Author: Jennifer Koch

Sexual harassment is in the news every week. And on June 26, the topic made news again, as the United States Supreme Court issued rulings on the final two cases in a trio of sexual harassment lawsuits this year — the first of which was ruled on March 4 — having important implications for employers and HR managers.

In one case ruling, for the first time since Title VII of the Civil Rights Act of 1964 became law, employer liability for sexual harassment between members of the same gender was clearly defined. In another case ruling, sexual harassment by supervisors has been outlawed, and in the third case ruling, an employee can now sue an employer for harassment, even if the employee suffered no tangible job loss because of the misconduct.

Take a deep breath, folks, because these three cases mean big changes. Some of these changes are favorable for employers, but some aren’t. The implications of the Supreme Court’s decisions are clear: Sexual discrimination and harassment won’t be tolerated in America’s workplaces. The legal arena is making sure of it. Here’s what was decided and what it means for your organization:

CASE I: Oncale vs. Sundowner Offshore Services, Inc. (No. 96-568)

Decision date: March 4, 1998

Key question: Is it sexual harassment when misconduct is between members of the same gender?

Facts of the case: Joseph Oncale was hired as a roustabout (a deckhand or waterfront laborer) through Sundowner Offshore Services’ (SOS) Houma, Louisiana, office. He was assigned to work with an eight-man crew on a Chevron USA oil platform in the Gulf of Mexico.

In 1991, three of the crew members, including two supervisors, forcibly subjected Oncale on numerous occasions to humiliating, sex-related actions, some in front of the rest of the crew. The two supervisors, John Lyons, a crane operator, and Danny Pippen, a driller, physically assaulted Oncale in a sexual manner, and one of the supervisors even threatened Oncale with rape. A third co-worker, Brandon Johnson, also participated in the harassment.

Oncale complained of the blatant sexual misconduct to his supervisor, the company’s safety compliance clerk. But instead of doing anything about the problem, the clerk replied that he, too, had been picked on by two supervisors who had called him a name suggesting that he was homosexual.

Oncale also reported the misconduct to the highest-ranking supervisor on the rig, who neither investigated nor intervened. Oncale ultimately quit because of the verbal abuse and harassment. He testified in his deposition that he thought if he didn’t leave his job, he’d be raped or forced to have sex. SOS later explained the supervisors’ behavior as mere horseplay.

U.S. Supreme Court ruling: Unanimous (9 0)

The Supreme Court unanimously declared that sexual harassment is actionable, even when the people involved are of the same sex. In Justice Antonin Scalia’s opinion, what matters is the conduct at issue, not the sex of the people involved and not the presence or absence of sexual desire, whether heterosexual or homosexual. The Supreme Court noted that the law equally protects men and women against workplace discrimination.

CASE II: Burlington Industries, Inc. vs. Ellerth (No. 97-569)

Decision date: June 26, 1998

Key question: Is it sexual harassment when there’s no tangible job detriment?

Facts of the case: Kimberly Ellerth, a former marketing assistant at Burlington Industries’ mattress-fabric division in Chicago, claimed her boss, Theodore Slowik, a divisional vice president for sales and marketing, had made repeated “passes” at her in 1993 and 1994 during her employment. She claims he made inappropriate comments to her, such as “You know, Kim, I could make your life very hard or very easy at Burlington,” and “Are you wearing shorter skirts, yet, Kim, because it would make your job a whole lot easier.”

Despite rebuffing his advances, Ellerth never suffered any tangible job detriment because of the harassment. And although Ellerth was familiar with the company’s anti-sexual harassment policy, she never informed management about her supervisor’s misconduct. Ellerth even received a promotion before quitting. Fifteen months after resigning, she sued Burlington.

U.S. Supreme Court ruling: Majority vote (7 2)

An employer can be liable for sexual harassment and can be sued regardless of whether a supervisor’s threats against an employee — for example, no promotion without sexual favors (quid pro quo) — are carried out. However, the Supreme Court says employers can assert an “affirmative defense” — meaning that an employer may be relieved of liability in the absence of tangible job detriment if it can show that it exercised reasonable care to prohibit and remedy sexual harassment, and if it can show that the employee unreasonably failed to take advantage of the corrective opportunities offered by the employer.

CASE III: Faragher vs. City of Boca Raton, Florida (No. 97-282)

Decision date: June 26, 1998

Key question: Is an organization liable for sexual harassment when the organization is unaware of a supervisor’s misconduct?

Facts of the case: Once an ocean lifeguard for the city of Boca Raton, Florida, Beth Faragher claimed she endured repeated sexual harassment from two male supervisors during the five years she worked on the city’s beaches.

Now a lawyer, Faragher says she and seven other female lifeguards worked for two men, Bill Terry and David Silverman, who would request sexual favors, grab them by the breasts and buttocks, try to break into their showers and referred to them regularly by vulgar epithets. Faragher says she didn’t report the problem to higher-ups because she feared retaliation. However, Faragher did speak to one police lieutenant about the behavior, but he didn’t think it was his place to act upon workplace complaints.

Attorneys for the city of Boca Raton argued that the city shouldn’t be held liable because it had a clear policy against sexual harassment since 1986, and because the male supervisors were acting on their own — not as representatives of the city. The city, however, had failed to disseminate the policy to its lifeguard employees or supervisors. Therefore, neither Faragher nor her supervisors had any knowledge of the policy.

U.S. Supreme Court ruling: Majority vote (7 2)

The Supreme Court said that an employer is liable for a pervasive, hostile atmosphere of harassment, and an employer is potentially liable for its supervisors’ misconduct, whether the company was aware of the harassment or not.

Sexual harassment: Unlawful between people of the same gender.
Of the three sexual-harassment cases decided this year, Oncale vs. Sundowner was the only unanimous decision handed down, which means a clear message for employers: Harassment between two or more men, or between two or more women, is still harassment. However, while on its way to the High Court, the Oncale case was perhaps the most misunderstood of the three harassment cases.

The confusion probably stems from the fact that whenever the word “sex” is involved in a discussion about sexual harassment, people get confused about what the term means. Does “sex” refer to the gender of the harasser or the victim? Or does it refer to the type of behavior? Or all three? That’s exactly the confusion that plagued lower courts with this case, and it was the issue that the nine Supreme Court justices agreed to answer.

Here’s what they had to work with: Title VII of the Civil Rights Act provides, in part, that “it shall be an unlawful employment practice for an employer … to discriminate against any individual with respect to his compensation, terms, conditions or privileges of employment because of such individual’s race, color, religion, sex or national origin.” It’s the “because of … sex” phrase that has created all the controversy and confusion over the years.

Until now, Title VII was unclear whether it covered sexual harassment between members of the same gender because of its original intent to prohibit employers from discriminating against women in jobs traditionally held by men. Because of the law’s origins, some lower courts ruled that in cases like Oncale, same-sex sexual harassment lawsuits could be brought to court only if the harasser was gay, but dismissed lawsuits when the harasser was heterosexual. Other courts suggested that in cases in which the victim was gay or lesbian, he or she wasn’t protected because the harassment was considered sexual-orientation discrimination, which Title VII has been held not to prohibit.

In an amicus brief sent to the Supreme Court to consider while deciding this case, Lambda Legal Defense and Education Fund — a legal organization based in New York City that defends the civil rights of lesbians, gay men and people with HIV and AIDS — urged the Supreme Court to recognize that Title VII should be applied without regard to the sex or sexual orientation of the harasser or victim.

