Author: Jennifer Koch

Tom Morris is a modern-day business philosopher. A former professor of philosophy at Notre Dame for 15 years, Morris is now Chairman of the Morris Institute for Human Values in Wilmington, North Carolina, and author of “If Aristotle Ran General Motors: The New Soul of Business,” which was just published by Henry Holt and Company, New York, last month. Here, in an exclusive interview, Morris discusses such time-tested ideas as truth, beauty, goodness and unity, and why HR professionals, and the workforces they serve, can benefit by tapping the wisdom of the ages.

Q: Although the ideas in your book also come from the teachings of other ancient philosophers from Greece, Rome and China, why do you focus on Aristotle?
A: Well, I started off surveying all the ancient thinkers and all the great philosophers throughout the centuries looking for the most powerful wisdom I could find to apply to modern-day business. Over and over again, I kept coming back to Aristotle, the person who had the most powerful perspective on any given issue. For example, what really motivates human beings? Many of the great thinkers had a lot of insightful things to say, but it was always Aristotle who seemed to really hit the nail on the head. Then, when I was thinking about what really holds an organization together and how people in an organization should view what they’re doing together, it was Aristotle, again, who had the key that unlocked the door to all kinds of powerful insights. Aristotle gives us the way to make the next step forward in our understanding of organizations, of motivation, and those kinds of things.

Q: What was the practical advice Aristotle proposed in his day that applies to us now in business?
A: Aristotle helps us understand human motivation: that human beings are searching for happiness in everything they do—in their private lives, in their family lives and in their work lives. Aristotle helps us understand, at a deeper level, what that’s all about. If business managers can understand what motivates people, they can understand the leverage points in their workers’ personalities for helping them attain the highest levels of excellence along with the greatest levels of satisfaction. Too often in modern work, those two things come apart. People are being driven to higher levels of excellence, but it’s being attained at the expense of their satisfaction. They feel nothing but stress and pressure. They’re disgruntled. Aristotle helps us, as business people, understand human nature so we can see how to build higher levels of excellence on a foundation of happiness and satisfaction, so people feel good about what they’re doing in the long run and, thereby, can sustain the kind of excellence businesses hope to achieve.

Q: In your book, your first point is truth. How does truth fit into the business picture?
A: We’re hearing a lot nowadays about businesses being “information societies” and “learning organizations.” People appreciate the importance of ideas. But so many organizations are almost desert landscapes when it comes to people telling each other the truth, the whole truth and nothing but the truth. Because of organizational politics, people fear open candor about the problems they’re facing and what really needs to be done. But human beings need truth just like they need air, water and food. It’s that important. I give lots of examples in the book about how truthfulness, truth-telling in the right way, always strengthens an organization. I show places where it has worked beautifully and try to show how to avoid misusing truth-telling because sometimes it can be a harmful exercise if people are uttering brutal truths in an uncaring and unfeeling way. So I help people understand the importance of truth in organizations and how they can inject more truth into the workplace.

Q: Do you think modern businesses have been withholding truth?
A: Yes, I do. And it’s based on a misunderstanding of a famous insight from philosopher Francis Bacon centuries ago. Bacon said, “Knowledge is power.” And a lot of people in modern business concluded from that, “If you want power, hoard knowledge.” They think that if you give away knowledge, you give away power. They don’t understand there are some things in human life (like love and knowledge) that when they’re shared, they’re actually multiplied: To share truth in the right way multiplies truth and strengthens the organization as a result. In the book, I show how that works.

Q: How does Aristotle’s second point, beauty, fit into the business arena?
A: Beauty is seen in the workplace on many different levels: cleaning up a factory, repainting a facility, beautifying a place where people work. Hospitals discovered a long time ago that if you hang beautiful paintings in recovery rooms and if you paint the walls a nicer color, people physically recover from surgery faster. The same thing holds true in the workplace. If people have more pleasant surroundings to work in they’re going to feel better about their workplace; they’re going to enjoy being there, and they’ll work at higher levels. So I talk about that sort of beauty at work. But I also talk about other levels of beauty: performance beauty, for example, delighting a customer, delighting an associate, empowering people to create beautiful solutions to business problems. Nobody wants to feel like a robot. People essentially are creative beings. HR professionals need to turn people loose to be artists, to be creators. There will always be constraints, but if they can help people feel that kind of beauty in their work, they will be helping employees achieve greater satisfaction.

Q: How does the third point, goodness, fit in?
A: Thoreau once said goodness is the only investment that never fails. Goodness is the power behind business ethics, and I’m talking about the deepest perspective on ethics there is. Ethics isn’t about staying out of trouble. Ethics is about creating strength. A nice side effect typically is staying out of trouble. But goodness is about something positive. That was the perspective of the ancient Greek and Roman philosophers. They believed goodness is a foundation for long-term excellence. So if you have an organization in which people feel they’re treated fairly with kindness and respect, that’s going to be a stronger organization. We hear so much about how loyalty has been lost in the business world in the last few decades. Goodness brings loyalty back into the equation. Goodness makes a huge difference in both little and big issues.

