presented the Personnel Desktop at IHRIM 2000 in Boston,she was surprised by the positive response. “We had a 4:30 p.m. timeslot atthe conference, and I thought no one would show,” she says. “We endedup with a full crowd. We also have had inquiries from another federal agencyabout our system.”

Development on the site continues. Since the Personnel Desktop made itsdebut, Wiles developed and implemented an interactive Web-response system. Thisallows clerks, mail-handlers, and letter carriers to apply for or, in PostalService parlance, “bid” on open positions within the system. It worksin conjunction with the interactive voice-response bidding system so that HRpeople do not need to enter manual bid cards for the 1.3 million bid entries peryear. “It’s a great project and exciting,” adds Wiles. “It isthe first time all USPS employees have access to the intranet for selfservice.”

Workforce, October 2000, Vol. 79,No. 10, pp. 116-119 — Subscribenow!

Everyone knows first impressions count. ButHoward Klein wanted to prove it. So the associate professor of management andhuman resources at Ohio State University conducted a study to evaluate theimpact of orientation programs.

“The Effectiveness of anOrganizational-Level Orientation Training Program in the Socialization of NewHires” was published in the spring 2000 edition of Personnel Psychology.

The title is long, but the conclusion is simple:effective employee orientation matters.

In 1995, Ohio State decided to overhaul itsemployee orientation program. Klein and co-researcher Natasha Weaver surveyed116 people who had recently joined the university in 80 different departmentsand held 70 different job titles. “I jumped on the chance to collectinformation from people who went through the new program and also from peoplewho chose not to go through it,” says Klein.

The university’s new three-hour orientationseminar, available to employees who had been with the university for less thansix months, focused on several areas: Helping new employees feel more a part ofthe organization, helping them to learn more about the university’s lingo andculture, and helping them to understand the university’s basic workplaceprinciples.

It included presentations, a videotaped welcomefrom the president and a video covering the mission, history, and structure ofthe university. Participants also received a notebook of information andparticipated in an exercise to familiarize them with the organization’straditions and language.

“The new program focused on theorganization level, not specific jobs or workgroups,” explains Klein. “It was a ‘hello’ to theorganization that covered things like history, goals, values and language.Previously the orientation program had been only about traditional information,such as physical layout, benefits, and so on.”

The researchers set out to prove two hypotheses:

1. That employees who attend the orientationwill be more socialized than employees who do not attend.


2. That orientation attendance will bepositively related to organizational commitment.

Questionnaires went out to employees before andafter they attended the seminar. Out of 116 employees in the sample, 55participated in the seminar. All subjects received a questionnaire before theprogram and 10 weeks following the program. Those who attended also filled out aquestionnaire directly after the seminar.

After analyzing the results, Klein and Weaverconcluded that employees who attended the orientation were better socialized inareas of goals, values, and history. They also displayed higher commitment totheir employer.

“We found there was a substantialdifference,” says Klein. “Those who attended were better socialized onseveral dimensions than those who did not attend. We also found that those whoattended had formed better relationships with colleagues. We didn’t expect thatlatter result, because they didn’t go to orientation with people they workedwith. We interpreted that it was the result of people being able to join in onconversations and beginrelationships with co-workers sooner.”

The study indicates that the orientation contentis crucial. “Orientation programs are one of those ignored things,”says Klein. “Everybody has them, and most are incredibly ineffective.Companies are missing an incredible opportunity to increase retention andsatisfaction of employees.”

Hospitals and doctors versus managed care. It’s a spat that goes back to the emergence of HMOs. For decades, insurance companies governed employee health benefits, paying hospitals and doctors for services rendered according to schedules of allowable fees.

As more sophisticated tests and procedures emerged, providers put them into play, prompted by patients who demanded access to the latest medical technology and as a defense against the rising tide of malpractice claims.

Managed care came on the scene as a way to reduce cost by trimming out inappropriate care. Community rating replaced fees for service and the accompanying incentives to order more referrals and tests that indemnity plans fostered. This approach seemed reasonable, and for a while there were significant savings in managed care plans.

Now, though, critics argue that managed care plans have gone too far in their efforts to cut cost by denying essential treatments and underpaying service providers. As the fight gets progressively nastier and the shouting matches get even more long-winded, a number of health-plan administrators and industry watchers are wondering whether the news will hit them where they live, and how hard it will hit them. And what they can do to soften the blow.

“There is an ongoing concern about employees having adequate coverage at reasonable prices,” said Judy Weil, executive director of the Massachusetts-based Northeast Human Resources Association.

Consider: North American Medical Management, which represents thousands of doctors nationwide, this spring threatened to sever its ties to managed care giant Humana Inc. of Louisville, Ky., unless Humana paid $10 million that NAMM alleged it was owed.

A few weeks later, St. Joseph Health System of Orange, Calif., said it would not accept any new HMO patients from its 17 managed care companies, citing $45 million in losses it reportedly sustained on its HMO contracts. Barely a week later, Greater Newport Physicians threatened to cut its contract with its largest managed care client, PacifiCare Health Systems Inc. of Santa Ana, California unless the HMO agreed to pony up more money for care.

“I do think it’s somewhat of a trend, but it’s going to depend on the area,” said Karin Landry, the group and health care practice leader for Watson Wyatt Worldwide, an international benefits consulting company.