“Lambda, with the ACLU, NOW, Women’s Legal Defense Fund and many other civil rights groups, urges the Supreme Court to recognize that sexual harassment is about subjecting employees to unfair working conditions by taking advantage of them at a very vulnerable, sexual level,” said Ruth E. Harlow, Lambda managing attorney, who assisted in writing the brief, and who was quoted in an article compiled by Badpuppy’s GayToday, a daily news publication for the global gay and lesbian community. “Every instance of severe sexual harassment plays upon the sex of the targeted employee and is unlawful under Title VII, regardless of the gender or sexual orientation of the perpetrators,” she said.

Interestingly enough, Oncale identifies himself as a heterosexual, and didn’t realize that he would become an icon for gay-rights advocates. “He started out living a very closed existence, not having much contact with gay people,” his lawyer told The Advocate, a gay issues publication, last year. “But during this process, he has learned what gay people face in terms of discrimination. If his case can help them out, he’s happy about that.”

In the end, sexual orientation wasn’t the issue. Disparate impact “because of sex” was the issue. In its final decision, the Supreme Court held that Title VII showed “a congressional intent to strike at the entire spectrum of disparate treatment of men and women in employment.” So even though sexual harassment isn’t expressly prohibited in federal employment discrimination statutes, the Supreme Court has said it is actionable as a form of sex discrimination under Title VII.

In making the decision, the Supreme Court looked to the law of racial discrimination, which makes it clear that it’s possible for an employer to discriminate against members of its own race, not just members of another race. The Supreme Court bolstered its opinion with a sports metaphor to connote that context is everything: “A professional football player’s working environment is not severely or pervasively abusive, for example, if the coach smacks him on the buttocks as he heads onto the field, even if the same behavior would reasonably be experienced as abusive by the coach’s secretary (male or female) back at the office.”

“I think for most major employers, [the Oncale case decision] is just a blip on their radar screen because their policies already prohibit harassment of any form — not only sex, but also racial, religious, ethnic and any type of harassment based on any protected characteristic,” comments Paul Salvatore, a New York City-based labor and employment law partner and an expert on sexual harassment issues at Proskauer Rose LLP. “It came as no great surprise, I think, to most employers of any size with any sophisticated human resource function that this was the way the Supreme Court was going to go on this case.” Salvatore emphasizes that this case isn’t a big deal for most big employers that already have had policies against same-sex harassment in place for a while.

That’s exactly how Bob Hamilton, human resources diversity consultant for E.I. du Pont de Nemours and Co. (DuPont), based in Wilmington, Delaware, sees it. “We’ve always treated sexual harassment among the same gender as inappropriate,” says Hamilton, “but up until the Supreme Court rulings, it depended on the various district courts as to whether it was actionable [under the law] or not. So the Supreme Court finally made clarity around this issue.”

DuPont’s HR team, which won the 1997 Workforce Optimas Award for its laudable approach to diversity issues, identified same-sex harassment as a “no-no” years ago. Since 1988, before most companies had even acknowledged the term “sexual harassment,” DuPont had its training program, “A Matter of Respect,” up and running.

The training, which involves a series of video vignettes that emphasize nondiscriminatory behavior in the work environment, clearly shows workers how to treat each other on the job — and serves as a model program for other employers to emulate. “From our nondiscrimination policy and from our policies about treating people with respect, we try to let people know that whether it’s [happening between members of] the same sex or not, [discriminatory] behavior is inappropriate.”

Although it’s been a no-brainer to treat same-sex harassment the same as opposite-sex harassment for big-name firms like DuPont, the majority of most larger, mid-sized and smaller organizations aren’t quite so enlightened. Most experts say there’s going to be quite a bit of tweaking of policies, practices and training going on over the next few years to comply with the new law because of the Oncale case. Says one attorney who wished not to be identified: “We all know same-sex harassment is now covered. But it’s a little unclear under what circumstances.” The lower courts are bound to have to address that question over the next several years.

There doesn’t have to be a tangible job detriment for harassment to be actionable.
The key question raised by the Ellerth vs. Burlington Industries case was if nothing happened to an employee in terms of a tangible job threat or detriment, such as a salary reduction, a less-desirable job assignment or denial of a promotion, could he or she claim sexual harassment? The Supreme Court affirmed that when harassment has a tangible consequence, like a poor work assignment, employer liability is absolute.

But what’s more interesting is that the court took the law a step further by saying that even when there’s no tangible job detriment to an employee because of sexual harassment, an employer may still be responsible. The Supreme Court is saying, in effect, that harassment is defined by the ugly behavior of the perpetrator, not by what happens to the worker subsequently.

And the Supreme Court clearly outlined employer liability when this concrete tangibility isn’t present. Employers can be held for liability or damages unless: 1) They have a clear policy against harassment, including how to report such behavior, and 2) Such a policy exists, but the employee bringing suit “unreasonably” failed to take advantage of it. These two conditions of liability are called, in legalese, an affirmative defense.

“The million dollar question now is what impact will the affirmative defense have? Will it be a complete defense to liability? Or will it simply be a defense that lessens the amount of damages for which the company is responsible?” asks Gerald L. Maatman, Jr., a partner in the law firm of Baker & McKenzie in Chicago, specializing in sexual harassment issues. The Supreme Court has made it unclear because it used the word “or” — liability or damages. There’s no way of predicting exactly how lower courts may interpret this in future court decisions.

The good news for employers is that the second prong of the affirmative defense implies employees have a bigger role to play than they previously had to. Under the old rules, workers needed to tell someone if they were experiencing sexual harassment. Under the new rules, workers now need to tell someone with decision-making power if they’re experiencing sexual harassment. Both the Ellerth and Faragher cases make it clear that a worker who’s being harassed must report it. The employee has “a corresponding obligation of reasonable care to avoid harm.” The Supreme Court made it more of a two-way street.

Says Salvatore: “Before, we were kind of reading the tea leaves and reading between the lines. Now we have a definitive statement from the Supreme Court.”

Employers are now liable for supervisor misconduct.
Up until now, most sexual harassment cases have been known as “hostile work environment” — when someone is the victim of a pervasive pattern of unwanted advances, touching and other misbehavior in a given workplace.

Many employers have had no trouble getting such cases thrown out of court. That’s been mostly because employee plaintiffs had to prove negligence — that a company knew, or should have known, about the offensive behavior. Under the old rules, a manager who didn’t know about sexual harassment among his or her employees usually wasn’t responsible for the behavior. That has changed — dramatically.

“There’s been a definite change in the standard of liability when the harassment is done by a supervisor in the hostile work environment context, changing from a basically negligent standard — the ‘knew or should have known’ standard — to vicarious liability with an affirmative defense,” explains Ellen McLaughlin, a partner in the law firm of Seyfarth, Shaw, Fairweather & Geraldson in Chicago. McLaughlin specializes in sexual harassment liability issues. Now, the manager will be held strictly liable for a harasser’s actions, unless a company has a strong system of dealing with such problems, as outlined in the previous section.

That means plaintiffs now have an easier path to sue because a company will be held liable for its supervisors’ misconduct. Supervisors need to be advised of their responsibility and know how to handle such problems.