Q: What about the fourth point, unity? How does unity help workers?
A: Unity is the target of what I call the spiritual dimension of human experience. Everybody wants to feel part of something greater than themselves. They want to feel like they belong, that they’re making their contribution in the world along with other people. So I talk about the different spiritual needs everyone has that have been too neglected in the workplace in the last few decades. And I’m not talking about institutionally religious things. I’m just talking about deep, psychological and spiritual needs that all people have: to feel special, to feel important, to feel like they belong, to feel they’re useful, to feel like the deepest parts of themselves are being called into play in their work. People don’t just show up at work to make money. They want to make a difference. So the fourth part of the book is all about unity and connectiveness.

This fourth foundation of human excellence helps make the workplace a place of meaningfulness for people. As business managers explore the spiritual dimension of human experience, they’re exploring an important and powerful leverage point for excellence in any organization that’s been unduly neglected. For such a long time, business leaders have just talked about quantifiable stuff, as if these other issues are the soft issues. But what company managers are working with here are soft beings, human beings. These issues end up being the most important issues for a company’s sustainable success, I think.

Q: How can human resources professionals begin to influence work processes and people in the workforce with these four points?
A: First of all, they’ve got to expose people to these four points. Then train people on them. These really are the simplest ideas in the world, but they’re also the most powerful ideas in the world. But sometimes people miss the simplest things. William of Ockham, a medieval philosopher, always said, “Simplify, simplify. Find the essential core of any situation. Learn to concentrate on that, and all the complications will fall into place.” Too often human resources managers try to institute all these different kinds of training programs that focus on how to do this and that. A philosopher is concerned with the whys. If you don’t understand the whys, you won’t ever get the hows right. For example, if Hewlett-Packard or Toyota do certain things, many managers at other companies think they should do likewise. But, the ancient philosophers always said, “Know thyself.” Companies should make alterations that fit their organizations. So first of all, everybody should be exposed to the deep roots of excellence in human nature, the universal human nature that we all share. What are those leverage points in human nature for making sure people do their best and feel their best about what they’re doing? That’s what the great philosophers bring to us. So, HR people could start injecting some of these big-picture perspectives into their training and then talk about how these ideas mesh into people’s lives. HR people need to realize that new gimmicks come down the pike every month, but what they’ve got to do is get their bearings with some of the most fundamental ideas that have never changed.

Q: How can American businesses regain the lost hearts and souls of their workers through either Aristotle’s plan or your plan?
A: Business executives have thought about numbers more than they’ve thought about people. Of course, they’ve got to have sustainable, profitable businesses. But they’ve also got to remember that with all the emphasis on product quality and on process efficiency, if they lose sight of the spirit of the people who do the work, they lose everything. It’s the spirit of the people who do the work that’s the core of any sustainable enterprise. By losing sight of that, modern American business has drifted so much so that people are instituting all these policy changes, such as process changes, reengineering and downsizing. Yet, managers are saying, “Why isn’t it working the way it was supposed to?” So much of modern business thinking is process-oriented rather than people-oriented. But ultimately, it’s the people who are the key to success. Relationships rule the world. And if [managers] ignore relationships for the sake of abstract, quantitatively measured process improvement, they’re barking up the wrong tree. The science of business has to do with the philosophy of human nature, ultimately. In his famous book “The Republic,” Plato once said, “It’s not until philosophers become kings or kings become philosophers that we’re going to have a good society.” He believed the people in charge better understand human nature. Yet, that’s not what business schools train future leaders in.

Workforce, October 1997, Vol. 76, No. 10, pp. 75-79.

The three new rulings by the U.S. Supreme Court imply that an employer may have to take the fall for sexual harassment, even if it’s got all the right policies and practices in place. That’s the bad news. However, if you do all the right things that the best minds in sexual harassment law and training suggest, you’ll have a fighting chance. Here’s what the experts suggest every organization do to protect itself from sexual harassment problems:

• Have a state-of-the-art policy that clearly says your organization won’t tolerate harassment, including harassment between members of the same gender.
• Widely disseminate the policy at regular intervals (annually or more often is ideal), post the policy on your intranet, keep records of when the policy was disseminated and keep signatures on file that employees received the policy.
• Make at least two reporting venues available to employees — one must be someone other than employees’ supervisors (HR, an ombudsperson, supervisors, managers, 800 number, open-door policy, internal review procedure or others).
• Conduct training for employees, supervisors and managers on anti-discrimination and anti-sexual harassment policies and practices. Ideally, have the firm’s leader introduce the sessions to nail down the point that senior management is serious about non-discrimination. Make sure everyone understands what constitutes discriminatory behavior and why it won’t be tolerated.
• Investigate all reports of sexual harassment promptly (including harassment between members of the same gender) and ensure that employees who report such misconduct aren’t retaliated against.
• Take swift and appropriate action against employees who are found to have violated company policies on sexual harassment and anti-discrimination.
• Hold supervisors, managers and executives accountable for communicating anti-discrimination and anti-sexual harassment policies and practices to their work groups, and dealing appropriately with any misconduct.

SOURCE: ASAP™, Littler Mendelson employment and labor law firm, San Francisco.

Workforce, October 1998, Vol. 77, No. 10, p. 5-7.

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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.

And Miami-based Burger King Corp.’s Laura Parsons, director of field human resources for the firm’s U.S. operations, offers these tips:

• 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.

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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.

Workforce, March 1998, Vol. 77, No. 3, p. 86.