“When you consider some of the providers in the New England area, with its large penetration of managed care, it may be difficult to say what will happen there versus some place where managed care has not reached the same level of penetration. I also think it’s a matter of supply and demand.”

Nasty little shouting matches aside, managed-care outfits are now dealing with ghastly levels of losses after 10 years of lustrous performance — if you go by popularity and fiscal conservatism: It’s expected that by the end of this decade one out of two Americans will be enrolled in some sort of managed care program; and managed care can be credited with helping to rein in the costs of the health care system.

Last year, for instance, Harvard Pilgrim Health Care of Brookline, Mass., posted tens of millions of dollars in losses and went through desperate measures to staunch its alarming flow of red ink.

The state’s Division of Insurance placed the company in receivership from which it emerged in May.

A few years earlier, Blue Cross and Blue Shield of Massachusetts, the state’s insurer of last resort, underwent a glaringly public process of regulatory overview in light of its financial woes (In 1997, the Massachusetts company was dead last among the nation’s 52 Blue Cross insurers in terms of fiscal stability, according to Weiss Rating Inc. of Palm Beach Gardens, Fla.).

“For several years HMOs just went crazy to get market share, and they did that, but in hindsight, they did it at the expense of running a good business. Now they’re feeling the crunch of financial losses,” said Raylana Anderson, a Peoria, Ill.-based human resources specialist and immediate past chairwoman of the compensation and benefits committee for the Society of Human Resource Management.

“We’re really looking at so many different sides of this, we don’t know which trend is going to come true.”

Still, managed care is not the only segment of the insurance industry guilty of slashing prices to lure customers. The practice is par for course with many insurance sectors, including life and property-casualty (the results have been especially pronounced among workers’ compensation providers).

The irony is that until the market hardens — that is, until policyholders suddenly start making a slew of claims on their policies, which often leads to jacked-up charges by coverage providers — insurers will continue to slash rates and offer discounts in an effort to retain their holds on the market, despite the effect the practice has on their bottom lines.

And then, there are the hospitals. Over the last few years, institution after institution reported huge annual losses, blaming them on Medicare and Medicaid reimbursement cuts and low managed-care rates. Hospitals blamed managed care organizations for not fronting their fair share on everything from basic medical visits to annual reimbursements for the coverage of various uncompensated care pools.

Where does this leave patients? What can companies do to make sure their health plans and their employees don’t go through the wringer as the turmoil plaguing the managed care industry gets more pronounced? No one quite knows.

Probably the only thing that can be considered definite is that managed care is as much a staple of office life as, well, the stapler: No company is going to survive without it. Once considered a perk that companies could offer at their discretion, health coverage is a benefit that even the fast-food industry cannot eschew if it wants to attract and retain workers.

So, what can you do?

“It’s not just a simple answer. It’s different for each organization. Some will accept increased costs and some will ask employees to accept increased costs. Really, the whole issue focuses on pricing. It’s a constant war on how to get a bigger piece of the pie. Until all that fleshes out, there’s no telling what the answer will be,” said Jerry Mattern, manager of human resources for Quebecor World in St. Cloud, Minn., and chairman of the benefits and compensation committee for the Society of Human Resources Management.

“You and I as consumers, we’re sitting here wondering what’s going to happen. You’re seeing a lot of issues tied to financial bills in Congress. You’ve got increased regulation, which causes more cost, which is driving more of the problems.” Some would argue that the answers to the managed care debacle should come from lawmakers.

Dr. Paul M. Ellwood, considered by many to be the founder of managed care, lambasted the system in a speech at Harvard University last year. Ellwood said that hospitals and health plans were not providing adequate care to patients. While the private sector needs to take the lead in fixing the problems of the managed-care system, government regulation would be necessary, he said.

And indeed, both the state and local level have seen a plethora of legislative initiatives over the last few years aimed at a so-called reform of the industry. The initiatives have attempted to address issues ranging from patient confidentiality to lengths of hospital stays.

Lobbyists, regulators, insurers, and doctors have argued themselves blue in the face over whether reform is necessary in light of the financial woes plaguing many of the players.

It may seem hopeless, but industry experts maintain there are a few things that human resources managers can do to ensure that their employees are not without some sort of coverage. The main thing is to make sure that the companies with which they contract are not going to implode fiscally any time in the near future.

“The basics are still going to be important,” Anderson said. “Check the A.M.Best rating, do some homework on whether things are financially stable. As long as you stick with a good decision-making process, that will probably be your best protection.” Oldwick, N.J.-based A.M. Best Co. (www.ambest.com) has a free company-rating search on its Web site that allows you to view the insurer’s profile. Or you can buy a company report, which contains a detailed overview of the insurer’s financial stability.

Another likely resource is the National Committee for Quality Assurance, a private, nonprofit group that assesses the quality of managed-care plans. The organization also has an accreditation program for these plans. The NCQA’s Web site (www.ncqa.org) and other managed-care industry watchdog sites provide easily accessible information to a company’s financial health.

Also working in an employers’ favor is choice. “They could look at the types of plans they offer and move from just managed-care plans to other platforms: points of service plans and PPO plans with out-of-network options. That means an employer who doesn’t want to go to a provider has a choice of going to those plans,” said Landry, of Watson Wyatt Worldwide.

Preferred provider organizations are a bit more expensive than traditional HMOs, but they do allow employees more control over the coverage they get.