“For once, being in Connecticut is an advantage,” quips Jim Carabetta, director of HR for Fosdick Corp. in Wallingford, Connecticut. He explains: “Connecticut has its own, more stringent harassment laws, which require every employee with the authority to hire, fire, promote, discipline, direct, review or effectively recommend any of the above within six months of hire or promotion into the mandated group, and have two hours of approved sensitivity/harassment prevention training in a course that meets the state’s criterion for content.” Carabetta says his firm sticks by these guidelines, and trains its managers accordingly. Because he’s already been up to speed with the supervisor training, the new rulings by the Supreme Court won’t have much effect on how he proceeds with sexual harassment training.

So where are we on the sexual harassment spectrum?
Employers are collectively standing at the crossroads on the issue of sexual harassment. These three cases make it clear that employers, and HR in particular, can’t afford to ignore the topic. This is happening with good reason: Everyone’s predicting more lawsuits. The courts are already flooded with such cases, especially since 1991, the year that the Anita Hill-Clarence Thomas hearings made headline news and plaintiffs were first eligible for punitive damages.

Maatman explains: “The bottom line is simple — employers should be prepared to benamed in more lawsuits, and to incur a much greater risk of liability.” He says the net result of the rulings is that it’s easier for a plaintiff to state a case so that more people who go visit a lawyer will be told they have enough evidence to file a case. Whereas before, it might not be worth the time and effort to even file a lawsuit. “Also, it will be easier for a plaintiff to recover [damages], at least in a case of a company sued for what its supervisor does,” adds Maatman.

These three high-court decisions are forcing a lot of employers to take stock. “Employers are quickly revisiting their policies and modifying them,” says Seyfarth, Shaw, Fairweather & Geraldson’s McLaughlin, who recently gave a seminar on these Supreme Court decisions to a group of 260 people, mostly HR pros.

And she adds that companies are scrambling to get training programs together. “At many companies, especially if they’re having a bad financial year, training may be one of those things that goes. But I’ve heard some HR pros say, ‘I’m going back to my boss and tell him or her we really need to put training about sexual harassment back in the budget, given what’s occurred with these Supreme Court decisions.” Those who’ve already been vigilant on this issue remain convinced they need to stand firm in their actions. “Essentially, the rulings have no immediate effect on us because we’ve had a long-standing policy in place,” says DuPont’s Hamilton.

And Los Angeles-based Atlantic Richfield Co. (ARCO) is taking the same strong stance it has always had on the issue, as well. “For California employers, the Supreme Court cases, while interesting, aren’t that big a deal,” says Lloyd Loomis, the firm’s senior corporate counsel, employee relations. Of course, ARCO has also been a pioneer in taking zero tolerance to sexual harassment for years. Despite being in a male-dominated industry, the firm has created a system of awareness about such issues, including a 15-page section on sexual harassment on the firm’s intranet called “You Just Can’t Do That!” that’s available to all 20,000 employees. Even with such extraordinary measures, the company found itself firing an oil-tanker captain several years ago for sexually harassing co-workers. Clearly, even firms with the best of policies find themselves continually dealing with the issue.

“If you’re trying to get ahead of the curve, be practical and want to do the right thing, you simply have to do what the Supreme Court is telling you a responsible employer should do,” says Maatman. “Then if you still get sued, at least you have all the potential arguments available to you that [suggest] the case ought to be kicked out of the system in the first 30 days. If the court says no, it simply goes to damages, and you will be in the best and strongest position possible, should you have to face the jury and argue the case.”

The issue of sexual harassment isn’t primarily a legal one.
Employers should remember that sexual harassment is a behavioral and cultural problem in Corporate America, and it should be dealt with on both the individual and cultural level. Indeed, when 1,700 employees at medium- to large-sized U.S. companies were asked by Walker Information, a global research firm based in Indianapolis, to complete a national business integrity survey, employees said the top ethical problem in their organizations is sexual harassment.

Says Jennifer Blalock, a Cincinnati-based trainer who specializes in conflict resolution and preventing workplace harassment: “The issue of sexual harassment forces us to examine human behavior and ask, ‘Why does it require an elaborate set of laws to get people to respect each other? Where would we be if there were no laws holding us accountable for our behavior?’”

Blalock has a good point. She says companies should focus on the average individual. People need to learn how to communicate with each other. “A policy is useless unless people use it. Most research indicates that a small fraction of employees ever say or do anything about harassing behavior. It’s best to intervene and provide solutions before they escalate into full-blown, formal complaints,” Blalock adds. Which brings us back to the Supreme Court decisions.

“I don’t think that anyone is running for the hills or throwing up their hands and saying, ‘The sky is falling’ as a result of these three rulings,” says Maatman. “Instead, they’re redoubling their efforts at training, circulation and dissemination of policy statements.”

What employers should keep in mind is this: If you didn’t pay much attention to the issue of sexual harassment before, the Supreme Court just gave you at least three compelling reasons to do so. It has raised the bar, so to speak. If you already had a pretty good handle on the issue, make sure you tweak your policy and procedures so that they fall in line with the new rulings. As the experts say, this issue still isn’t going away — so make sure you’re doing what’s appropriate to deal with it.

Workforce, October 1998, Vol. 77, No. 10, pp. 34-42.

J

anet M. Brady is a member of what we like to call “the new breed of HR.” She’s smart, visionary and doesn t mind shaking things up a bit in HR when she sees a better way. Brady was in marketing for 17 years at The Clorox Company, where she headed up the function for three years before moving over to HR five years ago. Shortly after her foray into HR, she completely reorganized it, and was featured in “Put Your Job On The Line” (Workforce, June 1995) for her innovative approach to partnering with line management. Here’s a look at Brady’s interesting and effective HR leadership style.

How would you describe your leadership style?
It s evolving. I find that the more I m in a leadership position, the more I have to learn about being a leader. Let me contrast it with my former job in marketing. Having “grown up” in the marketing environment, and done what the folks I was leading have done, then I could get away with being more directive.

But in HR, because I didn t “grow up” in the functional expertise areas, I don t know where the soft spots are. I m forced into more of a leadership mode because I must be able to articulate where I want to go and what I want it to look like. Then I ve got to leave it up to the experts to be able to deliver that. That gave me a kick to start moving away from management to leadership, but I still have a long way to go.

Do you think it was an advantage for you to not have come from an HR background?
It s both an advantage and a disadvantage. It s an advantage because I don t have any background that says, “This is the way it needs to be done.” It s a disadvantage because who knows what I m walking into? I ve found it s evolving–trying to be able to ask the right questions and give people the courage that we can achieve what might look on the surface like it is undoable or very difficult.

Do you have a leadership model?
The model I use in leadership is I try to paint a picture. I try to get people to think about what things could look like, so they can visualize it, too. To use a sports analogy: You re a high jumper and [your coach] says: “I know you can jump another inch.” You think, “How am I going to do that?” Then [the coach] says, “I know you can place in the top five in the state championships.” And you say, “Whoa, how do I do that?” I mean, he gets pretty energized. I try to paint this kind of picture that stretches folks beyond their comfort zones.

Can you give an example of painting a picture for your HR team?
I ll use a banking analogy. When people used to stand in lines to get their banking done, one solution could have been to add more tellers. But the banks said, “No, we re going to put in ATMs.” If you asked consumers, “What do you want?” they weren t going to say, “Gosh, I d like some ATMs” because they had never heard of an ATM. What they needed was faster, more convenient service. You ve got to get them to articulate that.

What we ve tried to do is get our clients to articulate what they need, so we don t just keep adding more HR people. It s asking a lot of questions. And then in this environment of having different constituents-I serve the board of directors, executive management, general office employees, retirees, production and salespeople across the country, every type of function-and they all view HR slightly differently based on their backgrounds, their needs and their histories. That has told me there isn t a one-size-fits-all solution. I ve got to listen and ask questions, so that we can ultimately do something that s fair for everybody. HRcan be very challenging because what we do can affect people at the most personal level and we can t lose sight of that. HR has been very much a challenge from a leadership perspective.

Has your leadership style changed from when you were heading up the marketing function at Clorox to now heading up HR?
My leadership style has changed most dramatically in HR because my constituents are so different. When I was leading the marketing function, I had a more homogeneous group: They came from similar schools had similar backgrounds and they were extremely confident in what they did. In HR, we re charting new ground. I m learning about what it s like to manage international HR. We need to balance the corporate philosophy with country specific needs. That s not easy.

But would you say your marketing background has actually helped you develop this idea of painting pictures for people?
Absolutely. After all, HRalso is in the business of marketing-the difference is we market products to our employees. They are our consumers. And there s also the communication element of leadership. You can t communicate enough.

What would you consider your biggest leadership strength? Do you think it s the painting pictures metaphor?
Yes. I think it s trying to paint a picture and being excited about our ability to deliver it. I m the catalyst for the changes, but I really credit this HR team with making it happen. It s like I m the coach, but I ve got these Michael Jordans. And you know, at the end of the day, you ve got to look at the Michael Jordans and say, “It s a privilege to coach this talent pool.”

What s your definition of a good leader?
You see all kinds of different models and different definitions and the things that resonate most with me are ideas about having a vision, having the courage to hang in there, communicating a lot and having credibility behind your ability to be able to deliver your vision. The courage part [is important] to me because when you re in uncharted territory, and folks are looking to you to guide them and you re not exactly sure this is the right thing to do, you really have to have the courage to say, “I think this is right.” Then you have to have a strong team that works with you to help you deliver the vision. But sometimes it can be very lonely when you make a suggestion and there are a lot of obstacles. Part of being an effective leader, I think, is to be able to overcome those obstacles-that s the thing I continue to learn. I m not an expert at it, but being a leader is very humbling because you can really stumble. If someone asks, “Hey, are you a good leader?” [The answer would be,] “No, but I know what a good leader is and I m certainly going to strive to achieve that.”

Can you give me an example of an obstacle you ve faced in trying to lead this way?
Yes, one of the biggest obstacles was when we reorganized HR a few years ago. Our old infrastructure was based on a model in which each division had its own group of HR people that supported it. And we moved to a model in which each senior HR person supported a function, not a division. Also, there was no longer a staff supporting each of the people underneath them.

And what do you mean by “supporting a function”? Are you talking about HR functions?
No. For example, it would be sales, marketing or accounting within a division. We ve moved HR across the company to be function-based, rather than division-based. So now we have an HR director who supports sales for the company, another HR person supports marketing, etc. And we also established Centers of Expertise, so we have centralized expertise for staffing, training, compensation, benefits and so on. In retrospect, it was absolutely the right move. But when you re going through it and disbanding something that was functioning okay, but wasn t optimal, and also was within the comfort zone of a lot of folks, it s very difficult.

And interestingly, it was the people running the businesses that were very supportive of the change. That s what kind of gave me this “a-ha” feeling, because they were saying, “I don t care how I get this stuff done, I just need it done. You go figure out the most efficient way to deliver it.” They weren t really married to this old infrastructure, they were really interested in what kind of support they needed, not how they got it. But there was initial resistance from HR folks and I was kind of muscling my way through the process. Now as we begin to rethink HR again, it is the HR team that is coming up with the challenging ideas, not me.

What has frustrated you most about your leadership style?
When I can see that it s not effective and when I can be excited about an idea, but people aren t interested. Then I have to really do some self-examination. I ll talk to people and say, “Why aren t I getting through here?” It has to be beneficial to all involved. You have to ask questions. Recently, I wanted to launch another [reorganization] of HR and there was frustration in the room. Then I opened it up to talk about it, and I got very insightful input. And I said, “Boy, I really missed the mark there.” You can t say, “Hey, guess what, let s turn this place upside-down.” The reaction would be: “Well, why?” You have to paint a clear picture and be open to changing it based on input from the stakeholder. Just make sure it s the right picture.

Workforce’s March 1997 survey on human resources professionals’ thoughts about motivating a minimum-wage workforce, revealed that 62 percent of respondents say they have a problem retaining minimum wage workers strictly because of pay. Sixty-nine percent said they motivate such employees to better performance with incentives, such as bonuses, prizes or promotions. Finally, 53 percent said they’ve had to give benefits to minimum-wage workers because they were unable to retain them with pay alone.

So how do you keep a low-wage or minimum-wage workforce happy and productive? Here are three tips from Tony Bryant, human resources associate of Irving Tanning Co., a producer of fine leather products based in Hartland, Maine:

• Connect workers to the big picture. It’s easy to become discouraged when you can’t see your impact on the final product. When you can see that your hard work is valuable, it makes you feel good.
• Involve workers in decisions that affect their jobs. When making changes in policies and benefits, ask the workers their opinions. They’re the ones who have to live with the decisions, so involve them in the process.
• Encourage personal growth. Educational benefits, training and internal promotions are good for both workers and their organizations.

• Treat people well, and with respect.
• Make the work environment a fun place to work. Burger King restaurant employees usually celebrate birthdays, anniversaries and recognize outstanding performance with a party. Some store employees organize softball teams and bowling leagues. Encourage activities that bring unity and teamwork.
• Offer flexible schedules.
• Offer bonuses. Burger King offers an anniversary bonus to employees for completing each year of service. The amount escalates with the employees’ years of service.
• Offer benefits. Burger King offers a benefit program for full-time employees at its company-owned restaurants (3 percent are company-owned) who average 30 hours of work a week. The plan includes health care after six months of service and dental care after five years.
• Offer management opportunities, and communicate the opportunities clearly and often.

Workforce, August 1998, Vol. 77, No. 8, p. 57.

October 1, 1996 was an eventful day. Not only did Teamsters chief Ron Carey file a $30 million libel suit against James P. Hoffa, but New Hampshire Natural Heritage Inventory scientists announced they’d found New England’s oldest living tree at 562 years old. And FedEx workers debated their newly styled uniforms.

But perhaps the most widely felt news event of the day for human resources and employment professionals was the federal wage increase which jumped from $4.25 to $4.75 — the first wage jump in five years. Then, only 11 months later on September 1, 1997, federal law required employers to increase wages again 40 cents to $5.15 as the second of a two-part increase. The latest increase marked the 25th such augmentation since the minimum wage was instituted in 1938 at 25 cents an hour.

Obviously, the ten million employees who are paid minimum wages appreciated the raise. But in 1997, $5.15 was still half of the country’s average hourly wage according to the U.S. Labor Department. That’s why arguments abound among politicians, employers and employees nationwide about minimum wage not being a living wage. Yet, “if you look at the hearings up on Capitol Hill, the average employer or employer groups resist increases in minimum wage because they say they can’t afford to pay a higher rate,” says Douglas McCabe, a professor at Georgetown University School of Business in Washington, D.C. who specializes in human resources issues.

But what real effects, if any, has the recent two-step wage hike had on employers’ HR practices? A new framework puts a fresh perspective on the issue.

Study suggests four effects.
A new study by the Washington D.C.-based Economic Policy Institute (EPI) reveals several effects created by the minimum wage hikes. The EPI is a nonprofit, nonpartisan think tank that produces research on the economy. The organization was founded in 1986 by economic policy experts, including Lester Thurow and Robert Reich. According to their survey, “Making Work Pay: The Impact of the 1996-97 Minimum Wage Increase,” there are four usual effects on employers and HR practices when a mandated minimum wage increase comes down the pike.

Jared Bernstein, a labor economist with the EPI who co-authored the study with John Schmitt, says: “When the minimum wage increases, the impact typically has to be felt somewhere. Every action has a reaction in the labor market.”

Bernstein says the four most common effects on employers are: 1) changes in employment, such as cutting or adding jobs or changing the number of hours employees work; 2) changes in prices — producers push price increases of products that are low-wage labor intensive; 3) absorption of the increase through production practices and operating more efficiently; 4) redistributing profits to wages so that profit margins fall at the expense of labor costs.

How the hikes have affected employment practices and prices.
The EPI’s research suggests that the first category — cutting jobs or work hours — is not the primary effect on U.S. employers. “You certainly can find cases like that,” says Bernstein, “just like you can find cases that go the other way.”

He emphasizes that EPI’s study averaged out many employer experiences, and incorporated a tremendous amount of research, including many experiments and analyses, and still found a zero effect on employment gains and losses. “Some employers had to cut back their workforces, but others had to add workers. It’s not a simple employment story, either in terms of jobs or hours,” he says. In fact, none of the company representatives interviewed for this story mentioned having to cut employees or hours.

However, several employers have had to raise their prices — confirming the second point in EPI’s study findings. For example, John Mickle, who owns and operates two Baskin Robbins ice cream stores in Southern California, one in Costa Mesa and the other in La Mirada, says he didn’t raise prices after the recent federal wage increases in 1996 and 1997.

Yet there’s been a third hike for California employers on March 1 when the state-mandated minimum wage rose to $5.75. That means California’s minimum went from $4.25 to $5.75 in about a year and a half. “I took the hit completely the first [two] times, but this last time I raised prices,” says Mickle, who employs 11 people at minimum wage in one store and 16 in the other. “That’s how things work. If your costs go up, you’re going to have to pass some of that along to the customer. You don’t pass all of it along. But you have to pass some of it along — that’s basically how I try to offset it.”

Confirms EPI’s Bernstein: “We saw some prices increase when the minimum was raised, but the increases tend to be small.” He points to the booming economy with its low inflation rate, even with the two last wage hikes. He adds that price increases were nil, even in markets that employ lots of low-wage workers.

One reason for the small impact is the minimum wage lags 30 percent behind its 1990 level in terms of its buying power. “So there’s room for the minimum wage to increase without putting price pressures on employers,” he explains. “It’s not that big a deal, especially in this economy, for an employer to pay $5.15 an hour. In many localities, many employers are already paying way above that.”

Ten states already had minimum wages higher than $4.75 before the federal law was changed. And the previous federal minimum wage of $4.25 had become almost irrelevant in metropolitan areas, where fast-food chains had long been paying a starting wage of $5 or more.

Other employers such as Miami-based Burger King Corp. whose workforce comprises primarily low-wage workers, aren’t affected directly by federal or state-mandated pay increases. “Basically, we pay the prevailing wage that’s competitive within the marketplace,” says Laura Parsons, director of field HR for all of Burger King’s U.S. locations. “That [wage] can vary across the country. In some markets, we have a starting paycheck of $7.00 an hour. In other markets, because of supply and demand, our wage might be lower — it might even be minimum wage — but in this economy, there are few places that are starting [people] at minimum wage.”

Because competition for workers in the lower wage bracket is so fierce, service-based companies like Seattle-based Starbucks Coffee Co. also starts workers at higher-than-minimum rates. In Oak Park, Illinois, for example, Starbucks workers start at $6.55 an hour.

Beyond employment changes and price increases, the other two factors that EPI’s study suggest do factor heavily into the HR arena when wages go up.

How the wage hike affected efficiency gains and redistribution of profits to wages.
Looking back to the EPI’s four-point model, efficiency gains are the third biggest effect employers experience with a minimum wage hike.

Bernstein explains that although a wage means operations are more costly, it forces employers to figure out ways to operate more efficiently and get a more productive hour of work — for that extra 90 cents. And since the low-wage labor market is characterized by high turnover, high vacancy rates and other inefficiencies, the increased wage helps lower some of those inefficiency problems by lowering vacancy rates, turnover and training costs and seems to be one of the ways employers absorb this increase, according to EPI’s study.

And focusing on the study’s fourth point, employers often redistribute profits to pay for the hike in wages. Bernstein says this is usually a temporary shift. “It doesn’t last long because other factors kick in, particularly the efficiency gains, and also because the minimum wage is falling in real terms from the day it’s legislated,” he says.

The EPI’s findings aren’t much comfort to one employer who says the recent federal wage increase actually cost him his business. “I sold my business largely because profitability wasn’t going to be there,” says Rick “Mouse” Glenn, who owned a Lamppost Pizza parlor in Huntington Beach, California, until December. He sold it three months before the second wage hike went into effect.

Glenn says that when his payroll went up with the first federal wage hike, payroll increases came right out of profits. When your business has a close profit margin like his did, it makes for a tight race. “I would’ve needed another day of sales a month just to meet the jump in payroll costs — and it wasn’t going to happen.”

While Glenn believes the minimum wage increase was a fair thing for workers, he maintains it was difficult for a smaller firm which had 30 workers, with 90 percent making minimum wage. “When you’re forced to give a 21 percent increase in 18 months, you’ll see a lot of small businesses fold,” he says.

On the other side of the minimum wage coin, some businesses have been relatively unaffected. “For us, the fiscal impact has been minimal,” says one human resources manager at a non-profit organization in Southern California, who wished not to be identified. Her organization employs 800 employees, and 300 to 500 temporary employees each month. Most of the temporary workers the organization employs are minimum wage earners.

However, other employers note another big effect of the minimum-wage hike — a ripple effect on wages across the board. For example, because the lowest paid workers got a raise at Glenn’s pizza business, he had to give his higher-paid workers raises, also, to be equitable.

And while companies like Burger King already pay higher-than-minimum wages to most entry-level workers, federal or state-mandated increases cause prevailing wage rates to increase. Parsons explains: “Because if you have a minimum-wage increase to $5.50 an hour, for example, suddenly the competitive wage on the street goes up 50 cents an hour, too. So that prevailing wage goes up, which actually drives up our labor costs.” This scenario may happen again in the near future because of another proposed minimum-wage increase. But it may have global, not just national, implications.

Global profitability and competitiveness may be affected.
There’s currently talk of another hike to the federal minimum wage. Senator Ted Kennedy (D-Mass) now proposes raising the minimum wage again by more than 50 percent over the next five years, to $7.25 an hour. Many employers aren’t looking forward to giving more mandated raises, should the legislation pass. And it may even affect global competition.

“The [last] minimum wage raise didn’t affect HR practices at my organization too much, since we pay above the local average,” says Tony Bryant, HR associate at Irving Tanning Co., a producer of fine leather products based in Hartland, Maine. “However, if the minimum [wage] goes up again so soon after it was raised, I foresee problems.”

Bryant says his firm employs 600 people in a small town where it’s difficult to find applicants. Because Irving’s management team offers a higher wage, the company has an edge over other local employers. “If the minimum wage goes up a great deal, then our attractiveness goes down, and so does our ability to maintain employment levels,” adds Bryant. “We could try to maintain a relative distance from the new minimum rate, but it would make our efforts to keep benefits costs down close to impossible.” As a firm that competes globally, he also says increases in wages are costs it’s foreign competitors don’t have, putting Irving at a disadvantage.

He may be right. For example, an April 26 article in the Los Angeles Times about the apparel business says there’s been a sharp increase in the number of Southern California apparel businesses that are shifting production work to Mexico primarily because of the recent minimum wage hikes and other competitive pressures. By moving production to Mexico, firms say they can cut labor costs by at least half and save at least 35 percent in total production costs, even with the additional charges for freight, and insurance on shipments. Although many firms have scrambled to set up shops in other countries because of comparatively high American labor costs, they certainly face other barriers to profitability by doing so. But that’s a debate with no clear winners or losers.

The Economic Policy Institute’s study on the effects of the recent minimum wage hikes on HR practices seems to shed new light on an otherwise politically charged and complex issue. While some employers’ experiences may differ from the study, at least it provides a framework from which to consider the HR effects when the next minimum wage increase comes along. And it will come along. Be prepared with options.

Workforce, August 1998, Vol. 77, No. 8, pp. 54-59.

Reports of sexual harassment are becoming more common. According to the Equal Employment Opportunity Commission (EEOC), there were 6,000 cases of sexual harassment in 1990. By 1996, 15,000 cases were filed.

However, according to twin studies on sexual harassment complaints at 900 firms by the White Plains, New York-based law firm of Jackson, Lewis, Schitzler & Krupman, the number of human resources professionals surveyed that had handled at least one such complaint a year dropped 22 percent, from 92 percent in 1995 to 70 percent in 1997. According to Greg Rasin, managing partner of Jackson Lewis, “There’s been a fundamental shift in employer attitudes about sexual harassment in just the past two years. With keener awareness and sensitivity, smart companies are developing more aggressive approaches to preventing the occurrence of sexual harassment. They’re learning how to limit their vulnerability to sexual harassment suits.”

One reason for the drop in complaints could be manager training on the topic. The survey indicates that in 1997, 62 percent of companies polled had provided sexual harassment training for supervisors versus 34 percent two years earlier. “When it comes down to it, a company can’t control every manager and every hire. But, a company can take preventative measures to have more control,” says Rasin.

While U.S. businesses may be a long way from being harassment-free, human resources managers are getting smarter about handling it.

Workforce, June 1998, Vol. 77, No. 6, p. 42.

Laying off your most important assets: Greg is the senior vice president of HR for a very large organization. He has spent a lot of time promoting the fact that employees are his firm’s most important asset. The company has done well for several years, but is now experiencing a major downturn. He has to decide whether to do the “easy” thing and institute a companywide downsizing, which shows the company does not, in fact, see employees as the most important asset (because it’s getting rid of people). Or Greg must help the senior management team figure out other courses of action — such as cutting senior managers’ pay — which shows that employees are the most important asset. What’s Greg’s best course?

Response from Frank Navran, a management and ethics consultant: Greg has fallen into a common trap. He has wrongly defined the problem, equating downsizing with not seeing employees as the most important asset, thus narrowing his choice of options. The problem isn’t whether or not to downsize. The problem is how to survive a (possibly short-term) downturn. This is a question of finding a balance among a trio of concerns: employees, customers and the bottom line. These three concerns are like the legs on a milking stool: They need to be nearly equal if the stool is to be stable. Employees, customers and the bottom line all need to be satisfied. Greg needs to communicate this redefined problem statement to all of the affected players: senior managers, employees, stockholders, vendors and strategic partners. All of these stakeholders can contribute to surviving a downturn through operational efficiencies, payment deferrals, salary adjustments, accelerated retirements, sabbaticals, leaves of absence or a dozen strategies, including layoffs. This isn’t an either/or proposition. It calls for telling the truth, preserving trust and creatively seeking balance.

Frank J. Navran, a manager, trainer and consultant for more than 25 years, knows about downsizing from three perspectives: survivor, victim and change agent. Now Navran is a senior consultant responsible for the design, management and evaluation of ethics consulting projects for the Ethics Resource Center (ERC) in Washington, D.C. In addition, as the center’s director of training, he spearheads more than 50 training seminars and workshops on organizational and business ethics for the ERC and its clients.

Workforce, May 1998, Vol. 77, No. 5, p. 66.

If you’ve been feeling “damned if you do and damned if you don’t” lately, you’re not alone. Human resources professionals everywhere are feeling they can’t win today than ever before. And they’re shouldering more role-related dilemmas as a result. Remember the UPS strike a few months ago? There, the HR leaders tried to temper strategic workforce-planning issues against temporary workers’ needs. And how about the Texaco racial-discrimination case last year involving secret audiotapes and allegations of racism among senior managers? HR had instituted diversity training, but incidents of apparent racism and discrimination happened anyway — and ultimately cost the firm more than $175 million.

As Roseanne Roseannadanna (played by Gilda Radner) humorously used to say on “Saturday Night Live”: “If it’s not one thing, it’s another.” She certainly had a point. Many human resources professionals can relate.

While strikes and discrimination charges are no laughing matter, for HR professionals, dilemmas like them are hitting faster, harder and more profoundly than ever. Consider these real HR issues: Employees are filing more lawsuits than ever. Disgruntled line managers need state-of-the art training — yesterday. CEOs won’t let HR anywhere near the strategic planning table, but in their next breath profess: “Employees are our most important asset.”

It’s time for an HR reality check. As if you didn’t already know it, the damned feeling is real. What you might not have thought about is that much of the frustration stems from dichotomies in the many roles HR plays. It could be that your HR department has so many internal and external customers — the senior management team, CEOs, employees, shareholders and other stakeholders — that you’re having a hard time steadying your eyes on the firm’s business goals and your HR mission in fulfilling those goals.

Of course, there are no simple answers to the complexities of HR’s many dilemmas, or to figuring out which roles the HR department should play in organizational strategy. But understanding where the dilemmas lie and why your current HR role is causing confusion, is a good place to start.

Damned, no matter what.
How often do HR professionals feel damned? “All the time,” says Max Wagoner, HR director for P2S Engineering Inc., which is based in Long Beach, California, and employs 69 workers. “I’ve told people the job is many times like being a high-wire walker. You can’t afford to deviate even marginally from a very straight line without falling off. And, of course, falling off can be very expensive.”

One of these expensive areas where HR often faces the “damned if you do or don’t” scenario is employment law and other legal entanglements. “There have been times I remember thinking that if I did A I’d be breaking one law and if I did B I’d be breaking another, and the only choices were A or B,” laments Wagoner. “So sometimes it meant making a decision as to which of the choices would be the least costly or have the least chance of coming back to bite us.”

But legal entanglements are only one reason why HR people are feeling damned these days, albeit a big reason. HR also has to fight old stereotypes and is still punished, it seems, for past sins. Other times, senior managers simply aren’t willing to allow HR’s emerging role as business partner. “I just left an organization where HR was just damned,” says Nancy Probst, who’s now a manager and organizational development (OD) consultant of management advisory services for Dixon Odom PLLC, a certified public accounting and management advisory firm, based in High Point, North Carolina. At her old firm, a large health-care system for which she was the director of organization development, Probst says she had helped her boss, the chief HR officer, outline a vision of HR as a strategic business partner. Unfortunately, the directors in that organization just couldn’t see the HR leader’s vision and fought it constantly. They truly preferred to preserve the paper-pushing, compliance/police role human resources had played for so many years,” she adds. “As a result, in their eyes, HR had little respect and basically couldn’t do anything right.”

That’s not to say the damned feeling is unique to HR professionals. Other directors of business functions, such as sales, production, accounting and marketing, also experience job frustrations and dilemmas. For example, a production manager has to decide which jobs to push through first on the production line. An accounting director has to figure out how to surface losses in one division, while trying to bury profits in another. These scenarios are certainly real business. But at the core of their functional roles, these other professionals don’t seem to experience the same type of role frustration that HR professionals do.

“I haven’t personally confronted that type of no-win scenario to any extent in the positions I’ve been in,” says Art Karacsony, manager of marketing and communications in Coopers & Lybrand LLP’s Parsippany, New Jersey, office. “In my role, I wear a number of hats: public relations, advertising, strategic planning, business development, corporate communications, management and so on.” But, he says, these hats all fit well within his job of serving his primary customers — the firm’s 1,200 partners.

Interestingly, when functional managers outside of HR do experience dilemmas, the concerns often tend to be employee-related. “In an ideal world, we could serve both of these objectives — being an employee advocate as well as a business manager — successfully,” explains Susan A. Orr, director of catalog marketing for Programmer’s Paradise, based in Shrewsbury, New Jersey. “Of course, we don’t live in an ideal world, so naturally, our dual objectives often conflict.”

However, the frustrations of business people in functional roles other than HR seem to arise with the changing nature of business itself rather than basic role discrepancies. Not so for HR. Much of HR’s struggle and conflict has surfaced in the form of the “damned if you do or don’t” feeling because HR has increasingly taken on the business partner role, while still holding on to other traditional HR roles: being employee advocates and administrators. This leaves HR with a uniquely dichotomous function in the corporate world.

Notes Bob Carter, HR staff consultant for Guilford County government in Greensboro, North Carolina, “Leave it to human nature, culture, life experiences, brain chemistry and [other factors], to make the world of HR one of the most difficult to master in terms of organizational effectiveness.”

Adds Joan Farrell, vice president of HR for Lawson Mardon Wheaton Inc. based in Millville, New Jersey: “I’ve worked in both line and staff roles, and my three years in production management were like a vacation because the possibilities were limited, the choices were clear, and at the end of the day you could look back and measure progress.” HR’s role isn’t so clear-cut. But it wasn’t always that way.

Today’s HR role: various and dichotomous.
Traditionally, the human resources role was fairly straightforward. The personnel function was the administrative force behind employee issues. Personnel managers hired, fired and did employment-related paperwork. Now, human resources is more. Much more. Not only is HR responsible for the administrative tasks and strategic planning issues relating to employees, it has also moved into the business partner roles of being a change expert, an organizational performance specialist, a best-practices consultant, a legal liaison and now, even a risk manager.

According to HR guru Edward E. Lawler III, director of the University of Southern California’s Center for Effective Organizations in Los Angeles, HR’s role is now both:

• Follower and Leader
• Reactive and Proactive
• Administrator and Strategist
• Controller and Business Partner
• Conscience and Businessperson
• Employee Advocate and Manager
• Doer and Consultant.

The many roles are causing HR to make some tough decisions: Choosing between business reality and social welfare, between current expediency and long-term viability, and between blind regulatory compliance and common sense. The problem is: What’s good for the business isn’t always good for employees, and vice versa.

For example, in the “Reactive and Proactive” scenario, U.S. HR managers are responding to single employees who are demanding that company benefits be more universal and not presuppose that employees have a traditional family. For instance, many companies provide child care, but don’t provide elder care or pet-care assistance. While HR managers have to react to benefit problems at hand, they also have to think proactively about making a benefits package that pleases workers and yields a high return on their company’s investment.

But, perhaps the biggest role conflict for HR has come in trying to be both business partner and employee advocate. This dichotomy has surfaced some big hot buttons for HR people in terms of clashes between employee-relations issues and ethical problems.

To add fuel to the fire, the dichotomies HR professionals face in trying to serve both company and employee interests aren’t always appreciated by other managers. “Unfortunately, operations managers and accountants don’t always understand that employees are the company’s most important resource and where your actions are really an extremely beneficial ‘business partner’ activity, they’re sometimes seen as ‘pro-employee and anti-company,'” says Wagoner.

He admits the employee advocate and business partner dichotomy does lead to some very real “damned if you do or don’t” scenarios. He points out that if a company has a union, for example, the labor relations manager spends his or her time representing the company exclusively. However, in nonunion workplaces, most HR managers have to understand the needs of employees and management. “Does this create a conflict between roles?” Wagoner asks. “It shouldn’t. But, in fact, it does perceptually.”

Says Lawler, “I think the toughest role for HR is the duality issue around conscience and employee advocate.” It’s now common for HR organizations to have centers of excellence that take care of administrative tasks related to worker issues. And HR can have another area that’s strictly concerned with business-partner issues. “What I’m not so sure about is how you balance the traditional role of HR being the employee advocate and conscience of the organization with simultaneously being a business partner,” he ponders. “It’s often in the same meeting that you need to be both.”

He suggests that in the best of all worlds, the conscience and the employee-advocate roles would be shared by everyone in the organization, especially those in other leadership roles. But getting other functional leaders to share the corporate conscience may be a daunting challenge considering that HR people (46 percent) currently tend to feel they’re cleaning up the messes caused by ethics violations in their companies, according to “The Business Ethics Survey Report,” a joint study of 747 HR professionals released in 1997 by The Ethics Resource Center based in Washington, D.C., and the Society for Human Resource Management. Getting other managers to act in sync with ethical standards could be a daunting task, but it’s not impossible.

And on the employee-advocacy front, HR professionals would have to continue pushing responsibility for employee-advocacy issues further out into line managers’ and supervisors’ hands. This has been a constant struggle for workforce managers who have been trying to switch gears and take on more of the business partner’s role over the past few years.

This is exactly what one general manager for HR in a large, nonunion company in Australia has done. “To empower employees, we’ve created and successfully trialed a position of ’employee adviser.’ This position is not in HR,” says this HR professional who recently posted her company’s idea on a popular Internet HR listserve. She adds: “HR staff advise management; the employee adviser supports employees. It also means I have a more independent view on whether management is stepping out of line and whether, and to what level, I may need to intervene.”

Adds USC’s Lawler: “I’m inclined to think that in the short term, if HR people are really going to become business partners, they have to partially abandon that [employee-advocate] role and gain credibility first as a business partner.” Then, once HR professionals have gained credibility as business partners, they can come back to that employee-advocacy role. “Because if you keep that [employee-advocate role] as a central piece of your behavior, it’s very hard to get seen as a business partner,” he says.

This idea represents a radical shift from what most see as the current role for human resources. But face it: HR’s role has become somewhat of a repository of tasks, functions and roles. To HR’s credit, HR professionals have proved in recent years that they can and will take on an organization’s toughest challenges, while still providing world-class, administrative record-keeping services. But, have HR professionals let organizations put them in a no-win situation where they can’t effectively serve two or more masters?

“HR, as a profession and as a function, is in flux,” says Probst, the OD specialist who had left a firm where human resources was just damned. “It’s important for HR professionals to truly decide what their roles will be. They need to take a proactive stand and make this decision based on the best outcomes for the organization. They’ve always been reactive and have waited to be told what they should be. Therefore, they haven’t gained the respect they so desire.” Perhaps it’s time to pick a role, instead of trying to be all things to all people, which can’t be very good to HR departments’ bottom line or the companies they serve.

Don’t get stuck in a no-win spot. Choose your role wisely.
When senior human resources managers clarify their primary roles upfront — whether it’s making the radical shift away from employee advocate to be more of a business partner, being a change agent or being the knowledge worker management guru — the dichotomies will work themselves out. That’s not to say that in the end you won’t have more than one role. Many world-class HR operations do. Yet, to put it simply, it’s not unlike the roles of any given individual who might at the same time be a businessperson or worker, a mother, a wife, a community volunteer, a friend, a daughter, a sister, a civic leader and so on. Everyone plays different roles at different times. However, it’s crucial to be clear about which roles are primary, which are secondary and how best to fulfill the roles your HR department agrees upon as most important with your firm’s other business leaders. And have a clear plan in mind.

The best HR professionals today are starting with their companies’ business mission and defining their human resources mission from there. Those who don’t, flounder. “The business mission is your North Star,” says Lawson Mardon Wheaton’s Farrell. “Without it to focus on, you can wander lost in the seas of uncertainty forever.” The lesson here is: If you take it for granted that you’re there to fulfill the needs and requests of everyone in the organization at all times, you’ll be spending a lot of time on unnecessary and nonvalue-added activities. Think big picture.

For example, Gayle Evans, assistant vice president of HR for Standard Insurance Co. based in Portland, Oregon, originally set her group’s human resources mission four years ago, but reassesses it yearly based on her firm’s business mission. The goal of her company, whose motto is “People, not just policies,” is to provide excellent insurance products and services to its customers. From there, Evans’ HR team extrapolates its mission: “Our HR service strategy is to be perceived by our customers — and we define those as external applicants, employees and managers — as caring, knowledgeable, flexible, responsive, approachable and fair.”

To assess how well the firm achieves its business mission and HR mission, each of the company’s seven divisions has subjected itself to a rigorous quality-improvement process since 1991. The process is based on both the Malcolm Baldrige National Quality Award qualification process and the Oregon Quality Award process. It measures quality in seven categories, including HR development and management, and quantifies the results of those activities. Evans says the clincher for her HR department’s strategy is making Standard Insurance a great place to work for all of its 1,750 employees. “And that’s all linked to our corporate vision, which is driven by the elements of long-term relationships, excellence and a supportive work environment,” she adds.

This is exactly the area that USC’s Lawler says is how human resources can still strategically keep the two HR roles as company advocate and employee advocate: That of making a company an employer of choice. These days, with the shortage of qualified workers, HR can frame the argument for continuing to be an employee advocate by positioning it under the “employer of choice” mantle. “The window has been opened more in the past couple of years as organizations have become concerned about retaining people and attracting high-talent people — particularly technical people,” says Lawler. If HR chooses the employee-advocacy role as its primary mission to make a firm the best place for employees to work and thereby fulfills the corporate mission of having the best workers who can be the firm’s strategic advantage, then HR’s role is clear. And everyone else will be clear on HR’s primary role as well.

When setting your HR vision, pay close attention to the CEO’s leadership signals. The CEO will speak volumes in the way he or she sets the company’s agenda. For example, at Verifone Inc., a wholly-owned subsidiary of Hewlett-Packard that’s a global provider of secure electronic payment solutions based in Santa Clara, California, its 2,700 employees around the world are considered the firm’s number one corporate asset. Therefore, the firm’s former chairman, president and CEO, Hatim Tyabji (who just announced his retirement last month) has considered HR his right arm for the past 12 years. “Most CEOs look upon HR as a backwater function,” says Tyabji. “But I look upon HR as a key element of my overall strategy in moving my company forward. HR people here are front and center in the formulation of the strategy and how to achieve it.”

Adds Tyabji, “We don’t operate in silos here.” He doesn’t separate the HR strategy from the business strategy because Verifone’s human resources strategy often drives the business. For example, to capitalize on top world talent, HR set up development centers globally in countries such as India. Half the firm’s employees work outside the United States. The company’s revenue has grown from $31.2 million in 1986 to $387 million in 1995; HR helped make it happen. “HR at Verifone is not an administrative spectator sport; it involves being part of the business solutions,” says Katherine Beall, vice president of global human resources. “Our HR strategy is to be collaborative business partners who provide value-added HR services.”

And at Cambridge, Massachusetts-based Polaroid Corp., Joseph G. Parham, Jr., corporate vice president of HR and total quality ownership, says he sees his primary role as working with the CEO to help run the company. “In so doing, I believe the interests of the employees, customers and shareholders align nicely with exceeding the customers’ requirements. Satisfied and enthusiastic employees are bound to deliver results which satisfy or delight shareholders.”

That’s HR nirvana, you say, and it’s impossible to achieve that type of human resources business partnership in the real world because most senior managers aren’t that enlightened. Just because it’s difficult to achieve doesn’t mean it’s impossible. Now that HR has begun to shake up the corporate hierarchy by stating its strategic partner value, it’s time to further clarify what it means to add people smarts to your business — and how it plays out in the management ranks.

Take a stand. Clarifying your primary role as a strategic business partner shouldn’t mean putting yourself in a no-win situation by diluting your HR effectiveness with conflicting roles. Experts say it’s well worth the effort. In fact, in this case, you just might be “damned if you don’t.”

Workforce, May 1998, Vol. 77, No. 5, pp. 62-74.

Firing the violent employee with mental disabilities: Christine, an HR professional at a large company faces this dilemma. An employee, Don, who has mental disabilities, threatens to commit an act of workplace violence. This isn’t the first such threat Don has made, according to Don’s co-workers, but it’s the first such threat that Christine hears about. If she fires Don, she risks the chance he might sue under the Americans With Disabilities Act. If she doesn’t fire him, she risks the chance he might hurt employees. What’s the best course of action?

Response from Brent Longnecker, an expert witness in HR issues: Depending on the severity of the situation, Christine might not want to fire Don immediately. It would be wise to place him into a performance-appraisal process and into counseling. By giving feedback, the company could show in a court of law that Christine tried to make sure Don was taken care of. To immediately terminate employment can put the HR executive in a bad situation legally.

The problem with this scenario is that this is the first time Christine has heard about the threats, and she’s being told about them by other people. You have to be careful in a courtroom because if the behavior hasn’t been documented, it’s considered hearsay and doesn’t hold weight in a court of law. It might be wise to place Don on a paid leave to seek counseling. Unfortunately, this type of situation occurs frequently. It’s wise to proceed cautiously.

Workforce, May 1998, Vol. 77, No. 5, p. 68.

Jacqueline Miller, author of “Heart at Work” and a San Francisco-based consultant, helped lead Edison’s “Creating Our Future” workshops. Miller, who has been through many corporate acquisitions, mergers and divestitures as a senior HR executive, offers her insight about how to explain the opportunities that such change offers people.

Miller says that large-scale corporate change can offer employees these three opportunities:

1. They may have an even better opportunity with a new owner than they currently have.

2. They can find a new job with another company and look forward to the typical pay raise of 8 percent to 10 percent that most people get when they change jobs.

3. They will receive a severance package if they are let go.

Miller says it’s best to deal with employees in a straightforward and direct, but heartfelt, way. Companies have the obligation to deal with people as feeling, caring entities who need emotional support during the journey, not just paychecks.